STAMP DUTY CASE.

Press, Volume LXI, Issue 18405, 11 June 1925, Page 5

STAMP DUTY CASE.

SUPREME COURT APPEAL. An appeal by Frederick "Wilding, K.C., against the decision of Mr Wyvern Wilson, S.M., in imposing a fine of £-5 for alleged evasion of stamp duty was commenced at the Supremo Court yesterday by his Honour Mr Justice Adams. In the Magistrate's Court the appellant had been convicted on the following charge:— That on or about August 13th, 1923, at Christchurch, being concerned in or about the preparation of a memorandum of transfer, dated August 13th, 1923, with intent to defraud his Majesty, did omit fully and truly to set forth all the facts and circumstances affecting the amount of ad valorem duty with which such instrument is chargeable. Appeal was made by way of a complete retrial. Mr P. S. K Macassey (Wellington) appeared for the Crown',' and Mr M. Myers, KC. (Wellington), and with him Mr M. J. Grosson, appeared for the appellant. His Honour said that the prosecution would have to prove that the appellant devised the scheme with a wicked mind, and deliberately gave a dishonest opinion. Mr Macassey said a farm property, known as Clifton Tails, was sold by Bowron Bros, and Co., Ltd., to W. G-. Stephens for £31,241 in September, 1917. Threo agreements for salo were executed by Stephens, the last one having been drawn up by Wilding and Acland, but none of them was stamped. Stephens remained in possession for 3J years, but owing to financial embarrassment he was unable to carry on. With the consent of Bowron and Co., Stephens then agreed to exchange his interest in Clifton Falls for Cook Bock, a property owned by Anning Bros. The sale of Clifton Falls was made from P. D. Boag to the Annings. The reasdn Boag came into the matter was that he was the owner of Clifton Falls before Bowron Bros. The idea orf Boag signing the agreement, counsel suggested, was to cut out the intervening sales to Bowron Bros!, and Stephens. . Mr Myers: My friend should say that this document was never brought to tho notice of Wilding and Acland. His Honour: Is thero a suggestion that the scheme to dofraud the revenue was carried on by people other than the appellant, and'finally brought to .his notice and taken up by him? Mr t Macassey: Yes. , His Honour: Then Bowron Bros., Boag, and Stephens were parties to a conspiracy to which ultimately Mr Wilding became a party Mr Macassey: No, no. It is a very complicated business. His Honour: It will be more complicated by bringing in outside issues. Mr Macassey: I have to establish that these were valid and enforceable agreements. I am giving .you a reason why Boag's name was used. The agreement was Stephens's agreement. Having established the validity of the documents, I have to show that the last little scheme to avoid payment of penal duty was prepared by Mr Wilding.

"Neither Agreement Stamped." Mr Macassey stated that neither of the agreements, Boag and Annings' and. Annings and Stephens', had been stamped. Anning Bros, went into possession of Clifton Falls, and remained in possession from April, 1921, until August, 1923. They paid rates and interest while in possession. Stephens went into possession of Oook Bock in April, 1921, and remained in possession until August, 1922. In an arrangement between Bowron Bros, and the trustees of the William Bowron Estate, the interest in the Cook Bock property was transferred to the' Bowron Estate. Stephens entered into an agreement with the Bowron Trustees for them to take over Cook Bock, the purchase of which Stephens could not complete. That agreement was not stamped. Wilding and Acland were acting for Aniiing Bros., who pressed Mr Granger, Wilding and Acland's chief clerk, to get them the sale of Clifton Falls and to give the title of Cook Eock to the Bowron Trustees. Counsel could see no reason why those titles should not have been given. Commissions had been paid on the sales to' Cook." Anning Bros, sold Clifton Falls to William John .Campbell, and Campbell sold his farm) Kelsie, to Anning Bros, - by way of exchange. The first agreement was dated July, 1923. The equality of exchange, £IBO3, was to be left as a fourth mortgage on Clifton. Falls. The equality was payable by Campbell to Annings. On August 10th, 1923, the Annings went into possession of Kelsie, and Campbell into possession of Clifton Falls. At this stage there had been,threo sales of Clifton Falls, none of which had been rescinded, and in the last stage a fourth mortgage was placed on the property. An arrangement was made for the parties to meet in Dougall and Upham's office on the evening of August 11th, a Saturday, The meeting was for the purpose of executing the necessary documents. A transfer had been prepared by Dougall and Upham, containing one blank recital. That document was sent to Wilding' and Acland, who cut out the recital. At this stage the Annings had paid a cheque 'to Wilding and Acland, in January, 1923, . for stamp Duty on the Clifton Falls purchase. At the meeting, when the Annitfgs saw that their name was to be brought into the transfer, they realised that they would be, liable-to the ordinary duty on the transfer, to a 100 per cent, duly becauso the agreement had not been stamped, and to a duty on their purchase of Kelsie. They said they would not pay the three duties, ,and .threatened not to go on with the transaction. Mr Granger saw. Mr • Wilding, on the following Monday, and the Crown said that a scheme was then evolved to get over the difficulty created by Anning Bros.' refusal to sign the transfer-and pay the three duties. To get over that difficulty an offer was made direct to Campbell, by Bowron Bros., to sell Clifton Falls. Tlhe offer was signed by Bowron Bros. It was drawn up by Mr Dougall, who was acting for Campbell, but Campbell never saw it. Mr Dougall had authority from Campbell to do everything necessary to secure the title of Clifton Falls for Campbell.

Mr Wilding gave advice ou the question of the transfer. If Mr Wilding honestly advised Bowron \Bros. that Anning Bros, could'be ignored, was that an attempt to carry out a contract because the contract with the Annings had been rescinded? If the Annings' contract had been rescinded, they would have to go out of Kelsie and back to Cook Kock. Counsel suggested it was a mere subterfuge to get the Annings' name out of the transfer. The Annings had remained in possession of Kelsie. Had the contract between them and Campbell been honestly cancelled, Campbell would have owned . Clifton Falls, having bought it from Bowron Bros., and he would also have owned Kelsie. These consequences did not follow, but the transaction went through' just as if the first contract had been adhered to. To hide up the transaction, the name of Anning Bros., as owners of the mortgage of £IBO3, was changed to that 1 af_ Bowron Bros, If the contract between the Annings and Campbell were cancelled, the Annings would lose the £IBO3. But Bowron Bros, admitted they held it as trustees to the Anningß. The matter had been referred' to Mr Wilding by Mr Granger, who must have

told Mr Wilding of tho Annings'- objection to pay the duty. The question was whether Mr Wilding gave honest advice or not. Counsel held that the contract with the Annings was never cancelled. If it had/' been cancelled there was no occasion for the mortgage of £l»u3 to have been given to Bowrwi Bros.. It was contended that the contract was. actually carried out as between Anning Bros, and Campbell, only the documents disguised that.

Evidence Called. Evidence was then called'. "William George Stephens, farmer, said that in 1917 he purchased Clifton Falls from Bowron Bros. and. Co., Ltd. He gave the history of t!he three agreements. ' With the approval of Bowron Bros., Ltd., he exchanged Clifton Palls for Coot Eock. He remained in pos-, session of Cook Eock from April, 192 L, to August, l»as, when ho sold out K Bowron's Trustoes, and they went into possession. To Mr Myers: Witness said that when he went out of Clifton Fa,lls ho owed* Bowron Bros, nine months' interest, amounting to over £3OO. Wilfred James Anning, farmer, said he was in possession of Cliftoii' Falls from April, 1921, to August, 1923. He had tried to get title to the property, and the negotiations for the title were put through at the office of Wilding and Acland. Witness saw Granger oh five different occasions in an endeavour to get tho matter cleared up. He was not behind with his and he was willing to give title to Cook Rock. On January 9th, 1923, he paid £203 to th*. firm to pay for stamp duty to give him tne title, In July, 1923, witness and hia brother arrange'd to exchange Clifton Falls for Campbell's property, known as Kelsie. At one meeting between the parties witness refused to sign an agreement, because as lie had no title to Clifton Falls, ho would have made himself liable to stamp duty and a fine. The transfer was finally made direct from Bowron Bros, to 7 Campbell.. To Mr Macassey: He had not told MiGranger about any of the agreements and other documents. Granger had taken the view that witness had no title to Clifton Falls.

George Bowron, a director of the firm of Bowron Bros., Ltd., said his company bought, Clifton Falls from Boag and sold it to Stephens. , f The case wa§ adjourned at this stage until this morning.