GOVERNMENT INSURANCE BUILDINGS.

New Zealand Herald, Volume XXXIV, Issue 10407, 3 April 1897, Page 6

GOVERNMENT INSURANCE BUILDINGS.

A QUESTION OF RATING. A OASE of considerable importance to municipalities throughout the colony, in the action Auckland City Council v. W. J. Speight, came on for hearing before Mr. H. W. Brabant, S.M., at che Magistrate's Court yesterday afternoon. The action is brought for the recovery of the sum of £9316s 3d, in respect to rates and penalties alleged by the plaintiffs to be due ou the property in Queenstreet known as the Government Life Insurance Buildings, of which defendant is held in the claim to be the occupier, and the Government Insurance Company, the owners. Mr. Thos. Cotter, city solicitor, appeared for the plaintiffs, and Mr. Theo. Cooper, instructed by Messrs. HesIteth and Richmond, conducted the case for the defence. Mr. Cotter, in opening the case, stated that the buildings in question were partly occupied by the defendant Speight and partly by tenants, who paid rent to defendant for the privilege of occupation. When the valuation list was originally made out tho occupier cf lot 16 (North Ward), the building iu question was shown to be William J. Speight and the owner the Government Life Insurance Company. When the valuations were brought on at the Magistrate's Court last year for the hearing of objections against the same, Mr. Speight objected on the ground that he was not the occupier of the property, and that the property being vested in Her Majesty the Queen was not ratable property. The objection was dismissed, costs being held over at the time to allow of an appeal being made, hut no appeal being made, costs were subsequently assessed at two guineas. The question now was as to whether His Worship was entitled to go into the question, counsel holding that he could not do so, the proceedings being final according to sections 32, 31, and 43 of the Rating Act, whicb stated that the decision was absolutely conclusive and binding on the parties concerned, and could not be carried into a higher Court once the

Uiessment had been made. Mr. W. E. Bennett, rate collector for the city of Auckland, was the first witness called for plaintiffs. He attested to the correctness of the valuation form, and remembered Mr. Speight's objection to the valuation, his appearance in support of the same, and the fact that the objection had been over-ruled by the magistrate. Due notice had been given to Mr. Speight, demanding tho rates, but no part of the money sued for, or the penalty, bad been paid. The sum of £98 16s 3d was still due to the plaintiffs. Mr. Cooper then put iu the evidence of the Government Insurance Commissioner, Mr. Richardson, as taken before the Stipendiary Magistrate at Wellington. This was done under protest by Mr. Cotter, who held that no evidence was admisable. Mr. Richardson in his sworn statement deposed: Mr. W. J. Speight is not the owner of the premises referred to, aud in respect of which rates are sought to be recovered in this action, nor is he the occupier thereof under or by any virtue of any tenure at all. He is the district manager at Auckland of the business of the Government Insurance Department, which occupies the § remises. The premises occupied by the efendaut are occupied in the conduct of the buainees of the department only, The property was acquired in 1885 under the New Zealand Government Insurance Association Act, 1884, and was vested in the Association incorporated under section 3 of that Act. The land became vested in the Crown under eection 7 of the Government Life Insurance Act, 1886, and has since the passing of that Act remained vested in the Queen, and is now vested in the Queen by virtue of section Jof that Act. Mr. Speight is a civil servant in the employ of the Crown, and his status t8 a civil servant is shown by section 8 of the Act of 1886. This section and section 4 of the Act of 1874 show that all officers of the Department are ciril servants. The Government Insurance business is managed by the Commissioner on behalf ot Her Majesty, and under section 3Sof the Government Insurance and Annuities Act. 1874, the consolidated fund is ultimately responsible tor the engagements of the Commissioner. Under sections 73 and 75 of the Public Revenues Act, 1891, the funds of the Department are public moneys within the meaning of those aections. The provisions of the Public Securities Act, 1895, apply equally to the securities of the Government Insurance Department with the other departments of the civil service. The salaries of the officers of the Department must be appropriated by Parliament, under section 39 of the Act of 1874, and the funds required for the purchase of sites or buildings must be paid out of the sums appropriated for the purpose from time to time by Parliament, The Legislature has deemed it necessary to specially impose liability for income tax on the Department under section 4 of the schedule C to the Land and Income Assessment Act, 1891, and section 3 of the Government Insurance Acts Amendment Act, 1891. The Government Insurance Department is a department of the civil service, and of the premises in Auckland in respect of which it is claimed that the rates sought to be recovered in this action are payable part is cocupied by officers ot the Department, engaged solely in the conduct of the business of the Department, and part is occupied by tenants. To Mr. Martin: Tho Department has paid local rates in some cases; they were paid out of the Government Insurance account. It might be charged to rates and taxes. Some particular account in the revenue account would be charged. It is a revenue account. On the one side is entered income from premiums and interest »nd any other sources of revenue, and on the other side the various items ot outgoings. In this account payment for rates diminishes the funds, not the profits. Every three years Wβ have au actuarial valuation of tho office to ascertain our actuarial liabilities. These liabilities are made uu ot the respective amounts, we ought to have in hand in respect of our policy contracts. We deduct this liability from the whole of the funds of the office. This is Hie profit subject to deductions for reserves. These profits or such part of them as Parliament, or if Parliament not sitting, the Governor, may direct isdivided among policyholders. This is under section 45 of the Act of 1874. The profits would be less by the amount of any rates paid during the three years. We have sold properties where the mortgages have been forclosed, but not offices held for the purpose of the Department. We have paid laud tax under the statutes referred to in examination in. chief. We do not have income tax on the profits. I do not know whether we paid land tax on buildings occupied by us. Our moneys are kept in separate accounts, and separate from other Government moneys, the business is separately conducted in a separate organisation or department of the State. To Mr. Treadwell: Part of our funds is invested in Government securities under the Act of 1894. I mean when I say separate organisation or department of the State separate from other departments. Local rates were paid in respect of Wellington, Auckland, Christchurch, and Dunedin premises as occupied by the Department, under a misapprehension of the law, aud elsewhere by arrangements with tenaants. Mr. W. J. Speight, district manager in Auckland for the Government Life Insurance Department, examined by Mr. Cotter, said the branch was never known as the Government Insurance Company. It was at one time called an association under the provisions of the 1874 Act, but this was altered by the Act of 1886. He had heard Mr. Richardson's evidence read. He believed the Government lusurance Department pays for postages, the Stamn Departments supplied stamps in bulk. The Department glio paid the telephone fees out of the interest account, which is charged by the Government to the Department. Other Government departments were charged with these fees, but did not pay them from the interest He did not let the office in the buildings in question on his own account, but ■nbmitted the offers to the Commissioner, by whom they were accepted. The rentals from clients amounted to about £000 per annum, which is two-thirds of the rateable value of the property. The Department had been in the habit of paying rates until the objection was laid. He did not know of any other Government department where the profits were divided amongst shareholders as Was the case with the Department he repretented, The only Department approachiug it in this respect was tho Public Trust Department. Ibis closed the case for plaintiffs. Mr. Cooper submitted that the defendant was not the occupier of the said buildings, and that the department being a State department and vested in Her Majesty the Queen was not rateable. In support of the contention he cited a series of analogous cases where similar decisions to that of the Assessment Court, had been overthrown, and sections of the Act similar to those of the Rating Act had been gone behind. He contended that the decision of the Assessment Court was not final, the determination having exceeded the jurisdiction of the Court, Speight not being the occupier of the buildings, and the same being a State department and vested in the Queen, therefore was not rateable within the meaning of the Rating Act, which exempted certain properties of which the Government Insuranci was one. The property should never have been placed on the roll, not being rateable. However, asiuming that there had been ground for action, the plaintiffs had proceeded against the wrong party. They should have sued the Government Commiwiouer, or Her Majesty the Qneen. Couniel said he would ask for a noniuit ou the above grounds. At this itage the cue wu adjourned until K3O this morning.