ANOTHER "PROTESTING" COMPANY

Dominion, Volume 4, Issue 998, 13 December 1910, Page 6

ANOTHER "PROTESTING" COMPANY

! ' /s^icui,ATiibN-':.i)ENiEa The Marainanga Estate Company, Limited, claimed a refund of JJ2SIU, taxation paid under, protest oii profits arising from I .the .sale ,of laud owned by tho. company. Mr. J. H. Ho'skiugahd Mr. A. W. lilair represented . tho company, and Mr., Halmoiid' (Solicitor-General),, with.'.'Mr. Koave,. appeared for' the defendant, tho Commissioner of Taxes. The statement of claim in this instance set; forth that, in June, .ISS2, many years prior to tho incorporation ot'tho plaintiff, company, J. S. Handyside, of Akitio (East Coast), sheepfarmor, and John Koberts, C.M.SS., of'Diincilin,- merchant, and sheepfarmer, purchased, in partnership with Hugh Eandyside, Adam Holland, James Henry Holland, . and Thomas James Scougall Koberts, leasehold and freehold lands in the proviuco of Wellington, having an aggregate area of 36,355 acres. The intention was to work this area as a", sheop-station', under the designation of the Marainanga Tho plaintiff company spent large sums in improving the land, but did not deal in land save in adjusting boundaries. In the year 1906, the members of tho partnership fornied.a company, in which their interests were vested. The company was registered under, the. Companies Act in 1906, with- a capital of ,£169,000. The only shareholders besides the original parties wero: James Alexander Koberts, Jjouisa ' Janu Koberts, Alexander ' Fowler Koberts, and Catherine Emily Koberts, each of whom htld one share,, in order that soven names • might .appear oil tho memorandum of association. The consideration for tho transfer of tho lands to the company was ,£6J,716 13s. -Id., by the issuo of shares to the nominal value of that sum. Further, tho company paid a sum of "£40,000, owing'by the partnership, a mortgage over the . lands. The price of tho lands.was based upon the land tax ..value, which, then stood at d£121,000:.; : Tho., company at its formation had no intention.of selling the land. In 1907 legislation was introduced under which the land tax payable by those interested in tho company, was largely increased. It was then decided .to sell the land. The total sum produced by tho sales up to June 30, 1908, was .£50,360 over, and.aboye the-price, fixed'.in-, the agreement; "■ Upon this amount the sum of -£2518-was paid'in-taxation under protest. 1 Statement'for -the-defence resembled that in the companion (Whiterock) case. Mr. J. Hosking, K.C., and with him Mr. Blair, appeared for the plaintiff; and Mr.. J.. Xf. .Salmond.: (Solicitor-General), and with him Mr. T. Neavc,. for'the defendant. . ■ ■ . '.'' .Mr. Hosking, opening his case, said it bore a close resemblance'to two previous cases, in which his Honour (Mr. Justice Cooper) had been concerned. These wero the-iliramar land case-and the Harbour Ferries case. The main question to be determined was,- first,, .whether, by tho constitution of- the Marainanga Company the-particular objects . of its business consisted.iit dealing in land, and, secondly, whether the acts of the company constituted it "a company that was carrying on the business of -dealing in land. Plaintiffs would submit that they came under neither designation. Tho Court adjourned until 10.30 a.m. to-day. ■ ' ' - • ' ; _■ ■