IMPORTANT JUDGMENT.

Globe, Volume XXIII, Issue 2243, 10 June 1881, Page 3

IMPORTANT JUDGMENT.

[press association telegram.] WELLINGTON, June 9. Mr Shaw, 8.M., delivered judgment in the case upon an information by the Deputy Property Tax Commissioner that the defendant, William Ernest' Greatrez, being a member of the firm of Charles Greatrez and Son, and being a person liable to taxation under the Property Assessment Act, 1879, and Property Assessment Act Amendment Act, 1880, had wilfully failed and neglected to furnish any statement of his property in the manner required by the aforesaid Acts within the prescribed time. The judgment was to the following effect: —The gist of the offence is not that defendant failed to provide a statement of bis property; because, although that was a statutory duty cast upon all residents within the colony, the omission to do so does not become penal unless the person is liable to pay duty. The defendant Mr Greatrez has pleaded exemption on the ground that he is not liable to pay duty, and he can only succeed upon the assumption that after deducting his just debts he has not £SOO worth of property in the colony of New Zealand. The facto of the case are somewhat peculiar. It seems from defendant’s admission that he is a member of a firm carrying on business under the name of Charles Greatrez and Son, in the town of Walsall, England, and in the city of Wellington, the partners being identical in each place. It seems, inter alia, that consignments are made by the firm in England to the firm in Wellington, and for the purpose of their business the accounts are kept distinct, that is to say, upon the arrival of a consignment of goods in Wellington, as far as I can understand from defendant’s admission, those goods are debited against the Wellington branch and credited to tne Walsall branch until a remittance is made to cover the goods. It is admitted, on behalf of the Crown, that if Mr Greatrez, residing in Wellington, be allowed to deduct all the debts of the Wellington branch in favor of the firm in Walsall, then, upon his sworn statement, be has not property in Wellington that would oome up to the statutory requirements—a cleat £SOO. On the other hand, if the property in the firm’s possession in the colony be not subject to this deduction, then defendant admits that he has to pay upon a certain amount, and therefore would be liable upon this information. No evidence was taken. Written admissions signed by the defendant were put in, and upon these the Court is asked to decide two questions First—ls a holder of property in New Zealand entitled) for the purposes of making a return of property, to dedwet debts payable outside the colony ? Secondly—lf he can, can defendant in this instance deduct the debts due to the firm of Charles Greatrez and Bon, Walsall, the deduction being made in favor of his own firm ? lam clearly of opinion that it is the intention of the Legislature, although not very clearly expressed, that a person owning property in New Zealand may deduct the debts, charges and liabilities upon that property due or to become due to persons outside the colony ; that I* to say in case of a merchant here receiving a cargo of flour as a consignment from Adelaide, hls porrespondent at Adelaide drawing upon him at or four months, I take it that until that bill has matuT--, iw until it is met, there is a liability upon that flour which could be properly deducted for the purpose of making the property tax return. It is immaterial to whom the liability is due, whether to a person in the colony or not. For the purpose of making a true and just return of his property, he is as much at liberty to deduct a liability due to a firm in Australia, as to one in the colony, the object being to get at the net value of the property of residents in the colony, and for that purpose it appears to me to be wholly immaterial where the liability has to be met. A more perplexing question arises when we oome to consider whether Charles Greatrez and Son, of Walsall, being identical with the firm in Wellington (whatever they may do for the purpose of internal arrangement and for the facilitation of the bookkeeping of the firm), can say that they are to be treated as two individual persons or two individual firms, and allowed to set off the debt due by one to the other. It being admitted that Charles Greatrez and Son in Walsall and Wellington are one firm, can the firm in Wellington say that a debt is due to the firm in Walsall and deduct it? For some time I was greatly struck with the difficulty of asking Mr Greatrez in Wellington to make such returns, because it occurred to me that it would be quite impossible for him to do so. There was very little to guide the Court as to what position.these goods were in, but undoubtedly some were consignments from the Home house, and the defendant could not tell whether the consignments were paid for by the Home house. If he is to be treated as identical with the Home' house, he ought to be able to say whether the goods are paid for, because if they are not paid for he would be allowed to set off the liabilities due for them in Walsall. He has told us it is impossible for him to make a return, for he cannot tell what bills have matured in Walsall. It is an unfortunate task which the Legislature in my opinion has set him. I think it is a casus cmissius in the Act. Evidently it was not in the contemplation of the Legislature that cases of this sort could occur, because no provision has been made for them, but in the absence of any provision to the contrary, in the absence of any statutory relief being afforded, I am afraid that defendant is liable to make such return, however impossible it may be. lam also of opinion that for the purposes of this information he has property liable to taxation. It was urged by Mr Bell, tbe Crown Solicitor, with great force, that if the Court would go so far as to rule that the liability to tbe Walsall branch could be deducted, all that any New Zealand merchant would hare to do would be to open a branch establishment in Sydney or Hobart, and by hocus-pocus book-keeping, by which he would credit the Sydney or Hobart town firm, evade the payment of tbe tax in this colony. Clearly, unless the liability was a bona fide liability 1 , which a person could be sued upon, or which would be a cause in action, I do not think it is a liability within the contemplation of the statute. It is evident that the firm in Walsall could not sue tbe firm here upon this liability, and it is not a liability which the defendant could deduct. Upon that ground, and upon that ground only I decide that the information must be sustained.

The defendant was fined £5, and an order follows that defendant should pay treble duty in addition to that of the rate of Id in the £ on the (property of the firm—that is a tax of 4d in the £.