Bomford v Osborne (Inspector of Taxes)
| Jurisdiction | England & Wales |
| Judge | The Lord Chancellor,Viscount Maugham,Lord Wright,Lord Porter |
| Judgment Date | 27 May 1941 |
| Judgment citation (vLex) | [1941] UKHL J0527-1 |
| Date | 27 May 1941 |
| Court | House of Lords |
[1941] UKHL J0527-1
House of Lords
Lord Chancellor
Viscount Maugham
Lord Russell of Killowen
Lord Wright
Lord Porter
After hearing Counsel, as well on Thursday the 27th and Friday the 28th day of February last, as on Monday the 3d day of March last, upon the Petition and Appeal of James Ferguson Bomford, of Spring Hill, near Pershore, in the County of Worcester, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of His Majesty's Court of Appeal, of the 20th of December, 1939, might be reviewed before His Majesty the King, in His Court of Parliament, and that the said Order might be reversed, varied, or altered, and that the Petitioner might have the relief prayed for in the Appeal, or such other relief in the premises as to His Majesty the King, in His Court of Parliament, might seem meet; as also upon the printed Case of W. P. Osborne (His Majesty's Inspector of Taxes), lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of His Majesty the King assembled, That the said Order of His Majesty's Court of Appeal, of the 20th day of December 1939, complained of in the said Appeal, be, and the same is hereby, Reversed, and that the Case stated be, and the same is hereby, remitted back to the Commissioners for the General Purposes of the Income Tax, acting for the Division of Pershore West in the County of Worcester, with a Direction to assess the whole of the arable land occupied by the Appellant under the general charge applicable to Schedule B: And it is further Ordered, That the Respondent do pay, or cause to be paid, to the said Appellant the Costs incurred by him in the Courts below, and also the Costs incurred by him in respect of the said Appeal to this House, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments: And it is also further Ordered, That the Cause be, and the same is hereby, remitted back to the King's Bench Division of the High Court of Justice, to do therein as shall be just and consistent with this Judgment.
My Lords,
The question to be decided arises on a Case Stated by General Commissioners under Section 149 of the Income Tax Act, 1918. The Appellant occupies about 550 acres of land in the Pershore district of Worcestershire, and the Commissioners reached the conclusion that the arable portion of the land (except that used for the growth of hops), amounting to about 230 acres out of the whole, should be separately assessed, for the year ended 5th April, 1937, as "gardens" under Rule 8 of Schedule B, while the rest of the holding should pay tax under that Schedule in the ordinary way by reference to assessable value.
The case came before Mr. Justice Lawrence who, if he had felt free to give effect to his own opinion, would have decided in favour of the taxpayer on the view that the facts before the Commissioners did not justify the separate assessment. The learned judge, however, considered that he was constrained by the decision of the Court of Session in Lowe v. Commissioners of Inland Revenue, 21 Tax Cases 597, to decide in favour of the Crown, but he struck out of the area classed as "garden" some twenty-six acres of arable carrying wheat, parsnips, mangolds, and lucerne on the ground (with which I thoroughly agree) that there was no justification for holding that this land was "ancillary" to the garden.
In the Court of Appeal there was a difference of opinion. Lord Justice Clauson and Lord Justice Goddard took the view that the General Commissioners were justified in deciding against the taxpayer, while Lord Justice Scott, in an elaborate Judgment, involving both historical research and a full examination of the earlier cases which might bear on the matter, was of a contrary opinion. The taxpayer now appeals to this House.
Rule 8 of Schedule B runs as follows:—
"8. The profits arising from lands occupied as nurseries or gardens for the sale of the produce (other than lands used for the growth of hops) shall be estimated according to the provisions and rules applicable to Schedule D, but shall be assessed and charged under this Schedule as profits arising from the occupation of lands."
As Lord Justice Scott points out, the substance of this Rule, so far as it applies to gardens, may be traced back to its origin in Addington's Income Tax Act of 1806. At that distant date, and for long afterwards, it may be presumed that the distinction between gardens and farm land was easily made. "Gardens for the sale of produce" were market gardens, usually situated near large towns, cultivated for the most part by spade, rake, and hoe, and growing characteristically garden crops. Lord Justice Scott's researches and quotations make this plain. The qualification "for the sale of produce" is manifestly inserted so as to exclude from the rule gardens where produce is grown for the supply of an adjoining house, belonging to the same occupier, or gardens where the profit is made by charging the public for admission. But a great change has come over the face of the country since 1806 in this respect, with the result that the distinction between garden and farm is not now so easy to draw. In consequence of a greater variety of products grown on farms, a better knowledge of the principles governing rotation of crops, and a revolution in transport as the result of which Covent Garden and similar markets can be supplied in bulk from a great distance with vegetables and fruit, much of the produce which was at one time confined to gardens may now be part of the output of a farm. The cultivation in open fields with a view to sale of what in earlier days would be regarded as a characteristically garden product cannot in itself justify the conclusion that such fields have become "garden." Etymologically, the word appears to imply that the ground is enclosed, and in common understanding a method and intensity of cultivation specially suitable to an area set apart for horticulture is part of the general conception.
The present Appeal, however, can be decided without adventuring upon the difficult task of precise definition. I am quite prepared to accept the view that a defined area may be a "garden," for the purposes of Rule 8, even though it is not fenced round, as long as it is a distinct and separate unity devoted to gardening. On the other hand, as I have already said, a field, or fields, of farming land should not be called a "garden" merely because they grow products which used to be characteristic products of gardens, or even products which are still mainly or largely found in gardens. The main test, in my opinion, is that the defined area should be subject to that nature and intensity of treatment which is characteristic of horticulture.
The Commissioners set out in a series of lettered paragraphs running from (A) to (R) the facts which were proved or admitted before them, and in order that my Judgment may be complete and self-contained I must reproduce these paragraphs in extenso.
"(A) For the year in question the Appellant was the occupier of 550 acres.
(i) Part of the land at Springhill and the land at Fingerpost Ground and Lower Moor was arable (excluding land utilised for the cultivation of hops) upon which the following crops were growing during 1936:—
16
acres
wheat.
7
"
potatoes.
3
"
mangolds.
1/2
acre
lucerne.
26 1/2
acres
peas.
18 1/2
"
beans.
44 1/2
"
brussels sprouts.
4
"
savoys.
18 1/2
"
cauliflower.
3 1/2
"
leeks.
4
"
carrots.
6
"
parsnips.
2
"
asparagus.
5
"
plants.
1
"
rhubarb.
17
"
plums.
1 1/2
"
blackcurrants.
32
"
strawberries.
5
"
raspberries.
2
"
loganberries.
11 1/2
"
fallow.
(ii) The remainder of the land at Springhill and land at Willspit consisted of:—
82
acres
mowing grass.
178 1/2
"
grazing.
40
"
hops.
7
"
osiers.
(B) The following live stock was kept by the Appellant:—
16
Horses.
90
Cattle.
232
Sheep.
1,012
Pigs.
8,045
Poultry.
The horses worked upon the farm. Cattle, sheep, pigs, and poultry were produced and bred by the Appellant upon the land.
(C) The whole acreage occupied by the Appellant was worked as a single mixed farm in one unit. The Appellant employed ordinary farm labourers who were not highly skilled.
(D) The Appellant used very up-to-date appliances and practised mechanised farming over the whole farm. The minimum amount of hand labour was used in producing crops upon the arable land, much of it being machine planted and machine hoed.
(E) The Appellant was a registered producer under the Pigs Marketing Scheme.
(F) Wheat was grown upon 16 acres of the arable land, partly to obtain the subsidy payable under the Wheat Act and partly to provide straw litter for the pigs. The mangolds, parsnips and lucerne were grown to provide feed for the stock and horses.
(G) The live stock, pigs and poultry, were kept not for the purpose of providing manure for the arable and pastoral land but for their fattening and sale.
(H) During the winter the poultry had access to the arable land.
(I) The Purchases and Sales of Livestock in 1936 were £5,386 1s. 6d. and £22,147 10s. 7d. respectively.
(J) The Wages for the year amounted to £9,684 17s. 10d. A big proportion of this expenditure was incurred in relation to the pigs and hops. The numbers of regular employees were 80 men and 29 women. These workers worked indiscriminately upon the whole farm whether upon the sheep, pigs, cattle and poultry or upon the pasture and/or the arable land often being engaged upon different...
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