COURT OF APPEAL

Otago Daily Times, Issue 21300, 2 April 1931, Page 16

COURT OF APPEAL

DEATH DUTIES- ASSESSMENT A QUESTION OF SUCCESSION. (Per United Press Association.) WELLINGTON, April 1. In the case of Rhodes-Moorhouse v. the Commissioner of Stamp_ Duties the Solicitor-General (Mr A. Fair) continuing his argument in the Court of Appeal, submitted that the estate vesting in Captain Rhodes-Moorhouse on. his mother’s death was. rightly valued as an estate in ' fee simple and that the amount, oi assessment, having regard to the expectation of life of ° his mother at the time of Captain Rhodes-Moorhouse’s death was correct. The death duties were correctly levied upon a sum of £176,000, the proceeds of the sale of part of the original estate. The Rhodes Trust Act,; 1901, authorised the sale only on condition that the proceeds should be .held on the same trusts as the land and did not give the trustees power to vary the terms of the will and defeat the very objects of the testator. Mr Hadfield, for the appellant, in reply, contended' that as the property, never passed into the possession of the deceased, Captain' Rhodes-Moorhouse, ■within the terms of the Death Duties Act, such property was not part of the dutiable estate and its value to him was nil. The court reserved its decision.

By the will of the Honourable William Barnard Rhodes, who died at Wellington on February 11, 1878, his estates known as Highland Park estate, Wellington, and Heaton Park estate, Rangitikei, were devised to trustees upon a trust after the death ol the daughter of testatrix, Mary Ann Rhodes, for the; first and every other son "of- his daughter, in tail male. Miss Rhodes subsequently married Edward Moorhouse, the eldest; child of their marriage being William Barnard Rhodes Rhodes-Moorhouse, an officer of his Majesty’s Forces, who was killed in France on April 27, 1915. He was survived by his wife, the present plaintiff, and a two-year-old son. Mrs Moorhouse, sen., died on April 2 last year, so that the deceased, W. B. R. Rhodes-Moorhouse, had never entered into possession of the estate tail, nor was he ever entitled to the income of such estate. The Commissioner of Taxes in assessing estate duty in reepeet of his estate included the estate tail in the unsold portions of Highland Park and in the proceeds of Heaton ' Park and portions of Highland Park jcold. The plaintiff, who is. the adminis- | tratrix of her late husband’s estate, objected to the assessment, and. a case ' stated was prepared for the opinion of the Supreme Court. This, however, was moved into the Court of Appeal for argument. BORSTAL DETENTION SUBSEQUENT IMPRISONMENT INEXPEDIENT. (Per United Press Association.) Wellington, April i. The court’s judgment in the case Rex ▼. Bryant and Broughton was delivered by the Chief Justice (Mr Justice Myers), who held that the Supreme Court had full power to do what was done by Mr Justice Ostler; but without laying down any definite rule he considered that in the majority of cases it was not expedient that a term of imprisonment with hard labour should be added to a ternj of Borstal detention. The alternative or better course was to increase the period of reformative detention. An order was made that the two accused be detained in a borstal inetitution for two years in lieu of two years’ imprisonment with hard labour, such detention to be cumulative upon the present term of Borstal detention being served. On November 4, 1929, George Thomas M'Donald Bryant, then 19 years of age, was sentenced by the Supreme Court tu three years’ detention in a Borstal institution. He was afterwards detained in the Waikeria Borstal Institution at Te Awamutu, from which he escaped on May 7, 1930. While at large he committed several offences to which he pleaded guilty when he was recaptured, and on May 27 last was sentenced by Mr Justice Ostler to two years’ imprisonment, with hard labour, cumulative on the sentence of detention in the Borstal institution. Mr Justice Ostler, however, reserved for the opinion of the Court of Appeal the following questions of law, which are being considered by it: —(1) Is a sentence of imprisonment with hard labour cumulative on Borstal detention authorised by law? (2) If not, have such sentences any operation or effect, and, if so, what is their effect? The same questions arose in the case of Rex v. William Broughton, who escaped with Bryant from Waikeria, and who also with him was sentenced on May 27 last to two years’ imprisonment, with hard labour, cumulative on the sentence of detention in a Borstal institution. For the sake of convenience Bryant’s case only was argued before the court. The prisoners were, not represented. COMPANY INCOME .TAX AN ASSESSMENT (Per United Press Association.) WELLINGTON, April 1. The judgment of the court in the case of the Dominion Farmers’ Institute, Ltd., v. the Commissioner of Taxes, was delivered by Mr Justice Smith. His Honor held that the two properties in question should be dealt with separately, and a separate deduction 1 made from each separate amount of: assessable income, the residue then becoming part of . the taxable income, The Land and Income Tax Act did not require that a deduction should be made from the total taxable income of the taxpayer, but, on the contrary, the terms of section 83 re: quired that the deduction should be made from that portion of the assessable income which was derived from the actual and exclusive use of the land for the purpose specified. The appeal was dismissed with costs; Prior to 1926 the company erected an eight-storey building on its Wellington property, and subsequently acquired adjoining sites. The company claimed exemption equal to 5 per cent, on the Government valuation of, the additional land over 6i months in 1927, and 5 per cent; in 1928, a total of £563 9s 7d. These deductions were disallowed by the Commissioner of Taxes, who declined to allow the two properties to be joined together as one for the purpose of the company’s business, but allowed a deduction of the income derived from the land in those two years. In May last year the Chief Justice, decided that the assessment of the Commissioner of Taxes was correct, and must be confirmed, and he therefore disallowed the appeal of the company. Against this the company appealed. For the appellant company it was contended that the land was used and occupied solely in connection with the company’s business, and that the Commissioner of Taxes was not entitled to assess the company on, two incomes, both of which were derived from rents. The contention for the respondent was that the vacant land •was being held by the appellant with a view to building thereon and letting such buildings, and was not being used exclusively for deriving rent or other profits for the purpose of the company’s business, so that the company was not entitled to exemption. Alternatively, it was contended that if any deduction was