The appellants appealed to the district court against the imposition of stamp duty by the stamp revenue collector (the “”Collector“) in accordance with Article 14 of the ESO.
The applicants then asked the court of first instance, the collector remaining neutral, to transfer the appeal of the stamp duty from the district court. The appellants argued that the transfer order should be returned for the following reasons:
- the appeal revealed an important legal question on the correct interpretation of section 45 of the SDO (relief in the event of transfer from one associated legal person to another) and that the resolution of the appeal was likely to have significant tax consequences for taxpayers owning shares and real estate in Hong Kong; and
- the appeal concerned a contested tax significantly exceeding the ordinary jurisdiction of the district court in civil matters.
Registrar Kwang asked the parties to explain whether the Court of First Instance had jurisdiction to hear these proceedings. As this was a jurisdictional issue, the case was referred to a judge for decision.
In accordance with Solicitor v Law Society of Hong Kong (2003) 6 HKCFAR 570, courts do not have an inherent appellate jurisdiction. Appeals are created by law, whether appeals from statutory courts to courts or appeals from lower courts to superior courts. Where the jurisdiction of a court has already been defined by law, there is no room for a court to exercise jurisdiction beyond that defined by law.
The Court considered Article 14 of the SDO, which is the main law conferring the right to appeal against stamp duty:
“(1) Anyone who is not satisfied with the collector’s assessment under section 13 or 47L may[…]appeal the assessment to the court and may, for that purpose, require the collector to declare and sign a record setting out the question on which his opinion was necessary and the assessment made by him.
(6) In this section … court (??) means the district court“
The court ruled that the statue confers jurisdiction only on the district court and no other court to hear appeals against the imposition of stamp duty. Outside of the SDO, there was no avenue of appeal. The stamp duty right of appeal invokes the appellate jurisdiction and not the original jurisdiction of the district court.
Once the district court has jurisdiction, the proceedings are governed by the order of the district court (Cap. 336) (“ACD”) And the Rules of the District Court (Cap. 336H).
Article 42 of the DCO provides that: –
“The court may, of its own motion or at the request of any party, order at any time the referral to the court of first instance or to the land court of all or part of any action or procedure before it and which fall within the jurisdiction of the Court of First Instance or the Land Court, as the case may be.“
The Court said that it is clear that the court to which a case is transferred must itself have jurisdiction in the first place. The parties cannot (by consent) and a court cannot (by transfer) confer jurisdiction on another court which does not have jurisdiction in the first place.
Is the Court of First Instance competent to hear appeals relating to stamp duty?
Section 12 (2) of the High Court Ordinance (Cap. 4) (“HCO“) provides that the civil jurisdiction of the court of first instance consists of”(a) original jurisdiction and authority of the same nature and extent as those held and exercised by the Chancery, Family and Queen’s Bench Divisions of the High Court of Justice in England; and (b) any other jurisdiction, whether originating or appellate jurisdiction, conferred on it by statute”.
The Court considered that there was no legal provision conferring jurisdiction on the Court of First Instance to hear appeals relating to stamp duties. Applying the legal principles relating to appellate jurisdiction, it is clear that the Court of First Instance is not competent to hear appeals relating to stamp duties.
Article 12 (1) of the HCO provides that the court of first instance is “a superior court of archives”.
The High Court, which comprises the Court of Appeal and the Court of First Instance, is a civil court with full jurisdiction. The significance of the Court of First Instance being a “higher” court of record (as opposed to a “lower” court) is that the “presumption of jurisdiction” applies. This means, prima facie, that no matter is deemed to be outside the jurisdiction of a superior court unless it is demonstrated, by express words or by necessary implication, that it is. When an order creates a right or a remedy, that is to say that the right or remedy does not exist independently of the order which creates it and, at the same time, the order establishes a particular method of exercising it before a particular jurisdiction, the courts will, without more, tend to confine a person exercising that right or recourse to that particular court or tribunal.
In the present case, the appellants invoked section 14 of the SDO, the express terms of which confer express jurisdiction on the district court. By necessary implication, taking into account the legal principles on appellate jurisdiction and Article 12 of the HCO, a similar jurisdiction is not conferred on the Court of First Instance.
The fact that article 14 of the SDO does not use the term “exclusive jurisdiction” or that “only” the district court has jurisdiction, did not call into question the conclusion.
Previous instance of a stamp duty appeal
Registrar Kwang asked the collector to check if there had been any previous appeals of stamp duty transferred from the district court to the lower court.
The collector found only one such case: World Magnate Shipping Ltd v Stamp Revenue Collector  HKLR 67. In view of the practical importance, and at the request of the appellant with the consent of the collector at the time, the appeal of the stamp duty in World Tycoon Expedition was transferred to the Supreme Court (now the Court of First Instance). The appeal was further transferred to a full court of the Supreme Court (with a panel of three judges, including the then chief justice), equivalent to the current Court of Appeal. It was on the order of the then Chief Justice under Article 28 of the Supreme Court Order that the case be heard, at first instance, in the Plenary Court without the need to ” first be tried and decided by a Supreme Court judge sitting alone.
The Court does not agree that World Tycoon Expedition was binding on this Court for the following reasons:
- Questions of jurisdiction and referral of the case to the Supreme Court do not appear to have been debated in World Tycoon Expedition.
- Section 28 of the Supreme Court Order was akin to a “leapfrog” approach that bypassed the single-judge tribunal and had a case heard directly through the equivalent of the Court of Appeal. Such a provision does not exist in the current HCO.
- Because World Tycoon Expedition, the Court of Final Appeal laid down the legal principles of appellate jurisdiction in Solicitor v The Law Society of Hong Kong (see above). This principle binds the judge in John Wiley & Sons UK2 LLP v Collector of Stamp Revenue.
For the reasons set out above, the district court was held to have exclusive jurisdiction to hear a stamp duty appeal under section 14 SDO, and the district court could not transfer a stamp duty appeal to the court of first instance, even by consent.