Harvey (Inspector of Taxes) v Breyfogle
| Jurisdiction | England & Wales |
| Judge | Lord Normand,Lord Morton of Henryton,Lord Reid,Lord Cohen |
| Judgment Date | 20 April 1953 |
| Judgment citation (vLex) | [1953] UKHL J0420-3 |
| Date | 20 April 1953 |
| Court | House of Lords |
[1953] UKHL J0420-1
House of Lords
Lord Normand
Lord Oaksey
Lord Morton of Henryton
Lord Reid
Lord Cohen
Upon Report from the Appellate Committee, to whom was referred the Cause Bray (Inspector of Taxes) against Colenbrander, that the Committee had heard Counsel, as well on Tuesday the 24th, as on Wednesday the 25th and Thursday the 26th, days of February last, upon the Petition and Appeal of Charles Bray, of 58 Conduit Street, London, W.l, one of Her Majesty's Inspectors of Taxes, 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 24th of July 1952, so far as therein stated to be appealed against, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Order, so far as aforesaid, might be reversed, varied or altered, or that the Petitioner 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 W. S. A. Colenbrander, 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 Her Majesty the Queen assembled. That the said Order of Her Majesty's Court of Appeal, of the 24th day of July 1952, in part 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 Appellant do pay, or cause to be paid, to the said Respondent the Costs incurred by him in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments.
My Lords,
In each of these appeals the Respondent entered into a contract of employment with an employer resident abroad. The contract was in each case entered into in the country of the employer's residence and it provided for payment of the employee's remuneration in that country. Parenthetically it should be said that there is no suggestion that the place of payment was nominal or pretended, or that the real or genuine place of payment was not the place specified in the contract. Nothing, therefore, of what follows in this Opinion in any way touches a case where the designated place of payment is challenged as nominal or pretended and unreal. Substantially the whole duties of the employee under the contract in each case were performed in the United Kingdom and any duties performed elsewhere were, for the purposes of these appeals, negligible. The Respondents were resident in the United Kingdom at all material times.
By the assessments under review the Crown assessed each of the Respondents under Schedule E in respect of all sums paid to them as the remuneration of their employment and the Crown has consistently maintained that the Respondents were assessable as persons residing in the United Kingdom in respect of the whole annual profits and gains accruing from an employment carried on in the United Kingdom under Case II of Schedule D which, by the provisions of Section 18 of the Finance Act. 1922. became chargeable under Schedule E. The Respondents have with equal consistency maintained that they are assessable under Case V of Schedule D and that the measure of assessibility is the amount of the actual sums annually received by them in the United Kingdom (Rule 2 of the Rules applicable to Case V). They claim the benefit of the express exception in section 18 (1) of the Finance Act. 1922, whereby profits and gains chargeable under Case V of Schedule D remain chargeable under that Schedule.
It is now quite settled that the word "possession" in Case V covers employment ( Colquhoun v. Brooks [1889] 14 A.C., 493, Foulsham v. Pickles [1925] A.C., 458, Bennett v. Marshall [1938] 1 K.B., 591, per Lord Greene M.R. 600-1). But to fall within Case V the "possession", the employment, must be outside the United Kingdom, which means entirely outside the United Kingdom. The Respondents' case is that an employment is entirely outside the United Kingdom if the place of payment under the contract of employment is outside the United Kingdom, and that the place or places at which the duties of the employment are performed by the employee are irrelevant to the question whether the "possession" is outside the United Kingdom. They further say, and it is admitted, that Bennett v. Marshall (supra), so decided. Bennett v. Marshall was decided by the Court of Appeal, and the Special Commissioners, Danckwerts, J., and the Court of Appeal, have all followed it as an authority binding on them in the present cases.
The present appeals are therefore brought for the purpose of bringing under review the ruling of the Court of Appeal (Sir Wilfrid Greene, M.R., Romer, L.J. and MacKinnon, L.J.), in Bennett v. Marshall that the employee was assessable only under Case V because the place of payment of his remuneration was outside the United Kingdom, and that the fact that some of his duties were performed in the United Kingdom was irrelevant to the question whether the "possession" was wholly outside the United Kingdom. The Court of Appeal's decision was unanimous and it affirmed the judgment of Lawrence, J., as he then was, in the Court below. In both Courts it was held that the case was concluded by the decision and reasoning of this House in Foulsham v. Pickles (supra). That was disputed by the Crown, and it is the real point of controversy in this case. The facts in Foulsham v. Pickles were the converse of those in...
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