Press Summary (English)

Press Summary (Chinese)

FACV NO. 5 OF 2023

[2023] HKCFA 36

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 5 OF 2023 (CIVIL)

(ON APPEAL FROM CACV NO. 278 OF 2021)

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JUDGMENT

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Chief Justice Cheung:

1. I agree with the judgment of Madam Justice McLachlin NPJ.

Mr Justice Ribeiro PJ:

2. I agree with the judgment of Madam Justice McLachlin NPJ.

Mr Justice Fok PJ:

3. I agree with the judgment of Madam Justice McLachlin NPJ.

Mr Justice Lam PJ:

4. I agree with the judgment of Madam Justice McLachlin NPJ.

Madam Justice McLachlin NPJ:

A. Introduction

5. The issue in this case is whether a sum of HK$1,765,821 (“ Sum ”) paid as damages by the Hospital Authority (“ HA ”) to the Taxpayer (“ Taxpayer ”) for standing by for work on rest days, statutory and public holidays, is taxable as salaries tax.

6. The Sum arose in this way. The Taxpayer argued that he (and other doctors in the same position) were entitled to rest days, statutory and public holidays pursuant to sections 17 and 39 of the Employment Ordinance, Cap 57 (“ EO ”), and by being on call they were deprived of this entitlement. This Court agreed in the judgment rendered on 20 October 2009 (“ CFA Judgment ”) and damages were assessed by Reyes J for the Taxpayer’s loss of rest days, statutory and public holidays from 17 March 1996 to 1 October 2005.

7. The history of these proceedings is as follows. The Commissioner of Inland Revenue (“ CIR ”) assessed salaries tax on the Sum under section 8 of the Inland Revenue Ordinance, Cap 112 (“ IRO ”). The Taxpayer filed an objection. The Deputy Commissioner of Inland Revenue affirmed the salaries tax assessment on 5 December 2018. The Taxpayer appealed to the Board of Review, which by its decision on 24 June 2020 upheld the determination of the Deputy Commissioner. On 27 April 2021, Anthony Chan J of the Court of First Instance granted leave to appeal against the decision of the Board of Review and allowed the Taxpayer’s appeal (“ HCIA Judgment ”). The CIR appealed this decision. By judgment issued on 22 February 2023, the Court of Appeal dismissed the CIR’s Appeal (per Kwan VP and Cheung JA, G Lam JA dissenting). On 11 May 2023, the Court of Appeal granted leave to appeal to this Court.