H—3B

806. On the same day (6th October, 1941) the Comptroller, by memorandum, advised the Minister of the payment and of the monthly statements produced by Murtha, which had not been previously produced to the Department, and of the fact that they indicated that the secretary-manager should have known that the actual gross quantity Brewedl was not being returned for duty purposes. The Comptroller also said that the casehad been finalized in so far "as penalties against the company and the brewers and theamount of beer duty short-paid were concerned, but that, if, as the monthly statements--seemed to indicate, the secretary-manager, or other officers of the company, were aware' of the frauds, the question arose whether such persons should be permitted to act in the general or special management or control of the company's breweries. The Comptroller said (notwithstanding the fact that, having regard to Murtha's demeanour and past performances, one must be prepared to discount allegations by Murtha against other people) he (the Comptroller) was arranging for an investigation of the secretarymanager's integrity. 807. On the 10th October, 1941, the Minister approved the Comptroller's memorandum and thereby made effective the acceptance of the balance of the duty and finessubsequent to the disclosure of the monthly manufacturing statements. 808. On the 16th October, 1941, the notice of the settlement was gazetted in these terms : In accordance with the provisions of section 244 of the Customs Act, 1913, it is hereby notified for public information that the Westland Breweries, Ltd., George Murtha, and Charles Murtha, having on the 14th day of May, 1941, admitted in writing that they had from time to time prior to that date committed offences against the Customs Act, the Minister of Customs has accepted from the said company and persons in full settlement of the penalties thereby incurred the following sums : Westland Breweries, Ltd., £l,OOO ; George Murtha, £5O ; Charles Murtha, £25. E. D. Good, . Comptroller of Customs. 809. The settlement, of which this notice was gazetted, was completed on the basisthat there was no evidence of deliberate fraud on the part of the company's directors,, or its secretary-manager. Yet the question does arise whether the company's own monthly manufacturing statements did not provide sufficient evidence (especially when added to the other circumstances) of deliberate fraud, sufficient to justify the holding-up-of the settlement pending, at least, an inquiry into the integrity of the secretary-manager-or the taking of the opinion of the Solicitor-General. Indeed, the questions arise (a)whether the whole settlement should not have been repudiated on the ground that themonthly manufacturing statements had not been disclosed by the secretary-manager, and (b) whether the question of the company's guilt or innocence should not have been, referred forthwith to the Court. 810. On these questions the Comptroller informs us that he considered that theMinister had, by his decision of the 22nd August, 1941, already committed himself toaccepting from the company a settlement under section 244, and that £l,OOO had already - been appropriated to the satisfaction of the penalty incurred by the company. The Comptroller considered, therefore, that the only courses open to him were to investigatethe integrity of the secretary-manager, and, if necessary, to prevent him from acting in the general or special management of the company's breweries, and also, if necessary,, to cancel or suspend the brewer's license under section 48 (1) of the Finance Act, 1917. 811. The Minister of Customs informs us that his decision to proceed with the settlement was based on the statements of the opinions of the officers concerned, that they were excellent officers, and that the Minister's knowledge of them, gained previously,, was such as to lead him to accept their statements of fact and regard highly their expressions of opinion. 812. While we appreciate these views, we think that the difficulty of concluding a settlement first and then investigating the integrity of the secretary-manager afterwards ■ was not appreciated. If the investigating officers found against the integrity of the-secretary-manager, then, presumably, the settlement based on his innocence would not have been completed. The investigating officers were, we think, placed in a somewhat difficult position.

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