Court of Appeal backs government’s claim for HK$330 million in late dues, rejecting the fung shui master’s excuse of mishaps in the mail
Diana Lee 09 March 2012
Self-styled fung shui master Tony Chan Chun-chuen lost his second legal battle in a week when a High Court ruled that he owed the government HK$330 million in unpaid taxes, in favour of the commissioner for inland revenue.
The commissioner was justified in rejecting a request by Chan (pictured) for more time to challenge 25 tax assessments after a provisional one-month limit expired, the Court of Appeal ruled yesterday.
“The commissioner must be of the view that it was plainly too much of a coincidence that all the 25 assessments, which were sent at different times, would not have reached the taxpayer,” Mr Justice Peter Cheung Chak-yau, one of the three appeal judges, said in a 26-page judgment. “It is not sufficient for the taxpayer to say that he had not received the assessments.”
Cheung said evidence indicated Chan - who claimed he did not know about the papers until months after they were mailed out - had indeed received the assessments. From October 2009 to February 2010, Chan used the postal address of a law firm, which said any letter it got would have been forwarded to the recipient.
The assessments were mailed in January and February 2010. Chan said he did not receive them and only became aware of them in April that year.
The appeal court yesterday overturned a Court of First Instance decision in June, saying it found Mr Justice Anselmo Reyes had erred when he ruled in favour of 51-year-old Chan.
The lower court had quashed the Inland Revenue Department’s decision to reject Chan’s challenge because the objection was filed late.
The Court of Appeal judges ruled that the tax commissioner, after sending the assessments, did not need to prove further that the tax papers “actually” came to Chan’s knowledge. Once the document was properly served, the actual notice was considered to have been given to the taxpayer, the judges said.
They also noted that the department sent out millions of tax returns, notices of assessment and other documents to taxpayers every year, and the only practical manner of sending them was by post. There is no requirement to send the letters to each taxpayer’s known addresses, and the person has a right to choose which address he wants to use for such official correspondence.
“It’s then up to the taxpayer to ensure that the document which he had chosen to be sent to a specified address would be brought to his attention,” Cheung said.
The appeal court also pointed out that Chan, in challenging the commissioner’s decision, had not based his judicial review on whether the firm had received the letters and forwarded them to him, or whether he was unaware of the tax assessments.
The court dismissed his argument that legislation implied that “giving of notice” meant the recipient must have actual knowledge of the same.
“There could be persons who, for one reason or another, do not avail themselves of such opportunity and remain ignorant of decisions that affected them,” Mr Justice Johnson Lam Man-hon said. “Such lack of actual knowledge would not impinge on the validity and effect of the decisions.”
Lam said Chan should exercise due diligence to make effective mailing arrangements with the law firm.
The tax claim involves 23 property tax assessments of HK$631,784 and HK$330.24 million in profits tax, which allegedly arose from fung shui services Chan gave to late billionaire Nina Wang Kung Yu-sum, who died in 2007. A spokeswoman for Chan said his legal team was studying the judgment to decide on an appeal.
Last Friday, a High Court ordered Chan to disclose everything he owns valued at HK$100,000 or more, rejecting his request for a delay. Chan is also fighting criminal charges that he allegedly forged Wang’s will, naming him the beneficiary.
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Tax case loss caps bad week for Tony Chan
Court of Appeal backs government’s claim for HK$330 million in late dues, rejecting the fung shui master’s excuse of mishaps in the mail
Diana Lee
09 March 2012
Self-styled fung shui master Tony Chan Chun-chuen lost his second legal battle in a week when a High Court ruled that he owed the government HK$330 million in unpaid taxes, in favour of the commissioner for inland revenue.
The commissioner was justified in rejecting a request by Chan (pictured) for more time to challenge 25 tax assessments after a provisional one-month limit expired, the Court of Appeal ruled yesterday.
“The commissioner must be of the view that it was plainly too much of a coincidence that all the 25 assessments, which were sent at different times, would not have reached the taxpayer,” Mr Justice Peter Cheung Chak-yau, one of the three appeal judges, said in a 26-page judgment. “It is not sufficient for the taxpayer to say that he had not received the assessments.”
Cheung said evidence indicated Chan - who claimed he did not know about the papers until months after they were mailed out - had indeed received the assessments. From October 2009 to February 2010, Chan used the postal address of a law firm, which said any letter it got would have been forwarded to the recipient.
The assessments were mailed in January and February 2010. Chan said he did not receive them and only became aware of them in April that year.
The appeal court yesterday overturned a Court of First Instance decision in June, saying it found Mr Justice Anselmo Reyes had erred when he ruled in favour of 51-year-old Chan.
The lower court had quashed the Inland Revenue Department’s decision to reject Chan’s challenge because the objection was filed late.
The Court of Appeal judges ruled that the tax commissioner, after sending the assessments, did not need to prove further that the tax papers “actually” came to Chan’s knowledge. Once the document was properly served, the actual notice was considered to have been given to the taxpayer, the judges said.
They also noted that the department sent out millions of tax returns, notices of assessment and other documents to taxpayers every year, and the only practical manner of sending them was by post. There is no requirement to send the letters to each taxpayer’s known addresses, and the person has a right to choose which address he wants to use for such official correspondence.
“It’s then up to the taxpayer to ensure that the document which he had chosen to be sent to a specified address would be brought to his attention,” Cheung said.
The appeal court also pointed out that Chan, in challenging the commissioner’s decision, had not based his judicial review on whether the firm had received the letters and forwarded them to him, or whether he was unaware of the tax assessments.
The court dismissed his argument that legislation implied that “giving of notice” meant the recipient must have actual knowledge of the same.
“There could be persons who, for one reason or another, do not avail themselves of such opportunity and remain ignorant of decisions that affected them,” Mr Justice Johnson Lam Man-hon said. “Such lack of actual knowledge would not impinge on the validity and effect of the decisions.”
Lam said Chan should exercise due diligence to make effective mailing arrangements with the law firm.
The tax claim involves 23 property tax assessments of HK$631,784 and HK$330.24 million in profits tax, which allegedly arose from fung shui services Chan gave to late billionaire Nina Wang Kung Yu-sum, who died in 2007. A spokeswoman for Chan said his legal team was studying the judgment to decide on an appeal.
Last Friday, a High Court ordered Chan to disclose everything he owns valued at HK$100,000 or more, rejecting his request for a delay. Chan is also fighting criminal charges that he allegedly forged Wang’s will, naming him the beneficiary.
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