Aspinalls Club Ltd v Revenue and Customs Commissioners
| Jurisdiction | England & Wales |
| Judge | Lord Justice Moses,Lady Justice Black,Lady Justice Gloster |
| Judgment Date | 15 November 2013 |
| Neutral Citation | [2013] EWCA Civ 1464 |
| Docket Number | Case No: A3/2012/3101 |
| Court | Court of Appeal (Civil Division) |
| Date | 15 November 2013 |
[2013] EWCA Civ 1464
Lord Justice Moses
Lady Justice Black
and
Lady Justice Gloster
Case No: A3/2012/3101
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE UPPER TRIBUNAL
(Tax and Chancery Chamber)
The Hon. Mr Justice Briggs
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Andrew Hitchmough QC and Mr Jonathan Bremner (instructed by PricewaterhouseCoopers Legal LLP) for the Appellant
Miss Elizabeth Wilson (instructed by the General Counsel and Solicitor for HM Revenue and Customs) for the Respondents
Aspinalls Club Limited offers incentive schemes to wealthy customers whom they wish to encourage. Those schemes offer either commission proportional to the amount of chips staked or a percentage rebate of losses, once the customers have achieved a minimum turnover requirement during the short (usually 14 days) duration of the agreement between customer and club. Aspinalls seeks to deduct the commissions and rebates from the "banker's profits" chargeable to gaming duty under the Finance Act 1997.
The Commissioners for Her Majesty's Revenue and Customs rejected such deductions. The First Tier Tribunal [2011] UKFTT 325 (TC) and Mr Justice Briggs sitting as the Upper Tribunal (Tax and Chancery Chamber) [2012] UKUT 242 (TCC) dismissed Aspinalls' appeals. Aspinalls now appeal against the decision of Briggs J.
The First Tier Tribunal and the Upper Tribunal set out the agreed facts, (paragraphs 17–27 of the First Tier Tribunal included in the Upper Tribunal decision at paragraphs 26 and 27).
The relevant statutory provisions with their history are explained by Briggs J (between paragraphs 8 and 25). Gaming duty is chargeable on premises where dutiable gaming takes place (s.10(1)) of the Finance Act 1997). Section 11 sets out the rates of duty. Gaming duty is chargeable for any accounting period by reference to specified rates applied to the "gross gaming yield"; percentages charged increase in line with increases in the gross gaming yield (s.11(2)). Section 11(8) provides:-
"For the purposes of this section, the gross gaming yield from any premises in any accounting period shall consist of the aggregate of —
(a) the gaming receipts for that period from those premises and
(b) where a provider of the premises (or person acting on his behalf) is banker in relation to any dutiable gaming taking place on those premises in that period, the banker's profits for that period from that gaming."
It was agreed that the club was both the provider of the premises and the banker (provider is defined in s.15(3)). The method of calculating the banker's profits is identified in s.11(10):-
"In sub-section 8 above the reference to the banker's profits for any gaming is a reference to the amount (if any) by which the value specified in paragraph (a) below exceeds the value specified in paragraph (b) below, that is to say:-
(a) the value, in money or money's worth of the stakes staked with a banker in any such gaming; and
(b) the value of the prizes provided by the banker to those taking part in such gaming otherwise than on behalf of a provider of the premises."
There were three types of incentive provided. Under the "Cash Chip Agreement" Aspinalls agreed to pay a player a commission based on the total amount of cash chips staked on all bets over the course of the agreement providing the player had staked enough to meet the turnover requirement.
In clear and beguiling submissions Mr Hitchmough QC, on behalf of Aspinalls, submitted that the value in money or money's worth of the stake staked was the value which the player risked. It was not, accordingly, necessarily the face value of the chip. On the contrary, the value of the stake staked had to be determined by reference to the contract between Aspinalls and the player under the Cash Chip Agreement. The value of the stake staked by a player who had entered into such agreement was therefore the value of the stake, less any commission due to him under the agreement.
Contrary to Briggs J's criticism, this argument does not depend upon "a perception of value to the player or value to the banker". It is consistent with the objective ascertainment of value assured by s.11(10)(a) (UT [35]).
But I reject the argument. Section 11(10)(a) is clear. The value in money or money's worth of the stakes staked is the face value of the chip. Staking a chip is the same as staking money and the value in money of the chip is its face value (see Davis LJ in CHT Limited v Ward [1965] 2 QB 63,79 and Lord Goff in Lipkin Gorman v Karpnale Limited [1992] 2 AC 548 (HL) 575 cited at FTT [30], and UT [35]). The stake is the amount risked in connection with the game; it is the value of that stake which is put at risk in the game. The value put at risk in the game is not altered by reference to any commission the player receives under the Cash Chip Agreement.
Mr Hitchmough sought to make good his argument by deployment of the reference in s.11(8) to "banker's profits". The concept of profit itself, so he submitted, contemplates the deduction of that which it cost to earn those profits; in short, the expression is a reference to what Mr Hitchmough called the underlying economic reality.
I accept that it is easy, when seeking to construe a statutory expression in its proper context, to overlook the impact of the particular expression or words used by the draughtsman. "If the terms of the definition are ambiguous, the choice of the term to be defined may throw some light on what they mean" (Lord Hoffmann in Macdonald v Dextra Accessories Limited [2005] AC 1111 [18]).
But there is no ambiguity in the definition of "banker's profits". "The value, in money or money's worth, of the stakes staked" means what it says: it is the value of the chips risked in the relevant charging period.
The Cash Chip Agreement did not depend on whether the player won or lost. In contrast, the other two incentive agreements, the "Rolling Chip Agreement" and the "Rebate Agreement", depended on the total value of chips...
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