Cork v Fiji Islands Revenue and Customs Authority [2007] FJHC 148; HBC0029.2007 (14 February 2007)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO HBC0029 OF 2007

BETWEEN

DAVID RODERICK CORK
PLAINTIFF

AND

FIJI ISLANDS REVENUE AND CUSTOMS AUTHORITY
DEFENDANTS

Counsel: Mr. G. O'Driscoll for the Plaintiff
Ms. S. Tagicaki & Ms. V. Gavidi for the Defendants

Date of Hearing: 14th February, 2007
Date of Ruling: 14th February, 2007

RULING UPON APPLICATION FOR TEMPORARY LIFTING
OF DEPARTURE PROHIBITION ORDER

[1] This ruling is necessarily being given in a short time as the plaintiff David Cork wishes to leave Fiji on 23rd of February and return on 24th April 2007. He is some 73 years of age and has medical treatment booked in India for the replacement of both his knees. A Departure Prohibition Order (D.P.O.) dated 8th of September 2006 has been served on him in respect of an unpaid tax assessment of $48,851.31 for Project Funding Limited. He is the person having a controlling interest in the company. The assessment relates to the years 1991 to 1996.

[2] I have before me the affidavit of Mr. Cork filed on 1st of February 2007 and schedules of events from the plaintiff and the defendants. I have also heard oral argument. Within those oral arguments there were certain representations of fact, for example: the plaintiff put forward his accountant Mr. Ho as someone who is willing to sign a surety for the tax claimed for the period Mr. Cork is away, the defendants put forward a letter purporting to show that the plaintiff's appeal against the tax assessment was out of time.

[3] The plaintiff says that he is a citizen of Fiji, his wife and adopted children live here and, in his own name, he has real estate. He asserts: the tax assessment is in respect of taxes from over ten years ago, there has been regular correspondence, the formal assessment was made in 1997 and was appealed in time and, if not in time, then the defendants have treated it as a valid appeal by their continuing correspondence and that, having issued High Court proceedings in 1999 for the recovery of this alleged debt, the defendants did not pursue those proceedings and they were eventually struck out in 2005 for want of prosecution, and further there has been no application to reinstate those proceedings.

[4] By response the defendants say these sums have been due and owing for a long time, the assessment was made in February 1997, there was no objection within the statutory time and it was not until May 1997 that a letter on its face dated the 26th of March 1997 was received. The Director replied to this on the 12th of May pointing out that the objection could not be valid as it was outside the 60 day limit. The defendants further say that it is a matter of discretion for the Commissioner as to whether someone who is the subject of a DPO may leave the jurisdiction and if so, upon what terms. The defendants accept that that can be the subject of review by the court but only if the Commissioner has behaved unreasonably. In this particular case, the defendants say that no approach was made to the Commissioner before the commencement of these proceedings. Instructions were taken by counsel during the course of the hearing and her response was that the Commissioner would not object to a temporary lifting of the DPO if the original sum in tax, that is without the penalties, some $39,000.00 were lodged with the court then there would be no objection.

[5] This action was begun by Writ of Summons. The endorsement of claim reads:

"The plaintiff claims the following reliefs:

(i) That the departure prohibition order dated 8th of September 2006 against the plaintiff be immediately cancelled.

(ii) Damages to be assessed.

(iii) Costs of this action to be paid by the defendant.

(iv) Such further and other reliefs as this Honourable Court deems fit."

[6] There is then attached an ex-parte Notice of Motion requesting the immediate removal of the departure prohibition order and that is supported by David Cork's affidavit of 1st February 2007.

[7] Neither party in this case has behaved with diligence and expedition.

[8] On the face of the papers currently before me it would appear that the plaintiff's objection to the assessment was out of time. Further, he apparently received the DPO on 15th September 2006 yet did not commence proceedings until over 4 months later. It would appear that in the interim, knowing there was a DPO, he booked for himself to go abroad for surgery to his knees. This was apparently in mid December. Yet proceedings were not commenced until the 1st of February. Further, he did not seek to approach the Commissioner directly to agree some kind of deposit or surety so that he might go overseas. If there was an unreasonable refusal then he could have come to court for review of that decision. It is debatable as to whether procedurally he can and should have commenced proceedings in the current form and with the current claim.

[9] The defendants themselves have not pursued this matter with diligence and expedition, even allowing for the various correspondence and delays which can enter these matters. An assessment was made in 1997. On the face of their argument there was no valid objection. Proceedings were issued in 1999. Apart from sporadic correspondence nothing was done to progress the civil action for nearly 6 years and it was struck out in 2005. Since that date, no application has been made for reinstatement. Such a set of circumstances must necessarily leave the defendant taxpayer wondering whether the claimed tax is really being pursued or his objections have been accepted and the matter abandoned. Even on the defendants schedule of events there is a period of over two years from the receipt of the last letter from the plaintiff's accountant to when the matter was struck out in court. Having been struck out there is then over another year before the "final notice ... demanding payment of the outstanding tax arrears and penalties within seven days" was sent. Eleven days after that letter the DPO was issued.

[10] The defendants do accept a temporary lifting of the DPO if the original tax assessed of some $39,000.00 is paid into court. The defendants object to the plaintiff's accountant, Mr. Anthony Ho standing as surety.

Although the plaintiff's have averred from the Bar Table that he is a Fiji citizen and has been resident in this country for over twenty years, the defendants say that experience has shown that even with ostensibly good sureties FIRCA have on occasion not been able to recover taxes owed.

[11] The law and regime concerning the collection of tax has in many authorities been described as "sui generis". The Commissioner has a number of powers which are designed to effect the efficient collection of taxes, the speedy flagging of objections and appeals and their disposal. In broad terms, where there is disagreement over the tax owed, the Commissioner is entitled to require payment of the assessed amount pending the resolution of any objection or appeal. It is only if the tax payer is successful that any excess is refunded. It is a payment regime where money is payable upon determination by one side and not left until after any disputes have been decided.

[12] Further, the Commissioner has a number of enforcement powers and orders at his disposal. The issuance of a D.P.O. is a draconian power as it curtails a fundamental right, namely that of freedom of movement. It has been ruled in this jurisdiction that such a power if properly exercised is not unconstitutional. It does however mean that such a power must be only used with full observance of all legal requirements.

[13] It is not been suggested by the plaintiff in this case that the defendants have failed to comply with the law. The plaintiff in essence says that it is unfair to utilise such a power given the slowness with which this matter is pursued by the defendants and their acquiescence in the strike out of civil proceedings. Further, they say that even if a DPO was properly imposed it is unreasonable to insist upon payment of either the full sum or the original assessed sum into court before an aged man can obtain the surgery which is necessary for his knees.

[14] In making this Ruling I do not criticise the current Commissioner for his pursuit of this tax nor his stance that the original assessed sum should be paid into court before there is a temporary lifting of the DPO. Within the confines of this particular case, even given the shortcomings in the plaintiff's behaviour, I will lift the DPO for the period from 23rd February 2007 to 25th of April 2007 inclusive upon the following conditions:

1. That the plaintiff's accountant Mr. Anthony Ho enters into a surety in respect of the sum of $48,851.31 by 3.00 p.m. on 16th of February. That surety contains an undertaking Mr. Ho will not leave the jurisdiction of this Court until after the return of the plaintiff.

2. That Mr. Ho provides to the defendants by 3.00 p.m. on 16th of February a signed schedule setting out the assets he holds from which that sum could be paid.

3. That the plaintiff travels only for the dates, purposes and to the place set out in his affidavit. If he fails to return to the jurisdiction by 2359 hours on the 25th of April 2007 the surety, Mr. Ho, becomes liable for the entirety of the said sum jointly and severally with the plaintiff.

[15] I will hear the parties on costs.

(R.J. COVENTRY)
JUDGE