INCOME TAX CASE.

Dominion, Volume 3, Issue 791, 14 April 1910, Page 6

INCOME TAX CASE.

CHARGES AGAINST BOWRON BROS. QUESTION OF JURISDICTION. ARGUED IN THE COURT OF APPEAL l'rqceeilings in connection with the Christchurcli incorao lax case, involving charges against Bon'ron Brothers, have reachwl the Court of Appeal.

, :Iri the Magistrate's Court at Christ .-■•: ch'uroh, on March 1, 2, and 3, Mr. H.-W .: Bishop, S.M., heard . certain . charge against Bowron Brothers, in connectioi witlr the hern's income' tax returns. Ai objection, made at,the hearing 1 by,.tin solicitor,-for the firm, ,tha .the-magistrate had no-jurisdiction t( . hear the case was;over-ruled. The 'casi ■ -' proceeded.■•.Bowron Brothers thon ap plied ,to the' Supreme Court for an ordei prohibiting the magistrate from hearing determining, or. adjudicating /upon tin ; : . matter.'-,,0n ApriUlj the Chief Justia consented that the point, should be ar Sued; in the Court of ..Appeal, insteac of. in the Supreme Court, and it was .-':'.'. this motion which came, before the Chiei Justice (Sir; Robert '..Stout), Mr. ■ Justicf .. Williams,: Mr. Justice Edwards, and Mr ..'•'■•Justice Chapman . yesterday. The plaintiffs were:' William Bowron, George' Bowron, and George John Smith, • merchants, of Christchurch, formerlj i ,: carrying on- business, in co-partnershij .' under ■;the style, of.-Bowron,Brothers; and .;. the defendants. were: , Helyar , Wedder- . • burn ißishop,. Stipendiary -Magistrate, oi , Christchurch. and William Morris Tyers, inspector under the Land and Income ■ Assessment- Act,-1908.. . \ ■■''.: -Mr. C. P.- Skerrett, K.C., with him Mr. H. H. Ostler, : appeared for the plaintiffs; Mr.- J. W. Salmond, Solicitor-Gen-eral,'and Mr. T.'W. Stringer,, K.C., of Christchurch. for the defendants. ; _~;■■■ ' The motion, presented to the Court of •Appeal, was'for/a'writ or brdei? of pro--.Jiibition, directed to the .magistrate, pro'hibitihg and restraining him from'■ proceeding to adjudicate upon the informations of the . defendant, Tyers. The . .firounds of the motion were that Mr. r Bishop had no''jurisdiction to adjudicate y ' - upon the informations, inasmuch as they ''-.: we're, hot laid (as plaintiffs alleged) within three years after the date-when the matter of iho informations arose, and upon the. further grounds appearing in; the statement'of.claim in the, Supreme Court action,' and in the' affidavit 'of' Archibald !■-'-. Henry Anthony." .'.':'"', '~/ THE PLAINTIFFS' STATEMENT. In the- statement,of claim (March 5, / 1910) lodged by the. plaintiffs (Bowron Bros.), in the Supreme Court,.'it was set '-out:— •'•■ '[ ' ■ ■'.; ' ."•".•■' •..■. .- "'' 1. That Tyers was.an'officer of the Land and'lncome Assessment Department, who '-.'•'..alleged that-he had,been appointed by his Excellency the' Governor for the purpose .of recovering the fines recoverable '.upon', the informations referred . to: in ■'■■■. paragraph.?.. '''';','•" '.' % That on, or about November 5, 1909, Tyers' was instructed by the Commissioner of Taxes to, swear the informations, but "not to abply for or cause summonses to - fee issued upon ;the. informations., . ;3. Accordingly, the informations were, drawn up and prepared by 'one E. T. Eedward, a solicitor in the • employment of the Crown' Law Office at Wellington, ; acting under the instructions or/with-the , .consent .or concurrence of Tyers. ~ ' 4. That, on November 5; the informa- ■'.. ■: tions were:sworn by Tyers, before ; Mr. l J. F. Andrews, a "J.P., of' Wellington; in, < the presence. of.-.E.: j. Eedward, but no, . charge, contained in any of'the informa-, tions was made before the J.P., other : than the mere formal swearing of the informations. ' When the ; informations , were sworn, they were retained by Eedward at the Cr'b'wn.Law Office,' Tyers concurring. v Neither ,at -the time of! the swearing of the.informations nor afterwards the-charges contained in'the- , informations entertained or considered by the J.P., nor was any application : made to him. to issue" summonses ' upon.' any of-the informations. The informations were merely sworn before the J.P. with-' . out the. charge being , otherwise ..brought --. .under.his:notice, aiid;without any application 1 being made to him. to. issue summonses, or any consideration of the. question whether summonses should issue. , -.-' 5. Eedward retained the, information in his possession as an officer, of the Crown / Law., Department, and, On' November 8, ,1909,' •',he took them to the clerk, of the i Wellington .Magistrate's Court, ' and handed them, to him, but directed him , ..not to apply to any J.P. to issue a summons upon,any of the informations, until '.- he gave instructions to do so. '■'':■'■■'.'■' 6.. That on' January-13, 1910, the; clerk :of the cour.t was instructed by Eedward -or some office; - of the Crown Law Office, to. forward the informations to' the clerk of the court at Christchurch, instructing the latter official-to apply to a J.P. to have summonses 'issued to the plaintiffs upon the informations. ' . / 7. .The substance, 6f the informations / Has as follows:— ' ' ..'•>!.'.. (a) That;-the,.plaintiffs, :on Novem- / ber 6, 1906, at Christchurch; did, by -.--. wilfully and knowingly making a false return in writing in relation to ' the income 0f... the co-partnership firm, of Bowron Brothers,. affecting . .that firm's liability to taxation, evade ■ full- taxation in respect of income. ■ tax. 1 '- ■'■;';."'.!.' ' ■ ' ■•''-'.- " ■'-.', ,(b) .That the'plaintiffs,, on Novem- ; ber 6; 19QG, at' Christchurch, knowingly and wilfully wade a false re- '-, . turn, in writing -in Relation to-the in- : • come of the. co-partnership'firm of,, Bowron, Brothers, affecting that firm's.' liability to taxation. . ...(c) That the plaintiffs, on Novem-v , ' ber. 6, 1906, at Christchurch, knowingly' and wilfully delivered, a false.'.: return in writing in' relation to. the income ■ of the co-partnership. firm : of. Bowron. Brohters, - affecting that firm's liability-to taxation. 8. That, subsequently to January 13, 1910, the clerk of the court at- Christchurch caused application to be made to a J.P. at 'Christchurch to issue -sum-' / mqnses upon the informations. .Sum-, monses were,issued by the J.P., calling '■ upon, the plaintiffs to appear'at. Christchurch to, answer, the charges contained in the. informations. .9.' That.-at a sitting of the Magistrate's Court at Christchurch, before the defendant. Bishop, on March 1, 1910, the plaintiffs were oharged upon the first information mentioned in paragraph seven, arid before pleading to the information," objected that the magistrate had ' no jurisdiction to hear the'claim, as ,the information was not laid within three years'from the time when the matter of .. the information arose. '_• 10. The defendant Bishop determined that he had jurisdiction to hear the informations, and the plaintiffs therefore, under protest, pleaded to, and appeared to, the informations. 11. After hearing the evidence of the informations the defendant Bishop reserved judgment thereof and had not yet delivered judgment.. . ' 12. The plaintiffs therefore claimed: That a writ or'order of prohibition should be issued, directed to the defendant Bishop, prohibiting .'him 1 , .from proceeding to hear, determine, . or adjudicate upon all or any of the informations. THE DEFENCE.. In answer to this .statement, the defendants filed the following defence:— 1. They admitted the allegations of / paragraphs of the statement of claim. '■ 2. They denied the allegations contained in paragraph 2, that Tyers was instructed by the Commissioner of Taxes not to apply for or cause summonses to bo issued upon tlir. informations, and said that Tyers was an officer duly appointed by his Excellency the Governor for the purpose of taking proceedings for the recovery of tines upon the informations, and that he had full authority and instructions to apply for and procure summonses to bo issued and to take all other steps necessary lor the recovery of the fines. 3. The defendants admitted the allegations contained in paragraph 3. ;

4. As to, paragraph i, the defendant; - admitted that the informations were . sworn by the defendant Tyers before Mr '. : J. P..Andrews, a'J:P.of'.Wellington, anc that no application was uiado to thi J.P. to issue, a summons upon, any ol the informations; but the 'defendants de nied all the other allegations contained in that paragraph of the : statement o: claim. • .5. The defendants .admitted the allega tions contained in paragraphs 5, C, 7, 8, 9 10, aud 11 of the statement of claim. . With reference to the matters referree to in paragraph i of the statement ol claim, the';defendants further said: A : 6. That the informations were sworr by the defendant T'yers before J. F. An. Drews in the presence of Frederick Fit chott, at that time Solicitor-General oi New Zealand. 7. That immediately before inforniations .were sworn they were read in tin presence and: hearing of Andrews, Tyers and ■ Fitohett, and. Andrews well knew and understood the nature and purpose of the documents, and he received the informations- in the intended exercise and pursuance of the powers conferred upon him by the Justices'of the Peace Act; 1908, in Respect of offences punishable, on summary conviction. 8. When tho informations were sworn before Andrews, no application was made to-him by Tyers,. or. any other person tor the issue of any summons or warrant in pursuance of those informations, and Andrews well knew and understood that the intention of the informant was thai application- should be made at a latei ™te either to 'he same or some other J.P. for the-issue of tho summonses in pursuance of the informations, in ac-cordance-with the Justices of the Peace Act, 1908. 9. When the informations had been sworn-before Andrews, he delivered them to Frederick Fitohett, Solicitor-General, with intent that summonses should there"fwr.be applied for. by or on behalf ot the informant, in accordance with the provisions of the Act. 10. That,' on February 3, 1910, summonses were applied for and issued accordingly by; a J.P.'at Christchurch. An affidavit was filed by Archibald Henry Anthony, solicitor, of. Christchurch, who said that he was present at the Christchurch Magistrate's.Court at.the hearing of. the informations. . The summonses pursuant to the. information were given under the hand of one W. C. Aiken, a .n& at Christchurch, on February 3, 1910. The other statements of the affidavit.were in corroboration of \the allegations in the ' statement of claim in respect of the swearing of the informations, ind of : the instructions . regarding summonses.. , An_ affidavit of James: Frank Andrews, 1 civil servant (Secretary to Cabinet) and a J.P., of Wellington, was also attached. Ihe deponent corroborated the statement made by", defendants .that the informations were -sworn before him in the presence of .Tyers and Fitchett. He understood that application was to be made later for the issue of. summonses. Interrogatories,-.an,'d, replies. ~ Interrogatories /had-* been: issued directing Tyers to answer questions as to the date- of the swearing of the' informations, ltd'as'to whether; when:the informations were sworn, • the Department had then determined to proceed with the informations. ■ The replies of the defendant Tyers to the interrogatories were as follow:— 1. He said that having been duly authorised by the Governor under. Section 109.0f the Land.and Income Assessment Act,,1908, to lay the .informations,, he appeared before •' Frederick Fitohett, ' then solicitor-General,' and James Frank .Anirews,: a; J.P., and- laid' before '■ them' the informations, which had been prepared by ;he -Solicitor-General. The-further prowith V.the informa:ions were left by'him in::the hands of :he Solicitor-General with intent that all accessary steps should be taken by him vithout delay,.-and in.duo course of law ■o bring tho informations." before the proper tribunal for hearing and ■'determination. He. did not, know whether ;hese o,r any other ■ facts constituted the •elation of solicitor and' client between ne Solicitor-General, and 'himself. .2. No instructions were given by him,, >r, to the; best, of his knowledge, by any ither. person,*to -FrederickuEitchett, that le was "not-iq proceed' with.: the infoTmaions by causing summonses to be issued ;her'eon until January 13, 1910.'. 3. At the.time of. the. swearing'of. the nformations, or., at any other time, JVtfderick Fitchett,.whs .not entrusted by he.' deponent, or;, to his knowledge, by my other'.person,: with authority, to deermihe thereafter whether or not the inbrmations should be proceeded with by ausing : summonses to lie issued thereon. i.- He did. not know whether Frederick ritch'ett ■ purposely abstained from.. issung summonses upon the informations to » applied for until January 13, 1910. 5. He did not know whether Frederick ?itchett, on or immediately after Januiry. 13,-1910, determined, to'proceed with, he informations by causing summonses o be;issued thereon. So-far : as it lay in he:.deponent's .power' to ."do so, he had letermiried,' on. the : swearing ■of "the inormations, that they should be duly proeeded'with according to law.. :' THE CASE OPENED. Mr. Skerrett, in opening proceedings, aid that the determination of the case ested ■ upon only one' question:' Whether m information cbuld be regarded as havng been laid, which, was'merely sworn lefore a i J.P., without any application, xpressed or implied, for the issue of a uinmons upon. it, and which was taken iway by: tho informant obviously for the rarpose of deliberating whether he would ir would not, at some future date, apply o the same, or some other J.P. for the ssue of a summons. Mr. Justice Edwards: Are those the acts? ' ■Mr. Skerrett:'Yes. Those are the facts, oughly. speaking.;-" . ..' . Mr.. Jusfict■' -Edwards: Tyers says that ie.left.it with' the Solicitor-General to ;o. on with it at once.' ■ ' ; The Chief Justice: He gave no'instrucions for any delay. That is what he ays. '• --'~, Mr. Justice Edwards: He left it with he lawyers to do their duty. - ' Mr. Skerrett said that the facts were lardly disputed, at all. It was admitted hat the informations had. been sworn, n the office of the Solicitor-General, bebre a J.P., to whom no application, exiressed. or implied, was made that he hoidd issue a summons'.. The informaions were taken possession of by Or. ?itchett, who he submitted must be ro;arded as the. solicitor for the informant. The informations remained in his lossession, and neither Tyers .nor he night'ever have applied for the issue of i summons.. The inference ,was that the nformations were formally sworn, merely or/the. purpose.of saving time and givng. the informant an opportunity to deliberate and determine whether or not ic would, at a later stage, apply for the ssue of a summons. 'It was submitted hat the Court was entitled to draw the nferenco that the persons associated with tyers in tho framing- of the informatidns •equired time for deliberation, and that hoy had not niado up their mind at hat time, nor until a much later date, vhether, they would proceed with the inbrmations and issue summonses. For the mrpose of binding Tyers as to what was lone, undoubtedly Dr. Fitchett was in ihe position of solicitor to tho informant, and what he had done or omitted o do, bound the informant, despite any ■esolution then existing in the mind of tyers, and despite any instructions he night have given to Dr. Fitchett or. to myone acting in bis place. •OWER TO ABANDON PROSECUTION. In reply to Mr. Justice' Edwards, Mr. Skerrett said that he would not disrate the proposition that Dr. Fitchett lad no power to abandon tho prosecu:ion at any- time. ' Tyers was i.,.. statutory officer, but; this was i . Government 'prosecution,, and the Solicitor-General was' the .adviser of he. Government' Tyers was subject, to he control and commands of tho Minster, a'member of : tho Government, of vhich the SolicitorrGencral was the ad■iser. It was npt .correct to-say that tyers hail control over the .prosecution,, md could have proceeded with it against he commands of his superior officers in he Department. . - : Mr. Justice Edwards: There is no sug;estionthat anybody did tho; commandng. -'■■ •■■'■ Mr. Skerrett: We do not know, and ,'our Honours will see that tho inter■ogatory has not been properly answered. The Chief Justice: We can see that the nformations were not proceeded with for ;hree or -four months.

Mr. Skerrett: That is probably quite sufficient for my purpose. Keturning to the interrogatories, Mr. Skerrett said that Tyers had not answered the questions directly. He had said that "no instructions had been given by him, or to the, best of his knowledge by any other person," etc. That was not sufficient;, he was expected to find out. Mr. Justice Edwards remarked that it was' not possible to get an answer as to what other people had done.

AN "INFORMATION" DEFINED. Mr. Skerrett: 1 shall ask the Court to draw the inference, from the facts, that the delay in applying for a summons until February 3 was designed for the purpose of giving the informant an opportunity .to consider whether he should proceed with the informations or. not. On November 8, the informations were sent to the Clerk of the Court, and that officer was given instructions. not to apply -for the. issue of-summonses until. further ordered. That is admitted.

3e Continuing, Mr. Skerrett. said.-thai 10 there were no express authorities on th( 30 question, although, there were various .A Uicta in the plaintiffs' favour. The mag. i, e istrate was given sole control of cases, j_ such as this, for the recovery of fines, appeals being allowed for.. The Act said that the informations might, be laid at jfl any time within three years after the le date of the offence. He contended thai n an information was ; not laid unless ■it a |' a d .been sworn before a magistrate 01 o a J.l 1 ., accompanied by an express or it implied application for the issue of a 't summons. The contrary view, he said, ■ r would produce disastrous results. A priir vate individual might swear an informan Hon before a J.P., take it away, put it 3 - in a pigeon-hole, and reproduce it five, :e ten, or twenty years afterwards. The Chief Justice: If a man swore an n information oh the last day of the limin tation, and took out the summonses next 1, day; would he be too late? .. Mr. Skerrett: I submit yes, 'your f Honour. e Following up this argument, Mr. Skerrett raid that a man who swore an information before a J.P., and took it l ~ away, was under no moral obligation to '" apply to any J.P.- for the issue of a summons. Such an information was not y "laid," he contended. . 0 ■ '' ;- SOLICITOR-GENERAL'S OBJECTION.' jj Stating the defence, Mr. Salmond first ° raised the point that prohibition wonld " not he at present, if at all. He sub- • niltted that, even if Mr.. Skerretfe ob- '• jections were, correct, ho could not proceed by a motion for prohibition. '"• Chief Justice:-They are matters - which the magistrate should himself de- •< cide, yoa say? Mr.; Salmond: I think so. • ' Proceeding,, counsel pointed, out that j the. ground of prohibition was that the informations . had been laid for an of- • fenc9 apparently committed beyend the period of limitation. • ■ 1 '- il \ Justice Chapman: -.'jTnat' depends on whether it is a question of-limitation j [ or whether it concerns ■ jurisdiction. Mr. Salmond: I do not dispute that, if a conviction had been entered, and it appeared that the offence Was beyond the period of limitation, that would have ■ been, a ground for appeal, or certiorari, 1 or an application to have the conviction ' ''' or vra ° t of jurisdiction. ' The matter, he continued, was one of • fact, to be settled by the magistrate. The date alleged in. an information did not brpd.a magistrate to decide that the ?r e Z lc ?* lf ftny ' had been committed on that date. It was necessary, before pro- - mbition could lie, to find that an offence had been committed, and to ascertain : the date of its committal. The case, he considered, could not come before the Court of. Appeal until the magistrate had • given his decision. He-did. not ask that the case should be decided oil this point, but would not • waive Ms'-pbjection.' Argurirenl. will be continued this-moin-™s- .-; ■ ....- : ..-.