NON-RESIDENT TRADERS.

Otago Witness, Issue 2905, 17 November 1909, Page 12

NON-RESIDENT TRADERS.

INCOME TAX ASSESSMENT.

OF INTEREST TO AGENTS.

! At the Magistrate's Court on the Uth tlie ! Commissioner of Tixcs sought on behalf of the Cry.vn to recover from Georgs Lyon Denniston, merchant, carrying on business" at , Bond street, Dunedin, £34 9s 9d for income tax unpaid. Defendant is agent in '. New Zealand for certain non-resident traders, and was assessed in that capacity. Ttfr J. F. M. Fraaer appeared for the , Crown, and Mr W. Dowuve Stewart appeared for defendant, who denied personal liability, on the grounds— (l) that no money ' had come to him in his' representative character as agent for" any of the eaid ion-" resident traders out of which he could pay f . the said income tax: <2) that, while such - income tax remained unpaid he bad not" -* alienated, charged, or disposed of any rear" or personal property held by him in his : ■ representative character; and (3) that no-' 3 income tax was payable by law for any oE'the transactions in respect of which the- : assessment bad been made. 1 George JLyon Denniston, giving evidence,' said that his practice was to book ordew .< for his principals and send the orders by cable or rcail. If he heard nothing from his principals within a limited time, he assume'! that his principals had accepted the order and sent out an advice note to . the buyer. The goods passed to the buyer • „ when shipped at Singapore, and were drawn ; for direct against document*. Neither money nor goods passed through bis hands.,,' He had no r.ower to -make contracts, and „-. heH no po^er of attorney. The contract* ,., were made ' and executed- abroad. | Mr Stewart, in arguing the law, said toe „ only argument the Crown could produce , f vas a deais on by Dr- Mararthur, S.M., which was quite unintelligible. The defendant was completely protected, because, \ ' by section 9 (a) he was only liable to pay tax on such income as reached his hands or was controlled by him. Clearly no -n^ * come reached defendant. Furthermore, / section 9"(f) expressly stated that defen- 1 ' dant should only be personally liable »f. while the tax remained unpaid, he parted , with property of the principal. But he had never had any to -part with, and 'the whole scheme of the act supported defendant's » contention Another defence was that the profits were not earned in New Zealand, but in Singapore, wbjre the contract was accepted. The court must distinguish between trading with a country and trading in a country. The House of Lords had expressly decided in Grainger v. Gough that, in exactly fimilar circumstances, a French wino merchant whose agent booked orders in Ens land and remitted them to France for acceptance, was not liable for income tax in England. Mr Fraser fdid Mr Denniston was admittedly an a<yenr, and therefore haxdbio as an agent. There was no doubt his position was an unfortunate one, but thousands • of pounds had been paid for taxation unde • similar circumstances. Section 9 (f) did not. bear the interpretation his learned friend had placed on it. The act contemplate.:, and imposed, a special tax for neople tr:ui. inpr as Mr Dennieton was doing. N c profits taxed were made :n: n this Dominion. There could be no profits until th» money was male, and the money and profits <rere made and paid in New Zealand. Ir did not 11 seem to "nvolve any great hardship. Had Mr Denn^toti re\>rp*cnt*>cl to hjs princi-M.-t'.s that truy would be liable to taxation, they would doubtless have paid it, or hare added the same to his account on commiesion. Mr Stewart admitted that Mr Denniston was an agent, but that of itself created no liability a« taxpayer. Tho Magistrate : An agent a nonresident trader. That's what you are? Mr Stewart: Yes; that such is ckar. Judgment was reserved.

During the tree olanting operations TO Wellington last winter, the corporation planted over 42,000 trees, comprising from 25 to 30 different epecies. :