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IN THE
SUPERIOR COURT OF JUDICATURE
IN THE
SUPREME COURT
ACCRA – A.D.
2010
CHAPEL HILL
SCHOOL LTD. VRS THE ATTORNEY
GENERAL THE COMMISSIONER
INTERNAL REVENUE CIVIL MPTION
NO. J7/10/2009 5TH
MAY, 2010
CORAM
ATUGUBA,
J.S.C. (PRESIDING) AKUFFO (MS),
J.S.C. DATE-BAH (DR), J.S.C
OWUSU (MS), J.S.C.
BAFFOE-BONNIE, J.S.C. GBADEGBE,
J.S.C. AKOTO- BAMFO (MRS), J.S.C.
Review –
Review jurisdiction - Income
tax - Educational institution
of a public character - tax
assessments - Exemption from
tax - Article 133 of the
Constitution – Whether or not
the circumstances were
exceptional and that in the
interest of justice there should
be a review.
HEADNOTES
Chapel Hill
School, was originally
established as the Takoradi
Chapel Hill Preparatory School
in December 1962 by fourteen
people who subscribed its
Instrument of Establishment and
Governance as founders. The
instrument of incorporation
purported to establish it as a
corporation sole. The appellant
school was subsequently
incorporated under the Companies
Act, 1963 (Act 179), as a
company limited by guarantee.
However, in 2001, the appellant
was incorporated as a company
limited by shares under the said
Companies Act, 1963 (Act 179)
The Internal Revenue Service
(hereafter the second
respondent), assessed the
appellant tax for the years 1994
to 2004 in the sum of
Gh¢39,864.40. Subsequently, the
appellant’s objection to that
assessment was turned down by
the Commissioner of Internal
Revenue. The appellant Chapel
Hill School therefore appealed
to the High Court, Sekondi, in
July 2005, seeking a declaration
that the appellant was an
educational institution of a
public character and thus its
income was exempt from tax. It
also sought an order for the
annulment of the tax assessments
for the years 1994 to 2004.
Even though the High Court found
that the appellant school was an
educational institution serving
the people of Takoradi and its
environs; and that the school
was for the use and benefit of
the public, the court held that,
that finding alone, did not make
the appellant a school “of a
public character” The High
Court therefore dismissed the
appeal. Upon a further appeal
to the Court of Appeal, that
court also dismissed the
appeal. Being aggrieved by the
dismissal of its appeal by the
two lower courts, the appellant
brought the instant appeal
before the Supreme Court On
these facts this court held (1)
that the respondent was until it
converted into a company limited
by shares, an educational
institution of a public
character and (2) that therefore
its income is exempted from
tax. In this review application
the applicant contests the
second limb of this court’s
decision.
HELD
MAJORITY OPINION
This is what
the Court did. It did not
purport to add anything to or
take anything away from the
statute, and certainly we did
not attempt to apply any
principles of equity to a fiscal
statute. Consequently, because
the Appellant has failed to
demonstrate in any cogent manner
that the decision of the court
has given rise to any
exceptional circumstances that
have resulted in a miscarriage
of justice, I join those of my
brethren who are minded to
dismiss the application for
review.
I am
reluctant, for the reasons set
out above, to revisit the pros
and cons of these alternative
interpretations. My reason is
that to go into the merits of
the case again would be to
entertain an illegitimate
appeal. It is sufficient to
state that the Supreme Court’s
decision to adopt the one
interpretation rather than the
other cannot fairly be
characterized as a
“misconstruction”. It is
certainly not such a
misconstruction as to attract
the review jurisdiction of this
Court.
I have meticulously examined the
application before us and regret
to say that I am unable to
conclude that this court
committed any error in its
Judgment and therefore renders
it a proper case for review. The
whole application was grounded
on a wrong premise as to what
the import of our judgment is.
The application is therefore
misconceived and same is hereby
dismissed.
MINORITY OPINION
The earlier
construction of this court in
this case which is sought to be
reviewed by this application,
operates to render the
qualifying words “...other than
income from a business” and
“...in so far as such income is
not derived from a trade or
business carried on by such
institution” in SMCD 5 and Act
592 respectively unduly
restricted in their scope .It is
clear that the misconstruction
will cause serious loss of
revenue to the applicant and
hence a serious miscarriage of
justice. For all these reasons I
would allow this application.
STATUTES
REFERRED TO IN JUDGMENT
Companies
Act, 1963 (Act 179),
1992
Constitution
Rent Act,
1962(Act 220)
Administration of Estates Act,
1961 (Act 63)
Courts Act,
1993 (Act 459),
Chieftaincy
Act, 1971 (Act 370
Internal
Revenue Act, 2000 (Act 592)
Income Tax
Decree, 1975 (SMCD 5).
Supreme Court
Rules, 1996 (C.I. 16).
CASES
REFERRED TO IN JUDGMENT
The
Commissioner of Internal
Revenue; Chapel Hill School v
Attorney-General & Internal
Revenue Service (2009) SC GLR
432
Quartey v
Central Services Co. Ltd.
(1996-97) SC GLR 398
Fosuhene v
Pomaa [1987-88]2 GLR 105 S.C
Practice
Direction (Reviews in the
Supreme Court) (1987-88)2 GLR
274, S.C
Mechanical
Lloyd Assembly Plant v Nartey
[1987-88] 2 GLR 598, SC;
Bisi v Kwayie
[1987-88] 2 GLR 295, SC;
Nasali v Addy
[1989-90] 1 GLR 573, SC;
Quartey v
Central Services Co Ltd
[1996-97] SC GLR 398;
Pianim (No.
3) v Ekwam [1996-97 SC GLR 431
Afranie II v
Qaurcoo (1992)2 GLR 561 S.C
Davis v
Warwick [1943] KB 329, CA;
Sharpe v
Nicholls [1945] KB 152, CA
Parker v
Rosenberg [1947] 1 KB 371, CA
Nasali v Addy
[1987-88]2 GLR 286, SC;
Bisi v Kwayie
[1987-88] 2 GLR 295, SC;
Mechanical
Lloyd Assembly Plant Ltd v
Nartey [1987-88]2 GLR598, SC
Ababio v
Mensah (No. 2)[1989-90]1 GLR
573, SC
Republic v.
High Court Kumasi Ex Parte
Abubakari (No. 3)[2000] SC GLR
45
Republic v
High Court, Kumasi; Exparte
Abubakari (No. 2)[1998-99] SC
GLR 904
Edusei (No.
2) v Attorney-General [1998-99)
SC GLR 753
Koglex Ltd.
No. 2) v Field (2000)SC GLR 175
Koglex Ltd v
Field [1998-99] SC GLR 451
Attorney-General (No. 2) v
Tsatsu Tsikata (No. 2)
[2001-2002] SC GLR 620
Afranie II v
Quarcoo [1992]2 GLR 561 at 609
Hanna Assi
(No. 2) v GIHOC Refrigeration &
Household Products Ltd (No.
2)[2007-2008] SC GLR 16
NTHC Ltd v
Antwi (2009) SC GLR 117
Pattinson v
Finningley Drainage Internal
Board [1970] 2 WLR 622
Director of
Public Prosecutions v Luft
[1976]3 WLR 32
Asare v
Brobbey (1971) 2 GLR 33 C.A
Phillips v
Copping (1935)1 KB 15
The Republic
v High Court (Fast Track
Division) Accra; Ex parte
National Lottery Authority
(Ghana Lotto Operators
Association & Others Interested
Parties) (2009)SC GLR 390
The South
African case of Chancellor,
Master and Schollars of the
University of Oxford v
Commissioner for Inland Revenue,
Republic of South Africa (1996)
58 SATC 45; [1996] (3) 1 All SA
257
Margin v IRC
(1971) AC 739
Cape Brandy
Syndicate v I.R. C [1921] 1 KB
64
BOOKS
REFERRED TO IN JUDGMENT
Ghana Tax Law
Primer, Dr. Benjamin Kunbuor
DELIVERING
THE LEADING JUDGMENT
ATUGUBA,
J.S.C:-
COUNSEL
PETER KORNOR
FOR THE APPLICANT.
JOHN MERCER
FOR THE 2ND
RESPONDENT.
P. G. NAANA
DONTOR CHIEF STATE ATTORNEY FOR
THE 1ST RESPONDENT
.
R U L I N G
_____________________________________________________________________________________
ATUGUBA,
J.S.C:-
This
application for Review raises a
short point but involves
important questions.
The earlier
decision of this court in this
case has been reported, see
In re Assessment of Income Tax
by The Commissioner of Internal
Revenue; Chapel Hill School v
Attorney-General & Internal
Revenue Service (2009) SC
GLR 432. The facts of the case
are as stated in the headnote
thereof as follows:
“The
appellant in this case, Chapel
Hill School, was originally
established as the Takoradi
Chapel Hill Preparatory School
in December 1962 by fourteen
people who subscribed its
Instrument of Establishment and
Governance as founders. The
instrument of incorporation
purported to establish it as a
corporation sole. The appellant
school was subsequently
incorporated under the Companies
Act, 1963 (Act 179), as a
company limited by guarantee.
However, in 2001, the appellant
was incorporated as a company
limited by shares under the said
Companies Act, 1963 (Act 179)
The Internal
Revenue Service (hereafter the
second respondent), assessed the
appellant tax for the years 1994
to 2004 in the sum of Gh¢39,864.40.
Subsequently, the appellant’s
objection to that assessment was
turned down by the Commissioner
of Internal Revenue. The
appellant Chapel Hill School
therefore appealed to the
High Court, Sekondi, in July
2005, seeking a declaration
that the appellant was an
educational institution of a
public character and thus its
income was exempt from tax.
It also sought an order for the
annulment of the tax assessments
for the years 1994 to 2004.
Even though the High Court found
that the appellant school was an
educational institution serving
the people of Takoradi and its
environs; and that the school
was for the use and benefit of
the public, the court held that,
that finding alone, did not make
the appellant a school “of a
public character” The High
Court therefore dismissed the
appeal. Upon a further appeal
to the Court of Appeal, that
court also dismissed the
appeal. Being aggrieved by the
dismissal of its appeal by the
two lower courts, the appellant
brought the instant appeal
before the Supreme Court.”
On these
facts this court held (1) that
the respondent was until it
converted into a company limited
by shares, an educational
institution of a public
character and (2) that therefore
its income is exempted from
tax. In this review application
the applicant contests the
second limb of this court’s
decision.
Principles
for entertaining Review
applications:
The Review
jurisdiction of this court is
laid down in article 133 of the
Constitution as follows:
“133.
Power of the Supreme Court to
review its decisions
(1)
The Supreme Court may review any
decision made or given by it on
such grounds and subject to such
conditions as may be prescribed
by Rules of Court.
(2)
The Supreme Court, when
reviewing its decisions under
this article, shall be
constituted by not less than
seven Justices of the Supreme
Court.”
Pursuant to
this provision r.54 of the Rules
of this court, C.1.16 of 1996
provides thus:
“54.
Grounds for review
The Court may
review a decision made or given
by it on the ground of
(a)
exceptional circumstances
which have resulted in a
miscarriage
of justice; or
(b)
the discovery of new and
important matter or evidence
which, after the exercise
of due diligence, was not within
the applicant’s knowledge or
could not be produced by the
applicant at the time when the
decision was given.”
The
application in this case is not
based on r.54 (b) relating to
the discovery of new evidence
but on the preceding r (a)
thereof. This provision itself
is a codification of the common
law principle earlier laid down
judicially. The typical
rendition of this principle is
as laid down in Quartey v
Central Services Co. Ltd.
(1996-97) SC GLR 398 where at
399 Abban C.J. stated:
“A review of
a judgment is a special
jurisdiction and not an
appellate jurisdiction conferred
on the court; and the court
would exercise that special
jurisdiction in favour of an
applicant only in exceptional
circumstances. This implies
that such an applicant should
satisfy the court that there has
been some fundamental or basic
error which the court
inadvertently committed in the
course of considering its
judgment; and which fundamental
error has thereby resulted in a
gross miscarriage of justice.
These principles have been
stated over and over again by
this court. Consequently, a
losing party is not entitled to
use the review process to
re-argue his appeal which had
been dismissed or to use the
process to prevail upon the
court to have another or a
second look at his case.”
The Reign of
the Stringent principle
The Review
jurisdiction was originally
judicially asserted by this
court as an inherent
jurisdiction in Fosuhene v
Pomaa [1987-88]2 GLR 105 S.C
and pursuant to that the guiding
principles for its exercise were
set out in Practice Direction
(Reviews in the Supreme Court)
(1987-88)2 GLR 274, S.C and the
stringent principle referred to
earlier was therein laid down
and followed consistently. See
Mechanical Lloyd Assembly
Plant v Nartey [1987-88] 2
GLR 598, SC; Bisi v Kwayie
[1987-88] 2 GLR 295, SC;
Nasali v Addy [1989-90] 1
GLR 573, SC; Quartey v
Central Services Co Ltd
[1996-97] SC GLR 398; Pianim
(No. 3) v Ekwam [1996-97 SC
GLR 431;
Modification
of the Stringent Principle
In Afranie
II v Qaurcoo (1992)2 GLR 561
S.C the Court restated the
Review jurisdiction thus:
“(2)
Under the law the only ground
for the review of a decision of
the Supreme Court was that the
circumstances were exceptional
and that in the interest of
justice there should be a review.
Although what exactly
constituted exceptional
circumstances had not been spelt
out, on the authorities the
court had found exceptional
circumstances where (a) the
circumstances were of a nature
as to convince the court that
the judgment should be reversed
int he interest of justice and
indicated clearly that there had
been a miscarriage of justice;
or (b) the demands of
justice made the exercise
extremely necessary to avoid
irremediable harm to the
applicant; or (c) a
fundamental and basic error
might have inadvertently been
committed by the court resulting
in a grave miscarriage of
justice; or (d) a decision had
been given per incuriam for
failure to consider a statute or
a binding case law or a
fundamental principle of
practice and procedure relevant
to the decision and which would
have resulted in a different
decision; or (e) the applicant
had sought for a specific relief
which materially affected the
appeal and had argued grounds in
support but the appellate court
had failed or neglected to make
a decision on it. The
misconstruction of the words of
a statute upon which the
decision of a case depended was
such an error of law that it
would deprive the court of
jurisdiction to decide the
matter. Under section
17(1)(h) of the Rent Act,
1962(Act 220) it was only
when a plaintiff could bring
himself within the provisions of
that section that the court
would be clothed with
jurisdiction to make an order
for possession. The plaintiff
had to establish to the
satisfaction of the court that
he was the landlord and he
reasonably required the premises
for his own business purposes.
Although section 36 of Act 220
defined a landlord to include
any person deriving title under
original landlord, it could not
be said that an executor or
administrator who derived his
title from the court by the
grant of probate or letters of
administration also derived his
title from the original landlord
under the definition in Act 220,
otherwise an executor or
administrator would have the
power to make a lease or other
disposition of the property
before grant. Even though under
section 1(1) of the
Administration of Estates Act,
1961 (Act 630) the property of
the deceased vested in his
executor or administrator it was
only “on trust” and “for
purposes of administration” and
would not merge in any estate or
interest vested in him in his
own right. Accordingly, the
power of an executor or
administrator to distrain for
rent under section 71 of Act 63
and participate in the running
of the estate on commercial
basis did not empower executors
and supposed trustees who had no
beneficial interest in
testator’s estate to sue for
possession of the testator’s
business under section 17(1)(h)
of act 220. In the instant
case, therefore, the plaintiffs
were not entitled to maintain
the action for recovery of
possession because they were not
landlords, and were also not
owners of the AAM’S Hotel
business for which they sought
Hotel de France as an annex.
Not being owners of the AAM’S
Hotel business, they could not
reasonably establish that they
required Hotel de France for
their own business purpose.
Since the plaintiffs failed to
satisfy the court as to the
statutory requirements provided
under section 17(1) (h) of Act
220, they were not entitled to
an order of possession.
Accordingly, since the
Supreme Court erroneously
construed the words of section
17(1) (h) of Act 220 so as to
bring the plaintiffs within its
ambit, they acted outside or in
excess of the court’s
jurisdiction. In the
result, its decision had had to
yield to a review. Davis v
Warwick [1943] KB 329,
CA; Sharpe v Nicholls [1945]
KB 152, CA and Parker v
Rosenberg [1947] 1 KB 371,
CA applied. Nasali v Addy
[1987-88]2 GLR 286, SC; Bisi
v Kwayie [1987-88] 2 GLR
295, SC; Mechanical Lloyd
Assembly Plant Ltd v Nartey
[1987-88]2 GLR598, SC and
Ababio v Mensah (No.
2)[1989-90]1 GLR 573, SC cited.
In Republic
v. High Court Kumasi Ex Parte
Abubakari (No. 3)[2000]
SC GLR 45, the judgment of which
was delivered on 15 December
1999 the sole question as to
whether the matter was a cause
or matter affecting chieftaincy
and which the earlier bench had
answered in the affirmative fell
for reconsideration before the
Review panel which reversed the
earlier decision. As captured
in the headnote thereof:
“In 1994 the long-serving and
acclaimed Moshiehene of Kumasi
died. A dispute as to his
successor erupted between two
rival candidates: Alhaji
Ibrahim on the one hand, and
Alhaji Abubakari on the other.
The dispute was referred to the
Asantehene, who appointed a
panel of arbitrators to settle
the matter amicably. The
arbitrators resolved the dispute
in favour of Alhaji Abubakari.
However not satisfied with the
decision of the arbitrators,
Alhaji Ibrahim sued in the High
Court, Kumasi for, inter alia, a
declaration that he, the
plaintiff, “is the Head of the
Moshie Community in Kumasi”,
duly selected, installed and
recognised as such by the
Asantehene. The defendant to
the action, Alhaji Abubakari,
denied the claim and also
counterclaimed for the same
relief, namely that he “is the
Head of the Moshie Community in
Kumasi.” The trial High Court
judge, on the evidence, found
that the plaintiff, Alhaji
Ibrahim, had been validly
installed as the Moshiehene of
Kumasi. He therefore gave
judgement on 31 July 1996 in his
favour.
Dissatisfied
with the decision of the trial
judge, the defendant brought
an application in the Supreme
Court for an order of certiorari
to quash the decision on
jurisdictional grounds, namely
that the matter determined by
the High Court constituted a
cause or matter affecting
chieftaincy in the Moshie
Community in Kumasi: and
that the High Court had no
jurisdiction to determine the
same under the Courts Act, 1993
(Act 459), s 57, and the
Chieftaincy Act, 1971 (Act 370),
s. 15(1). The Supreme Court,
by a three to two majority
decision, granted the
application on that ground:
(see Republic v High Court,
Kumasi; Exparte Abubakari (No.
2)[1998-99] SC GLR 904).
The plaintiff therefore
brought the instant application
for a review of the majority
decision on grounds of want of
jurisdiction. The court
noted that: (i) on the
undisputed evidence before the
trial High Court, the
qualification for candidacy of
headship of the Moshie Community
in Kumasi was not based on blood
or any royal lineage; and (ii)
the applicant for certiorari,
Alhaji Abubakari, ie the
defendant, in his statement of
defence filed at the trial High
Court, had admitted that the
headship of the Moshie Community
was neither a stool or a skin.
Held,
granting the application for a
review- Ampiah JSC dissenting:
(1) an application for a review
founded on want of jurisdiction
(as in the instant case) fell
within the ambit of exceptional
circumstances resulting in a
miscarriage of justice in terms
of rule 54 (a) of the Supreme
Court Rules, 1996(CI 16),
because jurisdiction was so
fundamental in the adjudication
of any dispute. Consequently,
whenever it was established that
an adjudicating authority had no
jurisdiction in the matter it
purported to determine, its
proceedings and judgment were
liable to be quashed. Dicta
Bamford-Addo and Acquah JJSC in
Edusei (No. 2) v
Attorney-General [1998-99)
SC GLR 753 at pp 757 and 776
respectively applied.
Per Edward
Wiredu JSC, concurring.
The quashing of the decision
of the High Court, Kumasi,
by the majority decision of the
court on grounds of want of
jurisdiction was fundamentally
wrong and has occasioned a
serious miscarriage of justice
and ought to be reviewed. The
applicant has demonstrated that
there has been a basic error of
law committed by the majority of
the court in its judgment and
this error, which is basic and
fundamental, has resulted in a
grave miscarriage of justice.
Per Ampiah
JSC dissenting.
In the present application, no
new evidence has been adduced to
warrant a re-consideration of
the issue. The issue of
jurisdiction cannot be said to
raise exceptional circumstances
to entitle this court to
overturn its decision on the
issue.
(2) On the
undisputed evidence or facts as
found by the trial judge, the
question of headship of the
Moshie Community in Kumasi did
not fall within the definition
of “chief” under article 277 of
the 1992 Constitution. The
legal definition required that
for a candidate to qualify as a
chief, he must hail from the
“appropriate family and
lineage”, ie be a member of the
family or lineage from which the
candidate must be selected, and
his nomination, election, etc
must be in accordance with the
established customary law and
practice governing the
position.”(e.s)
Again in
Koglex Ltd. No. 2) v Field
(2000)SC GLR 175, dated 16
February 2000 the facts as
stated in the headnote are as
follows:
“Some time
before 4 September 1985, the
managing director of the
plaintiff company entered into
negotiations with the defendant
for a lease of her landed
property. The parties agreed on
the payment of an annual rent of
¢600,000 as rent advance for
five years. The plaintiff
company paid also the payment of
the sum of ¢200,000 as part of
the agreed rent advance as at 5
September 1985, and the
defendant issued receipt for
same. Subsequently, the
plaintiff delivered to the
defendant a draft agreement
embodying the agreed terms of
the lease. On 11 September
1985, the defendant’s solicitor
wrote to the plaintiff, inviting
the plaintiff to a meeting in
respect of the intended lease.
Attached to the letter was a
handwritten memorandum of the
solicitor, paragraph 4(ii) of
which raised certain issues for
discussion by the parties.
At the
conclusion of the meeting on 14
September 1985, the parties
agreed that the terms of the
lease as discussed and agreed
upon were to be embodied in a
final lease document to be
prepared within a week by the
solicitor of the defendant.
The plaintiff company, believing
that all the terms of the lease
had been concluded at the
meeting, sent its workmen to the
landed property pending the
completion of the lease
document. However, the
defendant caused the plaintiff’s
workmen to be thrown out of the
property. Furthermore, the
solicitor for the defendant, in
a letter dated 30 September 1985
to the plaintiff’s solicitor,
denied that all the terms of the
lease had been agreed upon at
the 14 September meeting and, in
fact, further stated that the
defendant was “no longer
interested in any further
negotiations regarding the
plaintiff’s offer to take the
lease of the said premises.”
However, the letter said nothing
about the ¢200,000 rent advance
paid by the plaintiff.
Consequently,
the plaintiff, on 15 October
1985, sued in the High court,
Accra for, inter alia, an order
for specific performance of the
lease. The trial High Court
dismissed the claim for specific
performance on the sole ground
that issue 4(ii), raised in the
handwritten memorandum, had not
been discussed and agreed upon
at the 14 September 1985
meeting. The plaintiff
appealed from that decision to
the Court of Appeal, which by a
majority decision affirmed the
judgment of the High Court to
the effect that, on the
evidence, there was no concluded
contract between the parties for
which specific performance could
be decreed. The plaintiff
further appealed to the Supreme
Court which also, by a majority
decision (see Koglex Ltd v Field
[1998-99] SC GLR 451), affirmed
the majority decision of the
Court of Appeal. The
plaintiff, therefore, brought
the instant application for a
review of the majority decision
of the Supreme Court on the
ground of exceptional
circumstances resulting in a
miscarriage of justice.”
On these
facts this court held as per
holding (3) of the headnote as
follows:
“(3) In the
instant case, the finding by
the trial judge that the parties
had not discussed and,
therefore, not reached an
agreement on the issue raised in
paragraph 4(ii) of the
handwritten memorandum (and
which was the sole ground in
refusing to grant the
plaintiff’s claim for specific
performance) was patently
erroneous and unsupported by the
evidence on record. On the
contrary, there was, on the
evidence, positive admission by
the defendant and her witnesses
that all the issues raised in
the handwritten memorandum had
been discussed and agreed on at
the meeting attended by the
parties. The trial judge had
committed a fundamental error in
finding otherwise. The
error had thus occasioned a
grave miscarriage of justice to
the plaintiff in that the
judgment would have gone in
favour of the plaintiff if the
trial judge had not committed
such a fundamental error.
The decision of the majority of
the Court of Appeal, which had
also failed to detect the error
and which had been similarly
affirmed by the majority of the
Supreme Court, had thus
occasioned a grave miscarriage
of justice to the
plaintiff-applicant. The
decision would, therefore, on a
review be reversed.”
This blaze
reached its peak in
Attorney-General (No. 2) v
Tsatsu Tsikata (No. 2)
[2001-2002] SC GLR 620 dated 26
June 2002 which reversed the
earlier decision of this court
that the Fast Track Division of
the High Court had been
unconstitutionally established.
In his focal judgment at
634-635, Acquah JSC (as he then
was), after reviewing the
previously stringent principles
governing the Review
jurisdiction of this court
continued thus:
“But as Francois JSC cautioned
in Ribeiro v Rebeiro (No.
2) (Supra) at 143:
“Our attempts
to halt the abuse of the review
jurisdiction of this court by
frowning upon attempts to turn
the exercise into another avenue
for appeal, must be matched
by an equally genuine
willingness for introspection.
And where a fundamental error
has occurred, to be prepared to
admit and correct it.
Otherwise the exercise of review
would only amount to a
confirmation of a previous stand
and the mere endorsement of a
majority view.” (The
emphasis is mine).
Aikins JSC
made the same point in
Afranie II v Quarcoo [1992]2
GLR 561 at 609 thus:
“...it is
essential that this court
accommodates a re-examination of
the judge’s previous
thinking...with a view to
correcting a fundamental mistake
that has occurred. If this
is not done, the exercise of the
review power would end in
futility and would only serve to
rubber stamp or confirm a
previous stance of the court
which may result in a
miscarriage of justice.”
However, in
the final analysis it is
important to appreciate that
the review jurisdiction being a
discretionary one, the decision
to grant or not to grant
ultimately depends, as rightly
held in Mechanical Lloyd’s case
(supra), on the facts and
circumstances of each and as
dictated by the ends of
justice.”
The trend has
continued though once in a while
echoes of the former stringent
approach are still heard.
However in Hanna Assi (No. 2)
v GIHOC Refrigeration &
Household Products Ltd (No. 2)[2007-2008]
SC GLR 16 this court reversed
its earlier decision that
without a counterclaim the High
Court could not grant a relief
to a defendant. In all these
cases the same issues were
successfully reargued.
Most recently
in Antwi v NTHC Ltd CM
J7/3/09 this court (coram:
Sophia Akuffo, Dr. Date-Bah,
Sophia Adinyira, R C Owusu,
Dotse, Anin Yeboah and
Baffoe-Bonnie JJSC) unanimously
reviewed its previous judgment
reported as NTHC Ltd v Antwi
(2009) SC GLR 117 by adjusting
its award of interest in terms
of duration and currency because
it had overlooked certain
material facts which were before
the court at the time of its
earlier decision.
From all the
foregoing I hold that the Review
jurisdiction of this court is
exercisable upon grounds of the
commission of very serious and
important errors of fact or law
upon which the judgment of the
court is based and which
uncorrected would occasion a
serious miscarriage of justice.
As Professor Ocran JSC said at
38 in respect of the Tsatsu
Tsikata (No. 2) case, supra,
“Adzoe
JSC’s explanation of an
inadvertent error in that case
makes me even more uncomfortable
with this standard of review.
He wrote at page 742 (supra)
that when an error has been
committed inadvertently: “this
implies ...that the
erroneous decision must have
been made when no due
consideration was given to the
issues before the court.” In
other words, if the ordinary
panel considers a matter but
commits a fundamental error,
with their eyes and ears fully
open, and their wits fully by
them, this is still insufficient
for review.”(e.s)
Is there
Reviewable error in this case?
Certainly
there is reviewable error in
this case. The Afranie v.
Quarcoo case supra has held
that the misconstruction of a
statute which affects the
court’s decision is a reviewable
ground. The perceived error in
the Koglex v Field case
supra was far inferior to that
of the misconstruction of a
statute and yet the Review
succeeded. A statute is a
solemn sovereign act and judges
have professed themselves to be
servants of the Legislature.
The servant who realises that he
has disobeyed the master and
deliberately abstains from
remedying the situation is
certainly not a servant. In
Pattinson v Finningley Drainage
Internal Board [1970] 2 WLR
622 at 624 Bean J quoted the
following passage from Maxwell
on Interpretation of Statutes,
(12 ed) (1969) with approval:
“A later
statute may repeal an earlier
one either expressly or by
implication. But repeal by
implication is not favoured by
the courts. ‘Forasmuch’,
said Coke, ‘as Acts of
Parliament are established with
such gravity, wisdom and
universal consent of the whole
nation, for the advancement of
the commonwealth, they ought not
by any constrained construction
out of the general and ambiguous
words of a subsequent Act, to be
abrogated.” (The emphasis is
mine).
In
Director of Public Prosecutions
v Luft [1976]3 WLR 32, HL at
41 the House of Lords held that
a long standing wrong
construction of the words of a
statute in pari materia
is no bar to its correction.
All this
upholds the principle in
Asare v Brobbey (1971) 2 GLR
33 C.A. in which at 338 Archer
J.A. (as he then was) delivering
the judgment of the Court of
Appeal stated thus: “In
Phillips v Copping (1935)1
KB 15 at p.21 Scrutton L.J. said
“it is the duty of the Court
when asked to give a judgment
which is contrary to a statute
to take the point although the
litigants may not take it.”
On 22/7/2009
this court in The Republic v
High Court (Fast Track Division)
Accra; Ex parte National
Lottery Authority (Ghana Lotto
Operators Association & Others
Interested Parties) (2009)SC
GLR 390 unanimously held that a
court has no jurisdiction to
grant an injunction restraining
a person from carrying out
statutory functions pending
appeal. At 402 Dr. Date-Bah JSC
forcefully stated thus:
“I agree
that the order made on 1 April
2009 by his Lordship Asante J
granting the interested
parties an interlocutory
injunction pending an appeal
should be brought to this court
and be quashed. The learned
judge acted in obvious excess of
his jurisdiction. No judge
has authority to grant immunity
to a party from the consequences
of breaching an Act of
Parliament. But this was the
effect of the order granted by
the learned judge. The judicial
oath enjoins judges to uphold
the law, rather than condoning
breaches of Acts of Parliament
by their orders. The end of the
judicial oath set out in the
Second Schedule of the 1992
Constitution is as follows: “I
will at all times uphold,
preserve, protect and defend the
Constitution and laws of the
Republic of Ghana.” This oath
is surely inconsistent with any
judicial order that permits the
infringement of an Act of
Parliament.”
Misconstruction of the Statute
The gravamen
of the applicant’s case for
review of this court’s decision
in this case, reported as
Chapel Hill School v
Attorney-General & Internal
Revenue Service (2009) SC
GLR 432 is that this court
patently misconstrued sections
10 (1) (d) of the Internal
Revenue Act, 2000 (Act 592) and
3(1) (d) of the Income Tax
Decree, 1975 (SMCD 5). They are
as follows:
“10.
Exempt income
(1)
The
following incomes are exempt
from tax:
X X X
(d)
income accruing to or derived
by an exempt organisation
other than income from a
business;”
Section 94 of
Act 592 defines an exempt
organisation as follows:
““exempt
organisation” includes a
person
(a)
who or that is and
functions as
(i)a religious, charitable or
educational institution of a
public character;
X X X
(b)
who or that has been issued
with a written ruling by the
Commissioner currently in force
stating that it is an exempt
organisation; and
(c)
none of whose income or assets
confers, or may confer, a
private benefit, other than in
pursuit of the organisation’s
function referred to in
paragraph (a);”
Section 3(1)
(d) of SMCD 5 provides thus:
“The income
of an ecclesiastical, charitable
or educational institution of a
public character in so far as
such income is not derived from
a trade or business carried on
by such institution” is
exempted from tax.
The crucial
part of this court’s judgment on
this issue is as stated by Dr.
Date-Bah JSC in delivering the
judgment of this court at p.442
of the Report as follows:
“The second
respondent argues that what the
appellant does, namely offering
tuition for fees, out of which
activity it makes a gain or
loss, constitutes a business.
Our comment
on this argument by the second
respondent would be that the
mere fact that what the
appellant does constitutes a
business, does not inevitably
lead to the conclusion that the
activity cannot be exempt from
tax.
If the business concerned is
one that falls within the
purview of the educational
business carried out by an
educational institution of a
public character, then the
income from that business will
qualify for exemption from tax.
The South
African case of Chancellor,
Master and Schollars of the
University of Oxford v
Commissioner for Inland Revenue,
Republic of South Africa
(1996) 58 SATC 45; [1996] (3) 1
All SA 257 illustrates this. In
this case, the South African tax
authorities sought to assess the
South African Branch of the
Oxford University Press to tax
on its business in South
Africa. The South African Tax
Code has a provision on
exemption which is substantially
in pari materia
with the language “of
educational institution of a
public character” which this
court has to construe in this
case. Section 10(1)(f) of the
Income Tax Act, 1962 (Act 58) of
South Africa provides as
follows:
“10(1) There
shall be exempt from tax-
(f) the
receipts and accruals of all
religious , charitable and
educational institutions of a
public character, whether or
not supported wholly or partly
by grants from public
revenue...”
The South
African appellate court held
that Oxford University Press was
part of Oxford University and
had no independent legal
personality. The person whose
liability to tax was being
assessed was thus Oxford
University, which the court held
to be indubitably an educational
institution of a public
character. The fact that the
activities of Oxford University
Press South Africa appeared
commercial, did not deprive
Oxford University of its
exemption from tax in respect of
the proceeds from the business
from South Africa. Corbett CJ
explained the court’s decision
thus:
“In order
to apply section 10(1)(f) it is
necessary in each case to
categorize the person (ie
taxable entity) who has received
gross income or to whom
gross income has accrued, ie to
determine whether or not such
person is a religious,
charitable or educational
institution of a public
character. In the present case
such categorization presents no
difficulty. The appellant is
manifestly an educational
institution of a public
character. This is not
disputed. And that, one would
imagine, is the end of the
matter.”
The
respondent’s contention which
found favour with this court is
that once an organisation is an
exempt organisation its income
from the function that makes it
an exempt organisation is
pro tanto exempt from
income tax. Indeed the
contention is that an exempt
organisation is not taxable at
all. That is the South African
position from s.10 (1) (f) of
their Income Tax Act, 1962 (Act
58).
However, in
his invaluable book, Ghana Tax
Law Primer, Dr. Benjamin
Kunbuor, at p. 11 cites Lord
Donovan in Margin v IRC
(1971) AC 739 to the effect that
tax legislation has to be
strictly construed thus:
“First the
words are to be given their
ordinary meaning. They are not
to be given some other meaning
simply because their object is
to frustrate legitimate tax
avoidance devices...Secondly,
‘one has to look merely at what
is said. There is no room for
any intendment. There is no
equity about tax. There is no
presumption as to tax. Nothing
is to be read in, nothing is to
be implied. One can only look
fairly at the language used’
(Per Rowlatt, J, in Cape Brandy
Syndicate v I.R. C [1921] 1 KB
64). Thirdly, the object of the
construction of a statute being
to ascertain the will of the
legislature, it may be presumed
that neither injustice nor
absurdity was intended. If,
therefore, a literal
interpretation would produce
such a result, and the language
admits of an interpretation,
which would avoid it, then such
an interpretation may be
adopted. Forthly, the history
of an enactment and the reasons,
which led to it being passed may
be used as an aid to its
construction”
At p. 26 the
learned author states thus:
“The
Source Rule
The
importance of the source rule or
“source doctrine” as is often
called in taxing statutes
resides in the fact that
income tax is imposed on income
from various specific sources.
The corollary to this is that if
a source ceases to exist in the
year of assessment there is
theoretically no basis upon
which tax can be imposed......
Ghana’s
income tax jurisdiction is
basically source i.e. it is the
source which determines the
jurisdiction to tax.”
Quite clearly
then since the respondent does
not dispute the fact that its
educational activity constitutes
a business that should end the
matter. Since sections 3(1)(d)
of SMCD 5 and 10(1)(d) of Act
592 subject income derived from
the business of an exempt
organisation to tax it is a
plain serious infraction of the
statute to contend that an
exempt organisation is free from
tax despite these clear
provisions. However an exempt
organisation’s income that does
not emanate from business will
be free from tax. Examples of
such exempt income in my opinion
will include, endowment fund,
which the respondent admits is
one of its sources of income,
gifts, income from investment
etc; but certainly not income
from business. As stated at p.17
of Dr. Kumbuor’s book,
“(b) Income
as a legal concept
Ghana,
very much like other
commonwealth jurisdictions,
leaves the task of defining
income to the courts. Income
tax Acts merely provide for a
series of definitions of various
types of incomings, which are
declared to be either taxable or
not taxable. They do not
attempt to define income and
the rules only generally define
the source of income. Income
tax base is therefore whose or
what incomes are chargeable with
tax.
Various rules
are laid down for computing the
amount of income liable to tax
and decisions of the courts
contribute to the law on the
subject.”
One, inter
alia, has to roam over the Act
to ascertain what constitutes
income and its sources. See for
examples s.7 relating to “Income
from a business,” s.8 relating
to “Income from an employment”
and s.9 “Income from an
Investment.” These incomes will
not except as to section 7 land
an exempt organisation in tax
liability. S.94 deals only with
the status of exempt
organisation, but not non
liability to tax, which is dealt
with generally under s.10 and
ss.3(1)(d) of SMCD 5 and 10
(1)(d) of Act 592, as far as
relevant to this case. The
taxing provisions in s.31 (d) of
SMCD 5 and 10 1(d), Act 592
should not be read as if the
word “other” or some such
wording preceded the word
“business”. The earlier
construction of this court in
this case which is sought to be
reviewed by this application,
operates to render the
qualifying words “...other
than income from a business”
and “...in so far as such
income is not derived from a
trade or business carried on by
such institution” in SMCD 5
and Act 592 respectively unduly
restricted in their scope.
It is clear
that the misconstruction will
cause serious loss of revenue to
the applicant and hence a
serious miscarriage of justice.
For all these
reasons I would allow this
application.
W.A. ATUGUBA
JUSTICE OF
THE SUPREME COURT
AKUFFO (MS),
JSC:-
I have deeply
reflected on the arguments and
submissions made in support of
this application and have not
been able to glean any
justification for granting the
application herein. I,
therefore, agree with those of
my brethren who are of the view
that this application be
dismissed as not showing any
grounds for review within the
terms of Rule 54 of the Supreme
Court Rules, 1996 (C.I. 16).
There is really no need to
expatiate extensively on the
circumstances under which the
court may, appropriately
exercise its review
jurisdiction. Enough has been
written about it in some of the
opinions read today and I do not
intend, in this application to
say more than that our review
jurisdiction is one which has
and must be used with the
greatest circumspection and
within very narrow parameters.
According to
the Applicant, in its Reply to
the Respondent’s Statement of
Case, each of the courts that
have considered this case had
‘inadvertently’ failed to apply
‘a statute which is at the
core of the matter in
controversy, namely Section
10(1)(d) and how it affects the
business income of the
Respondent’. The Applicant,
therefore, submitted that the
decision of this court,
delivered on 22nd
July 2009, would have been
different had the court,
adverted its mind to the said
section, in which case the court
would have concluded that an
exempt organisation ‘of whatever
description is liable to pay tax
on its business income’. Indeed,
had this Court failed to take
into account any relevant
provision of any applicable
statute, we would have been duly
clothed, pursuant to Rule 54, to
exercise our review jurisdiction
in this matter. However, the
most cursory reading of the
judgment read on behalf of the
Court by my esteemed brother Dr.
Date-Bah, JSC, shows that, not
only was the said provision
taken into account, but, rather,
in view of the opposing views
between the parties as to its
scope, meaning and import,
(particularly the expression
‘income from any business’) it
was interpreted and the court
gave it a meaning that is
clearly within the confines of
the provisions of the statute.
The fact that such meaning turns
out to be more in line with that
put forward by the Respondent
herein cannot amount to a
miscarriage of justice to the
Applicant.
There is the
need to stress, in particular,
that, contrary to the
Applicant’s assertion, in no
part of the judgement did the
court hold that ‘by reason of
being an ‘exempt organisation
the Appellant was exempt from
tax on all types of income....’;
this is rather stretching the
clear import of the words used.
What the judgement did state in
this regard was that:-
“... the mere
fact that what the Appellant
does constitutes a business does
not inevitably lead to the
conclusion that the activity
cannot be exempt from tax. If
the business concerned is one
that falls within the purview of
the educational business carried
out by an educational
institution of a public
character, then the income of
that business will qualify for
exemption from tax.”
Thus, it
remains up to the Applicant to
carry out its functions, as
usual, and subject the
Respondent’s streams of income
to scrutiny and earmark the
appropriate sources in
accordance with law.
The fact that
the Applicant does not like the
interpretation this court has
placed on section 10 (1) (d)
does not amount to an error, or
any other exceptional
circumstance, and is not
sufficient reason to review the
interpretation. In the
interpretation of statutes,
whatever be the philosophical
concepts guiding the Court in
its decision, it is still
required to read every provision
as part of the whole statute.
Therefore, the Court is also
required to read the statute in
such a way as to give effect to
every part thereof so as not to
do damage to or ignore any
provision or part hereof. This
is what the Court did. It did
not purport to add anything to
or take anything away from the
statute, and certainly we did
not attempt to apply any
principles of equity to a fiscal
statute.
Consequently,
because the Appellant has failed
to demonstrate in any cogent
manner that the decision of the
court has given rise to any
exceptional circumstances that
have resulted in a miscarriage
of justice, I join those of my
brethren who are minded to
dismiss the application for
review.
S.A.B. AKUFFO
(MS)
JUSTICE OF
THE SUPREME COURT
DR. DATE-BAH,
JSC:-
I do not
consider that this case deserves
any lengthy treatment. I think
that it represents a classic
case of a losing party seeking
to re-argue its appeal under the
garb of a review application.
It is important that this Court
should set its face against such
endeavour in order to protect
the integrity of the review
process. This court has
reiterated times without number
that the review jurisdiction of
this court is not an appellate
jurisdiction, but a special
one. Accordingly, an issue of
law that has been canvassed
before the bench of five and on
which the court has made a
determination cannot be
revisited in a review
application, simply because the
losing party does not agree with
that determination. This
unfortunately is in substance
what the current application
before this court is.
In Chapel
Hill School Ltd. V The
Attorney-General and the
Commissioner, Internal Revenue
Service (Civil Appeal No.
J4/25/2009), this court made the
following determination:
“The Second
Respondent argues that what the
Appellant does, namely offering
tuition for fees, out of which
it makes a gain or loss,
constitutes a business.
Our comment
on this argument by the Second
Respondent would be that the
mere fact that what the
Appellant does constitutes a
business does not inevitably
lead to the conclusion that the
activity cannot be exempt from
tax. If the business concerned
is one that falls within the
purview of the educational
business carried out by an
educational institution of a
public character, then the
income from that business will
qualify for exemption from tax.”
The Applicant
disagrees with this
determination and has therefore
brought this review application,
arguing that if the Court had
adverted its mind to section
10(1)(d) of Act 592, this would
have materially affected its
decision and it would have come
to the conclusion that an exempt
organization of whatever
description is liable to pay tax
on its business income. This
argument is disingenuous since
the concluding sentences of the
Supreme Court’s judgment are as
follows:
“The Court of
Appeal was thus partly in error
in affirming the trial Court’s
holding that the appellant is
not an “educational institution
of a public character” within
the meaning of section 3(1)(d)
of the Income Tax Decree, 1975
(SMCD 5) and sections 10(1)(d)
and 94 of the Internal Revenue
Act, 2000 (Act 592). The appeal
is thus upheld in part.”
The point is
that the Supreme Court did not
act per incuriam and
indeed did advert its mind to
section 10(1)(d) of Act 592.
Merely because the Applicant
does not like, or agree with,
the decision reached by the
Supreme Court is not sufficient
reason for that decision to be
reversed on a review
application. The Applicant has
in my view failed to establish
any exceptional circumstances
resulting in a miscarriage of
justice and therefore I would
dismiss its application.
I would like
to reiterate the view that I
expressed in Gihoc
Refrigeration (No. 1) v Hanna
Assi (No. 1)[2007-2008]SCGLR
1 at pp. 12-13 that:
“Even if the
unanimous judgment of the
Supreme Court on the appeal in
this case were wrong, it would
not necessarily mean that the
Supreme Court would be entitled
to correct that error. This is
an inherent incident of the
finality of the judgments of the
final court of appeal of the
land. The brutal truth is that
an error by the final court of
the land cannot ordinarily be
remedied by itself, subject to
the exception discussed below.
In other words, there is no
right of appeal against a
judgment of the Supreme Court,
even if it is erroneous. As
pithily explained by Wuaku JSC
in Afranie v Quarcoo [1992]
2GLR 561 at pp. 591-592:
“There is only one Supreme
Court. A review court is not an
appellate court to sit in
judgment over the Supreme
Court.”
However, in
exceptional circumstances and in
relation to an exceptional
category of its errors, the
Supreme Court will give relief
through its review
jurisdiction. The grounds on
which this Court will grant an
application for review have been
clearly laid out in the case
law. Notable in the long line
of relevant cases are
Mechanical Lloyd Assembly Plant
v Nartey [1987-88] 2 GLR
598; Bisi and Others v
Kwayie [1987-88] 2 GLR 295;
Nasali v Addy [1987-88]
2GLR 286; Ababio v Mensah
(No.2) [1989-90] 1 GLR 573;
Quartey v Central Services
Co. Ltd. [1996 – 97] SCGLR
398; Pianim (No. 3) v Ekwam
[1996-97] SCGLR 431; Koglex
(Gh) Ltd. v Attieh
[2001-2002] SCGLR
947; and Attorney-General
(No. 2) v Tsatsu Tsikata (No.2)
[2001-2002] SCGLR 620. The
principles established by these
cases and others are that the
review jurisdiction of the
Supreme Court is a special
jurisdiction and is not intended
to provide an opportunity for a
further appeal. It is a
jurisdiction which is to be
exercised where the applicant
succeeds in persuading the Court
that there has been some
fundamental or basic error which
the Court inadvertently
committed in the course of
delivering its judgment and
which error has resulted in a
miscarriage of justice. This
ground of the review
jurisdiction is currently
exercised by the Court pursuant
to rule 54(a) of the Supreme
Court Rules 1996 (CI 16), which
refers to “exceptional
circumstances which have
resulted in miscarriage of
justice.” This is a high hurdle
to surmount.”
The public
interest in avoiding the
protraction of litigation
requires that this Court should
continue to uphold these
principles.
On the
particular facts and statutory
provisions of this case, I wish
to state, for the avoidance of
doubt, that I do not in fact
consider that the panel of five
was in error. There were at
least two competing and
available interpretations of the
provision in question, of which
the Court was aware. The one
interpretation is the literal
one, propounded by the applicant
and now espoused by the learned
President of this Court.
Another was based on the
context, or one could call it
purposive. I am reluctant, for
the reasons set out above, to
revisit the pros and cons of
these alternative
interpretations. My reason is
that to go into the merits of
the case again would be to
entertain an illegitimate
appeal. It is sufficient to
state that the Supreme Court’s
decision to adopt the one
interpretation rather than the
other cannot fairly be
characterized as a
“misconstruction”. It is
certainly not such a
misconstruction as to attract
the review jurisdiction of this
Court.
DR. S.K.
DATE-BAH
JUSTICE OF
THE SUPREME COURT
OWUSU (MS),
JSC:-
Under Article
133 of the 1992 constitution,
the Supreme Court is given power
to review any decision made or
given by it on such grounds and
subject to such conditions as
may be prescribed by Rules of
court.
When
reviewing its decision under
this article, the Supreme Court
shall be constituted by not less
than seven Justices of the
Supreme Court.
Under rule 54
of the Rules of this court, C.
I, 16 of 1996:
“The court
may review a decision made or
given by it on the ground of
Exceptional circumstances which
have resulted in a miscarriage
of Justice; or
(a)
The discovery of new and
important matter or evidence
which, after the exercise of due
diligence, was not within the
applicant’s knowledge or could
not be produces by the applicant
at the time when the decision
was given.”
The present
application is therefore
invoking this special
jurisdiction of the court and
praying for a review of the
Judgment of the court delivered
on the 22nd of July
2009 by which the court allowed
the appeal of the
Appellant/Respondent in this
application, exempting it from
payment of tax as an educational
institution of Public character.
The
Respondent had in the appeal
sought the following reliefs
from the High Court:
1.
A declaration by the court that
Chapel Hill School Limited is an
educational Institution of
public character and thus its
income is exempt from tax.
“An order for the annulment of
the tax assessment for the year
1994 to 2004.
The application was brought
under rule 54(a) as in paragraph
12 of the affidavit in support
of the motion, the Applicant
avers as follows:
“that I have been advised by
counsel and verily believe same
to be true that the matters
deposed to in paragraphs 10 and
11 of this affidavit, constitute
exceptional circumstances
resulting in a miscarriage of
Justice to the commissioner of
Internal Revenue and by
Extension to the Republic of
Ghana, thus necessitating this
application for review.”
Paragraph 7 of the affidavit
states as follows:
“That I have been advised by
counsel and verily believe same
to be true that section 10 (1)
(d) of Act 592 of 2000, exempts
from tax, all types of income of
an exempt organisation except
business income. However the
honorable court erroneously held
that an ‘exempt organisation’
like the appellant/respondent in
this review application, i.e.
Chapel Hill School Limited is
not liable to pay tax on its
business income.”
The Respondent vehemently
opposed the application for the
reason that the application has
not shown any exceptional
circumstance that has occasioned
a miscarriage of Justice within
the context of section 54 of the
Rules of the court to warrant a
review by the court of its
Judgment.
It averred further that there is
no error in the Judgment of the
court and that it has
demonstrated in the statement of
case in reply to that of the
Applicant that the application
is mischievous and misconceived.
What was the Judgment of the
court following which this
application for review was
filed?
On an appeal against the
Judgment of the Court of Appeal
dismissing the appeal of the
Appellant against the Judgment
of the High Court, this court
allowed the appeal in part set
aside the Judgment of the Court
of Appeal and held that –
(1)
The Appellant was until it
converted into a company limited
by shares, an educational
institution of a public
character and therefore
(2)
Its income is exempt from tax.
The
Appellant, Chapel Hill School
Ltd was originally established
as the Takoradi Chapel Hill
Preparatory School in December
1962 by fourteen people who
subscribed its instrument of
Establishment and Governance as
founders. The instrument of
incorporation purported to
establish it as a corporation
sole. The school was
subsequently incorporated under
the companies Act, 1963 (Act
179) as a company limited by
guarantee.
In 2001,
however the school was
incorporated as a company
limited by shares under the same
Act, 179.
For the years
1994 – 2004 the school’s income
tax was assessed by the Internal
Revenue Service, the second
Respondent/Applicant herein as
GH¢39,864.40. The
Appellant/Respondent in this
application objected to that
assessment but the objection was
turned down. The school
appealed to the High Court
seeking the declaration already
referred to and annulment of the
tax assessment.
The High
Court refused the school’s
appeal and on appeal to the
court of Appeal, that court
affirmed the High Court’s
decision that the school was not
an educational institution of
Public Character and therefore
did not qualify to be an “exempt
Organisation” as defined
under section 94 of the Internal
Revenue Act of 2000, Act (592)
which is as follows:
“exempt
organisation” includes a person
(a)
Who or that is and functions as
(i) a religious, charitable
or educational institution of a
public character;
(b)
Who or that has been issued with
a written ruling by the
commissioner currently in force
stating that it is an exempt
organisation; and
(c) None of whose
income or assets confers, or may
confer,
a private
benefit, other than in pursuit
of the organisation’s function
referred to in paragraph (a)”
Under section
10(1) (d) of Act 592, among
others –
“income
accruing to or derived by an
“exempt organisation” other than
income from a business” is
exempt from tax.”
Until the
coming into force of Act 592,
section 167 of which repealed
SMCD 5, section 3 (1) of the
Decree provided that:
“3. - - -
there shall be exempt from tax
the income of an ecclesiastical,
charitable or educational
institution of a public
character in so far as such
income is not derived from a
trade or business carried on by
such institution was exempted
from tax”
In the
instant application, therefore
the applicant has no quarrel
with the court’s decision that
Chapel Hill School until it
converted into Limited Liability
Company was an educational
institution of public
character. What the Applicant
is complaining about that it
terms an error is the court’s
decision that as such
educational institution of
public character, its income is
exempt from tax.
The second
Respondent/Applicant herein has
argued that what the Appellant
does namely offering tuition for
fees, out of which activity it
makes a gain or loss,
constitutes a business.
To this
argument, the court per my
respected brother Dr. Date-Bah
JSC said:
“the
mere fact that what the
appellant does constitutes a
business does not inevitably
lead to the conclusion that the
activity cannot be exempt from
tax. If the business concerned
is one that falls within the
purview of the educational
business carried out by an
educational institution of a
public character, then the
income from the business will
qualify for exemption from tax.”
In this
application, therefore, for the
Applicant to succeed, it must
satisfy this court that in the
appeal, it established before
the court that apart from the
business of offering tuition for
fees out of which it makes a
gain or loss, it carried on
business unrelated to that for
which it is an “exempt
organisation.
In the
Applicant’s statement of case,
it is stated that “the
import of the judgment
is that an exempt
organisation” within the
meaning provided in section 94
of the Internal Revenue Act
2000, Act 592 is exempt from all
tax types. [emphasis mine]
It is upon
this premise that counsel
submits that the court
erroneously held that the
Respondent in this application
is not liable to pay tax on its
business income.
The import of
the judgment as stated by
counsel with due deference to
counsel is a misstatement. The
court had qualified the business
to be business concern that
falls within the purview of the
educational business carried out
by an educational institution of
a public character.
A tax “exempt
organisation” may still
be liable for taxes on its
unrelated business income.”
Unrelated business income is
income from a trade or business
regularly carried on, that is
not substantially related to the
charitable, educational or other
purpose that is the basis of the
organisation’s tax exemption.
In QUARTEY
and others VRS. CENTRAL SERVICES
CO. LTD [1996-97] SCGLR 398
the Supreme Court, dismissing an
application for review,
unanimously held
that:
“the court
would exercise its review
Jurisdiction – being a special
jurisdiction and not an
appellate Jurisdiction – in
favour of an applicant only in
exceptional circumstances. Such
an applicant should satisfy the
court that there had been some
fundamental or basic error –
resulting in a gross miscarriage
of justice which the court
inadvertently committed in the
course of considering its
judgment on hearing the appeal.
Consequently, a loosing party
was not entitled to use the
review process to - - - or to
use the process to prevail upon
the court to have another look
at this case. - - -” [1996-97]
SCGLR 431
In PIANIM
(No. 3) VRS EKWAM AND ANOTHER,
the court had the occasion to
reiterate the distinction
between a review jurisdiction
and the appellate jurisdiction
of the Supreme Court.
per curiam:
“there
is a clear line of distinction
between a review Jurisdiction
and the appellate Jurisdiction
of the Supreme Court. This
court in several decided cases
has made it clear that:
“the review
Jurisdiction is not intended as
a try-on by a party losing an
appeal; neither is it meant to
be resorted to as an emotional
re-action to an unfavourable
judgment.”
See
MECHANICAL LLOYD ASSEMBLY PLANT
LTD VRS NARTEY [1987-88]2 GLR
598
In AFRANIE II
VRS QUARCOO [1992] GLR 561 the
Supreme Court reiterated its
review Jurisdiction in holding 2
as follows:
“Under the
law the only ground for the
review of a decision of the
Supreme Court was that the
circumstances were exceptional
and that in the interest of
justice there should be a
review. Although what exactly
constituted exceptional
circumstances had not been spelt
out, on the authorities the
court had found exceptional
circumstances where
(a)
the circumstances were of a
nature as to convince
the court that the
judgment had been a miscarriage
of justice; or
(b)
the demands of justice made the
exercise extremely necessary to
avoid irremediable harm to the
applicant; or
(c)
a fundamental and basic
error might have inadvertently
been committed by the court
resulting in a grave miscarriage
of justice; or
(d)
a decision had been given per
incuriam for failure to consider
a statute or a binding case law
or a fundamental principle of
practice and procedure relevant
to the decision and which would
have resulted in a different
decision; or
(e)
the applicant had sought for a
specific relief which materially
affected the appeal and had
argued grounds in support but
the appellate court had failed
or neglected to make a decision
on it. The misconstruction of
the words of a statute upon
which the decision of a case
depended was such an error of
law that it would deprive the
court of jurisdiction to decide
the matter.
Under section 17(1) (h) of the
Rent Act, 1962 (Act 220) it was
only when a plaintiff could
bring himself within the
provisions of that section that
the court would be clothed with
jurisdiction to make an order
for possession. The plaintiff
had to establish to the
satisfaction of the court that
he was the landlord and he
reasonably required the premised
for his own business purposes.
Although section 36 of Act 220
defined a landlord to include
any person deriving title under
the original landlord, it could
not be said that an executor or
administrator who derived his
title from the court by the
grant of probate or letters of
administration also derived his
title from the original landlord
under the definition in Act 220,
otherwise an executor or
administrator would have the
power to make a lease or other
disposition of the property
before grant. Even though under
section 1 (1) of the
Administration of Estates Act,
1961 (Act 63) the property of
the deceased vested in his
executor or administrator it was
only “on trust” and “for
purposed of administration” and
would not merge in any estate or
interest vested in him in his
own right. Accordingly, the
power of an executor or
administrator to distrain for
rent under section 71 of Act 63
and participate in the running
of the estate on commercial
basis did not empower executors
and supposed trustees who had no
beneficial interest in
testator’s estate to sue for
possession of the testator’s
business under section 17(1) (h)
of Act 220.
In the instant case, therefore,
the plaintiffs were not entitled
to maintain the action for
recovery of possession because
they were not landlords, and
were also not owners of the
AAM’S Hotel business for which
they sought Hotel de France as
an annex. Not being owners of
the AAM’S Hotel business, they
could not reasonably establish
that they required Hotel de
France for their own business
purpose.
Since the plaintiffs failed to
satisfy the court as to the
statutory requirements provided
under section 17(1) (h) of Act
220, they were not entitled to
an order of possession.
Accordingly, since the Supreme
Court erroneously construed the
words of section 17 (1) (h) of
Act 220 so as to bring the
plaintiff’s within its ambit,
they acted outside or in excess
of the court’s jurisdiction. In
the result, its decision had to
yield to a review.’’
In this application, it is
section 10(1) (d) that the
Applicant is contending has been
erroneously construed by the
court. If indeed the words of
the statute upon which the
Judgment of the court depended
had been misconstrued as counsel
urged upon the court, then the
error would be one for which the
court would exercise its review
Jurisdiction to correct it.
In NASALI VRS ADDY [1987-88] 2
GLR 286, in an application for a
review of a split decision of
the Supreme Court against him,
although the applicant contended
that the majority ignored
relevant authorities and thus
occasioned gross miscarriage of
justice, it was found that that
contention was wrong. The
application was dismissed. The
court held that even though the
Supreme Court had power to
correct its own errors by way of
review, it could not encourage
an application which merely
seeks to re-open the appeal
under the guise of review.
I have meticulously examined the
application before us and regret
to say that I am unable to
conclude that this court
committed any error in its
Judgment and therefore renders
it a proper case for review.
The whole application was
grounded on a wrong premise as
to what the import of our
judgment is. The application is
therefore misconceived and same
is hereby dismissed.
R. C. OWUSU
(MS)
JUSTICE OF
THE SUPREME COURT
BAFFOE-BONNIE, JSC:-
I agree that
the application be dismissed.
P.
BAFFOE-BONNIE
JUSTICE OF
THE SUPREME COURT
GBADEGBE,
JSC:-
In my view
the application does come within
the intendment of rule 54 of the
Supreme Court rules, 1996
(C.I.16). Accordingly, I am in
agreement with those of my
brethren who have come to the
view that the application be
dismissed.
N. S.
GBADEGBE
JUSTICE OF
THE SUPREME COURT
AKOTO-BAMFO
(MRS), JSC:-
I had the
benefit to read beforehand the
opinion of my brother Atuguba,
JSC and I agree with the
conclusion reached by him that
the application be allowed.
V.
AKOTO-BAMFO (MRS)
JUSTICE OF
THE SUPREME COURT
COUNSEL:
PETER KORNOR
FOR THE APPLICANT.
JOHN MERCER
FOR THE 2ND
RESPONDENT.
P. G. NAANA
DONTOR CHIEF STATE ATTORNEY FOR
THE 1ST RESPONDENT.
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