[2011] UKPC 34
Privy Council Appeal No 0097 of 2010
JUDGMENT
Sharon Investments Ltd
v
Mauritius Revenue Authority
From the Supreme Court of Mauritius
before
Lord Phillips
Lord Brown
Lord Mance
Lord Wilson
Sir Stephen Sedley
JUDGMENT DELIVERED BY
LORD WILSON
ON
12 SEPTEMBER 2011
Heard on 21 July 2011
Appellant
Sir
Hamid Moollan QC
Iqbal
Moollan
(Instructed
by Streathers Solicitors LLP)
Respondent
Philip
Baker QC
Rajesh
Ramloll
Imran
Afzal
(Instructed
by Royds Solicitors)
LORD WILSON:
1. Sharon
Investments Ltd, the appellant, has appealed to the Board against the order of
the Supreme Court of Mauritius dated 17 February 2010 (Balancy and Peeroo JJ),
by which it refused the appellant’s application for an order that, for use in a
pending appeal by the appellant to the Supreme Court against the Tax Appeal
Tribunal (“the tribunal”) by way of case stated, the record of the proceedings
before the tribunal should be brought up to the court and filed in the record
of the appeal.
2. At the
conclusion of the hearing on 21 July 2011 the Board announced that the appeal
would be dismissed. It now gives reasons
for its determination.
3. In
1999, almost four years late, the appellant made a tax return for the year
1995/96. For the purpose of income tax
it claimed a loss of Rs 1,095,197 for carriage forward into future years. But
the Commissioner of Income Tax determined the loss in the reduced sum of Rs
44,055. He did so on the ground that, in
that year, the appellant had lent to its sister companies sums amounting to Rs
7,508,189 for which it had not charged interest and that in the circumstances
subsections (1)(b) and (c) and (2) of section 43 of the Income Tax Act 1974
entitled him to attribute to the loans a notional return to the company by way of
interest such as would give rise to the specified reduction in the loss.
4. On 24
September 2002 the tribunal dismissed the appellant’s appeal against the
Commissioner’s determination. The
appellant promptly applied to the tribunal to state a case for the opinion of
the Supreme Court pursuant to section 8 of the Tax Appeal Tribunal Act 1984 and
to rule 3 of the Tax Appeal Rules 1984 (“the 1984 Rules”). In its application for the statement of a
case the appellant identified eleven points of law. On 22 October 2002 the tribunal stated the
case.
5. The
appellant contends that the case stated on 22 October 2002 is deficient and
precludes proper presentation of its appeal.
In particular it says that there was no evidence before the tribunal to
justify some of its findings; such would of course amount to an error of law.
6. The
appellant does not dispute that the proper course for it to have taken was to
apply to the Supreme Court under rule 4(3) of the 1984 Rules for an order that
the case be remitted to the tribunal for the statement of it to be
amended. In an appeal in which a
complaint is made of the absence of evidence to justify a finding, an order can
of course be made for the statement of case so to be amended as to set out the
evidence alleged to justify the finding: Yip Tong and Sons v Lie Kiem Haw &
Co [1962] MR 156.
7. Rule
4(3) does not prescribe the time within which an appellant should apply for an
order for amendment of the statement of the case. But there is English authority that the application
should be made speedily: Spicer v Warbey [1953] 1 All ER 284.
8. In the
Supreme Court the appellant first raised its dissatisfaction with the statement
of the case on 23 March 2006, ie more than three years following its receipt of
the case. By that time it was too late
for the court to order that the case be remitted to the tribunal for the
statement to be amended. For on 31 July 2004 the tribunal, which had earlier
been replaced by the Assessment Review Committee, had ceased to exist for all
purposes. On 23 March 2006, which
appears to have been the date set for the substantive hearing of the appeal,
the appellant, which had procured a copy of the record of the proceedings
before the tribunal, purported to include it in the material to be considered
by the court. The respondent objected to
its inclusion. The hearing was adjourned
until 4 February 2008 when the objection was upheld albeit only on the basis
that the appellant should, if so advised, issue, by motion, an application for
an order that the record of the proceedings before the tribunal be brought up
to the court and filed in the record of the appeal.
9. The
appellant issued such an application only on 12 December 2008. It is against
the refusal of the application by the Supreme Court on 17 February 2010 that
the appeal to the Board has been brought.
10. The
ground on which the Supreme Court refused the application was that the
appellant’s delay in alleging a deficiency in the statement of case was
excessive and unexplained.
11. Sir
Hamid Moollan QC, who appeared for the appellant at the hearing before the
Board, accepted that the delay was excessive and that it was and remains
unexplained. He speculated that it might
be attributable to what he
described as Mauritian laisser-faire. He accepted
(a) that
almost two years elapsed between the statement of the case and the tribunal’s
demise, during which the appellant could and should have applied for an order
that the statement be amended; and
(b) that
thereafter more than four further years elapsed before the appellant made its
application to the court in proper form for an order that the record be brought
up.
12. Sir
Hamid argued, however, that:
(a) in the
admirable words of Collins MR in In re
Coles and Ravenshear [1907] 1 KB 1 at p 4, “the relation of rules of practice
to the work of justice is intended to be that of handmaid rather than
mistress”;
(b) the
deficiency in the statement of the case was excruciating and, without access to
the record of the tribunal before the Supreme Court, the door would be closed
against the appellant’s appeal; but, on the cursory examination of these
assertions which Sir Hamid requested the Board to undertake and indeed which
alone was appropriate, their validity was not obvious to it;
(c) rule
4(3) did not prescribe the time within which an application for an order for
amendment should be made; but, for what it was worth, this point had been noted
by the Supreme Court;
(d) the
mechanism of appeal by case stated was unsatisfactory in certain respects; this
is true (see, for example, the judgment of Yeung Sik Yuen J, as he then was, in
the Supreme Court in Ally Khan Mohamed v Tax Appeal Tribunal [2002] SCJ 23) but
it is irrelevant;
(e) in
other appeals by way of case stated orders had been made for the record of the
tribunal to be brought up to the court and filed in the record; this is true
although Sir Hamid may have gone too far in stating that such orders were not
uncommon (see Hurhangee v Commissioner of Income Tax [2002] SCJ 100, in which
the court stressed their exceptional nature); and
(f) the
respondent would not be prejudiced by the order; this is arguable although in
answer the respondent raised the spectre of yet further delay in the collection
from the appellant of the correct amount of income tax for the years following
1995/96.
13. But the
Supreme Court had a discretion whether to order the record of the tribunal to
be brought up to it. The balance to
which the Supreme Court referred was for itself to weigh. In the proper conduct of the balancing
exercise it was inevitable that the Supreme Court would attach great weight to
the shocking delay; indeed in the Board’s view it was close to inevitable that
its weight would prove decisive against the grant of the application. The appeal to the Board was hopeless and,
although it will consider contrary representations if filed and served within
14 days of the date of delivery of this judgment, it is hard to imagine how
even Sir Hamid can conjure resistance to an order that the appellant should pay
the respondent’s costs of and incidental to the appeal.
