CURTIS BROWN, Ltd (as AGENTS for STELLA BENSON, D. H. LAWRENCE and PETER B. KYNE) v JARVIS (HM INSPECTOR of TAXES)

Stated under the Income Tax Act, 1918, Section 149, by the Commissioners for the Special Purposes of the Income Tax Acts for the opinion of the King's Bench Division of the High Court of Justice.

1. At a meeting of the Commissioners for the Special Purposes of the Income Tax Acts held on 3rd February, 1928, for the purpose of hearing appeals, Curtis Brown, Limited, (hereinafter called the "Appellant Company") appealed against assessments to Income Tax made upon it as agent for Miss Stella Benson, Mr. D. H. Lawrence and Mr. Peter B. Kyne, in the sums of £106, £631 10s. and £1,449 5s.respectively for the year ending 5th April, 1926, by the Additional Commissioners of Income Tax for the Division of St. Paul, Covent Garden, under the provisions of Schedule D of the Income Tax Acts.

2. The Appellant Company carries on the business of literary agents in Henrietta Street, Covent Garden, London.

3. Miss Benson, Mr. Lawrence and Mr. Kyne are authors. Miss Benson resides in New York, Mr. Lawrence in Italy and Mr. Kyne in California. None of these is a person residing in Great Britain.

4. The Appellant Company in the course of its business as literary agent acts on behalf of authors in making arrangements with publishers and others for the publication or disposal of an author's literary productions. The procedure usually adopted is that the author sends the manuscript of the literary production to the Appellant Company who submits it to publishers who are likely to accept it. If the publisher is desirous of publishing the production or of purchasing the author's rights in the work or otherwise dealing with it, the publisher's terms for the acquisition of the work are incorporated in a form of contract between the author and the publisher which is prepared in duplicate. One part is executed by the publisher and sent with the counterpart to the Appellant Company who in turn forwards the documents to the author. If the author approves of the contract the counterpart is signed by him and returned to the Appellant Company who delivers it to the publisher. The contract usually provides that the publishers will account to the Appellant Company for any royalties payable under the contract, and the Appellant Company remits to the author the amount of such royalties after deducting therefrom its commission and any incidental expenses incurred by it.

5. In May, 1919, Miss Benson (in the manner above described) entered into a contract with Macmillan & Co., Ltd. for the publication in the British Empire, except Canada, of a novel written by her and entitled "Living Alone" on the terms that the publishers should pay her, through the Appellant Company a royalty of 15 per cent. on every copy sold up to 2000 copies and 20 per cent. on all copies sold above 2000 and a royalty of 4d. a copy on every copy sold in the Colonial Edition. A copy of this contract is attached hereto and forms part of this Case.(1) The whole of the work was written abroad and the contract was signed by Miss Benson in America.

6. In April, 1920, Mr. Lawrence (in the manner above described) entered into a contract with Martin Secker whereby it was agreed that the author should assign to the publisher the exclusive right of printing and publishing in book form in the United Kingdom, its Colonies and Dependencies, a new work written by the author entitled "Women in Love" in consideration of the payment by the publisher to the author of a royalty of 1s. per copy on the first 2000 copies, 1s.6d. per copy on the next 3000 copies and 2s. per copy thereafter, 13 copies to be reckoned as 12, the copyright and all other rights not specifically agreed to be conveyed remaining the property of the author. A copy of this contract is attached hereto and forms part of this Case.(1) This contract did not contain a provision for payment through the Appellant Company but in fact the Appellant Company collected the royalties payable under it and remitted the amount, less commission and expenses, to Mr. Lawrence. The whole of the work was written abroad and the contract was signed by Mr. Lawrence in Italy.

7. In September, 1922, Mr. Kyne (in the manner above described) entered into an agreement with Hodder & Stoughton, Limited, whereby it was agreed that the publishers should during the legal term of copyright have the exclusive right of producing and publishing in the British Empire, except Canada, the next three novels of not less than 75,000 words each to be written by Mr. Kyne. A copy of this contract is attached hereto and forms part of this case.(1) The whole of this work was written abroad and the contract was signed by Mr. Kyne in California.

8. The Appellant Company also made arrangements on behalf of Miss Benson and Mr. Lawrence for the sale outright to publishers in this country of the copyright of certain minor literary productions, and during the year of assessment collected from the publishers and remitted to the authors (after deduction of commission) the proceeds of such sales.

9. For the year ending 5th April, 1926, a notice was served on the Appellant Company under Section 103 of the Income Tax Act, 1918, requiring it to make a return of any money or value or of

10. It was contended on behalf of the Appellant Company:-

1. (a) That the sums in question were not profits chargeable with Income Tax;

2. (b) That they were not profits arising from any trade profession or vocation exercised within Great Britain;

3. (c) That they were not profits arising from any property in Great Britain;

4. (d) That the Appellant Company was not an agent in whose name the non-resident authors could be assessed;

5. (e) Alternatively, that there is no provision in the Income Tax Acts whereunder an agent for a person not resident in Great Britain could be assessed otherwise than "in "like manner and to the like amount as such nonresident "person would be assessed and charged if he "were resident in Great Britain;"

6. (f) That for the year of assessment there was no statutory provision for the charge of Income Tax on royalties paid to an author who is not resident in Great Britain.

11. It was contended on behalf of the Crown inter alia:-

That...