THE PROPERTY TAX.—INPORTANT JUDGMENT.

Daily Telegraph (Napier), Issue 3105, 10 June 1881, Page 3

THE PROPERTY TAX.—INPORTANT JUDGMENT.

(BY TELEGRAPH.)

WEHiis-GTON', June 10 At the R.M. Court yesterday Mr Shaw delivered judgment in the case of the Deputy Property Tax Commissioner v. Greatrex. The informatian alleged that the defendant William Ernest G-reatrex being a member of the firm of Charles G-reatrex and Son, and being a person liable to taxation under the Property Assessment Acts, had wilfnlly failed and neglected to furnish any statement of his property in the manner required by the aforesaid Acts within the prescribed time.' His Worship's judgment was to the following effect: —The gist of the offence is not that the defendant failed to provide a statement of his property, because although that is 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 G-reatrex) has pleaded exemption on the ground that he is not liable to pay duty, and he can only succeed upon tho assumption that after deducting nis just debts he has not £500 worth of property in the colony of New Zealand. The facts of the case are somewhat peculiar. It seems from the defendant's admissions that he is a member of a firm carrying on business under the name of Charles Greatrex and Son, in the town of Walsall, in England, and in the city of Wellington, the partners being identical in each place. It seems, inter alia, that large consignments are made by the firm in England to the firm in Wellington, and for the purposes of their business the accounts are kept distinct— that is to say, upon tho arrival of a consignment of goods in Wellington, as far as I can understand defendant's admissions, those goods are debted against the Wellington branch and credited to the Walsall branch until a remittance is made to cover the goods. It is admitted on behalf of the Crown that if Mr Greatrex 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 he has not property in Wellington that would come up to the statutory requirement of a clear £500. On the other hand if the property in the firm's possession in the colony be not subject to this deduction then tho defendant admits he has to pay upon a certain amount, and therefore would bo liable on this information. No evidence was taken. Written admissions signed by tho defendant were put in, and upon these the Court is asked to decide two questions—first, is the holder of proporty in New Zealand entitled for the purpose of making a return of his property to deduct debts payable outside the colony ; secondly, if he can do so, can the defendant in this instance deduct debts due to the firm of Charles Greatrex and Son, of Walsall, tho deduction being made in favor of his own firm ? I am 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 debts, charges, or liabilities on that property due or to become due to persons outside the colony—that is to say, in the case of a merchant here received a cargo of flour as a consignment from Adelaide, his correspondent at Adelaide drawing upon him at three or four months, I take it that until that bill has matured and until it is met there is a liability upon that flour which could be properly deducted for the purpose of making a 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 to a firm in Australia as to one in the colony, the object being to got 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 come to consider whether Charles Greatrex and Son, Walsall, being identical with the firm in Wellington (whatever they may do for the porpose of internal arrangement and for facilitating , the book-keeping of tho firm) can say they are to be treated as two individual firms, and allowed to set off a debt due by one to the other. It being admitted that Charles Greatrex and Son in Walsall and Wellington are one firm, can the firm in Wellington gay 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 Greatrex in Wellington to make such a return, because it occurred to me that it would he quite impossible for him to do so. gfoert was ref-y little to guide the Court ua

to what position these goods were in, but undoubtedly some were consignments from the Home house, and the defendant could not tell whether tho 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 duo for them in Walsall. He has told us that 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 omissus in the Act. It evidently 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 the defendant is liable to make such a 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, the Crown solicitor, with great force, that if tho Court would go so far as to rule that tho liability to the Walsall branch could be deducted, all that any New Zealand merchant would have to do would be to open a branch establishment in Sydney or Hobarfc, and by hocuspocus book-keeping, by which he would credit the Sydney or Hobarfc firm, evade payment of the tax in this colony. Clearly unless the liability is a honct fide liability which a person could be sued upon, or which would be a chose 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 the firm here on this liability, and ifc 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 made that the defendant should pay treble duty in addition to the rate of Id in tho £l on the property of the firm —that is, a tax of 4d in the £1.