Warner v Yanjian Tonga Ltd (In liquidation) [2023] TOSC 9; CV 55 of 2018 (10 February 2023)

IN THE SUPREME COURT OF TONGA
CIVIL JURISDICTION
NUKU'ALOFA REGISTRY

CV 55 of 2018
(with CV 5 of 2021)

BETWEEN:

DIANE WARNER Plaintiff

-and-

[1] YANJIAN TONGA LIMITED (in liquidation)

[2] STONE COMPANY LTD

[3] HONGTAO YU

[4] FIETOKONI COMPANY LIMITED

[5] YALU GE

[6] CHINA CIVIL ENGINEERING CONSTRUCTION CORPORATION SOUTH PACIFIC (TONGA) LIMITED
Defendants

Objection to witness summons

RULING

BEFORE: LORD CHIEF JUSTICE WHITTEN KC
Appearances: Mr S. Fonua for the Plaintiff

Ms M. Mangisi, Deputy CEO (Legal) for the Ministry of Revenue &

Customs
Date: 10 February 2023

1. The trial of this proceeding is scheduled to commence on 23 February 2023 on an estimate of 10 sitting days.
2. On 13 October 2022, Counsel for the Plaintiff liquidator obtained from the Registrar of the Supreme Court a witness summons (or as they are commonly called, a subpoena) requiring Pita Tu’ivai, an officer the Ministry of Revenue of Customs (“the Ministry”) to attend court (then specified as 11 January this year) to give evidence on behalf of the liquidator to confirm whether:
   • (a) Mr Hongtao Yu (who is the Third Defendant in this action) was a registered PAYE [taxpayer] between June 2018 and 2019; and
   • (b) Mr Hongtao Yu was an employee of CCECC between June 2018 and May 2019.
3. Shortly prior to the issuing of the subpoena, Mr Fonua conferred with the Solicitor General in relation to the matter and the wording of the subpoena in light of s 67 of the Revenue Administration Act 2021 (“the Act”), which provides, relevantly:

67 Confidentiality

(1) A taxation officer shall keep confidential all documents and information that are, or have been, in the officer's possession or knowledge in connection with the performance of duties under any revenue law.

(2) Nothing in subsection (1) shall prevent a taxation officer disclosing a document or information to the following persons –

(a) another taxation officer for the purposes of carrying out official duties;

(b) a Customs officer for the purposes of carrying out any duty, power, or function under the Customs laws;

(c) the Tax Tribunal or a Court in relation to proceedings under a revenue law;

...

4. Ultimately, on 12 October 2022, the Solicitor General wrote to Mr Fonua in terms that he had obtained instructions from the Ministry (as “his client”) to agree to Mr Tu’ivai being summoned for the purposes of giving evidence as set out above.
5. In November 2022, Ms Mele Mangisi was appointed Deputy CEO for legal within the Ministry. On 23 January 2023, Ms Mangisi wrote to the Court requesting a chambers hearing to raise objections to the subpoena on the basis of the prohibition against disclosure provided by s 67(1) and that this action is not a proceeding under a revenue law for the purposes of the exception in ss (2)(c). The objection was brought to my attention on 7 February 2023 and the matter listed for hearing today.
6. Mr Fonua sought to defend the subpoena on the basis, he submitted, that the questions sought to be asked of Mr Tu’ivai do not fall within the scope of the prohibition in ss 67(1). He further submitted that the court has jurisdiction to issue the summons, as has occurred, and to ensure that this evidence is before the court in the interests of justice.
7. Section 5 of the Supreme Court Act empowers the Court to ensure that all “reasonably obtainable evidence” is available to the Court, to make orders and grant discovery of documents in accordance with the Rules of the Supreme Court and to issue summonses and to subpoena witnesses.
8. There is no issue about the Court’s powers in that regard. What is at issue is the apparent tension between that broad power conferred on the Court and the express provisions of s 67 of the Act.
9. The predecessor provision^[1] which is in relevantly equivalent term was discussed by the Court of Appeal in Friendly Islands Satellite Communications Ltd v Pohiva [2015] TOCA 14. The Court observed:

“[21] ... The key to determining the proper construction of s.57 and therefore the scope of the section's operation are the opening words "all documents and information coming into a taxation officer's possession or knowledge ... shall be confidential". Thus the section focuses only on information or documents which have "com[e] into the ... possession" of a taxation officer. Fairly plainly this concerns documents and information provided by taxpayers as part of the process of assessing tax liability or documents or information gained or obtained by a taxation officer in the course of investigating the tax liability of a taxpayer. There is an obvious public purpose achieved by such a provision. As a broad generalisation, a taxpayer is liable to pay tax on, inter alia, taxable income. There needs to be a process whereby a taxpayer can disclose taxable income without fear that such disclosure will have consequences on the position of the taxpayer beyond the imposition of tax. A classic example would be a taxpayer who was engaged in immoral or even illegal activities generating income. Similar protection has to be provided, for the same reason, to documents or information gained or obtained during the investigation of a taxpayer's affairs.”

10. The Court’s statutory power to ensure that all reasonably obtainable evidence is available to it must be read subject to any other enactment limiting the scope of disclosure of such evidence.
11. In my view, the information sought to be obtained from Mr Tu’ivai as framed by the questions posed in the subpoena does not fall outside the scope of the prohibition in s 67. The information sought to be obtained would necessarily involve him disclosing information in his possession or knowledge in connection with the performance of his duties under revenue law. That is because, in order to ascertain whether Hong Tao Yu was a taxpayer in the relevant period or was an employee of CCECC, Mr Tu’ivai will necessarily be required to examine the Ministry’s records in relation to both Mr Hong Tao Yu and CCECC. Even if the answer to each question was in the negative that would still involve the disclosure of information obtained through the performance of Mr Tu’ivai’s duty under the revenue law namely, an examination of records which are possessed by the Ministry solely for the purposes of the revenue law.
12. The evident intent of the liquidator seeking to subpoena Mr Tu’ivai is understandable insofar as, to date in the proceeding, there have been a number of attempts by the liquidator to obtain objective evidence either from, through or in connection with Mr Hong Tao Yu on these particular issues. Clearly, issuing the subpoena is a reflection of a liquidator’s dissatisfaction with the information obtained to date.
13. However, in my opinion, the summons offends s 67 and must be set aside.
14. Mr Fonua informed the Court that the liquidator has not yet sought for a subpoena to be issued requiring any responsible officer of CCECC to give evidence on these topics. That is something which, in my view, is open to a liquidator to pursue; and, that it has not been done to date also militates against maintaining the subpoena requiring Mr Tu’ivai to give evidence.
15. The alternative course would be to let the subpoena stand and require Mr Tu’ivai to attend court. However, it is highly likely that, in that event, as soon as he is asked any question along the lines of those specified in the subpoena or any other for that matter which requires him to disclose knowledge or information he has obtained through his work as an Ministry officer under the revenue law, he would be required as a matter of law to object to answering the question on the basis of s 67. In other words, there would be no utility in him attending court for that purpose.
16. For those reasons, the witness summons is set aside.

NUKU’ALOFA	M. H. Whitten KC
10 February 2023	LORD CHIEF JUSTICE

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^[1] Section 57 of the 2002 Act.