Commissioner of Inland Revenue v Druavisi [1997] FJHC 80; Haa0012.1997 (3 July 1997)

Fiji Islands - Commissioner of Inland Revenue v Druavisi - Pacific Law Materials

IN THE HIGH COURT OF FIJI

AT SUVA

CRIMINRISDICTION

CRIMINAL APPEAL NO. HAA 0012 OF 1997

BETWEEN:

COMMISSIONER OF INLAND REVENUE
Appellant

AND:

ATUNAISA B. DRUAVESI
Respondent

I.W. Bla for the Appellant
No appearance by the Respondent

JUDGMENT

The Respondent having failed to provide the Appellant (the Commissioner) with returns of income for the years 1985, 1986, 1987, 1988 and 1989 as required by Section 44(1) of the Income Tax Act ( Cap 201 - the Act) the Commissioner on 12 May 1992 served a Section 50(1) notice upon him requiring compliance by no later than 2 June 1992.

By April 1993 the Respondent had still not complied with the notice and accordingly he was charged with 3 offences of failing to supply information as requested by the Commissioner contrary to Sections 50(1) and 96(1) of the Act.

On 22 November 1993 the Respondent finally complied with the Section 50(1) notice, that is after a period of 180 days default. By Section 90 of the Act a defaulter is liable to a maximum penalty of $40 per day for each day of default. Given that the Respondent faced 3 charges he was liable if convicted, to a maximum penalty of $40 x 3 x 180 = $21,600. In view of the limitations imposed by Sections 7(b) and 12(2)(b) of the Criminal Procedure Code (Cap 21) absent a committal to the High Court under the provisions of Section 222 the maximum penalty faced by the Respondent was a fine of $2,000.

On 29 November the Respondent pleaded guilty to the 3 charges. The following mitigation reproduced in full and as literally recorded was offered:

"I would like to give reasons for the delay in submitting the tax return. I was employed by National Bank of Fiji from 1985 - 1992. The remand of employment by the Bank had kept me busy. The charge of portfolio and the events of 1987 put a lot of demand in my post. As a senior employee I have always kept my clients interest first at my expense. This is my first offence, I ask that consideration be given to my report job and that I am good citizen of the country. I am a member of Tikina Counsel, the Provincial Counsel. I am also a JP."

Having recorded the mitigation the Chief Magistrate "adjourned for sentence". It was not until over 2 months and 3 adjournments later that the sentence was finally passed. This practice for adjourning for sentence for substantial periods of time is to be avoided. Section 215 of the Criminal Procedure Code is quite clear. It does not envisage adjournment:

"The Court having heard both the Prosecutor and the Accused person and their witnesses and evidence shall either convict the accused and pass sentence upon or make an Order against him according to law or shall acquit him or make an Order under the provisions of Section 44 of the Penal Code."

While a magistrate who wishes to consider the appropriate sentence, perhaps after consultation with his colleagues or following study of reported sentence decisions undoubtedly has the power to adjourn for a short period, say, 1 or 2 days and while even longer adjournments may be justified to enable relevant enquiries to be made or to obtain a social enquiry report there is nothing to be said in favour of long adjournments of the kind which occurred in this case and the practice of adjourning in such circumstances should cease (see R v Esterling (1946) 175 LT 520).

In his sentencing remarks the Chief Magistrate first reproduced the mitigation which the Respondent had offered. He then continued as follows:

"The court having considered the facts of the case, the nature of the offence, and the need to comply with the provisions of the Income Tax Act.

The court having further taken into consideration the mitigating circumstances as outlined by the accused. The accused is an upstanding member of the community. Further having considered the accused plea of guilty and he is a first offender. The accused is a JP and a recently elected member of parliament.

The court therefore having taken all these factors into consideration, and exercising its powers under section 44 of the Penal Code, Cap. No. 17 without proceeding to conviction order a conditional discharge for a period of twelve months (12) on condition that he pays court cost of $30."

On 31 March 1994 the Commissioner appealed against the sentence on the 2 grounds set out in full in the Petition which really amount to the proposition that the sentence imposed by the Chief Magistrate was, in all the circumstances, manifestly lenient and wrong in principle. In yet another perfect example of the lamentable inefficiency of the Suva Magistrates' Court the record of the proceedings which could not reasonably have taken more than 3 hours to prepare took just under 3 years to reach the High Court.

On 27 May the appeal was set down for hearing on 30 June. On 19 June the Respondent was served with the Notice of Hearing. On 23 June the Respondent, citing Parliamentary commitments and the wish to brief counsel sought an adjournment until the end of August. In view of the Court's commitments the Respondent was advised that an application for an adjournment made on the Respondent's behalf by his Counsel on 30 June would be considered. In the event there was no appearance either by the Respondent or by his Counsel. I proceeded to hear the appeal in the Respondent's absence.

The scale of seriousness of failing to comply with a Section 51 notice and the appropriate sentencing approach have been considered on a number of occasions including Attorney General v. Hari Chand [1968] 14 FLR 245 where the Chief Justice having referred to the gravity of the offence (a default period of a mere 53 days) increased the fine imposed five-fold; State v Krishna Kewal (Lautoka Cr. App 54/92) where the Court allowing the Commissioner's appeal against a Section 44(1) discharge and imposing in its place a substantial fine labelled a discharge for this offence as inappropriate and most recently and comprehensively by Pain J in CIR v Patel (HAA 014 of 1994) and CIR v Rubine (HAA 0079 of 1993). In both these later cases the Section 44(1) discharge was set aside on appeal and fines imposed in lieu. In Rubine a substantial default period aggravated by a 5 year failure to furnish income tax returns was described as "serious offending demanding a conviction and realistic penalty".

Perhaps it is time to re-emphasize that the powers conferred by section 44(1) of the Penal Code should only be exercised sparingly (see Halligan v Police [1955] NZLR 1185) where the direct or indirect consequences of convictions are out of all proportion to the gravity of the offence and after the Court has balanced all the public interest considerations as they apply in the particular case (see Tipple v Police [1994] 2 NZLR 362).

I am satisfied that in his approach to sentencing this Respondent the Chief Magistrate erred. There was no reference to the published authorities. There was no reference to the seriousness of the offence. The mitigation which had been offered was uncritically accepted entirely overlooking first, that the offences with which the Respondent had been charged did not relate to the delay in furnishing income tax returns, secondly, that the "events of 1987" could have had no effect at all on the failure to comply with a notice issued in 1992 and thirdly, that the excuse that the Respondent worked for the National Bank of Fiji from 1985 to 1992 was incapable of amounting to even the beginnings of an excuse for failing to comply with the section 51 notice during the months December 1992 to November 1993 when he was no longer employed by the Bank. The fact that an accused is "an upstanding member of the community", a JP and a Member of Parliament, that he has pleaded guilty and is a first offender does not give rise to an entitlement to a sentence which is quite simply wrong in principle.

The Appeal succeeds. The sentence imposed is set aside. In view of the Respondent's non appearance and not wishing to proceed to substitute sentence in his absence and without benefit of representations on his behalf this Appeal will be adjourned part heard to Wednesday 17 September at 9.30 a.m. for continuation. The Chief Registrar is requested to serve the appropriate Notices on the parties.

M.D. Scott
Judge

3 July 1997

Haa0012.97