COMMISSIONER OF INLAND REVENUE v. LI & FUNG (TRADING) LTD

COMMISSIONER OF INLAND REVENUE v. LI & FUNG (TRADING) LTD

LFT's delay in commencing taxation (effectively seven months beyond the three-month period after expiry of the appeal window) was undue; settlement negotiations on costs were not sufficiently evidenced; however, given the Commissioner had not invoked r22(3) and thereby failed to assist the court as required by the CJR, a global percentage deduction was inappropriate. The appropriate sanction was to disallow interest on the taxed costs for a limited period of five months (15 July 2012 to 15 December 2012) for each bill.

Citation
COMMISSIONER OF INLAND REVENUE v. LI & FUNG (TRADING) LTD
Parties
Appellant / Paying Party: Commissioner of Inland Revenue; Respondent / Receiving Party: Li & Fung (Trading) Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
4 March 2014
Case Number
HCIA3/2010
Procedural Posture
Taxation Proceedings Arising From Appeals and Costs Orders (hcia 3/2010; HCMP 541/2011; CACV 86/2011) / Preliminary Objection on Delay and Taxation Hearing Before Master (ruling)
Outcome
Preliminary objection partially upheld; no global percentage deduction imposed; interest on taxed costs disallowed for 5 months.
Legal Topics
Undue Delay, Order 62 Rule 22, Civil Justice Reform (cjr), Interest on Taxed Costs, Settlement Negotiations, Compelled Taxation Under Rule 22(3)
Source Language
EN
Civil Procedure Tax Law Costs and Taxation Undue Delay Order 62 Rule 22 Civil Justice Reform (cjr) Interest on Taxed Costs Settlement Negotiations +1 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 5 Authorities cited 14 Party arguments 2 Amounts and remedies 4
Sign in to unlock

Parties

Commissioner of Inland Revenue

Appellant / Paying Party

Li & Fung (Trading) Limited

Respondent / Receiving Party

Procedural Posture

Taxation Proceedings Arising From Appeals and Costs Orders (hcia 3/2010; HCMP 541/2011; CACV 86/2011) / Preliminary Objection on Delay and Taxation Hearing Before Master (ruling)

Legal Issues

  1. 1 Whether LFT unduly delayed commencing taxation under Order 62 r22
  2. 2 Whether settlement negotiations or pending appeal excused the delay
  3. 3 Whether global percentage deduction is appropriate sanction or alternative measures (eg. withholding interest) better achieve justice

Ratio Decidendi

LFT's delay in commencing taxation (effectively seven months beyond the three-month period after expiry of the appeal window) was undue; settlement negotiations on costs were not sufficiently evidenced; however, given the Commissioner had not invoked r22(3) and thereby failed to assist the court as required by the CJR, a global percentage deduction was inappropriate. The appropriate sanction was to disallow interest on the taxed costs for a limited period of five months (15 July 2012 to 15 December 2012) for each bill.

Court Disposition

Preliminary objection partially upheld; no global percentage deduction imposed; interest on taxed costs disallowed for 5 months.

Orders

  • No interest from 15 July 2012 to 15 December 2012 on the costs to be taxed in each of the three bills filed in HCIA 3/2010, HCMP 541/2011 and CACV 86/2011.
  • Costs of this preliminary objection to be addressed at the resumed taxation hearing; counsel from the Department of Justice to attend the adjourned hearing.