Eight Charges Denied

Press, Volume CIII, Issue 30453, 29 May 1964, Page 12

Eight Char ges Denied

Eight charges of wilfully making false returns of income involving £14,216 were denied by Frank Blundell Wright, a company director, in the Magistrate’s Court yesterday. The charges were adjourned to June 4 by Mr K. H. J. Headifen, S.M., while the first witness for the prosecution was still being crossexamined by Mr P. T. Mahon, who appears for Wright. Mr N. W. Williamson is prosecuting. Outlining the case for the prosecution, Mr Williamson said Wright was charged with wilfully making false returns of income for the years ending March 31, 1952, to March 31, 1959, inclusive.

During those years Wright was in business as a public accountant, auditor and company secretary. He was also associated with two accountancy partnerships, was managing director of the New Zealand National Creditmen’s Association (5.1.), Ltd., and had associations with numerous other companies. Discrepancies Of £14,216

Wright’s affairs were complex, Mr Williamson said. An investigation by an inspector of the Department of Inland Revenue between September, 1959, and December, 1960, disclosed discrepancies in returns of income amounting to £14,216 19s, a deficiency of £3335 tax and £274 19s lid social security charge. The Crown alleged that Wright wilfully made false returns of income during that period.

The evidence could be dealt with under three headings—interest, dividends and proprietory income. Particular importance was placed on the interest in respect of the Batchelor Construction Company, Ltd., and P. G. Morrison. In each of these cases interest was paid directly into Wright’s bank account but was not returned.

A substantial portion of the tax deficiency, about onethird, related to Wright's omissions of proprietory income. In his returns a taxpayer was obliged to show any beneficial interest he might have in a proprietory company. The evidence would be that Wright did disclose some of his interests but not all.

There would probably be little dispute that the discrepancies did exist and that the returns were false, but it would be argued that the false returns were not made wilfully, Mr Williamson said.

There would be evidence of the strange conduct on the part of Wright during the investigation in regard to two matters. Wright, who seemed to be well conversant with his affairs, was vague concerning amounts marked S.A.C. in the books of Plumbing and Electrical, Ltd. He had said that these amounts iwere not connected with a [bank account of Supreme AdI vance Company in Nelson. It

later appeared that they were.

Wright claimed that his wife had given him a considerable sum just before she died. But in a written statement to the Duties Division he had said that his wife had not made any gifts in the three years before her death. “Risked Inquiry” Douglas Hodgkinson, an inspector of the Department of Inland Revenue, said to Mr Mahon that the prosecution relied mainly on the prorietory income interest and receipts not returned. The witness agreed that from 1952 to 1955 Wright had mentioned in his personal returns all the proprietory companies in which he had an interest. This could have been risking an inquiry. He agreed that it would have been foolish of Wright, had he designed a scheme to defraud the department, to disclose at some later time that there was a trusteeship in regard to shares in a company. Wright had said that he did not want to be in the registry of certain companies because of their association with the Creditmen’s Association.

Wright had explained that he had not put in returns from certain companies because the persons putting in the returns for them should have put them in correctly. The witness agreed that there was possibly no sinister motive on Wright’s part. Many persons did not include dividends or interest in their returns, knowing that they would be notified of them by the government.