Akeroyd v Attorney General and Tax Commissioner
| Jurisdiction | Bermuda |
| Judgment Date | 06 April 2020 |
| Date | 06 April 2020 |
| Docket Number | Civil Jurisdiction 2019 No 369 |
| Court | Supreme Court (Bermuda) |
[2020] Bda LR 27
In The Supreme Court of Bermuda
Civil Jurisdiction 2019 No 369
Mr P Sanderson for the Applicant
Mr N MacDonald for the Respondents
The following cases were referred to in the judgment:
A v Attorney General [2017] Bda LR 111
Williams v Minister for Home Affairs and Attorney General [2015] Bda LR 67
Attorney-General v Grape Bay Ltd [1998] Bda LR 6
Oliver v Buttigieg [1967] 1 AC 115
Arorangi Timberland Ltd v Minister of the Cook Islands National Superannuation Fund [2016] UKPC 32
Bank Mellat v HM Treasury (No 2) [2013] UKSC 39
National & Provincial Building Society, Leeds Permanent Building Society and Yorkshire building Society v UK (1998) 25 EHRR 127
Bas-Serco v BIU et al [2003] Bda LR 64
Law v Canada (Minister of Human Resources Development) [1999] 1 SCR 497
R v Hughes [2002] 2 AC 259
Constitutional challenge on land tax and stamp duty — Unlawful discrimination between belongers with Bermudian status and those without
JUDGMENT of Subair Williams J
1. This matter comes before the Court on an Originating Summons seeking declaratory relief that provisions in the Land Tax Act 1967 (“the LTA”) and the Stamp Duties Act 1976 (“the SDA”) unlawfully discriminate against ‘non-Bermudian Belongers’ on the grounds of place of origin, contrary to section 12 of the Bermuda Constitution Order 1968 (“the Bermuda Constitution” / “the Constitution”). The Applicant further seeks damages and injunctive relief.
2. The Applicant pleaded that the impugned provisions unlawfully discriminate between, inter alia, classes of persons who possess Bermudian status and those who belong to Bermuda but do not possess Bermudian status. On the Applicant's case, section 3A of the LTA and section 47A of the SDA unlawfully exclude the latter from the special land tax and stamp duty exemptions. These concessions are offered only to persons of a particular age group who own and reside in their primary family homestead and who possess Bermudian status. The Applicant says that these provisions are void under the Colonial Laws Validity Act 1865.
3. The Respondent, on the other hand, contends that the Applicant's case is misconceived as there is nothing constitutionally offensive about reserving the benefit of such tax concessions for benefit of the persons who meet the criteria set out in those provisions.
4. Having heard the able arguments of Counsel for both sides, I reserved my judgment which I now provide with the reasons outlined further below.
5. In an affidavit sworn by the Applicant on 10 September 2019 he stated the following:
“I was born on the 24th December 1949 and am 69 years of age.
On the 6th December 2018, I was naturalised as a British Overseas Territories citizen on the direction of the Bermuda Governor, and so belong to Bermuda pursuant to s.11(5) of the Bermuda Constitution. I exhibit at PA-1 a copy of my certificate of naturalisation.
On the 18th July 2019, I purchased Shoreby House, Newstead Belmont Hills Golf Resort and Spa, 27 Harbour Road, Paget (“Shoreby”). The annual land tax for Shoreby is currently $8,486. Shoreby is currently being renovated, and I intend to take up residence in April 2020.
If I possessed Bermudian status, I would be entitled to apply for tax to be assessed on a special concessionary basis, pursuant to s.3A of the Land Tax Act 1967, from the tax period commencing 1 July 2020 when I intend to be in occupation. The value of the special concessions is currently as much as $1,941 per year, and I should be eligible for the full exemption, as Shoreby exceeds the ARV threshold of $45,500.
Furthermore, if I possessed Bermudian status, I would be eligible to apply for a primary family homestead stamp duty exemption for Shoreby pursuant to s. 47A of the Stamp Duties Act 1976, meaning that stamp duty would not be payable on the value of Shoreby in the event of my death.
I verily believe that discriminating against non-Bermudian Belongers in the operation of special concession for land tax, and the primary family homestead stamp duty exemption is unlawful, and I seek relief from the court in respect of both.”
6. The Respondents filed evidence from the Assistant Tax Commissioner (Stamp Duty), Mr Antoine Lightbourne, who deposed that there is no record of an application from Mr Akeroyd for assessment on a special concessionary basis or for a stamp duty exemption with respect to the Shoreby property.
7. Notwithstanding, Mr Lightbourne explained that the policy objective of the topical concessions: “to give relief to Bermudian families who might own homes after years of hard work but could be described as “asset-rich but cash-poor.” The intention was to protect such Bermudians from losing their homes if they were unable to pay the taxes due. The concessions were not intended to apply to persons who moved to Bermuda from overseas as such persons were expected to have the financial resources to sustain themselves”.
8. Section 11 confers a general protection of freedom of movement. Section 11(5) of the Constitution deems four classes of people to belong to Bermuda (“Belongers”) for the purposes of section 11. The first category is reserved for persons who possess Bermudian status (“status”) (see Part III of the Bermuda Immigration and Protection Act 1956 (“the BIPA 1956”)) and the second group is described under section 11(5)(b):
“… a citizen of the United Kingdom and Colonies by virtue of the grant by the Governor of a certificate of naturalization under the British Nationality and Status of Aliens Act 1914 [1914 c 17] or the British Nationality Act 1948 [1948 c 56] …”
9. For present purposes, I am not concerned with the remaining two categories of Belongers under section 11(5).
10. Sub-sections (1) and (2) under section 12 of the Constitution safeguard a protection from discriminatory laws and discriminatory performances by a public office or authority:
“Protection from discrimination on the grounds of race, etc
12 (1) Subject to the provisions of subsections (4), (5) and (8) of this section, no law shall make any provision which is discriminatory either of itself or in its effect.
(2) Subject to the provisions of subsections (6), (8) and (9) of this section, no person shall be treated in a discriminatory manner by any person acting by virtue of any written law or in the performance of the functions of any public office or any public authority.”
11. Sub-section (3) defines “discriminatory” as follows:
“(3) In this section, the expression “discriminatory” means affording different treatment to different persons attributable wholly or mainly to their respective descriptions by race, place of origin, political opinions, colour or creed whereby persons of one such are subjected to disabilities or restrictions to which persons of another such description are not made subject or are accorded privileges or advantages which are not accorded to persons of another such description.”
12. Sub-section (4)(a) of section 12 contains a proviso limiting the application of subsection (1) in respect of revenue, funds, taxes and fees:
“(4) Subsection (1) of this section shall not apply to any law so far as that law makes provision—
(a) for the appropriation of revenues or other funds of Bermuda or for the imposition of taxation (including the levying of fees for the grant of licences);”
13. The proviso under section 12(4) also imports a ‘reasonably justifiable’ test in respect of subsection (1) for the making of laws which are discriminatory. Section 12(4)(d) provides:
“(Subsection (1) of this section shall not apply to any law so far as that law makes provision) whereby persons of any such description as is mentioned in subsection (3) of this section may be subjected to any disability or restriction or may be accorded any privilege or advantage which, having regard to its nature and to special circumstances pertaining to those persons or to persons of any such other description, is reasonably justifiable in a democratic society.”
14. Section 12(5) contains another relevant proviso to subsection (1):
“(5) Nothing contained in any law shall be held to be inconsistent with or in contravention of subsection (1) of this section to the extent that it requires a person to possess Bermudian status or belong to Bermuda for the purposes of section 11 of this Constitution or to possess any other qualification (not being a qualification specifically relating to race, place of origin, political opinions, colour or creed) in order to be eligible for appointment to any office in the public service or in a disciplined force or any office in the service of a local government authority or of a body corporate established directly by any law for public purposes.”
15. Section 12(6):
“(6) Subsection (2) of this section shall not apply to anything which is expressly or by necessary implication authorised to be done by any such provision of law as is referred to in subsection (4) or (5) of this section.”
16. Section 3A of the LTA provides:
“Special concessionary basis
3A (1) A person may make an application to the Tax Commissioner (on such form as may be provided for the purpose), requesting that, in relation to a valuation unit to which this section applies, tax shall be charged, levied and collected on the special concessionary basis in subsection (4).
(2) As respects any tax period, this section applies to any valuation unit in relation to which the Tax Commissioner is satisfied that the criteria specified in subsection (3) (“the qualifying criteria”) are met during any part of that tax period.
(3) The qualifying criteria for a valuation unit are –
(a) that it is a private dwelling; and
(b) that it is actually occupied by an individual who—
(i) is the owner of that unit;
(ii) is...
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