Taxation — stamp duty — leave to appeal out of time — whether applicant prevented by illness from lodging appeals within time — whether requirements under s. 14(1B) and (5B) of the Stamp Duty Ordinance (Cap. 117) satisfied
Civil procedure — originating summons — practitioners issuing summons under s. 14(1B) and (5B) must use general form (Form 8) not expedited form (Form 10) — non-compliance might result in delay, dismissal of summons and costs consequences — Rules of the District Court (Cap. 336H, Sub.Leg.) O. 7 r. 2(1), (1)(B), (2) — Practice Direction 5.8, para. 1
Words and phrases — “prevented” — “hardship”
On 4 and 17 August 2017 respectively, the Collector of Stamp Revenue (the ‘Collector’) issued to X two notices of assessment (‘Notices’ A and B) and demand for stamp duty chargeable for two assignments over two properties (‘Properties’ A and B). Under two trust deeds executed by X, she held the Properties on trust for THW who would pay all stamp duty (the ‘Trust Deeds’). Pursuant to s. 14(1) of the Stamp Duty Ordinance (Cap. 117) (the ‘SDO’) X had one month from the date of assessment to lodge an appeal. In August 2017, X was struggling with whether to have surgery, in pain and on medication. On 1 September 2017, X’s solicitors wrote to the Collector to indicate her wish to appeal against the assessment in Notice A, provide bank guarantees as security for payment of the stamp duty and apply for an extension of time to appeal (the ‘Notice A Letter’). Between 4 and 9 September 2017, X was hospitalised for surgery and then on sick leave until 17 November 2017. On 14 December 2017, X applied for an extension of time to appeal against the Notices under s. 14(5B) of the SDO because she had been prevented by illness from bringing the appeals within time; and leave under s. 14(1B) to allow the appeals to be brought on the security of bank guarantees for payment of the stamp duty.
Held, dismissing the application, that:
- Whether to exercise the discretion to grant an extension of time for appeal under s. 14(5B) of the SDO involved a three-stage test (Wan Wah Shing v. Collector of Stamp Revenue  4 HKLRD 674 applied):
(a) the court must be satisfied that the applicant suffered from illness, had been absent from Hong Kong or had any other reasonable cause;
(b) the applicant must show that one or more of the three factors above prevented her from bringing an appeal within the statutory time limit; and
(c) even if the above two criteria were satisfied, the court had a residual discretion as to whether to grant an extension of time. (See para. 20.)
- The word “prevented” in s. 14(5B) meant “unable to”. An applicant seeking an extension under s.14(5B) must demonstrate that he was unable to lodge an appeal within time due to illness, absence from Hong Kong or other reasonable cause (Chow Kwong Fai v. Commissioner of Inland Revenue  4 HKLRD 687 applied). (See paras. 22–23.)
- In order to fulfil the factors in s. 14(5B), the applicant must show that payment of stamp duty assessed would impose hardship on him, that non-payment was reasonable in all the circumstances and security to the court’s satisfaction was given for the duty to be postponed. The court must consider a party’s subjective stance in forming an objective view on all the circumstances as to whether hardship was established (Wan Wah Shing v. Collector of Stamp Revenue  4 HKLRD 674 applied). (See para. 24.)
- X had not shown that she was prevented by illness from lodging appeals against the assessments within time. Despite being ill, in August 2017, she had instructed solicitors to write the Notice A Letter. Although Notice B was sent to X’s home address and, she claimed, remained unopened because she was ill, Notice B was also sent to her solicitors so that she would also have been able to give instructions thereon. Thus, there was no ground to exercise the discretion under s. 14(5B) in X’s favour. (See paras. 31–35.)
- As for s. 14(1B), “hardship” meant “financial hardship”. Even if the Notice A Letter was a formal application to postpone payment of stamp duty, it was made outside the 14-day time limit under s. 14(1A), hence the Collector could not accede to X’s request. No similar request had been made for Property B. Further, X had not adduced evidence of the “hardship” she would suffer if she had to pay the stamp duty so that the Court could not consider her financial circumstances; or evidence that THW would be unable to pay the stamp duty under the Trust Deeds. (See paras. 37–39.)
- (Obiter) X should not have commenced these proceedings by an originating summons in expedited form (Form 10), but used the general form (Form 8) instead. Under O. 7 r. 2(1)(1B) of the Rules of the District Court (Cap. 336H, Sub.Leg.) (‘RDC’), practitioners were only to use Form 10 if it was prescribed under a written law. There was no such law regarding applications under s. 14(1B) and s.14(5B). Under para. 1 of Practice Direction 5.8, non-compliance might delay the proceedings or result in the summons being dismissed and might also have costs consequences (International Automotive Components Group SRO v. Xuke Trading Ltd  3 HKC 137 applied). (See paras. 40–41, 43–45.)
This was an application by the intended appellant for an extension of time to appeal against two notices of stamp duty assessment; and leave to allow the appeals on giving security for the payment of the stamp duty. The facts are set out in the judgment.