BOWRON BROS.’ INCOME TAX CASE

New Zealand Times, Volume XXXII, Issue 7110, 23 April 1910, Page 6

BOWRON BROS.’ INCOME TAX CASE

QUESTION OP APPEAL

LEAVE TO GO TO PRIVY COUNCIL EEFUSED

The Court of Appeal yesterday came to a unanimous decision not to grant leave to the plaintiffs in the case of Bowron Bros. v. Bishop and Tyers to appeal to the I’rivy Council. The idaintiffs had been charged with making a false income tax return in November, 1900. The matter was tried Before Air 11. W. Bishop}, S.AI., at Christchurch. The magistrate reserved Iris decision, and Bowron Bros, applied to the Court of Appeal for an order of prohibition, preventing him from giving judgment on tho ground that he had no jurisdiction to hoar tho case. The Court of Ax»pcal decided against them, and they asked letLvo to appeal to the Privy Council. This application was argued yesterday before their Honors tho Chief Justice (Sir Robert Stout), and Justices Williams, Edwards, and Chapman. Alt C. P. Skerrett appeared On behalf of tho plaintiffs, tho respondents being represented by Air J. IV. Salmond, Solicitor-General. Tho application had been made by Air Skerret/t on tiho previous day, and was adjourned until yesterday, to allow Air Salmond to argue tho matter. Alt Skorrebt’s application was made under rule 2 of tho rules governing appeals from colonial courts to tho Privy Council. This rule is as follows : —•

Subject to the provisions of those rules, an appeal shaE Ho: (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 £SOO or upwards, or where the appeal involves, directly or indirectly, some claim oir question to or respecting x>roperty, or some civil right amounting to or of - tho value of £SOO or upwards. (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 reason of its great general or public importance, or otherwise, ought to be submitted to his Majesty-in-CouncE for decision. MR SAXAIOND’S ADDRESS. Mr Saimond said that tho application whs an alternative one, made under both paragraphs of rule 2 of tho New Zealand Supreme Court and os. Paragraph (a) referred to appeals as of right, and paragraph (b) to appeals at the jurisdiction of the court. Paragraph (a) stated that there was a,n appeal as of _ right where -Share was a sum exceeding £SOO involved, or whoro the matter involved property or civil right valued at more than £SOO. Counsel submitted, in the first place, that there was no appeal as of right in a criminal matter, -and the present was _ a criminal matter within the moaning of the rule. He submitted that it was a simple step in a criminal prosecution. A criminal prosecution commenced in an inferior court could come before a superior court in many ways—by appeal, certiorari, prohibition, mandamus, habeas corpus—and whatever way it became (transferred, whether temporarily or permanently, to a superior court, it remained a criminal proceeding. The Judicature Act allowed no appeal on a criminal matter except on a ques■fsian of defect in law. The Chief Justice: This case has boon treated as a oivE matter so far. There are two sides of the court, civil and criminal, and criminal matters ‘ are expressly provided for in the ■xules. Mr Saimond: But there is practically no distinction, your Honor, be- ! tween the two sides of the court. Mr Justice Chapman: This matter may have had its-origin as a criminal ! proceeding, but is not considerable property involved? Air Saimond: Mo,”your Honor. Tho matter is purely criminal, and there r™n ho no appeal as of right. The matter is quite unprecedented. The Chief Justice: You say the matter of civil right cannot bo raised? Mr Saimond: No, your Honor; not vn a criminal proceeding. Mr Justice ’Williams • These proceedings were taken under, the rule governing civil procedure. Air Saimond: les. Air Justice Williams: The case comes before the court in its clv-1 jurisdiction. Air Saimond: It comes under the civil rules. The question, is—what is (the intention of the Privy Council rule? Is it to give an appeal as of night, in a case which in England would bo regarded as a criminal proceeding? The Privy Council is not concerned with our rules. Air Justice Chapman quoted the case of a clergyman who had taken a case to tho House of ■ lords, although tiro matter was a criminal one, with no property involved. Air Saimond: But tho court was an

Mr Justice Chapman: The Court of Arches was acting as a criminal court. TT-r Salmond : There was no question t£ imprisonment involved. Mr Justice Chapman: The proceeding was to secure obedience, and not to punish past offences. Mr Salmond: I submit, your Honor. that that was no more a criminal matter than an induction. CIVIL OK CREMEvAL.

Mr Salmond continued that air ■Sfcerrett had contended that there was civil right involved. Counsel said that his friend wont so far as to say that a proceeding in which the amount of fine which could be imposed was more than £SOO was a proceeding on which appeal could lie. Mr Justice Chapman; There is, in addition to tho fine, the question of the collection of tho tax. Mr Salmond: I submit, your Honor, that that question is not involved at all. There is no difference between this case and the fine imposed on a man for drunkenness. Sections 10G and 107 of the Land and Income Tax Assessment Act, 190 S, provided for the collection of the tax. There is no limitation,- and once it is assessed it is recoverable for ever. Short payment has to he discovered within three years, and not necessarily sued for within that period. If discovered it can ho recovered at any time afterwards. The next section jjrovides for the assessment of tho tax. In such a case.,as.,this tho assessment is mado in

the ordinary way, and there is a right of objection to tho assessment, which can be carried to tho Privy Council if necessary. When the tax has been assessed, tho fine to bo imposed is fixed by law, and is not a matter for the magistrate. His Honor the Chief Justice remarked that in the strict sense there was no civil right in tho present case. The right to bo fined was not a civil right. A civil right was a definite thing, not a negative thing. Mr .Salmond; There is no civil right, your Honor, but a criminal liability. In any criminal case which comes before the court, there is tho power for the imposition of an unlimited fine. If this case can go to tho Privy Council, then every criminal case could go there on appeal as of right involving more than £SOO. To allow such a plea would be absolutely revolutionary, and a violation of all tho rules of the Privy Council.

COURTS DISCRETIONARY POWER. Counsel then went on to deal with tho application as made under rule 2 (b), which gives the court discretionary power in the case of a matter of great public or general importance. This power had been derogated to the Court of Appeal by tho Privy Council, by the new' rule of January 13th of this year, and this was the first occasion on which it had come before tho Court for interpretation. The power was one which had always been jealously guarded by tho Privy Council itself. The Chief Justice: The Privy Council may exercise its power in any case. Air Salmond: If the court refuses leave to appeal, it may still grant that leave. But I submit that this court should he careful not to grant special leave in a case in which tho Privy Council itself would not grant leave in England. The Chief Justice; It is very doubt ful whether the Privy Council would grant leave in this case. Air Salmond; I submit with confidence, your Hon or. that this is the last case in which the Privy Council would give leave. Air Justice Williams; Say this case had gone against you, what would you have done?

Mr Saimond; I should most probably have applied to the Privy Council for leave, but I should have been very much surprised if X got it. I should have had a better case, I think, than my friend lias, but I should have thought very poorly of my chances. Counsel continued that the amount iS interest of tire parties did not mattVr at all in such an application. Many times tho Privy Council had refused leave to apneal when the parties were very greatly interested. There was the case of Deeming, 1892. This man was charged with murder, for which he was subsequently hanged, but the Privy Council refused to consider his case. What greater interest could a man have than his life? The Chief Justice: There is another wav of looking at it. A matter of £SO might mean a groat deal more to one man than £SOOO to another. Clearly, Mr Saimond continued, the matter was not one of great general or public importance. Air Justice Edwards; Is it not a matter of public importance to have poisons evading the payment of taxes tor three vears? (Laughter). Air Saimond, in conclusion, submitted that tho present case was not one for special leave. He suggested that the court should refuse.to grant such leave, and say to tho parties, “You can ask the Privy Council itself for special leave. This court is satisfied. 7 To grant leave would be a revolutionary act, and would involve departure from a fundamental principle laid down by the Privy Council. It would not do for a colonial court, on the first apnlication made to it since it had been granted this discretionary power, to depart from every practice of tho Privy Council AIR SKERRETT REPLIES.

Mr Skorrett submitted that it could clearly bo said that this ease was one involving property of a greater value than £SOO. Tho Chief Justice; It might mean tho loss of money, but can it be said that it involves property ? Mr Skorrett: Indirectly d® 6 ®; your Honor. It may yet bo said that wc are liable. . ' . Tho Chief Justice: This court is not asked for a final decision on the case, but merely a stopping of proceedings. , . . Mr Skerrett: A final decision giving us immunity from payment of large sum of money. . . , ilr Justice Hdwards; Tins is not a civil right. Mr Skerrott: I don’t know that it is not a civil right, your Honor. There* is a iaxgo amount of property involved. Tho Chief Justice: It is not a suit albqut property in the ctirect sense. Mr Skerrett: No, your Honor. Tho Chief Justice: What would happen in the case of a man .who had no money? Would property ho involved ? , Mr Skorrett: An order for payment would ho made. The Chief Justice: This is not a suit for money. If it were_ a claim fot damages it would bo a different thing. Mr Skerrett: That would not bo a ■criminal matter. , Mr Justkie : It would no so far a criminal matter that you l could not interrogate. Mr Skerretit submitted that the case* was one -for special leave. All the eases quoted hv his friend as showing the action of the Privy Council had been with reference to ‘crimiimal courts. In all the cases what had been affected was the' meifits of the case, or the domestic prooedluro of a colonial court, with which Hie Privy Council .would nob interfere. In such oases an apwould not bo allowed. Tlio PtjtV Council would not act as a Court of Appeal in criminal cases, ,or interfere with the procedure of other courts. Mr Salraond had laid emphasis on the fact that the decision of the Court of Aptpeal had boon unanimous, but ashiS Honor the Chief Justice said, tho case was one of first- impression-, and_ thare wore no previous decisions in the matter. Mr Salmond had also proposed conditions, should tho court allow special leave, such conditions beinn- that the amount of the possible fine should ho iraid. Such conditions were unnecessary, as the department could go on.; take judgment, and .collect the fine. ' Mr Salmond: Mo should be taking a

big risk. Mr Skorrofcb; You would certainly be taking a risk. Mr Justice TWwards: Only the risk of having to make a refund. Mr Salmond: No, your Honor. Wo

should have to defend a claim for damages for having proceeded on an invalid judgment. If the, PrivyCouncil held that tho magistrate had no jurisdiction, the conviction would of course ho upset. Air Skerrett went on to argue that the matter was not a criminal one, but an action to pnotcot tho revenue. Air Justice Edwards; An action founded on fraud. Air Skerrett: Fraud is in.t always criminal. Alany cavil actions aro based on deceit. THE COURT’S DECISION. LEAVE REFUSED.

Tho oourt delivered oral judgment. His Honor the Chief Justice said ho was of opinion that tho court should refuse leave to appeal. Tho plaintiffs still had the night to go to the Privy Council itself and ask far spoeial leave. His Honor did not desire that the pla.'intiffs should bo embarrassed by the court might now say. The Privy Council should decide tho question as if this application had never been made. Referring to the application under rule 2 (a), his Honor said that on the previous diay he had taken the viow that the application could not .be granted on this ground, and this opinion irad since boon confirmed by reference to English authorities, and by Afr Salmotid’s argument. Tho action was nab a claim in respect of property. Ifc was an application for a- jwohibition to prevent a court, for trial cf a crimdnal matter from proceeding with that

trial. There was no question of civil right, as that term was used in tho rule and usually- spoken of by writers on jurisprudence. There was no riivil right in the strict sense. All that was involved was whether the plaintiffs arc guilty or not guilty of the offence charged. Again, no application could bo granted under rule 2 (b). Tho court had to consider whether the case was one of great general or public interest. His Honor did not think it was. Now Zealand had had a similar law for about seventy year's, and the question ' had never risen before in all that time. In order to get an appeal before tho Privy Council oto a criminal matter, it was necessary to get special lenve. Whenit was looked into, the present case appeared to be a criminal matter. Tho appeal was therefore on the proceeding of a criminal court dealing with a criminal matter. Were permission granted in this case there would bo prnctiHiUy no limit to tho cases which could go forward. For instance, a person charged tbuld apply for prohibition on the grounds of “want of jurisdiction, because there bad been no offence under the statute.’' Thus ©very criminal matter coming bofor© the court, could bo delayed and hung up for ycfcrs. This opinion his Honor had formed on the previous day, and shill held. Ho did not think the case was one in which the Privy Council would interfere. Ho held that no appeal could lie under either paragraph of rule 2. Mr Justice Williams concurred. There could be no appeal as of right under paragraph (a). Tho effect of the judgment" was to render the plaintiffs liable to a fine in a criminal proceeding. His Honor did not think that'there was a question respecting property. Nor could it be said that there was a civil right within the meaning of paragraph (a). Tho words “ civil ” right as used in that paragraph must be construed with reference to the recognised practice of the Privy Ocmncil in criminal matters. Nor did his Honor think the_ court should exercise tho discretion given it by paragraph (b). According to the view I take, this is an objection to the jurisdiction of a magistrate, and if that objection is sustained, wo go to the root of the proceeding. There is a distinction between this ease and that kind of appeal on merits from the decision of a criminal court. At the same time, his Honor oould not say that the present case was one of great general or public importance, and the court had to bo satisfied of this before it could exercise tho discretionary powers granted to it by the Privy Council. The court had also to consider whether there was any doubt as to the accuracy of its decision. He did not think that any hardship would be caused to tho plaintiffs if tho court should decide that it oould not exercise its discretionary power. He was of tho opinion that leave could not be granted. Air Justice Edwards agreed. Neither directly nor indirectly did the question involve civil right or property. The liahiEty to pay a fine did not come within the matter either way—either within (a) or (b). The case was of no public importance at all. The matter was one which should be left to the Privy Council to determine according to its own rules. No hard- . ship could result, as Air Skerrctt ad- ; mitted that proceedings would not bo stayed by special leave. The only hardship w-as that tho plaintiff might ’ have to pay more costs. That did not affect the proceedings in this court. | Air Justice Chapman was of the same opinion. It could not come , within the meaning of paragraph (a). Tho rule was widely worded. If it could ho said that this claim either directly or indirectly involved pro- ' perty the right would apply to ordi- ’ nary cases of felony. As. to para,graph (b) has Honor was unable to say that . this was a matter of great general or public importance. It was really a j matter of importance to individuals, \ and the wording of the rule distinguished between these. For these , reasons his Honor was of tho opinion 1 that leave could not bo granted.

The motion for leave to appeal was therefore dismissed, with £o us costs.