LAW REPORTS.

Dominion, Volume 3, Issue 808, 4 May 1910, Page 7

LAW REPORTS.

• -— : *- SUPREME COURT, v TAXING OF - LARGE ESTATES. MCE LKGAI, POINTS. The decision of the Supreme Court was asked yesterday in a land tax niotter, Henry .Gaisford, sheep farmer, of Oringi, tie.il- Danuuvirke, versus the Commis-sioner-of Taxes, Wellington. The case war. argued beforo the Chief Justice (Sir Robert Stout), Mr. C. P. Skerrett, K.C., with him Mr. H. H. "Ostler, appearing • for Gaisford, ami Mr. J. W. Salmond ■ (Solicitor-General) for the Commissioner of. Taxes. The proceedings came in the form of a jpcciul case, the following facts being placed before the Court:—From March 31,': 1807,'. until .the present day,i Gaisford was the legal "and beneficial owner of the Oringi Estate, liear'Damievirke, the unimproved value of which was £5'2,609 on March' 31, ISO". He was also the legal and beneficial owner of the ltauparo Estate, near-Hastings, the aggregate unimproved value of the l , Raupare and Oringi Estates being ,£118,698 on March ' 31, ISKJS. ■■-

.The Mount Herbert Estate, near-Wai-pukurau, was .vested, in Gaisford, for a legal estate :in fee simple, as tho solo trustee 'of . the f will of the late Henry Eobert- Russell, sheep farmer, of Hawke's ■Bay.. On March 31, 1907, tbo unimproved value of tne Mount Herbert Estate was '.\£50,654, and on March 31, 190S, -£71,631. Gaisford .was the sole trustee of the will of , the late Henry Robert Kussell, and, pursuant..to,. the-trusts of the will, was carrying on..'sheep-fanning on the Mount Herbert Estate,-the live stock being valued at .£16,000. or .£IB,MO. ! The working of the station was shown Ito be:—Year ending May 31, 1905, profit, .£ISS6 15?, 2d.,- year ending May 31, 1908, .profit, ,£5069 14s. '7d.; -year ending May 81, '1907, profit, .£1312 lis. Bd.; total, •£8269 Is. 5d.; year ending May 31, 1903, loss, .£3340 ss. Id.; balance, £4928 16s. 4d. Sifice the death of the testator no profits from' ; the estate had been available for division among the beneficiaries under the will, the profits having been wholly required to pay liabilities in regard to interest or principal owing upon the estate, : and in regard to the" carrying on of ■: the business of tbo estate.' I'he will gave to Gaisford, the .trustee, power to Mil-and convert into money the whole or any part of tlie testator's estate, and to the proceeds as directed by the jwill., The will also contained a provision ithat ■.half of the net annual income of Ithe estate should bo paid to Gaisford for ilifej and. the other lialf to his wife, now * dead. Gaisford had five children living, ifour of whom were of age, and, as provided ,in fho will, the Mt. Herbert Estate was jield'by Gaisford in trust for his. five 'children, subject to his life estate in ; a moiety of the annual profits. Gaisford aid not personally manage or reside upon 'uie Mount Herbert Estate, but employed ta. manager to carry on the work of the station. .He had never at any time worked. the Oringi and Raupare Estates in conjunction with the Mount Herbert Estate. ••

The Commissioner for Taxes, in assessing. Gaisford for land tax for 1907-8 and 1908-9, had added to the value of the Oringi. and Raupare Estates (owned legally and beneficially by Gaisford) onehalf, of the value of the Mount Herbert Estate- (in respect of Gaisford's life interest in one-half of the annual profits ■ under the will), but;had allowed a deduction from that assessment of one-half of-the- graduated land tax (payable by Gaisford as trustee of the Mount Herbert Estate). !

; Gaisford had paid to the Department, under protest, the amount of the assessment so made. Gaisford contended that the assessment had been wrongly • made, and that he should have been assessed on the,value' of the Oringi and Raupare Estates,. without taking into account any part of the value of the Mount Herbert Estate, held by him as trustee. • '■If Gaisford was correct in contending for this basis .of taxation, he -had .over-:, paid the tax. due by the sum of £324 9s. 6d. I

The following questions were submitted opinion of-the Court:—

"•■(a) Whether graduated land tax is , r payablq'by .Gaisford (so contended by the Commissioner of Taxes) upon tho ■ total ' aggregate unimproved values of "the Oringi and Rauparo Estates, and one-half of ■ the. unimproved value. of "the Mount Herbert Estato, with a de- ; duction of one-half of the tax payable by : the Mount Herbert Estate, or whether (as contended by Gaisford) he is liable to pay graduated tax on the aggregate unimproved values of the Oringi and Raupare Estates alone?

: . (b) What is the correct basis upon which; tho estates shall bo assessed 'for graduated land tax? •

'In "regard to judgment, the" solicitors for the parties, in stating the case, said that judgment should be entered in. accordance with the answers of thu Court, and if neccssary the amount (if any) overpaid by Gaisford might be ascertained by an inquiry held before the Registrar. ' " . Having heard lengthy argument on the law, his Honour reserved judgment. , COSTS IN A BIG CASK. ' A . motion for costs was dealt with by his Honour the Chief Justice yesterday in a case,. heard in March, involving a claim for tho specific performance of an agreement for the sale of a large Marlborough Tun, called Birch Hill, containing "18,800 acres. The action had been' brought by Thomas Morland, farmer,- of Rakaia, against Frederick. Hales, Benjamin Coleman, James Brownlie, John Oliver, and j Thomas Wilson, gentlemen, of Wellington. Edw'ard Somerville, .sheepfarmer, of Southbridge, was joined as a third party. In-giving - judgment, the Chief Justice (on. April 4) said that two purchases of the property had been made, in good faith. The question really was: Which of the two prospective purchasers was entitled to have his bargain completed— I Morland or Somerville? The equities in i the. case, in his Honour's. opinion, were ,equal, and Somerville, .Who obtained the (first valid contract, was entitled to have 'the; property, conveyed .to. him. : Costs would have.to be allowed to the defendants.

.When the matter of costs was brought np yesterday, Mr. T. Young appeared for .plaintiff; Jlr. C. P. Skerrett, K.C., with him Mr. H. P. OXeary, for defendants, and_Mr. P. Levi for'the third party. His Hononr said that the proper course 6eemed to be to nonsuit the plaintiff. That left him free as to what he might do':'.afterwards, otherwise he might be prejudiced. % Mr., Skerrett agreed that this course ought to be followed, and the Court would have to settle the costs of the third party. llr. Levi submitted that his client could get costs against the plaintiff, and, if not, against the defendants in any case. The .defendants had brought the third party before the Court. His Honour- They brought you here in order that, if anytlijng happened, it could not be said that they were not representing your interests properly. You need not have, defended.

Mr. -Levi said that tlio third mirlj was entitled to appear in defence, being bound by the result of the case. The contest had actually been between the plaintiff arid the third party; the defendants were really unconcerned in the result. The ground of the decision wholly depended upon the existence of the third narty. After further argument. the Chief Justice said that ho would fake time to decide thn matter, remarking that on one. occasion, in Dunedln, a * learned legal gentleman had declared that the most important matter to be decided in every case was the matter of costs. IN CHAMBERS. • COMPANY TO WIND UP. Mr. Justice Cooper presided .yesterday at a sitting in Chambers. The Court made au order, undir the Companies Act, that Hudson and Marriott, Ltd., auctioneers and general merchants, of Levin, should bo wound up. Mr. H. F. Von Haast appeared for the petitioning creditor, D. J. Macdonald, storekeeper, of Wellington, and Mr. C. B. Morison, appearing for tlio company, offered. no oEDOsitiou. I

A BANKRUPTCY PETITION. In regard to the application previously made that Gini Angelinv settler, of Wellington, should be adjudicated a bankrupt, Mr. H. P. Von Haast asked that tiio petition should be withdrawn, Acgelini having paid tho amounts due from him. Mr. T. Neave appeared on behalf of Angelini.