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Francois Ngo v Commissioner Of Inland Revenue

Judgment Cited authorities 10 Cited in 1 Precedent Map Related
Vincent
Judgment Date19 November 2018
Neutral Citation[2018] HKCFI 2516
Year2018
Judgement NumberHCIA1/2018
Subject MatterInland Revenue Appeal
CourtCourt of First Instance (Hong Kong)
HCIA1/2018 FRANCOIS NGO v. COMMISSIONER OF INLAND REVENUE

HCIA 1/2018

[2018] HKCFI 2516

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

INLAND REVENUE APPEAL NO. 1 OF 2018

____________

BETWEEN
FRANCOIS NGO Appellant
and
COMMISSIONER OF INLAND REVENUE Respondent

____________

Before: Hon L Chan J in Chambers
Date of Hearing: 30 October 2018
Date of Judgment: 19 November 2018

______________

J U D G M E N T

______________

Introduction

1. This is an application made by Mr Ngo Francois (“Mr Ngo”) under s 69 of the Inland Revenue Ordinance; Cap. 112 (“the IR Ordinance”) for leave to appeal against the decision of the Board of Review (“the Board”) dated 19 December 2017 (“the decision”). The Board dismissed the appeal of Mr Ngo brought against the determination of the Deputy Commissioner of Inland Revenue (“the Deputy Commissioner”) dated 22 September 2016 (“the determination”).

2. The Deputy Commissioner by the determination raised additional salaries tax at HK$443,460 for the year of 2011/12 on Mr Ngo. The additional tax was raised on an additional assessable income of HK$2,715,790. Mr Ngo obtained this sum from a settlement of his claims in HCA1575 of 2012 against his former employer Cantor Fitzgerald (Hong Kong) Capital Markets Ltd (“CFHK”) and claims he intimated against its ultimate holding company Cantor Fitzgerald, LP (“CFLP”), a US limited partnership.

Whether the application is filed and served out of time

3. The first point made by the Commissioner of Inland Revenue (“CIR”) in opposition is that Mr Ngo filed the leave application out of time. S 69 (1) to (3) of the IR Ordinance provide:

“69. (1) Where the Board of Review has made a decision on an appeal under section 68, the appellant or the Commissioner may appeal to the Court of First Instance against the Board’s decision on a ground involving only a question of law.

(2) No appeal may be made under subsection (1) unless leave to appeal has been granted, on the application of the appellant or the Commissioner—

(a) by the Court of First Instance; or

(b) if a further application is made under subsection (4), by the Court of Appeal.

(3) For the purposes of an application to the Court of First Instance under subsection (2)(a) for leave to appeal—

(a) the application—

(i) must be lodged with the Registrar of the High Court, and served on the other party, within 1 month after the following date—

(A) subject to sub-subparagraph (B), the date on which the Board’s decision is made;

(B) if the Board’s decision is notified to the appellant or the Commissioner by notice in writing, the date of the communication by which the decision is notified;” (emphasis supplied)

4. The Board made the decision on 19 December 2017 and posted the same to Mr Ngo on the same day. Mr Ngo was then living overseas. The Board also sent him an email on the same day advising that a hard copy of the decision was being posted to him. But no soft copy was attached to the email as the Board did not regard it proper to send a decision by email. The email also advised Mr Ngo of s 69 of the IR Ordinance which provided that an application for leave to appeal had to be lodged with the Registrar of the High Court and served on the other party within 1 month after the date when the decision was made or was communicated to the applicant.

5. The decision was delivered to Mr Ngo’s address on 8 January 2018. He sent the CIR an email on 18 January containing his submission on appeal. The CIR replied by email on 24 January confirming receipt of his submission, but told him that the application for leave to appeal had to be made by summons under s 69(3) of the IR Ordinance. He sent the CIR on 7 February by email a copy of his summons applying for leave to appeal. He then posted a hard copy of the summons to the CIR on 14 February and the CIR received it on 23 February.

6. Mr Julian Lam, counsel for CIR identified 3 issues:

1.1. When did time start to run for the purpose of s 69(3)(a)(i) and whether Mr Ngo’s application was made out of time?

1.2. If Mr Ngo’s application was made out of time, does the Court have jurisdiction to extend time?

1.3. If the Court has jurisdiction to extend time, should it exercise its discretion in favour of Mr Ngo?

7. The time should not have started to run from the date on which the Board’s decision was made as provided in s 69(3)(a)(i)(A) as Mr Ngo was residing overseas. The applicable provision should be as provided in s 69(3)(a)(i)(B) so that time should have started to run from “the date of the communication by which the decision is notified”.

8. In D30/06 (2006) 21 IRBRD 568 (Chairman: Anthony Chan SC), which concerned a previous s 69(1)[1] with the material part similar, the Board held:

“14. Bearing in mind the ordinary meaning of ‘communication’ and the use of the words ‘date of the communication’ in the context of the sub-section, it is quite plain to this Board that those words refer to the action of communicating. ...

...

16. Ms Tsui’s submission turns on what are the possible parameters of the action of communicating. Her contention is that ‘the communication’ was the posting of the Decision on the 13 December 2005. There is certainly force in Ms Tsui’s submission. On the other hand, there is a respectable argument that an action of communicating does not simply begin and stop at, in the case of posting, the act of posting. It can be said that the action of communicating is a process which ends when the communication reaches the address to which it was sent.

17. ... In the case of D2/04, IRBRD, vol 19, 76, the Board of Review had to consider the meaning of the phrase ‘after the transmission to him’ under section 64(4) of the IRO and it was held, at page 80, that:

‘... unless the intention is clear, we should not impute to the legislative an intention that time begins to run even before the determination could have reached the taxpayer for him to have any chance of dealing with it. We should observe that the end of the process of transmission does not depend upon whether the determination has physically reached the recipient. The process of transmission would normally end when the determination reaches the address that it was sent to.’

18. This Board agrees with the above ratio which is equally applicable to the point in issue. It should be added that this interpretation of ‘the communication’ has the support of the learned authors of the Encyclopaedia of Hong Kong Taxation [see vol 4, paragraph II [21065]-[21105]]. This Board holds that on a true and proper construction of section 69(1), ‘the communication’ is a process and it concludes when the communication reaches the intended address. ...”.

9. Though the two sections are not identical, I agree with the Board in D30/06 and hold that the same reasoning applies to the construction of s 69(3)(a)(i). I do not accept Mr Lam’s argument that “communication” could mean the letter itself and not the date when the letter reached the intended address. I hold that time should have started to run from 8 January 2018 for the purpose of s 69(3)(a)(i).

10. The time limit was not merely for lodging the application with the Registrar of the High Court. It was also a time limit for service of the application on the CIR. Mr Ngo had sent the summons to the CIR by email on 7 February 2018, but service of documents by email is not recognised by O 65 r 5 of the Rules of the High Court (“the RHC”) and hence such service is invalid. Since the hard copy of the summons was only delivered to the CIR on 23 February 2018, Mr Ngo made the application out of time.

11. The next issue is on whether this court has jurisdiction to extend the time limit for the application. Mr Lam highlighted the lack of provision in s 69 for extension of the time limit provided in s 69(3)(a)(i). He also referred to O 3 r 5 of the RHC which provides that this court may extend or abridge the time limits provided in the RHC, or any judgment, order or direction. He submitted that s 69(3)(a)(i), which provides the time limit for an application for leave, is not a rule of the High Court or a judgment, order or direction. Hence, this court cannot extend the time limit under O 3 r 5 of the RHC.

12. In the light of the wordings of s 69(3)(a)(i) and O 3 r 5, I agree with Mr Lam that there is no power in this court to extend the time limit for Mr Ngo to make this application. This application is thus bad for having been made out of time and should be struck out.

13. In case I am wrong to hold that this court has no power to extend the time limit, I would also consider, in case I have the power to extend time, whether I should extend the time limit in favour of Mr Ngo.

14. The Board has, by its email dated 19 December 2017, advised Mr Ngo the time limit for making an application for leave under s 69 being one month. He was able to file the summons with the Registrar of the High Court on 8 February 2018 which was just within time. There was no valid reason why he should not have served a hard copy of the summons on the CIR on the same day. Even if he was not clear as to the filing process or the time limit, he could have instructed lawyers for advice. He had the resources to do so. He at one time also indicated an intention to instruct lawyers to review the decision. Hence, there is nothing unfair for him to bear the consequences of his failure to comply with the time limit in s 69. Hence, even if I should have the power to extend the time limit, I would not exercise the discretion in his favour.

15. However, in case I am wrong in holding that I have no power to extend the time limit or should not extend time for Mr Ngo to make this application, I would also proceed to consider the merit of this...

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  • Suen Hung Shan v Commissioner Of Inland Revenue
    • Hong Kong
    • Court of First Instance (Hong Kong)
    • 26 June 2020
    ...So Siu Chou v Chief Electoral Officer Vivian Ting [2008] 1 HKCLRT 173. Specifically, in Francois Ngo v Commissioner of Inland Revenue [2018] HKCFI 2516 at §§11‑12, L Chan J held that there was no jurisdiction for the court to extend the 1‑month time limit prescribed by s 69(3)(a)(i) of the ......

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