COURT OF APPEAL

Gisborne Times, Volume XXIX, Issue 3266, 11 July 1911, Page 5

COURT OF APPEAL

A QUESTION OF TAXATION.

'INTERESTING OASE FROM HAWKE’S BAY.

[PER PRESS ASSOCIATION..! . WELLINGTON, July 10. The Court of Appeal, consisting of the Chief Justice, Sir Robert Stout, and Judges Williams, Denniston, Edwards, and Sim, sat this morning to hear an originating summons, moved into the Court of Appeal for argument, between G. P. Donnelly, of Hawke’s Bay, and the Commissioner-of Taxes. The questions for the Court’s consideration arose in connection with the interpretation of section-56, of the Land and Income Assessment Act, 1908 v and are: ’(1) whether the ' right- of ' occupation given by the. will of his. wife to plaintiff, is leasehold' estate, in Hand within the meaning ■of the said section; (2) .whether the' right of occupation given hiin by agreement with-the trustees of the. will is leasehold estate; (3) whether when-land . is' owned' in common by Europeans and"' Maoris,- a leasehold es•tate granted by'such European to ' a European in respect; of undivided interest of less, or is exempted from taxation under, the said section as being leasehold estate in Maori land within the meaning of sub-section 3 of the said section.

By her will testatrix devised to her husband (plaintiff) all her interest in Waimarama blocks, subject to certain conditions. These' conditions were not fulfilled, and plaintiff’s present occupation is, by agreement with the trustees until they should acquire possession thereof for the purpose of sale, subject to payment of interest on certain mortgage monies secured on the properties. Plaintiff also was entitled under the will to the use and occupation, rentfree, of all lands of testatrix not leasea to others. These are the lands referred to In'question one, and the Waimarama block are lands referred to in question two. Mr 'H. D. Bell. K.C., and Mr Lewis, appeared for the plaintiff, and the Soli-citor-General for the Commissioner of Taxes.

Mr Bell, in opening his ' argument, stated that the. importance of the case to the plaintiff lay in the- fact that- if the Court held that plaintiff had a right to the use .and occupation, the estate was leasehold within the meaning of section 56 of Land and -Income Assessment Act. 190 S. The value of the-leasehold estate would be added to the value of other properties held by plaintiff when assessing graduated land tax. He contended that only real leasehold was contemplated by the legislature under this section,- and not mere occupation for an indefinite, term, and proceeded to cite authorities in support of this proposition.

The Solicitor-General said that the purpose of the graduated land tax was to impose heavier taxation upon the holder of large estates. That Act was intended to tax persons in possession of land under any title whatever, and jneluded land held under the right of occupation. At the conclusion of the SolicitorGeneral’s argument Mr Bell briefly replied, and the Court reserved its decision. ' . *