Tuitt v Comptroller of Inland Revenue et Al

• Jurisdiction: Montserrat
• Court: High Court (Montserrat)
• Judge: Georege-Creque, J.
• Judgment Date: 21 March 2005
• Neutral Citation: MS 2005 HC 1
• Docket Number: MNIHCV2004/0012
• Date: 21 March 2005

Tuitt

and

Comptroller of Inland Revenue et al

George-Creque, J.

MNIHCV2004/0012

High Court

Public law - Freedom of movement — Exit certificate — Overdue taxes — Claimant prevented from leaving island due to arrears of income tax — Whether first defendant acting unlawfully in preventing claimant from leaving island for not having an exit certificate — Whether claimant owing arrears of income tax — Income Tax Act, s. 84 — Constitution, s. 62 — Constitution Order, 1989 — Whether Income Tax Act, s. 84 in conflict with constitutional right to freedom of movement — Finding that constitutional right infringed — Inquiry into compensatory damages ordered — Claimant ordered to pay arrears of income tax.

Appearances:

Mr. David S. Brandt and Mr. Warren Cassell for the claimant

Ms. Esco Henry Greer, Attorney General and Ms. Radha Permanand for the defendants

Georege-Creque, J.

1 The reliefs claimed in this action are in the main in the nature of administrative orders under Part 56.7 of the Civil Procedure Rules, 2000 (“ CPR 2000”) and arises under the Income Tax Act (“The Act”) and the requirement of the claimant to have a tax exit certificate under section 84(1) of The Act. By Fixed Date Claim Form, issued on March 24th, 2004, the claimant sought as against the defendants, inter alia, the following orders:

• (1) An injunction to restrain the 1st defendant by himself his servants or agents or otherwise howsoever from taking any steps whatsoever to prevent the Claimant from leaving the island;

• (2) An order that 1st defendant issue or cause to be issued to him a tax exit certificate. (This relief is no longer being pursued as the requirement for tax exit certificates has now been suspended by government).

• (3) A declaration that the actions of the 1st defendant are not reasonably justifiable in a democratic society and is unconstitutional;

• (4) A declaration that section 84(1) of The Act was impliedly repealed by the Montserrat Constitution Order, 1989;

• (5) A declaration that section 84(1) of The Act is in conflict with the Montserrat Constitution Order, 1989.

• (6) A declaration that the action of the 1st defendant is illegal.

The 1st defendant, The Comptroller of Inland Revenue (“the Comptroller”) has claimed against claimant, arrears of income tax for the years, 1998, 1999, 2000, 2001 and 2002 and seeks an order for payment of said arrears penalties and interest said to be due under The Act.

The 2nd defendant, the Attorney General, is named as a party to the proceedings by virtue of the Crown Proceedings Act.

The Background

2 The reliefs claimed arise against the following background:

• (a) In or about the month of September, 2002, the claimant a citizen and resident of Montserrat, and a building contractor by profession, held discussions with the Comptroller in respect of a refund of monies he considered as due to him as overpaid on income taxes.

• (b) Having not received the refund he inquired of the Comptroller as to the reason for non refund and was referred to a Colin Usherwood a senior member of staff in the Department of the Comptroller and the outcome was that the claimant would be allowed time to employ an accountant so as to finalize his tax situation.

• (c) Accounting services were in short supply in Montserrat at the time due to the volcanic activity, and an accountant from Antigua was employed and accounts presented to the Comptroller, but the claimant was informed by letter dated 25th September, 2002 from Mr. Colin Usherwood, Comptroller of Inland Revenue, that these accounts were unacceptable as not meeting generally accepted accounting standards. That letter also stated that notices of assessments for the years, 1995, 1996, 1998 and 1999 income years were attached and further advised how the claimant's tax credit had been applied as well as the basis of assessment for the years 1998 and 1999. He was also advised that his financial statements for the years 2000 and 2001 were overdue and should be filed forthwith.

• (d) The claimant by letter from his solicitors dated 17th January, 2003 advised the Comptroller that he had employed another accountant in Montserrat namely Mr. Vincent Placide to prepare and submit accounts on his behalf and sought an extension of time for their submission and stated that he objected to the assessments made against him. No ground for the objection was stated.

• (e) The claimant says that he went to the Tax Department on 17th January, 2003 to obtain a tax exit certificate as he had heard on ZJB Radio, that all persons leaving the island must first receive a tax exit certificate. He says that he was informed by Mr. Usherwood in a meeting, that he owed sizable amounts in taxes according to his files and that if he could not make immediate arrangements to pay off the taxes or make a substantial payment, a tax exit certificate would not be issued. He also says that during the said discussions with Usherwood he informed him that he needed to go off island to check on a medical condition. He was refused a tax exit certificate.

• (f) On 20th January, 2003, the Comptroller wrote to Claimant'S solicitor'S in which he stated that he was replying to the claimant'S solicitor'S letter to him of 17th January, 2003 in which he stated inter alia, “I would hope that Mr. Tuitt has briefed you in regards to his ‘lax affairs’; the sum determined by the Department that he owes, his non filing of returns and the other conditions which place him in the category of persons to whom Exit Certificates are refused.” This letter was copied to the 2nd defendant and of significance, to the Commissioner of Police. I shall revert to this later.

• (g) On 30th January, 2003 the Comptroller wrote to Mr. Placide, the claimant's new accountant in essence advising that a tax exit certificate would be issued to the claimant for a two-month period, on certain conditions which were that (i) the accountant confirm in writing his commitment to prepare and file financial statements on behalf of the claimant for the years 1998 and 1999 by 15th March, 2003, (ii) the claimant completes and files a Statement of Financial Position as earlier provided to him by 15th March, 2003 and (iii) a written commitment from the Claimant by 14th February, 2003 to file financial statements in respect of the income years 2000 and 2001 within a reasonable time frame. This letter does not appear to have been copied to the claimant and he says that the first time he became aware of it was when it was exhibited before the Court in this cause.

• (h) On 24th March, 2004, the claimant launched these proceedings. On 4th May, 2004, on application being made by counsel for the claimant, un-opposed by counsel for the defendants, an order was made for the grant of an exit certificate to the claimant to remain in effect until the hearing and determination of the action herein.

  • (i) The Comptroller, in his affidavit sworn on 22nd April, 2004 admits that claimant applied for a tax exit certificate but says that claimant was advised that he would be issued such a certificate only if he made satisfactory arrangements to pay taxes. This is denied by the claimant.

Is section 84 (1) of the Income Tax Act in conflict with the Montserrat Constitution Order, 1989 and was thus impliedly repealed thereby?

3 The reliefs set out at paragraphs (3) to (6) inclusive of the Fixed Date Claim Form are all interconnected and to one extent or the other, grounded in the issue of the constitutionality of section 84 (1) of The Act which deals with exit certificates. The claimant asserts that the refusal of the 1st defendant to issue to him an exit certificate deprived him of his constitutional right to freedom of movement as guaranteed by section 62 of the Constitution of Montserrat (“The Constitution”) in that he was prevented from leaving the island Territory of Montserrat.

4 Section 84 of The Act must therefore be considered in conjunction with Section 62 of The Constitution. In order to gain an appreciation of the issues raised, it is necessary to set out in part, section 84 of The Act and section 62 of The Constitution which I now do. Section 84 of The Act states as follows:

Exit Certificates

• 84 (1) Subject to the provisions of subsection (4) of this section no person shall leave or attempt to leave (my emphasis) Montserrat nor shall any ticket entitling any person to leave Montserrat be issued to any person nor shall any accommodation on any aircraft or ship be provided for any person to leave Montserrat unless such person has in his possession and produces to the airline or shipping agents and the immigration authority an exit certificate, dated not more than one year before the date of departure, duly signed by or on behalf of the Comptroller, certifying that such person -

  • (a) does not owe any income tax; or

  • (b) has made satisfactory arrangements for the payment of any income tax payable by him.

• (2) Notwithstanding the provisions of any law to the contrary, the provisions of subsection (1) of this section shall not apply to any member of the Executive Council or of Legislative Council.

• (3) Any person who neglects to comply with or acts in contravention of the provisions of this section shall be guilty of an offence against this Act:

  Provided…

• (4) Subsection (1) of this section shall not apply to -

  • (a) …

  • (b) …

  • (c) …

  • (d) …

  • (e) …

  • (f) any person who -

    • (i).…

    • (ii).is not a person whose name has been notified to the Commissioner of Police by the Comptroller as owing income tax; (my emphasis)

  • (g) …

• (5) …

• (6) …

Section 62 of The Constitution states as follows:

Protection of freedom of movement.

62 -

• (1) Except with his consent, no person shall be hindered in the enjoyment of his freedom of movement, that is to say, the right to move freely throughout Montserrat, the right to reside in any part thereof the right to enter Montserrat and immunity from...