Kum Kee v Attorney-General [2001] KICA 22; Civil Appeal 09 of 2000 (5 April 2001)

IN THE KIRIBATI COURT OF APPEAL
CIVIL JURISDICTION
HELD AT BETIO, KIRIBATI

Civil Appeal No. 9 of 2000

BETWEEN:

MOTI KUM KEE
Appellant

AND:

ATTORNEY-GENERAL
IN RESPECT OF INTERNAL REVENUE BOARD
Respondent

Before: Casey JA
Bisson JA
Tompkins JA

Counsel: Mr B Berina for the appellant
Mr D James for the respondent

Date of Hearing: 28 March 2001
Date of Judgment: 5 April 2001

JUDGMENT OF THE COURT

In a Writ of Summons and Statement of Claim dated 28 December 1994 judgment was sought by the Internal Revenue Board for $65,619.42 in respect of income tax owning by the appellant according to assessments over a period 31st December 1982 to 31st December 1991 after deducting payments of $7,909.82 paid on account in the years 1989 and 1990. After a hearing on 22 November 2000 judgment was entered for the plaintiff/respondent for $74,361.21 including interest to 20 November 2000. From that judgment the appellant has appealed to this Court on the following grounds,

1. The learned Chief Justice erred in law in relying on the certificate of the Commissioner of Taxes in coming to his assessment of the damages in that the Inspector of Taxes is not recognised under the Income Tax Ordinance Cap. 44 as capable or authorised to produce the certificate upon which the trial judge relied.

2. The learned Chief Justice erred in law in accepting the assessments as valid in that the assessments were invalid because:

(a) they were not made by the Internal Revenue Board

(b) they were not made by a person who had been delegated the power to assess by the Internal Revenue Board.

In his judgment the Chief Justice referred to the defence in the new paragraph 6 below as the crux of the defence and Mr Berina for the appellant acknowledged that this was so.

6. That should the Plaintiff have assessed the Defendant as alleged in the Statement of Claim (which is denied) then such assessments are invalid in law in that the Plaintiff is not authorised by law to make such assessments.

The Chief Justice found no merit in any of Mr Berina's points as he considered s.138 of the Income Tax Act 1990 (as introduced in 1997) was clear and absolute and a complete answer to paragraph 6 of the defence.

138: Any Income Tax assessment and any Notice of Assessment made in accordance with section 100, and served in accordance with any Regulations made hereunder, in respect of income tax for any tax year prior to 1990 shall be deemed to be an assessment or a Notice of Assessment, as the case may be, made and served in accordance with the repealed legislation and any such assessment or Notice of Assessment shall in all respects be valid and apply as if it had been properly made and served by the Minister in accordance with the Repealed Legislation.

Dealing now with the first ground of appeal, that the certificate of the Commissioner of Taxes should not have been relied upon by the Chief Justice because the Inspector of Taxes is not authorised to produce the certificate upon which the judge relied. In our view the Certificate was produced by the respondent which is the Internal Revenue Board. If the appellant challenges the authenticity of the Certificate we point out that it is not merely signed by the Commissioner of Taxes but is also signed by her as the Secretary of the Internal Revenue Board of which she is a member (see Internal Revenue Board Act 1990 s.3(1)(g)).

There is no reasonable objection to the Court receiving that certificate in evidence and acting on it. We note that Mr Berina, when he had the opportunity to cross-examine the Commissioner of Taxes, did not challenge her authority to sign the Certificate for the Board. Furthermore, this Certificate which is dated 17/11/00 is not a certificate under the repealed Income Tax Ordinance Cap. 44 but under the Income Tax Act 1990 pursuant to which Act the assessments of tax have been made.

The second ground in support of the appeal is that the Chief Justice should not have accepted the assessments as valid because they were not made by the Internal Revenue Board nor by a person who had been delegated the power to assess tax by the Internal Revenue Board. Mr Berina relied heavily on a letter dated 1 March 1993 to his client from the Internal Revenue Board signed by Matereta Birita as Inspector of Taxes. In this letter she says, "I have issued amended assessments on the partners for the years 1979 to 1991."

We do not read that letter as meaning the assessments were not made by the Internal Revenue Board. Someone had to deal with the appellant in making assessments of tax. He had not made returns of income at all, but by s.100(3) of the Income Tax Act 1990 the Board may estimate the income of such a person and assess the person accordingly. This was done more than once and the second reassessment notices have been signed "for the Inland Revenue Board".

These assessments were made by the Inland Revenue Board and were confirmed as made by the Board and not by the Inspector of Taxes in her own capacity. Accordingly Mr Berina's submissions that there was an invalid delegation of power, whether express or implied, to the Inspector of Taxes have no relevance and we need pursue the matter no further by recourse to s.100(11) of the Act. Mr Berina's final submission was, "There being no valid delegation, the exercise by Raiman of the Board's power to make assessments is invalid, rendering the assessments and the Notices thereof void and of no effect". For the reasons we have given we do not agree.

Mr Berina sought to raise a new constitutional argument but agreed not to pursue it in the face of opposition from Mr James who had had insufficient notice to prepare an adequate argument in response.

The appeal is dismissed. There was no application for costs, the appellant being already heavily indebted to the Attorney-General for costs in other litigation.

Casey JA
Bisson JA
Tompkins JA