萬國法律事務所

The Ministry of Finance (MOF) issued an exit restriction on Mr. Hsueh, the temporary manager of Yeong Yu Construction Company (in Chinese: 永裕興業公司), based on the fiscal arrears of the company representing more than NTD 20 million. Following Mr. Hsueh’s success before the Supreme Administrative Court (SAC) after a series of administrative proceedings challenging the imposition of the exit restriction, the MOF failed to immediately lift the exit restriction and Mr. Hsueh was banned from exiting the country for more than 3 months. Mr. Hsueh launched a suit for state compensation based on the MOF’s failure to perform its duty and the Taipei District Court held on August 24, 2009 in favor of the individual and held that the MOF shall compensate Mr. Hsueh an amount of NTD 1 million.

This decision is the first court decision imposed on the MOF for state compensation on the grounds of inappropriate application of exit restrictions and failure to perform its duty leading to impediment of rights of a citizen.

The Court held that a temporary manager of a company is not the legal liquidator or a responsible person thereof, and therefore is not within the scope of the imposition of exit restrictions under the relevant provisions of the fiscal regulations. The Court took the position that the officials of the MOF had failed to immediately inform the Ministry of the Interior and the National Immigration Agency to lift the exit restriction on Mr. Hsueh upon receipt of the final judgment from the SAC confirming the revocation of the administrative disposition and impeded on Mr. Hsueh’s freedom of mobility and rights. The conditions for state compensation under the relevant regulations being met, the MOF will therefore be liable to compensate for the damages caused.

The Court therefore allowed for a compensation of NTD 1 million as moral damages, taking into consideration Mr. Hsueh’s income for 2006 and 2007. This decision may be appealed.