INCOME TAX CASE.

Dominion, Volume 3, Issue 799, 23 April 1910, Page 3

INCOME TAX CASE.

> WILL IT GO TO PRIVY COUNCIL. APPEAL COURT REFUSES LEAVEDIRECT APPLICATION MAYBE MADE The application for leave to appo.il to the Privy Council on the question of the jurisdiction of tho magistrate in the Bowron Bros.' income tax case was further argued before the' Court of Appeal yesterday.. The Bench again comprised the Chief Justice (Sir Robert Stout), Mr. Justice Williams, Mr. Justice Edwards, and Mr. Justice Chapman. The plaintiffs wore: William Bowron, George Bowron, and George John Smith, merchants, of Christchurch, formerly carrying on business in co-part-nership under the style of Bowron Brothers; and the defendants: Helyar Wedderburn Bishop, Stipendiary Magistrate, of 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, Solici-tor-General, and Afr. T. W. Stringer, K.C., of Christchurch, for the defendants". •' ■ ". ' ' •-. ~The groundsi of the motion were that J Sir. Bishop had no jurisdiction to hear the ca3o inasmuch as the informations were not laid (as . plaintiffs alleged) - within three . years after the date when the matter of the • informations arose. The Court of Appeal on Thursday last gave its decision, upholding the jurisdiction of the magistrate. Mr. Skerrett then. asked for' leave to appeal, and argument • was begun. It was resumed yesterday morning. l ' ' ' ■ ■ ' • NEW RULES OF PROCEDURE. Mr. Salmond, said that the applica-, tion for leave to appeal to the Privy I Council had been made under paragraphs of Rule 2 of the new rules, which provided as follows:— . , '. Subject to the provisions of these rules, an appeal shall lie—. ~-. t (a) As. of right from 'any final '' judgment of the Court of Appeal where the matter in dispute on the appeal ■ amounts to, or is of the value of, £500 sterling -or upwards, or whore tho appeal involves, directly or indirectly, somo claim or question to or respecting property or some civil right ""amounting to, or of the value of, £500 sterling or upwards;- and ' (b) At the discretion of the Court , of, Appeal, from any other judgment of that Court, whether final or interlocutory, if in the opinion of that Court the question involved in the appeal is one,which by rea.son of its great general or public importance or otherwise ought to be submitted to his Majesty-in-Council for decision. , ■ NO APPEAL AS 0F... RIGHT. In the first' place Mr. Salmond submitted that there was no appeal, as of right, in a criminal matter, and that this case was a criminal' matter within tho meaning of the rule. It .was, in his opinion, simply a step in a criminal prosecution. A criminal ■ prosecution commenced in an , inferior Court might oomo into a superior Court in many ways—by appeal, by prohibition', by certiorari, by mandamus, by motion 16.' quash a conviction, by habeas corpus— but in whatever .way it was transferred, temporarily or permanently, from tho lower Court to . the , higher Court, it was from beginning to end a criminal proceeding , ■

Mr. Justice Chapman: There is no appeal to the House of Lords in a criminal proceeding. Mr. Salmond: That is just the point to.-which I wish to refer. "•■• ' Mr. Justice Chapman: In an appeal for stay of criminal proceeding, iho appeal does reach the House, of Lords. Mr. Salmond: No. I submit not. The English authorities to which I refer aro authorities on the construction of Section 47 of the Judicature' Act of 1873. That section prohibits an appeal to the Courtoorf r Appeal from the decision, of the High Court in a criminal matter.. Section 47 provides:— The jurisdiction aiwi authorities in relation to questions of law arising in criminal trials . . .-shall and may bo- exercised after tho commencement of this Act by the judges of the High Court of Justice, or five of them at the least.. . . . The determination of any such question by tho judges of tho said High Court, iu manner aforesaid, ehaU be final and without appeal; and no appeal, shall lie. from any, judgment of tho said High Court . in any criminal cause or matter save for some error of law apparent upon the record, as to which no question shall havo been reserved \ for the. consideration of the 'said judges. ... '■•'"' The meaning of the section had come before the Court.on several occasions. "AS A CIVIL PROCEEDING." Mr. Justico Williams: These proceedings were taken under the code of civil proceedings. . ■■ • ■ Mr. Salmond: That is so. Mr. Justice Williams: In this country, at any rate, by our code, this is treated as a civil, proceeding, and it comes to the Court of Appeal, as a civil proceeding. The civil and criminal jurisdictions of- the Court of Appeal aro carefully 'separated in.our Judicature Act, and this sase comes here under the civil jurisdiction. It may be that that does not govern the- meaning of tho Privy Council rule. In this country, according to our . code and rules, it .is a;.civil matter. ' ." Mr. Salmond: It is undoubtedly in form a civiLproceeding. But that is,not the question.. The - question is ' tho intention of this rule.. Is it the intention to give an'appeal as of right in what is regarded in England- as a criminal proceeding? ' ■■'••■' Proceeding' to ; deal-with the meaning of the words "civil right", as used in. the rule, Mr. Salmond asked: What was the nature of the.qivil right involved in the case? Opposing counsel might say that it was a right: riot defined. Mr. Skerrett would havo to go as far as to say that a proceeding in which , a man could be fined a greater sum than £500 was . a proceeding in which there was a right of'appeal to'the Privy Council. Mr. Justice Chapman, referred to the matter of the collection of the tax. Mr. Salmond: This proceeding does, not. involve tho collection of the: tax. It will be manifest that . the only niattor. here is a fine imposed in summary, proceedings in tho ordinary way. Tlio proceedings are not distinguishable from those in which a.fine may be imposed, on a man for.being drunk and disorderly. ■•'■' : '■ Mr. Justice Chapman: How is the tax collected for that year?. Mr.' Salmond: In the ordinary way, your Honour. '.'..-.'■ Continuing, Mr. Salmond said that tho case was concerned with Sections 106' and 11)7 of the Land and Income Assessment Act, 1008. "If a tax has bTOii assessed aiicl .unpaid," lie went, on, "there is no limitation.-' It is recoverable! for cvnr by the Crown.". Mr... .Tustiuo i'Mwnrds: Wlioro there linn Uwm an fai> r ioov ajws&aisDii 4 in-

duced by false returns, as you say has happened in this cas«, what happens? Sir. Sahnond: There is no limitation. It has to bo discovered within three years—an extraordinary provision—but, if discovered within three years, -it may bo recovered at any time afterwards. A "RICHT NOT TO BE FINED." The procedure for estimating the amount-of tho fine, said Mr. Salmond, was under Section. 107. The tino was not fixed by the magistrate. The tax was to be assessed in the ordinary manner, and tho taxpayer could h thu ordinary manner and could' go to the Privy Council, but the amount, when settled, was the amount upon which the fine operated. In the present case, tho facts were not in dispute. The tax was to be settled by collateral and definitive proceedings, which proceedings might go" to the Privy Council. The only point in the case was as to Bowron Bros.' liability to a fine in the ordinary course of criminal proceedings, nothing inuro, nothing less. 'He- contended that the proposition which must be maintained by Mr. Skerrett was that exemption from liability to be fined was I a civil right. The Chief Justice: In the strict phrase, it is not a civil right. The right "not to be fined" is not a civil right; a right is not a. negative thing. Mr. Salmond said.that a civil right was usually connected with property, and the point in issue in the present case was not as to a civil right, but as to criminal liability. Under a section of the Crimes Act, there was unlimited power of.fining, and, under that Act, there would be power to appeal to the Privy Council, if a question of criminal liability was to be allowed to go to the Privy Council. To say that there might be_ an appeal to the Privy Council in a criminal case in which the question >v2.s liability to fining would.-'be absolutely revolutionary in the whole practice of the Privy Council. APPEAL COURT'S NEW POWER. to the alternative application for leave to appeal, made under Rule 2b, Mr. Salmond said that this was a new rule, embodying a power given to the court for the first time by the new rules of January 10 last. This was the first occasion on which the interpretation of the rule'and the princiciples under, which the power ought to be exercised had been discussed. ■ The rule involved, 'a delegation to the Court of Appeal by the Privy Council of power which the Privy Council had in the past jealously kept to itself. Therefore the Court of Appeal must be careful in granting , appeals under this rule. ... Tho Chief Justice: It will not prevent the Privy Council from exercising it still. • 6 Mr. Salmond: Refusal by this court would ■ not, but if this court granted the appeal, that would prevent the Privy Council from exercising its power. . ' - Mr. Salmond further urged that t!he powers' under the rule must be exercised by the Court of Appeal only in those cases which were in accord with tho previous practice of the Privy Council. The Court of Appeal should not giant special leave in any case in which, according to the established practice and tradition of the English cases, the court considered ihat leave to appeal should not be given. He eubmitted confidently that this was a case in which, the Privy' Council would not grant leave. >Ho desired to call attention to well-known, precedents of cases in the Privy Council. The established ■ principles were ■ perfectly uniform, and had been "insisted upon by the Privy Council in every case. Mr:' Justice Williams: Suppose the decision ha"d been against the Crown? Mr. Salmond: I admit that I might have applied for leave to appeal to. the Pnvy Council, but I should have been very much surprised if I had got leave. Mr.-Salmond. wetit"on' to .'.quote copiously from authorities to the effect that leavo to appeal to the Privy Council in criminal cases was only given on'the ground that' the broad v principles of natural justice had been violated; , and was not given on account of any technical irregularity. In the.;' present instance the application rested upon minutiae of legal, procedure, and was precisely the kind of case in which the Privy Council had laid down that it would refuse leave to appeal. To allow appeals in criminal cases on such grounds would mean that a wealthy person could interpose a long delay between- his conviction and his sentence. . . ■■ ' •■'■-;::

' IS THE CASE IMPORTANT? Irrespective of the cases quoted, the rule required that there must be special grounds for leave to appeal 'to be if.nted. One ' such special ground might be that the case was ono "of great general or public importance." It was obviously not enough that the case should be of great'importance to the parties.. Otherwise, leave to appeal would have to be granted in capital'cases, or cases that might result in penal servitude. It would be intolerable, that leave should be granted in such a case as the present one, and should be refused to a man who was sentenced to be hanged, because it was not important enough to him., The importance of the case to the parties was an absolutely irrelevant consideration. . The Chief Justice said the magnitude of a monetary consideration' could not be taken into account. To a poor mail £50 might be of more value than £5000 to another. - ■

" jVhv Salmond 6a.id the question of pecuniary, importance to the parties could be' left out entirely. Moreover, a case more destitute of great public importauce could hardly be imagined. Another point was that, if the Court was clear that its decision was right, it should not grant leave to appeal against it. ■ That was. the principle adopted by the Privy Council itself, and it should be followed by that Court also. If, however, special • leave were granted, it might be granted on such conditions as the Court thought fit, and he submitted that one condition should be that the appellants should first.pay the fine that might bo imposed. . Mr. Justice Edwards: But they don't know-yet-what "the fine is.

- Mr. Salmond said the leave to appeal would be contingent upon Bontoneu being, passed upon tho-appellants. In; conclusion, counsel urged thai to grant tho.leave asked for. would be a revolutionary act and ■ a complete departurn from the fundamental principles laid down-by the Privy Council'in regard to appeals in criminal! matters. On this, the first occasion for the use of a doleMated authority given by tne Privy Council, the Court' should not depart from the . principles ■ thoroughly established by the delegating authority. IS PROPERTY INVOLVED?

Mr. Skerrett submitted .that the decisions under the English Judicature Act had no application to the present proceedings. Section 47' had been construed in England to mean that the character of the cause or matter had to be ascertained, noi from the form, but'from the subject matter of 'tho proceedings, the. reason being that , tho English Court of Appeal was. for the hearing of. civil causes. It followed that whenover the substanco of the judgment of. a Court related to a criminal matter, tho English Court of Appeal had uo jurisdiction, but it did nob follow, that this applied to the jurisdiction of- tho Privy Council.' ■ Mr. Skorrett next referred to Rule 2, paragraph (a), the new rules, relating to appeals to tho Privy Council, as quoted above,and asked: Did tho present case iuvolvo property over £500 in value, or not?! Tho Cliit,f Justice: It involves mono)", but can you say that that is property? It does not affect land, or goods, or property in that senso; nor does it involve recovery of a penalty, for the magistrate may say that plaintiff is not entitled .to pay-anything.

Mr. Skerrett submitted that, as alirge sum of money depended on the uase, and property was indirectly involved—: Mr. Justice Edwards: Not indirectly, but contingently. Mr. Skerret still submitted that the judgment was a final judgment within the meaning, of Enle 2, paragraph (a), and indirectly affected property. ,-, The Chief Justice: Supposo thesp (leople had no property, then you could ■not say that property was involved in tho suit. If it had been a suit for a penalty or complaint, it might have been different: . ; NOT MERE MINUTIAE. Mr. Skerrett went on to say that all the cases cited by Mr. Salmond on ap-plications-for special leave were cases in which jthe criminal administration of justice had ■ been. concerned, and in all those cases,., except two, which were in favour of the plaintiffs, the matter affected the merits in controversy or the.domostic procedure of the particular Courts which determined the- matter, and in such cases the Court did not interfere with the " administration of criminal justice. It was impossible for the Privy Council as a Court of Appeal to control the local Courts in criminal matters; but that had nothing to clo with a case of ..usurped jurisdiction, in which a Court'-'was not competent to try a class~of casesor a particular case. If his argument should prevail, with ilie Privy Council, then it would be declared that the magistrate was incompetent to try the information, anS had usurped jurisdiction. There was no reason of inconvenience that would prevent;the Privy Council determining' the matter: It was not within that ; rule' at. all.-- ;The..Solicitor r General' had just.said that this, was a.matter of the mere minutiae, of legal procedure,' but it was not sor.-'lf ;tKe. plaintiffs' '.contentions prevailed; it would go to the whole jurisdiction of .the magistrates,; A QUESTION OF EXPENSE. His learned friend.had said that be-' cause the Court was unanimous in its decision it should not- grant leave to appeal. •■. . - ■ ■ The Chief Justice: That.is not the groTind. We might be unanimous and yet have doubts. .' ■ '.' ; Mr. Skerrett said, the Chief. Justice had-stated that it was a judgment of first impression. The matter had never been. decided by any English Court, and although the Court was unanimous, he submitted that it was .desirable that the matter should be authoritatively settled by!the Privy Council. . ■'■■'■. .Mr.'Justice'.'.'Edwards:' Why. not go to the Privy Council to get leave P '/ Mr. Skerrett said there was the objection of expense.'i / ' Mr. Justice EdwWds: There- is no very great expense in an- application for leave to.appeal. - ' : ■ ■ . Mr. Skerrett: I have had some ex r perience in sending Home applications for leave and in opposing them, arid I can assure your Honours that the expenses are not small. Mr. Skerrott then, argued against the suggestion that if leave to appeal were grante'd it should be a condition, that any .fine to be imposed should first be fully paid. The pendency of an appeal to the Privy Council would ■ not prevent the Crown or the informant proceeding with the information. ': Mr. Salmond: Or getting a convic- : tion. ' . . : , , - ~..-' Mr. Skerrett: Just so: but you would have tb'take the risk of the Court not having jurisdiction.. . .... Mr. Salmond: And then it would be a void'.conviction", if the appeal were! allowed. ! ■ . ,■ : ' Mr. Skerrett proceeded to argue that the present case was only a so-called criminal: proceeding; it was really a proceeding for-. the protection of the revenue. He considered that this! class, of case was not within the rule of the Privy.Council at all. -It was within the , W&mS^^gulatnig;V'the; LEnglishJ Court oPAppeal. There they had no jurisdiction to entertain ah appeal dealing with the matter ofvpriminai proceedings. So far as the'jurisdiction of the ,, Priv y: Council was concerned, the Privy .Council possessed that power, and this class of proceeding was. not'within the contemplation of'the Privy Council when, itih'ad.'said that it wouldl.bo, chary invinte'rfering with the procedure of local'.Courts in criminal;,cases/' . :