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In re Logan Ltd [2014] FJHC 769; Civil Action 127.2014 (24 October 2014)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION
Civil action No. 127 of 2014

IN THE MATTER of LOGAN LIMITED

AND

IN THE MATTER of Section 28(7) of the Tax Administration Decree 2009

Appearance: Ms Lemaki N with Ms Malani R, Legal Officers of the Petitioner
Mr Solanki B for the Respondent

Date of Judgment: 24 October 2014

JUDGMENT

1. An application pursuant to Section 28(7) of the Tax Administration Decree 2009 was made by the Petitioner FIJI ISLANDS REVENUE and CUSTOMS AUTHORITY (FIRCA) and sought the following orders:

(a) For the sale of the property in any manner to be determined by the Petitioner;

(b) For the appointment of a Receiver of the rents, profits or income thereof;

(c) For the payment of the amount of the charge and the cost of the Petitioner out of the proceeds of the sale or out of the rents, profits or income; and

(d) The Chief Registrar to sign the Transfer documents if the taxpayer's property is sold.

2. The Petitioner had registered a Charge No. 754373 on the property of the Taxpayer on 17 January 2012 on Housing Authority Lease No. LS/4297/6/VD (marked as "VDB") stated in the Affidavit in Support filed by Visvanath Das the National Manager of the Debt Management Unit of the Petitioner. This petition was filed seeking orders on the said property as stated in the paragraph 1 of this Judgment.

3. The Petitioner's Affidavit states all recovery measures taken have proven to be futile and on 8 May 2008 Demand Notice was issued to the taxpayer (marked as "VDC").

4. On 10 May 2012, the Petitioner issued a letter the taxpayer that the Petitioner is petitioning the court for the enforcement of the charge to recover tax pursuant to Section 28(7) of the Tax Administration Decree.

5. On 3 January 2013 further Demand Notice was issued (marked "VDE"), on 20 January 2014 an amended Charge was registered on the property. It was further stated the taxpayer was given enough grace period to make payments and it was failed to do so.

6. Section 28(7) of the Tax Administration Decree 2009 states:

"28 – (2) The CEO may lodge for registration any Charge or place a Caveat on the real property subject to the Charge by depositing with Registrar of Titles a Certificate under the hand of the CEO setting forth the description of the property charged and the amount of tax payable and the Registrar of Titles must, without fee, register the certificate as if it were a "registrable instrument under law"

The Petitioner had registered the Charge on 20 January 2014 pursuant to Section 28(2).

7. The Taxpayer Logan Limited filed an Affidavit in Opposition sworn by Pauline Baledrokadroka dated 18 June 2014. The Logan's Limited's position was that there was a judgment pending in Case No. HBT 7 of 2013 and the application by the Petitioner is premature. I also refer to the paragraph 6 of my Judgment in Case No. HBT 7 of 2013 delivered today and I reproduce the said paragraph in this Judgment:

"6. Prejudice caused to the Respondent

6.1 On this issue Learned Tribunal in the paragraph 12 of its decision had stated (Copy Record page 84)

"12. – Since the Respondent has not filed any Affidavit in Reply, there are no factual materials before the Tribunal to show whether the Respondent will be impacted or suffer prejudice if this application is granted. Nevertheless, the Applicant says that pursuant to Section 21(3) of the Tax Administration Decree 2009, an objection or appeal does operates as a stay of recovery of taxes and the Respondent is not encumbered from proceeding with its debt recovery actions if the extension of time is granted by this Tribunal. Therefore, there is no prejudice caused to the Respondent. Furthermore, the Respondent would have maintained tax files relating to the Applicant and they would be capable of putting a defence to any appeal that would be lodged by the Applicant considering that the delay is only 8 months."

There is no Affidavit filed by the Respondent in Response. However, the Appellant had stated in its submissions filed in the Tribunal that pursuant to Section 21(3) of the Tax Administration Decree 2009 an objection or appeal does not operate as a stay of recovery of taxes and such an appeal is not an encumbrance to debt recovery action by the Appellant. Having stated that before the Tribunal the Appellant had obtained an Interim Order against the Recovery action filed by the Respondent in Case No. HBC 127 of 2014. In fact, the Appellant's conduct is questionable on the said position, non disclosure in the said case and the Appellant had misrepresented the facts. By obtaining the said Order in Case No. HBC 127 of 2014, great prejudice is being caused to the Respondent by delaying the recovery action. The Appellant's conduct does not warrant any redress from this court.

In the Affidavit dated 18 June 2014 filed on the same day it was stated in the paragraph 24:

"24. Also if the Order is granted to sell the property and if the same is sold before a judgment is delivered, it would be extremely prejudicial to the Respondent in the event the judgment was favorable to the Respondent. In that case, Logan would not be able to recover the said property once it is sold to a third party."

This position is contrary to the submissions made in the Tribunal (Refer paragraph 12 of the written submissions filed by the Appellant and paragraph 12 of the Decision of the Tribunal). The Appellant's intentions are clearly established that is to delay the recovery action which is prejudicial to the Respondent."

8. The Judgment in the said Case No. HBT 7 of 2013 is delivered today 24 October 2014 dismissing the application for Review out of Time. As such taxpayer Logan Limited's application cannot sustain, this action.

9. Orders of the Court

(a) The Orders (a); (b); (c); and (d) as prayed in the Petition dated 8 May 2014 granted;

(b) The Taxpayer Logan Limited is Ordered to pay summarily assessed cost of $1,500.00 to the Petitioner within 30 days of this Judgment.

Delivered at Suva this 24th Day of October 2014.

C. Kotigalage
JUDGE