The House was asked whether a particular transaction was ‘an adventure in the nature of trade’.
Held: Although the House accepted that this was ‘an inference of fact’, on the primary facts as found by the Commissioners ‘the true and only reasonable conclusion’ contradicted that decision.
The House set out principles for establishing that decisions of a commissioner were ones of law, and were reviewable by an appellate court. Whether facts as found or admitted fall on one side or the other of some conceptual line drawn by the law is a question of fact.
Lord Radcliffe said that ‘Perversity’ in a decision means that ‘the facts found are such that no person acting judicially and properly instructed as to the relevant law could have come to the determination under appeal. In those circumstances, too, the court must intervene. It has no option but to assume that there has been some misconception of the law and that this has been responsible for the determination.’
Viscount Simonds said: ‘For it is universally conceded that, although it is a pure finding of fact, it may be set aside on grounds which have been stated in various ways but are, I think, fairly summarized by saying that the court should take that course if it appears that the commissioners have acted without any evidence or upon a view of the facts which could not reasonably be entertained.’
Lord Radcliffe criticised the tendency of courts to treat questions as ‘pure questions of fact’, so as to exclude review: ‘As I see it, the reason why the courts do not interfere with the Commissioners’ findings or determinations when they really do involve nothing but questions of fact is not any supposed advantage in the Commissioners of greater experience in the matters of business or any other matters. The reason is simply that by the system that has been set up the Commissioners are the first tribunal to try an appeal, and in the interest of the efficient administration of justice their decisions can only be upset on appeal if they have been positively wrong in law. The Court is not a second opinion where there is a reasonable ground for the first. But there is no reason to make a mystery about the subjects that Commissioners deal with or to invite the courts to impose any exceptional restraint on themselves because they are dealing with cases that arise out of facts found by the Commissioners. Their duty is no more than to examine those facts with a decent respect for the tribunal appealed from and if they think that the only reasonable conclusion on the facts found is inconsistent with the determination come to, to say so without more ado.’ and ‘I do not think that it much matters whether this state of affairs is described as one in which there is no evidence to support the determination or as one in which the evidence is inconsistent with and contradictory of the determination, or as one in which the true and only reasonable conclusion contradicts the determination. Rightly understood, each phrase propounds the same test. For my part, I prefer the last of the three …’ As to the commissioners findings of fact: ‘Their duty is no more than to examine those facts with a decent respect for the tribunal appealed from and if they think that the only reasonable conclusion on the facts found is inconsistent with the determination come to, to say so without more ado.’
HL Income Tax, Schedule D-Purchase and sale of cotton spinning plant – Isolated transaction – Whether adventure in nature of trade.
Judges:
Lord Radcliffe, Viscount Simonds
Citations:
[1956] AC 14, [1955] 3 All ER 48, [1955] 36 Tax Cas 207, [1955] UKHL 3, [1955] UKHL TC – 36 – 207, 36 TC 207
Links:
Jurisdiction:
England and Wales
Cited by:
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Held: Where the taxpayer was a professional person of previous good character, the standard of proof required before a . .
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An investment company sought to set against its liability to corporation tax, the various costs of taking over another company. They argued that as an investment company these were not costs of the purchase and could be set against tax.
Held: . .
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The appellant had applied for and been refused disability living allowance on the basis of being able to carry out certain cooking tasks.
Held: The purpose of the ‘cooking test’ is not to ascertain whether the applicant can survive, or enjoy a . .
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The taxpayer company employed a subsidiary company through which it conducted its trade in land. It then sought to represent the profits from that subsidiary within its own accounts as trading profits for corporation tax purposes. The commissioner . .
Cited – Biogen Plc v Medeva Plc HL 31-Oct-1996
The claim patented sought to protect a genetic molecule rather than a whole mouse namely that the molecule would, if inserted into a suitable host cell, cause the cell to make antigens of the Hepatitis B virus. A recombinant method of making the . .
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The OFT had considered whether it was necessary to refer a merger between two companies to the Competition Commission, and decided against. The Competition Appeal Tribunal held that the proposed merger should have been referred. The OFT and parties . .
Cited – Clark v Oxfordshire Health Authority CA 18-Dec-1997
A nurse was employed under a contract, under which there was no mutuality of obligation; she could refuse work and employer need offer none. This meant that there was no employment capable of allowing an unfair dismissal issue to arise.
Sir . .
Cited – Regina v Medical Appeal Tribunal ex parte Gilmore; Re Gilmore’s Application CA 25-Feb-1957
The claimant had received two injuries resulting in his total blindness. He sought an order of certiorari against the respondent who had found only a 20% disability. The tribunal responded that its decision, under the Act was final.
Held: In . .
Cited – Arnold (Inspector of Taxes) v G Con Ltd ChD 4-Mar-2005
The revenue appealed against an order by the general commissioners to grant to the taxpayer, a construction industry subcontractor, a fresh exemption certficate where he had been consistently late in submitting tax and NI payments of several . .
Cited – Sony Computer Entertainment Europe Ltd v Customs and Excise ChD 27-Jul-2005
The appellants had imported Playstation computer games. They appealed refusal of a rebate of 50 million euros paid in VAT before a reclassification of the equipment so as to make it exempt from VAT.
Held: ‘The effect of the annulment of a . .
Cited – Templeton (Inspector of Taxes) v Transform Shop Office and Bar Fitters Ltd ChD 15-Jul-2005
The contractor had not met its liabilities to pay PAYE. The general commissioners had nevertheless granted a construction industry certificate under sections 561 and 565, having found an informal agreement to allow late payments.
Held: No tax . .
Cited – Wisdom v Chamberlain (Inspector of Taxes) CA 8-Nov-1968
The taxpayer, a comic actor, bought silver bullion hoping it would act as a hedge against a possible deflation of the pound. The revenue sought to tax his profits on sale under Schedule D. He argued that the money, being from one transaction, did . .
Cited – Matthews and others v Kent and Medway Towns and Fire Authority and others HL 1-Mar-2006
Retained or part-time firefighters sought parity of working conditions with full time firefighters.
Held: The retained firefighters’ appeal succeeded (Lords Carswell and Mance dissenting). The test was whether the part-time and full time . .
Cited – Yuen v The Royal Hong Kong Golf Club PC 28-Jul-1997
(Hong Kong) The applicant was dismissed as a golf caddie after nine years. The Club denied that he had ever been an employee. He was issued by the club with a number, a uniform and a locker. Caddying work was allocated to available caddies in strict . .
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Deciding Whether person was an employee
(Hong Kong) The Board considered the conclusion that the applicant stone mason was not an employee of the defendant: ‘even if I leaned towards the opposite conclusion, it would nevertheless be quite impossible for me to say that no tribunal . .
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The trial judge had refused an order requested at a preparatory hearing by the defence for the disclosure of documents held by the prosecutor. The House was now asked whether a right of appeal existed against such a refusal.
Held: The practice . .
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The court was asked whether the weight-watchers program which included attendance at a course and a supply of supporting materials was one single standard-rated supply or separate supplies of zero-rated printed materials and standard-rated support . .
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The taxpayer sought to set off against tax some pounds 200,000 spent defending professional disciplinary proceedings. The House was asked whether this was ‘money wholly and exclusively laid out or expended for the purposes of the trade.’
Held: . .
Cited – D’Souza v Director of Public Prosecutions HL 15-Oct-1992
The police went to detain the appellant under the 1983 Act. To do so they entered the property against her wishes. She resisted detention, and now appealed her conviction for assaulting the Police officers in the execution of their duty, saying that . .
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The Corporation had commissioned a report as to its coverage of Middle East issues. The claimant requested a copy, and the BBC refused saying that the report having been obtained for its own journalistic purposes, and that it was not covered by the . .
Cited – Gerrard v Staffordshire Potteries Ltd CA 2-Nov-1994
The plaintiff was injured when working for the defendants spraying glaze onto jars. A small foreign body was blown into her eye. She said that no eye protection had been suuplied as required by the regulations.
Held: The plaintiff’s appeal . .
Cited – Revenue and Customs v Smallwood and Another CA 8-Jul-2010
The taxpayers had set up trusts which they said were based in Mauritius allowing them to claim double taxation relief. The Revenue had issued closure notices, confirmed by the SPCT, but overturned by the High Court. The Revenue appealed, saying that . .
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Power to call in is administrative in nature
The powers of the Secretary of State to call in a planning application for his decision, and certain other planning powers, were essentially an administrative power, and not a judicial one, and therefore it was not a breach of the applicants’ rights . .
Cited – HM Revenue and Customs v A M Brander As Exec of The Will of The Late Fourth Earl of Balfour UTTC 16-Aug-2010
UTTC Inheritance tax – Exempt transfers and relief – Business property relief Replacement property – Deceased having liferent interest in family estate – Deceased declared to be fee simple proprietor of the . .
Cited – Daejan Investments Ltd v Benson and Others CA 28-Jan-2011
The landlord had set out to refurbish the building occupied by the defendant tenants. They began a consultation process for the repairs, but failed to complete it, and the tenants objected. The landlords now appealed against rejection of their . .
Cited – The Attorney General for Northern Ireland v Crawford and Another ChNI 4-May-2016
The AG sought leave to appeal against a decision by the tribunal for the removal of a trustee of a police charity.
Held: Permission was given. The decision of the tribunal was open to proper criticism. The appeal raised several important . .
Cited – Lancashire County Council, Regina (on The Application of) v SSEFRA and Another SC 11-Dec-2019
Two appeals as to the circumstances in which the concept of ‘statutory incompatibility’ will defeat an application to register land as a town or village green where the land is held by a public authority for statutory purposes. In the first case, . .
Lists of cited by and citing cases may be incomplete.
Taxes Management, Judicial Review, Litigation Practice, Income Tax
Leading Case
Updated: 15 May 2022; Ref: scu.181055
