Inland Revenue v PNT Enterprises Ltd [1992] CKHC 2; CR 819.1991 - 833.1991 (24 June 1992)

IN THE HIGH COURT OF THE COOK ISLANDS
HELD AT RAROTONGA
CRIMINAL DIVISION)
C.R. NOS. 819/91 TO 833/91 INCLUSIVE

BETWEEN

INLAND REVENUE
Informant

AND

P.N.T. ENTERPRISES LTD
Defendant

Counsel: Mr Arnold for Informant
Mr George for Defendant

Date of Judgment: 24^th day of June 1992

JUDGMENT OF DILLON J

On 3 February 1992 fifteen informations laid by the Informant against the Defendant company came before Mr Tangaroa, a Justice of the Peace. Previously the Defendant had elected that the informations against it should be dealt with by three Justices of the Peace under the provisions of recent amending legislation to the Judicature Act 1980-81.

Mr Tangaroa J.P. has referred the issues argued before him to this Court pursuant to Section 105 of the Criminal Procedure Act 1980-81. Section 105(1) states as follows:

"If a question of law arises on a trial before the Court presided over by a Justice or Justices of any person for any offence the Court whether on the application of the Prosecutor or the Defendant or of its own motion may refuse to continue the trial and may adjourn it for retrial before a Judge."

I shall proceed to determine that issue of jurisdiction which is the question to be decided.

Originally the jurisdiction of three Justices was determined by the Judicature Act 1980-81. Section 20 of that Act states as follows:

"Section 20(a) - In criminal proceedings (i) in respect of any offence specified in Part 2 of the Second Schedule to this Act, and (ii) in any case where the enaction creating the offence provides that jurisdiction may be exercised by the Court presided over by three Justices."

Part 2 of the Second Schedule referred to in Section 20 above relates to various offences but limited to the Crimes Act 1969. Therefore three Justices of the Peace did not have jurisdiction to deal with informations under the Income Tax Legislation in accordance with those particular provisions.

However in 1991 that Act was amended by the Judicature Amendment Act and provided insofar as it relates to the matters here in issue as follows:

"15A(1) - Notwithstanding this or any other enactment on the trial of any Defendant where Sections 14 and 15 of this Act do not apply, the Defendant shall have the right to have a trial before three Justices sitting together or before a Judge alone where the matter to be tried is under....

(c) The Income Tax Act 1972."

At first glance it would appear that this amending legislation provides a Defendant with the election of trial by three Justices or a Judge in matters related to the Income Tax Act Legislation. No doubt it was on this interpretation that the Defendant was given the right of election and selected as his preference three Justices.

The Informant then argued before Mr Tangaroa J.P. as to whether three Justices did in fact have jurisdiction to hear the informations. The Informant argued that the maximum penalty on the informations was a fine of $1,000 only. Therefore Section 15 of the Judicature Act 1980.81 applied. Section 15 of that Act states as follows:

"On the trial of any person for any offence punishable only by fine or by imprisonment for a term not exceeding six months or by both, the trial shall be before a Judge or a Justice or Justices as the case may be without a jury."

The argument of the Informant then continued that as the maximum penalty under the Income Tax Act was a fine only; that as Section 15 of the Judicature Act did apply for that reason; and that as Section 15A of the Amendment Act already referred to provides "... where Section ... 15 of this Act do not apply..."; therefore the argument concluded that three Justices of the Peace did not have the necessary jurisdiction under the amending legislation, although -such amending legislation specified the Income Tax Act pursuant to which the informations were laid. Three J.P.s were of course always excluded from dealing with Income Tax cases under the original principal Act.

Mr George, for the Defendant company, strenuously and vigorously opposed the Crown's application, relying on the fact that his client had been given an election; pursuant to that election his client was prepared to go before three Justices of the Peace; and that it would be grossly unfair and unreasonable to now deprive his client company of the election that had been made. In addition he referred to the delays which have occurred; what he believed was the unfair treatment of his client; and the apparent defect in the legislation which should not penalise his client as a result.

To be fair to Mr George I think his eloquence and pleadings would have been most appropriate if addressed to a jury. When this Court is required to determine issues of jurisdiction and the meaning of legislation, it should not be moved by eloquence but rather a hard cold factual assessment of what the law states. The main issues to the argument before me are as follows:

1. The Defendant company was given an election and as a result elected to be tried by three Justices. Clearly that election should not have been given. While Mr George can protest, as he certainly has done, he cannot insist on an election that in law can't be given.

2. The question of the extent of the jurisdiction is clear in that this case can only be dealt with by a Judge or a single Justice. The monetary jurisdictional limit of a single Justice is $500. The maximum fine that could be imposed under this Income Tax legislation is $1000.00. Mr George claims that a single Justice of the Peace would thus be dealing with a matter which in fact is outside his monetary jurisdiction. Mr Arnold, on the other hand, says that if convicted by a single Justice of the Peace then the maximum fine that could be imposed would be $500.00.

Mr Tangaroa J.P. has prepared a comprehensive and detailed statement of the submissions presented to him on 3 February 1992. The Court believes that he has handled this whole matter very appropriately and correctly. It is the Court's opinion that his referring the problems and difficulties which occurred was indeed the correct and only recourse open to him.

Clearly three J.P.s do not have the jurisdiction to adjudicate. It is, in my opinion, just as important that a single Justice of the Peace should not adjudicate on information which attract penalties in excess of that Justice's jurisdiction.

I have treated the ruling by Mr Tangaroa J.P. as not only a request for me to resolve the jurisdiction conflict, but also that he has invoked the provisions of Section 24 of the Judicature Act 1980-81 that states as follows:

"24(1) - Where proceedings by way of information have been commenced before a Justice under Section 19(a)(ii) of this Act ... the Justice... may decline to deal further with the information and require that it shall be dealt with by a Judge..."

In this context it is appropriate to refer to Part I of the Second Schedule to this Act, and in particular Paragraph 2 which states as follows

"2. - Any other offences against any provisions of any enactment, ordinance, regulation or bylaw for which the maximum term of imprisonment does not exceed three years."

Finally Mr Arnold referred briefly to the background of this case; why these informations were issued; and why the matter is of some consequence to the revenue of the Cook Islands. Mr Arnold said that the informations refer to undisclosed turnover tax evasion involving a potential loss to the country's revenue of $1 1/2 million; that there are some 4,000 documents which comprise the basis of the informant's case against the Defendant; that there are at least eight witnesses who will be required to give evidence; and that it is estimated that the case would take three full days to be heard.

There is no doubt whatsoever in my mind that a Justice of the Peace should not be burdened with this complex and complicated dispute that will engage him in a three day trial; it is just as clear that the Defendant is entitled to have the opportunity of full and detailed legal arguments on the undoubted difficult matters which I am told are required to be resolved. For those reasons alone it clearly proper that these cases be dealt with by a Judge; that it would be quite inappropriate for the reasons already stated to be dealt with by a Justice of the Peace, and no doubt for those reasons Mr Tangaroa J.P. was perfectly correct in referring the case to a Judge for final determination.

The Registrar will set down these informations for hearing before a Judge alone at the earliest possible date in order to avoid any further delays.

The questions of costs is reserved.

DILLON J