27th May 2022
Mr. Carlyle Rogers
201 The Rogers Office Building
Edwin Wallace Rey Drive
George Hill
Anguilla
BWI
Dear Mr. Rogers
Re: Goods and Services Tax Act
1. The subject refers.
2. I beg to acknowledge receipt of your letter dated 16th May, 2022, regarding the matter under reference, on behalf of the Honourable Premier and on my own behalf.
3. The contents of your said correspondence are duly noted.
4. Undoubtedly, the implementation of the Goods and Services Tax (GST) Act, being a taxation measure of the Government of Anguilla, is a matter of public and general importance, and, rightly a legitimate subject of free and democratic debate.
5. However, your essential complaint is that the GST Act (the Act) is unconstitutional for violation of the principle of the separation of powers implicit in the Constitution. The provisions of section 45 are highlighted in your correspondence as demonstrative of the contravention of the separation of powers doctrine in this behalf.
6. Your correspondence under reference describes itself as a pre-action protocol communication, and makes certain critical legal propositions in respect of which I am obliged to respond suitably.
7. Regarding the constitutional validity of the Act, which on your contention, is impugned in the manner such as you have propounded, I am obliged to advise you as shall now follow.
Separation of powers principle
8. Constitutions established on the English Westminster Constitutional model comprehend a separation of the principal organs of the state and government.
9. It is accepted that those organs are principally three branches of government, namely, the Executive, Legislative and Judicial branches.
10. A living conception of the separation of powers doctrine simply stated is that neither branch must trespass upon the legitimate province and functions of the others.
11. However, separation of powers in English constitutionalism, such as have been inherited under Westminster-type constitutions, is a concept differently understood to American constitutional founding, for instance. The distinction lies in the notion of institutional separation of powers in contrast to the functional separation of powers. Institutional separation of powers requires that the personnel in performing the functions of each branch of government must themselves be separate and that neither performs any functions of the others.
12. Of contrasting significance, because constitutions such as ours are evolutionary, not revolutionary, in the way they were conceived and devised, and provide for continuity of government, it has been judicially acknowledged that the practice in drafting constitutions is to leave much to implication.
13. There is a fusion and overlap in the operations of the main branches of government in English constitutionalism- some of which we have inherited. Indeed, our Constitution directs that members of the executive branch are to be derived from the legislative branch and that nothing in the constitution shall operate so as to prejudice the provisions of any laws in force in the territory whereby functions are, or may be, conferred on persons or authorities other than the Executive.
14. The modern constitution on the Westminster model is a written code regarding which the principle of separation of powers is therefore implicit
15. The Constitution is, in truth, the supreme law of the land, and all laws enacted by the Assembly are tested against the prescribed criteria provided by the Constitution for the protection of the fundamental guarantees, which it assures to the person against the overreach of the state.
16. So much is uncontroversial.
17. However, the constitutions on the Westminster model by their very structure provide for functional flexibility in the interlaced character of the workings of government and the deployment of sovereign authority, requiring a distinction to be made at times between executive authority and executive function.
18. The legislature enacts law, the executive enforces the law and the judiciary interprets and applies the law passed by the legislature.
19. Section 22(2) of the Anguilla Constitution empowers the Assembly to confer core executive and governmental functions, such as that of revenue assessment and collection, upon the Comptroller for the purposes of those executive functions of the government – the Comptroller is not exercising executive authority as such, but an executive function expressly permissible by the Constitution.
Separation of powers in proper perspective
20. The discussion by the Judicial Committee of the Privy Council to which you have alluded in reference to Hinds v R [1976] 2 WLR 366 (PC), emerged from the historical and juristic backdrop referred to at paras. 8 to 14 hereof. Unsurprisingly, therefore, Lord Diplock in describing such constitutions said in Hinds (at 372 c – d): “all these constitutions .. . were negotiated as well as drafted by persons nurtured in the tradition of that branch of the common law of England that is concerned with public law and familiar in particular with the basic concept of the separation of legislative, executive and judicial power as it had been developed in the unwritten constitution of the United Kingdom.”
21. Of critical significance is what Lord Diplock (writing for the majority) had to say in Hinds (at 372 F- G)- he said: “It is taken for granted that the basic principle of separation of powers will apply to the exercise of their respective functions by these three organs of government Thus the constitution does not normally contain any express prohibition on the exercise of legislative powers by the executive or of judicial power by either the executive or legislature. ”
22. Later (at 373 d-e) Lord Diplock observed that “What, however, is implicit in the very structure of a constitution on the Westminster model is that judicial power, however, it be distributed from time to time … is to continue to be vested in persons appointed to hold judicial office in the manner and on the terms laid down in the chapter dealing with the judicature, even though this is not expressly stated in the constitution. ”
23. In sum, Lord Diplock’s observations in Hinds regarding the principle of separation of powers were more aptly expository of the penumbra of judicial powers which emanate from the basic structure of the constitution, the outer limits of which extend to preserve judicial independence from the legislative and executive branches, rather than as elevating this unwritten principle of separation of powers to an overriding constitutional rule.
24. Subsequent and recent judgments of the Judicial Committee of the Privy Council have put the separation of powers doctrine in proper perspective.
25. Separation of powers is not an independent constitutional cause of action that it was once conceived to be. The principle of separation of powers is not an overriding supraconstitutional principle but a description of how the powers under a real constitution are divided. Most constitutions have some overlaps between legislative, executive and judicial functions: Matthew v State [2004] 4 LRC 777 (PC) at para [28] (Lord Hoffman for the majority).
26. Again, recently in the unanimous judgment of the Board delivered by Lord Hodge in Chandler v State [2022] UKPC 19 at para [75] the Judicial Committee emphasised that:
“The Board has repeatedly taken the view that the doctrine of separation of powers is not an overriding principle that exists independently of a constitution but is implicit in a constitution having regard to the powers of the judiciary, the legislature and the executive which are laid down expressly or by implication in a constitution. ”
27. Where, under a constitution on the Westminster model, a law which it is alleged confers judicial power upon a non-judicial or executive body or person, the question whether the law conflicts with the provisions of the constitution dealing with the exercise of judicial power does not depend on the label which attaches to the Act or provision, or, even words of a provision, but rather the inquiry is as to the substance of the law and the true nature of the transaction or the jurisdiction being exercised. (See – Hinds at 374 B-C (Lord Diplock) and Duncan v AG[1998] 3 LRC 414 (ECCA) at 427 e (Byron 0).
28. So that, to fasten on the phrase appearing in section 45(2) of the Act to the effect that – “the Comptroller may file, with the clerk or registrar of a court of competent jurisdiction, a statement certified by the Comptroller setting forth the amount of the tax due and payable by that person, and that statement shall have the effect of a civil judgment lawfully given in that court in favour of the Comptroller for a debt in the amount specified in the statement; and the court shall issue a writ of execution in respect against the defaulter/; and equiparate this enacting formulation to mean that judicial powers of the Court are purportedly transferred to or conferred on the Comptroller of Inland Revenue, is, with great respect, misleading.
29. The assessment and determination of tax liability is inherently a function of the Comptroller as the Chief Revenue Officer under the Act. This function is not judicial in character. The collection of tax and enforcement of the taxation measure are entrusted to the Comptroller – those functions are intrinsically functions of the executive. The determination upon assessment of tax liability of the taxpayer is not akin to a claim to be adjudicated, but a determination of liability (tax debt) by the tax authority, in respect of which, unless otherwise judicially disturbed, is an enforceable debt, for which court process is appropriate. The taxpayer is afforded access to the courts, mechanisms for disputation of the assessments and rights of appeal. All of these are constitutional safeguards, which particularly affords the person the protection of the law guaranteed by the constitution itself. There is no usurpation of the functions of the court.
30. The determination of constitutional validity of a legislative measure is not for this reason a unidimensional evaluation.
31. It is not accepted that the provisions of section 45(2) contravene section 7 property right protection under the Constitution either, for the exaction of taxation is a permissible derogation from property right guarantees as is made abundantly clear in section 7(2)(a) of the very Constitution itself.
32. Moreover, the grievance expressed with section 38( 4) and (5), whilst its intuitive disagreement is understood; it overlooks certain matters of precedent consideration.
The first is that it is not objectionable or unconstitutional for the Assembly, as the legislature for the territory, to enact as a condition precedent to conferring or enabling a statutory right of appeal or right of objection on the taxpayer that he should pay 50% or the whole of the tax in dispute before he can mount a challenge to the Comptroller or in the appeals tribunal. The deposit requirement positively imposes no fetter on the taxpayer’s right of appeal or right of objection because the taxpayer has no such right unless he fulfils those requirements. All rights of appeal and objection are procedural and created by statute. The right to the protection of law is otherwise afforded by the various mechanisms for access to the courts and recourse to judicial arbitration of tax related disputes built into the enactment and the Constitution itself.
33. Second, sections 38(8) and (9) provide for full refund to the taxpayer, with interest, in the event that an objection to the tax assessment succeeds.
34. We consider that it is a correct statement of constitutional principle that it cannot be the case that every Act of Parliament, which impinges in any way upon the rights protected in the Constitution, is for that reason alone unconstitutional. Legislation frequently affects rights such as freedom of thought and expression and the enjoyment of property. These are both qualified rights, which may be limited, either by general legislation or in the particular case, provided that the limitation answers a legitimate aim and is proportionate to it. It is for Parliament in the first instance to strike the balance between individual rights and the general interests. The courts may on occasion have to decide whether Parliament has achieved the right balance: Suratt v A-G of Trinidad & Tobago [2008] 2 WLR 262 (PC) at 282 para [58] (Baroness Hale of Richmond).
Reasonably required and reasonably justifiable
35. We respectfully do not accept your contention regarding the matter of whether the Act in question is reasonably required. As we understand the law, the test of ‘reasonably required’ and that of ‘reasonably justifiable’ are comprehensively distinct.
36. In AG & Anor v Antigua Times Ltd (1975) 21 WIR 560, to which you referred in your letter, the Judicial Committee of the Privy Council held that “the proper approach to the question is to presume, until the contrary appears or is shown, that all Acts passed by the Parliament were reasonably required. ”
37. If, however, it is shown that the provisions of the Act are so arbitrary as to compel the conclusion that it does not involve an exertion of the taxing power but constitutes in substance and effect, the direct execution of a different and forbidden power, then the presumption is rebutted and a determination must be made as to whether the legislative measure is reasonably justifiable.
38. The determination of the question of the arbitrariness of the measures provided for in the enactment requires an analysis of whether the limitation upon guaranteed rights is excessive or proportional. The three-fold criteria for evaluating the ”reasonably justifiable’ requirement propounded by the Privy Council in DeFreitas v Permanent Secretary (1998) 53 WIR 131 has been reformulated by the UK Supreme Court and extended to a four-fold fact-dependent evaluative criteria for determining the proportionality of a legal measure which has the effect of limiting a protected right (see
Bank Mel/at v HM Treasury(No. 2) [2013] 4 AllER 533 (UKSC)).
39. The three elements of a tax Act are that- (i) it must be imposed by the Crown or public authority, (ii) it must be compelled, and (iii) the imposition must be for public purposes.
40. We are satisfied that the GST Act is not unconstitutional and is a valid exercise of the legislative competence of the Assembly.
41. Nevertheless, the Government assures that just as the implementation of the Act continues to be a legitimate subject of debate, equally, the GST Act continues to undergo necessary revision and amendments responsive to the overriding objective of efficiency and simplicity in its implementation.
42. In this connection, stakeholder and sectoral feedback are important aspects of informing this revision.
43. In the final analysis, we consider that litigation with the enterprise of striking down the Act would be unprofitable, costly and inadvisable.
44. In the result, I am to advise that the Government is familiar with the substance of the matters communicated in your correspondence on behalf of your clients, and will doubtless consider them together with other stakeholder and sectoral input as part of the ongoing revisions being made to aspects of the GST Act.
45. Many thanks.
Sincerely,
Cc: Her Excellency, The Governor
Honourable Ministers of the Crown
Honourable Ministerial Assistants of the Government of Anguilla
President of the Concerned Citizens of Anguilla
