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[2022] 1 LNS 1461
thelaw (law23)
Universiti Utara Malaysia
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DALAM MAHKAMAH PERSEKUTUAN MALAYSIA DI
PUTRAJAYA
(BIDANG KUASA RAYUAN)
[RAYUAN SIVIL NO.: 01(f)-9-07/2021(B)]
ANTARA
PEMUNGUT DUTI SETEM ... PERAYU
DAN
LEE KOY ENG (NO. K/P: 550105-10-5586) (sebagai Pentadbir kepada harta pusaka Tan Kok Lee @ Tan Chin Chai, si mati) ... RESPONDEN
DIDENGAR BERSAMA DALAM MAHKAMAH PERSEKUTUAN MALAYSIA DI PUTRAJAYA SEMAKAN PERMOHONAN SIVIL NO.: 08(R)-2-02/2022(B)
ANTARA
LEE KOY ENG (NO. K/P: 550105-10-5586) (sebagai Pentadbir kepada harta pusaka Tan Kok Lee @ Tan Chin Chai, si mati) ... PEMOHON
DAN
PEMUNGUT DUTI SETEM ... RESPONDEN
[Dalam Mahkamah Rayuan Malaysia Bidangkuasa Rayuan Rayuan Sivil No: B-01(A)-335-07/
Antara
Pemungut Duti Setem ... Perayu
Dan
Lee Koy Eng (No. K/P: 550105-10-5586) (sebagai Pentadbir kepada harta pusaka Tan Kok Lee @ Tan Chin Chai, si mati) ... Responden]
[Dalam Perkara Saman Pemula No: BA-14-1-03/2019 & BA-14-2- 07/ Di Mahkamah Tinggi Malaya di Shah Alam
Antara
Lee Koy Eng (No. K/P: 550105-10-5586) (sebagai Pentadbir kepada harta pusaka Tan Kok Lee @ Tan Chin Chai, si mati) ... Perayu
Dan
Pemungut Duti Setem ... Responden]
CORAM: ROHANA YUSUF, PCA HASNAH MOHAMMED HASHIM, FCJ MARY LIM THIAM SUAN, FCJ
Some factual background
[4] The respondent’s claim started when the appellant imposed ad valorem stamp duty on Forms 14A executed by the respondent together with one Mr Tan, as co-administrators of the estate of Mr Tan Kok Lee @ Tan Chin Chai who died intestate on 17.5 leaving three beneficiaries, namely the respondent who is the deceased’s widow and their two children. The deceased owned five properties which under a deed of family arrangement dated 2.10, the two children agreed to inter alia distribute those five properties solely to their mother. A Court order dated 20.12 was issued to vest those properties on the respondent. Pursuant to the vesting order, the co-administrators were required to execute instruments of transfer, Forms 14A under the National Land Code to affect the transfer of the five properties to the respondent.
[5] By virtue of section 36(1) of the Stamp Act 1949 [Act 378], the appellant imposed ad valorem stamp duty on those instruments of transfer, assessing the amount payable under item 66(c) in the First Schedule to Act 378 as the transfer was treated as a ‘release or renunciation by way of gift’. The respondent disagreed and asked for a review under section 38A, claiming that the transfer should be assessed under item 32(i) where the amount is RM10 and not under item 66(c).
[6] The review was dismissed by the appellant. The respondent then invoked her right of appeal under section 39(1) and filed two separate appeals; which appeals were later consolidated as one. Meanwhile, as required by section 39, the respondent paid the stamp duty as assessed by the appellant.
[7] On 20.12, the High Court allowed the appeal. The respondent’s appeal to the Court of Appeal was later dismissed. On
28.6, the Federal Court granted leave to appeal on three questions of law posed by the appellant.
Appealability of an appeal by way of case stated under section 39 of the Stamp Act 1949
[8] We understand at the time of the application for leave to appeal, the matter of appealability of this appeal was raised by learned counsel for the respondent as a preliminary objection in opposition to the application for leave under section 96(a) of the Courts of Judicature Act 1964 [Act 91]. After hearing submissions, that preliminary issue was dismissed. In opposition to the respondent’s application for review of that grant of leave, the appellant has raised inter alia the matter of res judicata. We want to place on record that the matter of jurisdiction is not properly the subject of res judicata. If the Court has no jurisdiction, it has no jurisdiction and despite the grant of leave, the issue of j urisdiction always remain open for the Court hearing the substantive appeal, to relook at the issue. There are more than enough authorities to that effect
- see for instance, Badiaddin Mohd Mahidin & Anor v Arab Malaysian Finance Bhd [1998] 2 CLJ 75; Capital Insurance Bhd v Aishah bte Adbul Manap & Anor [2000] 4 MLJ 65; Raphael Pura v Insas Bhd & Anor [2003] 1 MLJ 513; Government of India v Petrocon India Ltd [2016] 3 MLJ 435; Martego Sdn Bhd v Arkitek Meor & Chew Sdn Bhd & another appeal [2019] MLJU 742; Asia Pacific Higher Learning Sdn Bhd (registered owner and licensee of the higher learning institution Lincoln University College) v. Majlis Perubatan Malaysia & Anor [2020] 2 MLJ
[9] Consequently, we have ample jurisdiction to hear this preliminary issue.
[10] In order to address the matter of appealability of this appeal, we
together with any fine or penalty which may have been paid in consequence thereof, shall be ordered by the Court to be repaid to the appellant, with or without costs as the Court may determine.
(5) If the assessment or additional assessment of the Collector is confirmed the Court may make an order for payment to the Collector of the costs incurred by him in relation to the appeal.
[11] In real terms, any appeal under section 39 is always invoked by the person paying the stamp duty and not by the Collector; we cannot envisage an appeal by the Collector himself against his own decision. Although the notice of appeal is lodged at the High Court and thence categorised as an appeal, section 39 provides the appealing party the right to require the Collector to state and sign a case, setting forth the question upon which is opinion was required, and the decision made by him. Where that right is invoked, the Collector states the case, setting out the question upon which the Court’s opinion is required, and the Collector’s decision on that question. When the case stated is ready, a copy is sent to the appealing party and the case may then be set down for hearing by the High Court. These steps were followed in this appeal.
[12] As a case stated, the High Court is not required to hear evidence and make findings on factual evidence heard. The nature of a case stated is well-explained in the following cases and we feel it timely to rem ind ourselves what exactly a case stated entails despite its ancient roots. The proper appreciation of what a case stated is necessary as it then attends to the myriad of related issues as to conduct of the case stated at the High Court and more significantly, the jurisdiction of the High Court that is invoked. As we will soon see, there has been a lack of proper and due understanding of what a case stated means and entails that has, to a large extent, caused much confusion to the state of law as we now hav e.
[13] Interestingly, in Lee Yee Sheng & Anor v. Commissioner of Inland Revenue [2008] 2 HKC 436, the Court of Final Appeal, Hong Kong called on a relook at this system or process of case stated, describing it as an “anachronism”:
“.. case stated procedure arose out of circumstances that have long gone. It is now easily overlooked that appeal was not a common law remedy:
Commissioner for Railways (NSW) v Cavanough (1935) 53 CLR 220 at 225. It is the product of statute. Under the common law, legal defects in the conduct of cases had to be remedied by the writ of error or the bill of exceptions or motions for a new trial or arrest of judgment. (Conway v R (2002) 209 CLR 203 at 209, Australian Iron and Steel Ltd v Greenwood (1962) 107 CLR 308 at 315-317) and later by the Case Stated procedure. That procedure probably had its origins in the practice of nisi prius judges referring disputed questions of law to their brethren at Westminster for informal discussion and advice: see Conway v R (2002) 209 CLR 203 at 209-210. In days when tribunals and courts seldom had access to transcripts, where there were no appeals and where lay tribunals needed advice on questions of law, the Case Stated procedure no doubt served a useful purpose. But times and circumstances change. The Case Stated procedure now seems an anachronism. Certainly, it creates delay, takes up the time of tribunals and parties and increases the expense of conducting litigation. Often enough, dissatisfaction with the contents of the Case Stated leads to interlocutory litigation. An appeal, limited to questions of law, avoids these delays, expense and potential for interlocutory litigation. The chief
sought to be raised by the Case Stated, but in that event it will be necessary for the Case to be remitted to the Commissioners themselves for further findings. It is the primary facts so found by the Commissioners that they should set out in the Case Stated as having been “admitted or proved”.
From the primary facts admitted or proved the Commissioners are entitled to draw inferences: such inferences may themselves be inferences of pure fact, in which case they are as unassailable as the Commissioners’ findings of a primary fact but they may be, or may involve (and very often do), assumptions as to the legal effect or consequences of primary facts, and these are always questions of law upon which it is the function of the High Court on consideration of a Case Stated to correct the Special Commissioners if they can be shewn to have proceeded upon some erroneous assumption as to the relevant law. It is therefore desirable that in a Case Stated the Special Commissioners should set out in a separate paragraph from that which contains their findings of primary facts such inferences as they have drawn from those primary facts in the process of arriving at their decision, so that the Court may be able to identify the true nature of the inferences: viz – whether they are pure inferences of fact or whether they involve assumptions as to the legal effect or consequences of fact; and, in the latter event, what those assumptions were.”
[16] The Federal Court in Director-General of Inland Revenue v. Rakyat Berjaya Sdn Bhd [1984] 1 MLJ 248 also explained that-
“Appeals from the decisions of the Special Commissioners in tax cases are made by way of case stated under the Income Tax Act,
1967 Schedule 5, paragraph 34. The paragraph states clearly that any appeal is on a question of law. Hence, pure findings of fact may not be challenged on an appeal. However, the court has clear and undoubted jurisdiction to reverse a decision on questions of law. The term “question of law” includes the correctness of (a) pure statements of law (e. as to the correct interpretation of a statutory provision), and (b) the inferring of a conclusion from the primary facts (where the process of inference involves assumptions as the legal effect or consequences of the primary facts).”
[17] The Federal Court further explained that “the power of the court to interfere is quite limited where the findings of the Special Commissioners are basically findings of facts. The court will interfere only if there is no evidence to justify the finding or where they have applied erroneous tests in arriving at their conclusions or have drawn a wrong inference on the facts or have misdirected themselves in law...”
[18] Thus, when we read the Federal Court decision in Collector of Stamp Duties v. Ng Fah In & Ors [1981] 1 MLJ 288, we must do so with caution. The issue of how a case stated ought to have been conducted, the ambit of the Court’s jurisdiction did not arise and was thus not addressed. At page 291, the Federal Court noted that the High Court judge had taken evidence in order to come to a decision on the value of the land which was subject to the imposition of ad valorem stamp duty. The High Court judgment is reported together with the judgment of the Federal Court at pages 288 – 290 and it is quite apparent that a full-blown trial had taken place at the High Court, despite the case stated process.
[19] The Courts should not be unduly troubled by this understanding of limitation on its powers when exercising its jurisdiction in a case stated.
“... the only purpose of the case stated was to facilitate the court to answer the stated questions on the basis of facts as stated. There is no burden of proof on any party as the issues to be decided are issues of law.
[15] In our view, the Judge has adopted the wrong approach. Whilst his approach would have been completely justified if these proceedings had been ordinary adversarial proceedings with respect to disputed issues of fact, a case stated is a different kind of court proceedings. A case stated is an established forensic device whereby questions of law are referred to the court for determination on stated facts on the basis that the facts are true. For this reason, the circumstance that the vendor is not a party in the proceedings is not material to the case stated. If the stated facts are not sufficient to enable the court to answer the questions referred to it, then the court should direct that the case stated be amended to include the necessary additional facts for the questions to be answered. The court should not dismiss it on the ground that inadequate facts have been stated or another interested party has not been made a party to the proceedings. The case stated states an issue or issues of law between the stated parties.”
[22] While the above observations were made in the context of the tax regime where the decisions of the Special Commissioners are appealed upon through the case stated mechanism, we find the principles as discussed apply equally to the appeal by case stated process stipulated under section 39 of Act 378. Although section 39 talks about the Collector identifying or setting forth the question upon which the opinion of the High Court is required, and the Collector’s decision on that
question, without specifying that the question set out is a question of law, the question is necessarily one of law having regard to the case stated process. This is fortified when we turn to the other provisions in section 39. For instance, the High Court is required to assess the duty chargeable in the event it forms the opinion that the instrument in question is chargeable with duty. Where the Court opines that the assessment or additional assessment by the Collector is erroneous, any excess paid shall be ordered to be repaid to the appellant – see sections 39(3) and (4).
[23] These reminders on how case stated proceedings are to be conducted, particularly the fact that the High Court is tasked with fact finding but instead is solely required to answer what really is a question of law posed, must be well heeded and followed. Should there be any insufficiency of facts, the case stated ought to be sent back to the Collector for clarification and for further gathering of evidence; it is not a trial before the High Court.
[24] It is the failure to understand what a case stated is that has led to the misunderstanding of the particular jurisdiction under which the High Court is exercising when hearing a case stated. While there is a right of appeal, it is a limited right of appeal. It is limited by statute in that only a question or issue may be sent to the High Court for determination.
[25] The problem or confusion is compounded when the case stated is sent to the High Court. Correctly, it should have been by way of an originating motion since it only concerns a question of law. However, under the new Rules of Court 2012, the originating process of an originating motion has been deleted. Under Order 5, all originating processes are now either by writ or by originating summons. From what we see in the records before us, the case stated was lodged as an appeal. It is this manner in which the appeal by way of case stated was lodged at
given by way of an originating summons setting out the grounds of the appeal and supported by an affidavit, and if the Court so directs at the hearing of the appeal, by way of oral evidence.
[28] This originating mode is consistent with section 29 of the Courts of Judicature Act 1964 [Act 91] which provides that “all civil appeals from a subordinate court shall be by way of rehearing”; guided of course, by the principles of appellate intervention as established through caselaw.
[29] However, this is not the position for appeal by way of a case stated procedure. As elaborated earlier, the case stated procedure does not involve the High Court making any inquiry as to facts. The facts would be as found by the Collector and as stated. The High Court’s sole function in a case stated is to answer the question(s) p osed. That being so, the case stated from the Collector under section 39 ought to have been filed at the High Court by way of an originating motion. In view of the present Rules of Court 2012, that originating process is no longer available. The case stated ought to have been filed by way of an originating summons. Unfortunately, and as pointed out earlier, it was not so filed, lending to the state of confusion insofar as the matter of what jurisdiction of the High Court has been invoked when dealing with the question of law posed in the case stated. Although the case stated was filed as an appeal; this does not alter the true nature of proceedings before the High Court. The case stated here was posed to determine the question of-
“Sama ada duti setem ke atas Memorandum Pindahmilik (Borang 14A) tersebut hendaklah ditaksir di bawah peruntukan item 32(e) atau item 66(c) Jadual Pertama, Akta Setem 1949”.
[30] When the High Court hears this case stated, it only answers that question as posed. While the High Court is empowered to make orders
and vary the sums already ordered by the Collector, the High Court does so in exercise of its original jurisdiction. It does not sit in appeal. Consequently, the case stated is appealable to this Court, and this Court is vested with jurisdiction to hear this appeal after leave was granted on the questions posed.
[31] For all the reasons stated we dismiss the application in 08(R) -2- 02/2022(B) and affirm the decision of this court in granting the said leave questions.
Dated: 7 July 2022
(MARY LIM THIAM SUAN)
Federal Court Judge Malaysia
Counsel:
For the appellant - Hazlina Hussain, Ridzuan Othman & Mohamad Asyraf Zakaria; Deputy Revenue Solicitor Jabatan Undang-Undang Lembaga Hasil Dalam Negeri Malaysia Menara Hasil Aras 16 Persiaran Rimba Permai Cyber 8, 63000 Cyberjaya Selangor
For the respondent - Thayalan S/O Muniandy, Theomus Foo, Abigail Kung & Teaw Zhen Yang; M/s Chambers of Jason Chew Peguambela & Peguamcara No. 32A-1, Lorong Batu Nilam 3A Bandar Bukit Tinggi 41200 Klang Selangor
[2022] 1 LNS 1461
Course: thelaw (law23)
University: Universiti Utara Malaysia
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