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Commissioner of Inland Revenue v Senara [2019] WSDC 1 (8 March 2019)

DISTRICT COURT OF SAMOA
The Commissioner of Inland Revenue v Senara and Others [2019] WSDC 1


Case name:
The Commissioner of Inland Revenue v Senara


Citation:


Decision date:
8 March 2019


Parties:
THE COMMISSIONER OF INLAND REVENUE v REVEREND TAUTIAGA SENARA AND OTHERS (ministers of religion)


Hearing date(s):
1 March 2019


File number(s):
D4134/18.D4135/18.D4136/18.D4137/18.D4138/18.D4139/18.D4140/18. D4141/18.D4142/18.D4143/18.D4144/18.D4145/18.D4146/18.D4147/18. D4148/18.D4149/18.D4150/18.D4151/18.D4193/18.D4194/18.D4195/18. D4196/18.D4197/18.D4198/18.D4199/18.D4200/18.D4201/18.D4202/18. D4203/18.D4204/18.D4205/18.D4206/18.D4207/18.D4208/19.D4209/18. D4210/18.D4211/18.D4212/18.D4213/18.D4214/18.D4215/18


Jurisdiction:
CRIMINAL


Place of delivery:
District Court of Samoa, Mulinuu


Judge(s):
JUDGE MATAUTIA RAYMOND SCHUSTER


On appeal from:


Order:
  • i. For the reasons above, the application to transfer proceedings to the Supreme Court is denied.
  • ii. Matter is adjourned to set a hearing date for the application to quash informations and stay of proceedings.
  • iii. Costs are reserved


Representation:
Mr Ah Leong and Mr Tumua for Informant
Mr Su’a and Ms Faasili for defendants


Catchwords:
Constitutional issues – infringement of the Constitution


Words and phrases:
uncertainty, unreasonableness and absurdity raising administrative law –


Legislation cited:
Criminal Procedure Act ss8 (2), 53(1) and 53(3)(a) s.9
District Courts Act 2016, ss 30(1) and 61
Income Tax Act 2012, ss70(1) and 71(a)
New Zealand Tax Administration Act 1994 section 149A


Cases cited:
Nepa v Attorney General [2010] WSCA 1 (7 May 2010),
Toailoa v Duffy


Summary of decision:

IN THE DISTRICT COURT OF SAMOA
HELD AT MULINUU


BETWEEN


THE COMMISSIONER OF INLAND REVENUE
Informant


A N D


REVEREND TAUTIAGA SENARA AND OTHERS (ministers of religion)
Defendants


Counsel:

Mr Ah Leong and Mr Tumua for Informant
Mr Su’a and Ms Faasili for defendants

Decision: 8 March 2019


DECISION OF DCJ SCHUSTER

Introduction

  1. An amendment to the Income Tax Act 2012 labelled the Income Tax Amendment Bill 2017 proposed in Parliament in July 2017 came into force on the 1 January 2018. This amendment made it a requirement for ministers of religion to pay salary and wage tax where previously ministers of religion were exempted.
  2. In the Congregational Christian Church of Samoa’s (CCCS) annual general meeting from 21 – 25 May 2018, the General Assembly re-enforced the General Assembly’s resolution of 2017 to oppose the legislation by non-compliance.
  3. As a result of abiding by the resolution of the CCCS General Assembly as attested in the defendants supporting affidavits, the defendants numbering twenty (20) who are CCCS ministers of religion posted in various villages were individually charged on or before 23 November 2018 pursuant to sections 70(1) and 71(a) of the Tax Administration Act 2012 (hereinafter referred to as “the TAA”) which states:
  4. The charges were first mentioned before Senior District Court Judge Roma on the 18 December 2018 and was adjourned without plea to the 5 February 2019 for the defense counsel Mr Alexander Su’a to obtain instructions. On the 5 February 2019, prior to defendants entering their plea, Mr Su’a advised Judge Roma that he had filed for orders to quash the charges and for a stay of prosecution. The matter was further adjourned to 19 February 2019 for the Informant to file and serve their response to the application by the defendants.
  5. On the 19 February 2019, I dealt with the matter. Mr Su’a advised the court that he had filed a separate application for the hearing of this matter to be transferred to the Supreme Court. This was opposed by the Informant and a hearing was scheduled for the 1 March 2019 for the application to transfer the hearing to the Supreme court.
  6. Mr Su’a submits three main grounds in support of the application and relying on factual grounds contained in the affidavits filed by the defendants in support:

Upon further grounds appearing in the affidavit in support filed by the defendants.

  1. Ms Avila Ah Leong acting for the Commissioner of Inland Revenue (the “Informant”) opposed the application to transfer the hearing to the Supreme Court upon the grounds:

Upon further grounds appearing in the affidavit in support of the Assistant Chief Executive Officer Mr Puipuifatu Ian Filemu.

The Law

  1. The basis of the defendants’ application lies in sections 8(2), 53(1) and 53(3)(a) of the Criminal Procedure Act 2016 (CPA):

...................

(a) under subsection (1), if the District Court Judge is satisfied –

(i) that a question of law of general or public importance has arisen or may arise; or

(ii) that otherwise in the public interest or interests of justice it is desirable that the trial be conducted in the Supreme Court; or

(b) under subsection (2), if the Judge of the Supreme Court is satisfied that –

(i) the information filed within the Supreme Court is within the District Court jurisdiction; or

(ii) the matter is within section 5.

  1. Sections 8(2), 53(1) and 53(3)(a) of the CPA are straight forward providing for a judge of the District Court applying judicial discretion to transfer an information laid in the District Court to the Supreme Court.
  2. Sections 8(2) and 53(1) are also clear in that an application to transfer an information laid in the District Court may be made by way of the Judge’s initiative or by way of application by either the prosecutor or the defendant. In this case, the defendants are applying for a judge of the District Court to apply the discretion in favour of their application.
  3. As to the jurisdiction of the District Court to determine any information laid before the District Court, section 9 of the CPA and sections 30(1) and 61 of the District Courts Act 2016 (DCA) provide:

............

  1. The penalty under section 70 and 71 of the TAA respectively is a maximum of 10 penalty units or imprisonment for a term not exceeding one (1) year or both. By virtue of the maximum penalty prescribed by the TAA, the informations relating to the defendants clearly come under the jurisdiction of the District Court.
  2. In saying that, the jurisdiction of the District Court does not appear to be an issue as both counsels for the Informant and the defendants in their written and oral submissions accept that the District Court pursuant to the DCA and the CPA has the jurisdiction to determine the informations.

Defendants Application to Transfer Proceedings – “a question of law of general or public importance has arisen or may arise”

  1. Mr Su’a has correctly, by way of application, sought the exercise of judicial discretion of the District Court to transfer the informations to the Supreme Court for hearing based on his grounds outlined in paragraph 6 above. There appears to be no local judicial authority that has previously dealt with the issue of a disputed application to transfer the hearing of criminal informations from the District Court to the Supreme Court for hearing. In practice, criminal and civil matters are generally transferred unopposed between the District and Supreme Courts and vice versa based on jurisdiction of the courts.
  2. However, Mr. Su’a did not indicate in his application under this head what specific question or questions of law were of general or public importance that has arisen or may arise in relation to the charges under section 70 and 71 of the TAA for which his clients have been charged. In his written submissions paragraph 18, Mr Su’a provides five (5) questions and submit that these questions give rise to “... uncertainty, unreasonableness and absurdity raising administrative law and constitutional issues”:
  3. In proceedings pursuant to informations laid before the District Court, issues relating to “questions of law” and “questions of fact” occasionally arise. The criminal jurisdiction of the District Court does not require trial by assessors given the maximum penalty is seven (7) years imprisonment. This means that a judge sitting alone determines both questions of law and questions of fact. A question of law is a question that must be answered by applying relevant legal principles to the interpretation of the law to be applied to the circumstance and facts of the case.

Elements of the charges

  1. In considering whether the questions posed by Mr Su’a stated above are questions of law, the court must consider, inter alia, the elements of the offence under sections 70 and 71 of the TAA. In relation to the charge under section 70(1), there appears to be four elements the informant must prove against each defendant:
  2. The elements for section 71 of the TAA appears to be:

Standard and burden of proof

  1. There is no specific provision governing the burden and standard of proof in the TAA. The New Zealand Tax Administration Act 1994 section 149A specifically provide for the burden of proof as that of the Commissioner (of Inland Revenue) and the standard of proof is the criminal standard of proof beyond a reasonable doubt:
  2. The current informations are brought under Part 15 of the TAA then followed by section 81 which provides:

PART 15
“OFFENCES AND PUBLICITY”
Division 1

Taxation Offences

  1. It is clear from the outline and wording of Part 15 dealing with taxation offences and section 81 that alleged commission of offences are to be proceeded by way of “prosecution” and the laying of an information. This then necessarily requires the application of the criminal jurisdiction of the District Court whereby the burden of proof rests with the Commissioner as the informant and the standard of proof in relation to the information and imposition of penalties is beyond a reasonable doubt.

Standard and burden of proof of a preliminary application

  1. Concerning the preliminary application by the defendants to transfer proceedings to the Supreme Court for hearing, I am required to apply the standard of proof on the balance of probabilities and the onus is on the applicant to prove the merits of their application which is open to refutations by the informant.

Discussion

  1. Turning now to consider the questions posed by Mr Su’a reproduced in paragraph 15 above as questions “... of general or public importance has arisen or may arise”. I find that these are not questions that raise an issue of law relating to the defendants and the effect of sections 70 and 71 of the TAA but questions of fact. These factual questions are those that can properly be raised in the trial proper in opposing the charges subjected to the normal rules of evidence.
  2. Mr Su’a has made no reference to any other provision of the TAA or any other relevant tax legislation (apart from Articles 1 and 15 of the Constitution) to amplify his submissions on this issue. I am only then left with the conclusion that the questions posed by Mr Su’a only relate to section 70 and 71 of the TAA. However, Mr Su’a has posed no question of law so far as it relates to the elements of section 70 and 71 of the TAA that would invoke the consideration of the district court as to whether such a question or questions is/are questions of law that may or may not be referred for the determination of the Supreme Court.
  3. Even if Mr Su’a were to raise a question or questions of law, that alone does not necessarily follow that the question(s) must be transferred to the Supreme Court for hearing. That would be to undermine the jurisdiction and power of the district court as outlined in paragraph 11 of this judgment to deal with matters that come within its jurisdiction including questions of law.
  4. As to Article 1 and 15 of the Constitution, Mr Su’a has not stated in his motion nor in his submissions a question of law requiring judicial interpretation relating to sections 70 and 71 of the TAA. A question of law requiring the interpretation of a provision of the Constitution is the prerogative of the Supreme Court. If such a question were to be made, the appropriate course is for Mr Su’a to apply to the Supreme Court to determine the constitutional question of law notwithstanding the fact that the informations are before the District Court. It would also mean that Mr Su’a would have to seek a stay in these proceedings until the constitutional question is determined and referred back to the district court for the substantive hearing.
  5. However, Mr Su’a now applies via sections 8 and 53 of the CPA to transfer proceedings to the Supreme Court for a determination of a constitutional question that has arisen or may arise and for hearing of the informations. The posing of a legitimate constitutional question relating to the infringement of Articles 1 and 15 by sections 70 and 71 of the TAA would without a doubt warrant the transfer of the proceedings, if only, for determination of that issue. Despite Mr Su’a’s contention, he goes on to concede in paragraph 21 of his submissions that Article 1(3) is “unambiguous”. I take this to mean that there may be no need for a judicial interpretation of Article 1(3) and this court is then only required (should this be Mr Su’a’s assertion) to consider whether sections 70 and 71 of the TAA violate Article 1(3) which this court is empowered to undertake (see Toailoa Law Office v Duffy [2006] 2 LCR 138).
  6. As for Article 15, not much has been made out from Mr Su’a’s motion or his submissions as to a question of interpretation. Mr Su’a in paragraph 27 merely refers to the “... infringement of the fundamental rights and freedoms pertaining to discrimination on the ground of religion ...”. Mr Su’a has not shown for the purpose of this application what question of law of public or general importance has arisen or may arise as to the interpretation of Article 15 that, if not judicially determined, will affect the fundamental rights of the defendants and expose them to discrimination on the grounds of religion so long as sections 70 and 71 of the TAA continue to exist.
  7. In paragraph 22 of Reverend Tavita Anesone’s affidavit identical to paragraph 20 of the affidavits of the other nineteen (19) defendants, depose to “the law” as discriminating against them. It is not clear as to what “law” the deponents were referring to but presumably sections 70 and 71 of the TAA. However, the issues raised in sub-paragraphs (a) to (d) by the defendants relate to whether sections 70 and 71 of TAA violates Article 15 which is a question this court can determine following Toailoa v Duffy.
  8. In the absence of what that specific constitutional question or questions may be, I am left not persuaded that there is a question of law of general or public importance that has arisen or may arise.

That otherwise in the public interest or interests of justice it is desirable that the trial be conducted in the Supreme Court

  1. I turn now to the second ground under section 53(3)(a)(ii) of the CPA. Mr Su’a relied on two (2) persuasive judicial authorities from New Zealand in The Commissioner of Inland Revenue and Garry Albert Muir & Others [2013] NZHC 2881 and Kensington Developments Ltd (in receivership) and Commissioner of Inland Revenue CA64/2014 2015] NZCA 60.
  2. The Muir case involved an application by the Commissioner of Inland Revenue (“the Commissioner”) to the High Court of New Zealand to transfer to the High Court civil proceedings currently before the Taxation Review Authority (the TRA) and to consolidate with other similar or like proceedings in the High Court.
  3. On the face of it, Muir can be distinguished from the present case on several grounds. Firstly, it is a civil case where plaintiffs such as Muir were bringing challenges to the Commissioner’s tax assessment. Secondly, the initial proceedings were brought before the TRA. Thirdly, the grounds upon which the Commissioner relied to transfer proceedings to the High Court (echoed in Mr Su’a’s submissions) would be reasonable and appropriate given the history and nature of the case.
  4. The grounds in Muir I list below:
  5. In the case of Kensington, this was an appeal by Kensington to the Court of Appeal of New Zealand to overturn a High Court decision in favour of the Commissioner of Inland Revenue to transfer proceedings before the TRA to the High Court. In dismissing the appeal, the High Court noted the “... cumulative weight of four particular relevant factors that outweighed the advantages inherent in a hearing before the TRA”.
  6. Notwithstanding the above factors, the court of appeal arrived at the conclusion that, in the circumstances of this particular case, the important precedential value of the proceedings before the High Court alone is determinative in favour of granting the application for a transfer.

Discussion

  1. I agree with Mr Su’a that the Muir and Kensington cases are useful guides so far as to what grounds the court may take into consideration when an application for transfer of criminal proceedings is made notwithstanding the fact that these cases were civil in nature. This list by no means do I suggest to be exhaustive given the circumstances and merits of each case.
  2. However, in considering Muir and Kensington, I find that the circumstances of these two cases do not assist the defendants in their application for the consideration of a transfer of proceedings to the High Court. The High Court considered:
  1. The TRA in the New Zealand tax legislation appears to be the equivalent of the Tax Tribunal established under Part 17 of the TAA to hear applications for challenges to the Commissioners objection decisions. So far as this case is concerned, Part 17 is not relevant as the proceedings are brought as prosecutions under Part 15 of the TAA.
  2. In my opinion, it was reasonable, appropriate and in the interest of justice that the Commissioner in Muir applied under the grounds relied on to transfer proceedings from the TRA given the nature of the case. The Court of Appeal in Kensington again in my view correctly dismissed the appeal by Kensington given the nature of the case and that it would be in the interest of justice that the matter be heard in the High Court and not the TRA.
  3. As indicated earlier in paragraph 11 above, Mr Su’a accepts that this court has the jurisdiction to determine the charges pursuant to section 9 of the CPA and sections 30 and 61 of the DCA. The emphasis of Mr Su’a’s submissions appears to evolve around a constitutional question and the likelihood of and appeal. I have dealt with the constitutional question and will not say any more about that. I will discuss the issue of “likelihood of an appeal” shortly in this judgment.
  4. The District Court, other than the jurisdictional limitation differentiating it from the Supreme Court, constitutes the same mandate as the Supreme Court to determine the factual, legal, evidential and procedural issues in prosecutorial charges that it is empowered by statute to undertake. The District Court is not to be measured in the same category as the TRA (or Tax Tribunal in the TAA) as confirmed in the cases of Muir and Kensington.
  5. I turn now to Mr Su’a’s ground of the “likelihood of an appeal”. In the context of the Muir and Kensington cases, the high number of similar challenges like Muir’s case in the TRA was likely to also bring an equal number of appeals to the High Court. This as determined by Justice Toogood would pose significant delays to determination of these matters. It was therefore in the interest of justice that a transfer of Muir’s case and consolidation of all the cases like and similar to Muir’s to the High Court as the court of first instance to determine the matter and set a binding precedent. The same precedent would also be the guiding principle upon which consideration of an appeal can be measured.
  6. In Kensington, the Court of Appeal emphasized that the “ ... precedential value of the proceedings alone is determination in favour of granting the application”. The effect of this is that it would set a binding precedent that would stem the likelihood of appeals from the TRA from cases of similar nature.
  7. As to the current proceedings, there is no such similar or like cases pending in any lower court or tribunal as in Muir or Kensington. These cases are the first of its kind under section 70 and 71 of the TAA where ministers of religion are charged for failing to file tax returns and for failing to withhold tax respectively filed before the District Court. The Tax Tribunal under the TAA is not relevant as the Commissioner has determined to proceed against the defendants by way of prosecution. This point on its own vastly distinguishes Muir and Kensington from these proceedings.
  8. The Commissioner in Muir and Kensington was concerned with an extra layer of appeal and accompanying delay from all the like and similar cases from the TRA to the High Court given the history and nature of Muir’s case. This is not so in these proceedings as this court is the court of first instance, not the Tax Tribunal.
  9. The circumstances warranting a transfer in Muir and Kensington is clearly not the same in these proceedings. The charges against the defendants are brought before the District Court. Therefore, like all other criminal matters that come before the jurisdiction of the District Court including the informations against the defendants, the avenue of an appeal upon conviction is available to a convicted person as permitted by law. Mr Su’a did not specifically argue the point that there would be undue delay in appeals but perhaps suggested to the court to draw the inference based on the likelihood of appeals.
  10. However, there is no justified cause moved by Mr Su’a that would warrant convictions under sections 70 and 71 of the TAA to receive special attention just on the likelihood of an appeal. I therefore find that this ground as the basis of a transfer as a neutral factor.
  11. The further grounds as enunciated by Mr Su’a on behalf of his clients, though may be relevant, do not justify the basis of concern as held by the defendants nor does it prejudice or disadvantage their case. Mr Su’a has not shown specifically what the complexity or complexities of the case are under section 70 and 71 of the TAA that would be beyond the competency of this court other than the general assertion that tax law is a complex law. That may be so, but in considering the charges, these appear (on the face of it) to be straight forward.
  12. As to the precedential effect of any judgment, Mr Su’a has not shown where this court would not be able to set a precedent that would be binding on similar cases as opposed to a tribunal. This is not the case as in Muir and Kensington where there were several proceedings of a similar nature pending in the TRA and a binding precedent was one of the grounds for a transfer to the High Court was sought by the Commissioner.
  13. Finally, aside from all the grounds relevant for a transfer of proceedings referred in this judgment, Mr Su’a has not put forward the case as to why the interests of justice would be better served if the matter was transferred to the Supreme Court as opposed to the District Court. The only notable difference between the courts so far as the application is concerned relate to the extent of jurisdiction.
  14. The ensuing question which follows therefore is whether, upon consideration of all the relevant grounds, there be a miscarriage of justice to the defendants if their application to transfer the matter was denied and the matter proceeded to be determined before this court. This is generally the unavoidable overarching consequence of such applications is the temptation of attracting ill-defined wide ground of miscarriage.
  15. In Nepa v Attorney General [2010] WSCA 1 (7 May 2010), the Court of Appeal had this to say about miscarriage of justice [25]:
  16. Mr Su’a was asked by the court if there be a miscarriage of justice on his clients if their application were to be denied and, if there were, what would be the miscarriage. He was unable to respond but merely abandons the question to the discretion of this court. Mr Su’a, however, has not put forward any argument relating to any perceived prejudice to his clients due to abuse of process or the conduct of the case if it were to be dealt with by this court.
  17. It seems to me that Mr Su’a’s main contention is on the question of a constitutional issue and submits as a ground warranting a transfer. This court would have agreed with Mr Su’a if Mr Su’a were to show that the issue was one of Constitutional interpretation or effect of Articles 1(3) and/or 15 of the Constitution.
  18. I therefore find no reason to suggest that there would be a miscarriage of justice to the defendants should the application be denied.

Conclusions

Judge Matautia Raymond Schuster

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