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HCMP003053/1984
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Miscellaneous Proceedings
No. 3053 of 1984 |
IN THE SUPREME COURT OF HONG KONG
COURT OF APPEAL
MISCELLANEOUS PROCEEDINGS
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IN THE MATTER of Victoria District Court (Civil Jurisdiction) Action No. 9225 of 1984
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IN THE MATTER of Order 59 Rule 14 of the Rules of the Supreme Court, Cap. 4 and Section 63(1) of the District Court Ordinance, Cap. 336
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BETWEEN
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THE COMMISSIONER OF INLAND REVENUE, HONG KONG |
Plaintiff
(Respondent) |
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AND
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CRESCENT INVESTMENT COMPANY LIMITED |
Defendant
(Applicant) |
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Coram: Hon. Cons, Fuad and Kempster, JJ.A.
Date of hearing: 23 November 1984
Date of delivery of judgment: 23 November 1984
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JUDGMENT
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Cons, J.A. delivered the judgment of the Court:
1. This is an application for leave to appeal against an order of the District Court staying particular proceedings before it, the stay being made subject to the production of adequate security for the sum involved. That was in the region of $44,000,000, a sum assessed by the Commissioner of Inland Revenue as profits tax due from the Defendant Company.
2. The assessment had been made on the 4th May this year. Objection can be taken under the Inland Revenue Ordinance Cap. 112, within one month. On the 2nd June, one of the Directors of the Company had indeed signed a letter of objection, but, for reasons which are not clear, that objection did not reach the Inland Revenue until the 19th June. Nothing however turns on that for on the 3rd September a late objection was accepted by the Commissioner.
3. In the meantime, on the 2nd August, action had been commenced against the Company in the District Court. No defence was filed. Indeed, it is difficult to imagine what defence could be raised. Then on the 29th August judgment was obtained in default of defence. Application was soon made to set aside the judgment, and on the 25th September the Judge did so. He also made an order to stay further proceedings in the Court, on condition that security was provided for the full amount due within 28 days, giving liberty to apply purely on the question of the adequacy of any security that might be offered.
4. On the 5th October the Company applied to the Judge for leave to appeal and for a stay of execution pending the appeal. The Judge refused the application on the 22nd October. (The following day the Commissioner rejected the objection which had been lodged, although he did reduce the amount very slightly.)
5. There is now an application to this Court for leave to appeal against the Judge's order of the 25th September insofar as the condition imposed in that order is concerned. The basis of the appeal will be that, the Company being unable in the circumstances to comply with the condition, its ultimate effect will be to force the Company into liquidation. It is said that that would work an injustice.
6. With respect we do not see that as a correct analysis of the situation. What the condition really did was to offer a life line to the Company, a life line which would enable it to avoid, at least for the time being, what would seem to be an otherwise inevitable winding-up. It may even be that in doing so, the Judge exceeded his jurisdiction, a matter on which we make no comment, save to refer to what appears to be the clear and unambiguous language of Section 71 and Section 75 of the Inland Revenue Ordinance. But in any event the condition that the Judge did impose is in fact to the benefit of the Company, and no Court would interfere with that condition at the Company's own behest.
7. For these reasons, we refuse the application for leave to appeal.
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(D. Cons)
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(K.T. Fuad)
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(M. Kempster)
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Justice of Appeal
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Justice of Appeal
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Justice of Appeal
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Representation:
Mr. A.G. Rogers, Q.C. and Mr. B. Barlow (Hastings & Co.) for Applicant.
Mr. R. Osborne for Respondent.
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