Bdo Cayman Ltd and Four Others v Governor in Cabinet

JurisdictionCayman Islands
Judge(Mangatal, J.)
Judgment Date07 May 2018
CourtGrand Court (Cayman Islands)
Date07 May 2018
Grand Court (Cayman Islands)

(Mangatal, J.)


M. Imrie and C. La-Rhoda Thomas for the applicants;

P. Bowen, Q.C., M. Brandt and K. Hemans for the respondent.

Cases cited:

(1)Associated Provncl. Picture Houses Ltd. v. Wednesbury Corp., [1948] 1 K.B. 223; [1947] 2 All E.R. 680; (1947), 177 L.T. 641, referred to.

(2)Barclays Mercantile Bus. Fin. Ltd. v. Mawson (Inspector of Taxes),[2004] UKHL 51; [2005] 1 A.C. 684; [2004] 3 W.L.R. 1383; [2005] 1 All E.R. 97; [2005] STC 1; [2004] BTC 414, considered.

(3)Blue Metal Indus. Ltd. v. Dilley, [1970] A.C. 827; [1969] 3 W.L.R. 357; [1969] 3 All E.R. 437, applied.

(4)Foster v. Action Aviation Ltd., [2013] EWHC 2930 (QB), considered.

(5)Graham v. Police Serv. Commn., [2011] UKPC 46, referred to.

(6)Inco Europe Ltd. v. First Choice Distribution, [2000] 1 W.L.R. 586; [2000] 2 All E.R. 109; [2000] 1 All E.R. (Comm) 674; [2000] 1 Lloyd’s Rep. 467; [2000] C.L.C. 1015; (2000), 2 T.C.L.R. 487, referred to.

(7)Ingram v. Inland Rev. Commrs., [1997] 4 All E.R. 395; [1997] STC 1234, dicta of Evans, L.J. considered.

(8)LB Holdings Intermediate 2 Ltd. (Joint Administrators) v. Lehman Brothers Intl. (Europe) (Joint Administrators), [2017] UKSC 38; [2018] A.C. 465; [2017] 2 W.L.R. 1497; [2017] 2 BCLC 149; [2017] BCC 235, considered.

(9)Nottinghamshire & City of Nottingham Fire Auth. v. Gladman Commercial Properties Ltd., [2011] EWHC 1918 (Ch); [2011] 1 W.L.R. 3235, considered.

(10)Pearson v. Primeo Fund, 2017 (2) CILR 75, referred to.

(11)Pepper (Inspector of Taxes) v. Hart, [1993] A.C. 593; [1992] 3 W.L.R. 1032; [1993] 1 All E.R. 42; [1992] STC 898; [1993] I.C.R. 291; [1993] IRLR 33; [1992] BTC 591; [1993] 2 LRC 153, followed.

(12)R. (Edison First Power Ltd.) v. Central Valuation Officer, [2003] UKHL 20; [2003] 4 All E.R. 209, considered.

(13)R. (Health Care Corp.) v. Elmbridge B.C. (1992), 63 P. & C.R. 260; [1991] 3 PLR 63, dicta of Popwell, J. considered.

(14)R. v. Visitors of Hull Prison, ex p. St. Germain, [1979] 3 All E.R. 545; [1979] 1 W.L.R. 1401, referred to.

(15)R. (South Yorks. Transport Ltd.) v. Monopolies & Mergers Commn., [1993] 1 W.L.R. 23; [1993] 1 All E.R. 289; [1993] B.C.C. 111; [1994] E.C.C. 231, dicta of Lord Mustill applied.

(16)R. (Spath Holme Ltd.) v. Environment Secy., [2001] 2 A.C. 349; [2001] 2 W.L.R. 15; [2001] 1 All E.R. 195; (2000), 33 H.L.R. 31, considered.

(17)Robinson v. Northern Ireland Secy, [2002] UKHL 32, dictum of Lord Hobhouse considered.

(18)Savarin v. Williams (1995), 51 W.I.R. 75, referred to.

(19)Standard Commercial, referred to.

(20)Thompson v. Health Servs. Auth., 2016 (1) CILR 93, referred to.

(21)UBS AG v. Revenue & Customs Commrs., [2016] UKSC 13; [2016] 1 W.L.R. 1005; [2016] 3 All E.R. 1; [2016] STC 934; [2016] BTC 11, referred to.

(22)WT Ramsay Ltd. v. Inland Rev. Commrs., [1982] A.C. 300; [1981] 2 W.L.R. 449; [1981] 1 All E.R. 865; [1981] STC 174, referred to.

Legislation construed:

Interpretation Law (1995 Revision), s.4(b):

“. . . words in the singular include the plural, and words in the plural include the singular.”

Trade and Business Licensing Law (2007 Revision), s.3: The relevant terms of this section are set out at para. 14.

s.12: The relevant terms of this section are set out at para. 15.

s.14: The relevant terms of this section are set out at para. 15.

Schedule: The relevant terms of the Schedule are set out at para. 16.

Accountants — licences — fees — under Trade and Business Licensing Law (2007 Revision), accountancy firm (with more than 5 accountants) to pay licence fee under Schedule, Item 2 (i.e. per firm fee) — not also required to pay fee under Item 1 (i.e. per accountant fee) — required to pay both fees under Trade and Business Licensing Law 2014

The applicants sought judicial review of decisions of the Governor in Cabinet.

The Trade and Business Licensing Law (2007 Revision) provided in s.12 that every person carrying on a trade or business mentioned in the Schedule, unless exempted under s.3, had to take out an annual licence in accordance with the Law. Section 14 required an application for a renewal of a licence to be accompanied by the fee set out in the Schedule. The Schedule provided in Item 1, “Accountant,” that a fee of $2,000 was to be paid for each professional member of the business. Item 2 provided that “Accountancy firms” were to pay a fee based on the size of the firm, with firms of 1–5 accountants being exempt, firms of 6–10 accountants and other professionals paying $20,000, firms of 11–15 paying $40,000 and so on. (The category of “accountancy firm” and the per firm fee had been introduced by a 2002 Revision.)

The applicants were accountancy firms carrying on business in the Cayman Islands. The Trade and Licensing Board required the applicants to pay a fee of $2,000 for each professional member of their businesses as defined by Item 1, as well as a fee pursuant to Item 2 of the Schedule based on the size of their firms, and claimed such payments dating backfor past periods. The applicants’ appeals were dismissed by the respondent, the Governor in Cabinet, who considered both fees to be payable. The applicants, on the other hand, claimed that only one fee was payable by them, namely the per firm fee in Item 2.

The 2007 Law was repealed by the Trade and Business Licensing Law 2014. The 2014 Law expressly provided that accountancy firms were to pay the per accountant fee in addition to the per firm fee.

The applicants were granted leave to apply for judicial review of the decisions of the respondent. The applicants sought judicial review on three grounds: (1) unlawfulness, on the basis that the respondent made an error of law; (2) unreasonableness/irrationality, on the basis that the decision was plainly wrong and therefore so unreasonable that no reasonable decision-maker could have made it; and (3) breach of natural justice, as the respondent had refused to allow the applicants to be heard or make submissions, contrary to the principles of procedural fairness. The applicants sought the following relief: (a) an order of certiorari to quash the decision; (b) a declaration that they were not liable to pay a fee of $2,000 under Item 1 of the Schedule for each accountant that they employed in addition to the per firm fee under Item 2 calculated by reference to the number of accountants and other professionals within the firm; (c) a declaration that the term “Accountant” in Item 1 of the Schedule did not include accountants who had already been counted within the number of accountants or other professionals for determining the per firm fee payable by accountancy firms; (d) a declaration that the applicants were not required to pay any additional fees and were entitled to refunds of the overpayments of any per accountant fee paid in respect of their licence renewals between 2002 and 2012; (e) costs; and (f) further and other relief.

The applicants submitted that the proper approach to statutory interpretation was that, first, if the legislation was unambiguous, the court must apply it; secondly, if the legislation appeared ambiguous, the court should construe it by reference to internal aids; thirdly, if that were insufficient, the court would look to external aids such as the Interpretation Law (1995 Revision) or other linked legislation; and fourthly, if the above were insufficient, the court could turn to other external aids. As the respondent did not contend that there was any ambiguity or uncertainty in the relevant provisions, the court did not need to and should not look to any aids to statutory interpretation and the respondent’s approach was wrong. On the ordinary meaning of the Schedule and ss. 12 and 14 of the Law, the only fee payable was the per firm fee, which interpretation was confirmed by relevant extracts in Hansard. To the extent that the 2007 Law required them to pay two fees, it breached the principle of doubtful penalization.

The respondent submitted inter alia that the applicants’ approach to statutory interpretation was misconceived. In particular, it was submitted that with the exception of reports of proceedings in Parliament, which were subject to special rules, both internal and external aids to construction could be considered regardless of whether there was any ambiguity inthe grammatical or literal meaning of an enactment. This purposive approach had displaced the literal approach contended for by the applicants. On both a literal and purposive interpretation, two fees were payable by the applicants.

Held, quashing the respondent’s decision:

(1) The legislature had intended to charge accountancy firms that were not exempt only one fee for their trade or business, namely the per firm fee set out in Item 1 of the Schedule to the Trade and Business Licensing Law (2007 Revision). The court had had regard to the relevant statutory provisions construed in their context, the statutory purpose of the 2007 Law as a whole and Items 1 and 2 of the Schedule in particular, and all internal and external aids including admissible Hansard reports. An interpretation of the 2007 Law as imposing such substantial increases by way of per firm bands yet at the same time, without express language such as appeared in the 2014 Law, requiring the per accountant fee also to be paid, would be illogical and arbitrary. The respondent had erred in its construction of the correct meaning of the 2007 Law and of the fees payable by the applicants. The decision was unlawful and the court was bound to interfere. It would declare that the applicants were not required to pay any additional fees in respect of their trade and business licence renewals between 2002 and 2012 (paras. 205–211).

(2) When an administrative body such as the respondent was tasked with an assessment of law, it must carry out such an assessment correctly. The test was not one of Wednesbury unreasonableness. Correctness, rather than reasonableness, was required. In order to...

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