Mallalieu v Drummond

JurisdictionEngland & Wales
JudgeLord Elwyn-Jones,Lord Diplock,Lord Keith of Kinkel,Lord Roskill
Judgment Date27 July 1983
Judgment citation (vLex)[1983] UKHL J0727-1
Date27 July 1983
CourtHouse of Lords
Drummond (Inspector of Taxes)

[1983] UKHL J0727-1

Lord Diplock

Lord Elwyn-Jones

Lord Keith of Kinkel

Lord Roskill

Lord Brightman

House of Lords

Lord Diplock

My Lords,


I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Brightman. I agree with it, and for the reasons he gives I would allow this appeal.

Lord Elwyn-Jones

My Lords,


The issue in this appeal is whether the disbursements of the appellant tax payer in the relevant years on replacements, laundering and cleaning the clothes she wore during the practice of her profession of barrister were "wholly and exlusively laid out or expended for the purposes of her profession": see section 130 of the Income and Corporation Taxes Act 1970.


As stated in paragraph 4 of the case stated, the Commissioners found, after hearing oral testimony from the appellant which their findings indicate they accepted, that:-


1. the appellant would not have have incurred any of the expenditure on the items of clothing in question had it not been for the requirement of her profession that she should comply when appearing in Court with the Notes for Guidance of the Bar Council (which are quoted in the speech of my noble and learned friend Lord Brightman);


2. at all material times she had a private wardrobe of clothes and shoes which were amply sufficient to keep her clothed and shod in comfort and decency;


3. the preservation of warmth and decency was not a consideration which crossed her mind when she bought the disputed items;


4. she bought the items only because she would not have been permitted to appear in Court if she did not wear them when in Court, or other clothes like them.


It was common ground that the relevant time for determining what were the appellant's purposes and what was in her mind when the expenditure was incurred was at the moment the expenditure was made.


The Commissioners did look into the appellant's mind (as far as humans can look into the minds of others) and found that "when Miss Mallalieu laid out money on clothes for wearing in Court her purpose in making that expenditure was to enable her to earn profits in her profession and also to enable her to be properly clothed during the time she was on her way to chambers or to Court and while she was thereafter engaged in her professional activity." This apparently is in fact what she said and their findings of fact indicate that they believed her.


The test as to why the expenditure was incurred is subjective. As Romer L.J. stated in Bentleys, Stokes and Lowless v. Beeson [1952] 2 All E.R., 84 [1952] 2 All E.R., 84 - 85:

"The sole question is �. what was the motive or object in the mind of the (individual) �. in question".


This proposition was affirmed by Walton J. in Robinson v. Scott Bader [1980] 1 W.L.R. and by the Court of Appeal [1981] 1 W.L.R. 1135.


Applying that test I respectfully agree with the conclusions of Slade J. and the Court of Appeal that the Commissioners' findings of fact in this case led inevitably to the conclusion that the appellant's expenditure was expended wholly and exclusively for the purposes of her profession.


It was in my view not open to the Commissioners in view of their findings of fact as to the appellant's purposes to conclude that as in this case the clothing was suitable for private as well as for professional use, one of her purposes must have been to spend money on the clothing for her private use. This in my view was to disregard the evidence which they accepted as to her actual motive and purpose. This they have found was to enable her to carry on her profession. Other benefits derived from the expenditure, namely that the clothing also provided her with warmth and decency, were purely incidental to the carrying on of her profession in the compulsory clothing she had to wear.


I am naturally diffident in disagreeing with my noble and learned brethren but I find the conclusions arrived at by Slade J. and the Court of Appeal inescapable in view of the Commissioners' findings of the primary facts in this case.


I would dismiss the appeal.

Lord Keith of Kinkel

My Lords,


For the reasons given in the speech to be delivered by my noble and learned friend, Lord Brightman, which I have had the opportunity of reading in draft and with which I agree, I too would allow the appeal.

Lord Roskill

My Lords,


I have had the advantage of reading in draft the speech to be delivered by my noble and learned friend, Lord Brightman. For the reasons he gives I too would allow this appeal.

Lord Brightman

My Lords,


The immediate issue in this appeal concerns the right of a female barrister, in computing the profits of her profession, to deduct the cost of upkeep of a wardrobe of clothes of a design and colour suitable to be worn under her gown during court appearances. But during the course of the argument this issue was found to resolve itself into a far more general and fundamental question: whether any person carrying on a trade, profession or vocation on his own account is entitled to a similar deduction if he chooses to set apart clothes, underclothes and footwear for use only at his place of work, and when proceeding to and from his place of work.


The taxpayer is a member of the junior Bar with a busy court practice. When appearing in open court she is obliged, with a few exceptions, to wear a gown over her ordinary clothing, and a wig. When not in open court but in the chambers of a judge, master or registrar, she would (or could) appear in her ordinary clothes without wig or gown. What sort of clothes a barrister should wear in court (I include chambers) is a matter of good taste and common sense, the criterion being that they should be appropriate to the dignity of the occasion. However in recent years some brief rules have been laid down or authoritative guidance given as to what is the appropriate clothing to be worn by barristers appearing in court. So far as I am aware no official guidance was ever thought necessary until about 60 years ago. A barrister conformed as a matter of course to the sartorial standards of his colleagues. By 1922 the ranks of the Bar began to be enriched by the entry of women barristers, who had no precedents or comparisons to draw upon. Rules were accordingly issued by the Lord Chief Justice, and amended in 1968. The 1968 rules have now been replaced by brief "Notes for Guidance on Dress in Court", which apply to barristers of both sexes. These notes were formally approved by the Bar Council and received the assent of the Lord Chief Justice. The notes for the most part reflect the requirements of common sense. They are short, and so far as relevant for present purposes provide as follows:-

"1. The dress of barristers appearing in court should be unobtrusive and compatible with the wearing of robes.

2. Suits and dresses should be of dark colour. Dresses or blouses should be long-sleeved and high to the neck � Shirts and blouses should be predominantly white or of other unemphatic appearance. Collars should be white and shoes black."


There are no other rules relating to the clothes to be worn by a female barrister under her court gown.


The taxpayer bought clothes in conformity with those requirements. The initial cost of purchase was a capital expense, and therefore not material for present purposes. However, she needed to clean and renew them from time to time and in the accounting period for the 1977/78 year of assessment she spent some £500 on replacements, laundering and cleaning. This sum is claimed as a deduction in computing the profits of her practice chargeable under Schedule D. To qualify as a deduction, the expenditure must fall outside the prohibition contained in section 130 of the Income and Corporation Taxes Act 1970. The relevant paragraph of the section is paragraph (a) but paragraph (b) should perhaps be read with it as it was referred to in argument:-

"130. Subject to the provisions of the Tax Acts, in computing the amount of the profits or gains to be charged under Case I or Case II of Schedule D, no sum shall be deducted in respect of -

(a) any disbursements or expenses, not being money wholly and exclusively laid out or expended for the purposes of the trade, profession or vocation,

(b) any disbursements or expenses of maintenance of the parties, their families or establishments, or any sums expended for any other domestic or private purposes distinct from the purposes of the trade, profession or vocation."


The effect of paragraph (a) is to exclude, as a deduction, the money spent by Miss Mallalieu unless she can establish that such money was spent exclusively for the purposes of her profession. The words in the paragraph "expended for the purposes of the trade, profession or vocation" mean in my opinion "expended to serve the purposes of the trade, profession or vocation"; or as elaborated by Lord Davey in Strong, & Co. of Romsey Ltd. v. Woodifield [1906] A.C. 448 [1906] A.C. 448, 453 "for the purpose of enabling a person to carry on and earn profits in the trade etc." The particular words emphasised do not refer to "the purposes" of the taxpayer as some of the cases appear to suggest; (as an example see the report of this case in [1983] 1 W.L.R. 256 F.). They refer to "the purposes" of the business which is a different concept although the "purposes" (i.e. the intentions or objects) of the taxpayer are fundamental to the application of the paragraph.


The effect of the word "exclusively" is to preclude a deduction if it appears that the expenditure was not only to serve the purposes of the trade, profession or vocation of the taxpayer but also to serve, some other purposes. Such other purposes, if found to exist, will usually be the private purposes of the taxpayer. See for...

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