Commissioner Of Inland Revenue v Poon Cho-ming, John

CourtCourt of Final Appeal (Hong Kong)
Judgment Date13 Jan 2020
Neutral Citation[2020] HKCFA 2
Citation(2020) 23 HKCFAR 74
Judgement NumberFACV1/2019
SubjectFinal Appeal (Civil)
FACV1A/2019 COMMISSIONER OF INLAND REVENUE v. POON CHO-MING, JOHN

FACV No. 1 of 2019

[2020] HKCFA 2

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO.1 OF 2019 (CIVIL)

(ON APPEAL FROM CACV NO. 94 OF 2016)

_________________________

BETWEEN
COMMISSIONER OF INLAND REVENUE Appellant
and
POON CHO-MING, JOHN Respondent

_________________________

Before: Mr Justice Ribeiro PJ, Mr Justice Fok PJ Mr Justice Cheung PJ, Mr Justice Bokhary NPJ and Lord Neuberger of Abbotsbury NPJ

Date of Judgment: 13 January 2020

_________________________

JUDGMENT ON COSTS

_________________________

Mr Justice Bokhary NPJ:

1. We have before us somewhat novel circumstances in which a party seeks an exercise in his favour of the discretion to award costs on a basis of taxation more generous than the usual party and party basis. At the invitation of the president of the panel, I give the Court’s judgment on costs.

2. On 17 October 2019 we heard, and on 14th of the following month we handed down, our judgment dismissing the appeal by the Commissioner of Inland Revenue (“the Commissioner”) against the Court of Appeal’s judgment which reversed the Court of First Instance’s judgment which had affirmed the Board of Review’s decision in the Commissioner’s favour. By the judgment which we handed down, we made an order nisi awarding costs, to be taxed if not agreed, here and below, to the respondent taxpayer Mr John Poon (“the Taxpayer”). The Taxpayer asks us to vary that order by ordering that the costs of and incidental to the appeal to us (including the costs of the application for leave to bring that appeal) be taxed on an indemnity basis or, alternatively, on a common fund basis rather than on the usual party and party basis. Such variation would, the Taxpayer contends, achieve a fairer result. The Commissioner opposes any variation of the order nisi.

3. As is usual, the issue as to costs is being dealt with on the parties’ written submissions, for which we thank them.

Correct approach to the exercise of the discretion

4. With particular reference to indemnity costs but relevantly also to common fund costs, the following propositions emerge from this Court’s judgment in Town Planning Board v Society for Protection of the Harbour Ltd (No 2) (2004) 7 HKCFAR 114 at paras 14-18:-

(a) In certain circumstances, costs may be awarded on a more generous than usual basis of taxation so as to achieve a fairer result.

(b) It is for the receiving party to show that the case has some special or unusual feature.

(c) Such features are not confined to an ulterior motive, an improper purpose, deception or underhand conduct on the part of the paying party.

(d) Neither the attributes of the parties nor the character of the proceedings are irrelevant to the question of whether a more generous than usual basis of taxation should be ordered.

(e) The discretion to order a more generous than usual basis of taxation is not to be fettered or circumscribed beyond the requirement that such taxation be ordered only when it is appropriate to do so.

(f) As to that, the grounds on which a more generous than usual basis of taxation is to be ordered must be connected with the case. That extends to - but no further than to - any matter relating to the litigation and the parties’ conduct in it, and also to the circumstances leading to the litigation.

5. As to why we were of the view that the...

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