Firestone Tyre & Rubber Company, Ltd v Lewellin (HM Inspector of Taxes)
| Jurisdiction | England & Wales |
| Judge | Lord Morton of Henryton,Lord Radcliffe,Lord Tucker,Lord Cohen |
| Judgment Date | 14 February 1957 |
| Judgment citation (vLex) | [1957] UKHL J0214-1 |
| Date | 14 February 1957 |
| Court | House of Lords |
[1957] UKHL J0214-1
House of Lords
Lord Morton of Henryton
Lord Radclife
Lord Tucker
Lord Cohen
Upon Report from the Appellate Committee, to whom was referred the Cause Firestone Tyre and Rubber Co. Ltd. (as agents for Firestone Tire and Rubber Company of Akron in the United States of America) against Lewellin (Inspector of Taxes), that the Committee had heard Counsel, as well on Thursday the 13th, as on Monday the 17th and Tuesday the 18th, days of December last, upon the Petition and Appeal of the Firestone Tyre and Rubber Co. Ltd. (as agents for Firestone Tire and Rubber Company of Akron in the United States of America), whose registered office is situate at Great West Road, Brentford, in the County of Middlesex, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of Her Majesty's Court of Appeal of the 13th of February 1956, might be reviewed before Her Majesty the Queen in Her Court of Parliament, and that the said Order might be reversed, varied or altered, or that the Petitioners might have such other relief in the premises as to Her Majesty the Queen, in Her Court of Parliament, might seem meet; as also upon the printed Case of Mrs. Catherine Mary Lewellin (Her Majesty's Inspector of Taxes), lodged in answer to the said Appeal; and Counsel appearing for the Respondent, but not being called upon; and due consideration being had this day of what was offered for the said Appellants:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Order of Her Majesty's Court of Appeal, of the 13th day of February 1956, complained of in the said Appeal, be, and the same is hereby, Affirmed, and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the Appellants do pay, or cause to be paid, to the said Respondent the Costs incurred by her in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments.
My Lords,
In this case I agree with the conclusions successively reached by the Special Commissioners, Harman, J., and the Court of Appeal, and I can state my reasons very briefly.
Three companies were concerned in the transactions giving rise to this appeal. They are—
(1) the Firestone Tyre and Rubber Company, Limited, which carries on the business of tyre and rubber manufacturers at Great West Road, Brentford, Middlesex;
(2) the Firestone Tire and Rubber Company of Akron, Ohio, in the United States of America;
(3) a company named Aktiebolaget A. Wiklunds Maskin & Velociped-fabrik, carrying on business ( inter alia) as a distributor of tyres at Stockholm, Sweden.
These three companies have been referred to in the Courts below as "Brentford", "Akron" and "Sweden" and I shall adopt the same convenient course.
The events giving rise to this appeal are fully set out in the Case Stated and are summarised in the judgment of the Master of the Rolls. I gratefully accept his summary and shall not repeat it. The questions for determination before the Special Commissioners were—
(a) whether Brentford itself was carrying on a trade on its own behalf of selling tyres to persons outside the United Kingdom; and, if not,
(b) whether Akron was exercising within the United Kingdom a trade of selling tyres to persons outside the United Kingdom, and, if so,
(c) whether that trade was carried on by Akron through the agency of Brentford.
The Special Commissioners answered question ( a) in the negative and the Crown has not sought to contest this decision, so your Lordships are only concerned with questions ( b) and ( c).
The relevant provisions of the Income Tax Act, 1918, are as follows:—
The Income Tax Act, 1918, Schedule D, paragraph (1), provides:
"Tax under this Schedule shall be charged in respect of—( a) The annual profits or gains arising or accruing … (iii) to any person, whether a British subject or not, although not resident in the United Kingdom, … from any trade, profession, employment, or vocation exercised within the United Kingdom;"
General Rule 5 provides:
"A person not resident in the United Kingdom, whether a British subject or not, shall be assessable and chargeable in the name of … any factor, agent, receiver, branch, or manager, whether such factor, agent, receiver, branch, or manager has the receipt of the profits or gains or not, in like manner and to the like amount as such non-resident person would be assessed and charged if he were resident in the United Kingdom and in the actual receipt of such profits or gains."
General Rule 10 provides:
"Nothing in these rules shall render a non-resident person chargeable in the name of a broker or general commission agent, or in the name of an agent not being an authorised person carrying on the regular agency of the non-resident person or a person chargeable as if he were an agent in pursuance of these rules, in respect of profits or gains arising from sales or transactions carried out through such a broker or agent."
It is clear that if Akron was carrying on the trade in question through the agency of Brentford, the agency was a "regular" one within the meaning of General Rule 10, and Counsel for the Appellants did not seek to rely upon that Rule.
The first stage in considering questions ( b) and ( c) is to determine whether the trade in selling tyres to persons outside the United Kingdom, with which this appeal is concerned, was exercised within the United Kingdom. My Lords, I cannot doubt that it was so exercised, in view of the facts as to the course of dealing set out in the Case Stated and in particular in paragraphs 6 to 12 inclusive.
Jenkins, L.J., states the result of this course of dealing, in language which I entirely accept, as follows:—
"An order placed by a distributor direct with Brentford as one of the listed manufacturers of Firestone tyres could at most only create a contract between the distributor and Akron to the effect that the distributor would purchase, and Akron would cause the manufacturer to sell to the distributor, the tyres ordered on the terms and conditions of the Distributor Agreement. There was no privity of contract between distributor and manufacturer quoad the Distributor Agreement, and it is, I think, quite impossible to hold that the mere placing of an order with any one of the listed manufacturers would, without more,...
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