Moriarty v Evans Medical Supplies Ltd
| Jurisdiction | England & Wales |
| Judge | Viscount Simonds,Lord Morton of Henryton,Lord Tucker,Lord Keith of Avonholm,Lord Denning |
| Judgment Date | 04 December 1957 |
| Judgment citation (vLex) | [1957] UKHL J1204-2 |
| Date | 04 December 1957 |
| Court | House of Lords |
[1957] UKHL J1204-2
House of Lords
Viscount Simonds
Lord Morton of Henryton
Lord Tucker
Lord Keith of Avonholm
Lord Denning
Upon Report from the Appellate Committee, to whom was referred the Cause Moriarty (Inspector of Taxes) against Evans Medical Supplies Limited, et è contra, that the Committee had heard Counsel, as well on Wednesday the 30th, as on Thursday the 31st, days of October last, as on Monday the 4th and Wednesday the 6th, days of November last, upon the Petition and Appeal of Louis Moriarty, of 11/13 Orleans House, Edmund Street, Liverpool, 3, 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 13th of December 1956, 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 Petition and Cross Appeal of Evans Medical Supplies Limited, whose registered office is situated at Speke, in the City of Liverpool, 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 December 1956, so far as regards the words "Now it is Ordered that the above mentioned Order of the Honourable Mr. Justice Upjohn be discharged", and also so far as regards the words "And it is further Ordered that the Respondent's Costs of this Appeal be taxed by one of the Taxing Masters and one half thereof be paid by the Appellants to the Respondent or his Solicitor", 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 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 Evans Medical Supplies Limited, and also upon the printed Case of Louis Moriarty (one of Her Majesty's Inspectors of Taxes), lodged in the said Original and Cross Appeals; and due consideration had this day of what was offered on either side in these Appeals:
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 December 1956, so far as complained of in the said Cross Appeal, be, and the same is hereby, Reversed, and that the Judgment of the Honourable Mr. Justice Upjohn, of the 18th day of May 1956, thereby Discharged, be, and the same is hereby, Restored: And it is further Ordered, That the said Original Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That Louis Moriarty (one of Her Majesty's Inspectors of Taxes) do pay, or cause to be paid, to Evans Medical Supplies Limited the Costs incurred by them in the Court of Appeal, and also the Costs incurred by them in respect of the said Original and Cross Appeals 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 Chancery Division of the High Court of Justice, to do therein as shall be just and consistent with this Judgment.
My Lords,
The respondent company, Evans Medical Supplies Limited, and its predecessors have for a long time carried on in the United Kingdom and elsewhere the business of manufacturing chemists, wholesale druggists and kindred trades. It has a worldwide trade and reputation. In the year 1953 it carried on business in Burma through an agency in that country.
On the 20th October, 1953, it entered into an Agreement with the Government of the Union of Burma under which it became entitled to receive and received the sum of £100,000 and certain other sums therein mentioned. It will be necessary for me to refer in some detail to this Agreement.
The company was duly assessed in respect of its profits as wholesale druggists for the year 1954-55 under Case I of Schedule D, and in this assessment the sum of £100,000 was treated as a receipt of its trade liable to be included in the computation of its profits. Against this assessment the company appealed to the Commissioners for the Special Purposes of the Income Tax Acts, who upheld the assessment but at the instance of the company stated a Case for the opinion of the High Court. The case came on for hearing before Mr. Justice Upjohn, who allowed the appeal of the respondent company and reversed the determination of the Special Commissioners. From his judgment the Crown appealed to the Court of Appeal. That Court discharged the order of the learned Judge and ordered that the case be remitted to the Special Commissioners with the direction "to ascertain in accordance with the judgments and subsequent proceedings of the Court of Appeal what part, if any, of the amount of One hundred thousand pounds (£100,000) should be attributed to the imparting of the secret processes to the Government of Burma, such part to be treated as a capital receipt, and to adjust the assessment accordingly, and with power to the parties to call such evidence as they may consider necessary", and it was further ordered that the Commissioners should (if required by either party) state a Supplemental Case setting forth the facts of their determination. Neither party had asked for, or suggested the propriety of, such an apportionment. The Crown has appealed against the Order, inviting your Lordships to restore the determination of the Commissioners; the respondent company has cross-appealed, claiming that the judgment of Mr. Justice Upjohn should be restored. Both sides have argued throughout on the basis of "all or nothing".
My Lords, largely, I think, as a result of the way in which the case was originally presented on behalf of the Crown and the consequent form of the Commissioners' determination, a number of difficulties have been created which might well have been avoided. Essentially the case seems to me to be a very simple one except only on one point which has caused me some anxiety.
Inasmuch as the Case Stated raises amongst other questions the familiar one whether there was evidence upon which they could make their determination, it will be necessary to refer to the Case in some detail.
The Commissioners, after stating the question as I have already stated it, refer to the fact that at the hearing of the appeal evidence was given by a Mr. Fergusson, the Chairman and Managing Director of the company, and that certain documents (including the Agreement of the 20th October, 1953) had been put in evidence and formed part of the Case. They then refer to the incorporation and objects of the company as stated in its Memorandum of Association, and mention that it took over a business which began in the year 1809 and is one of the leading pharmaceutical manufacturers with a worldwide trade. Paragraphs 4 and 5 of the Case have been relied on by one side or the other, and I set them out verbatim.
"4. The Company carries on its trade abroad, in some cases by means of subsidiary companies in various countries, in other cases by means of foreign agencies, and for a considerable period prior to the year 1953 it had an agency in Burma. In the year 1953 the Burmese Government decided to build a factory and laboratories in Burma for the purpose of establishing an industry there for the production of pharmaceutical and other products. Accordingly, the Burmese Government despatched a Trade Mission to Europe, with a view to inducing some leading firm of manufacturing chemists to advise as to the erection of such a factory, the supply of equipment for manufacture, and to impart to them the processes, formulae, and knowledge necessary to the production and manufacture of pharmaceutical products in Burma.
5. The said Trade Mission got into touch with firms of wholesale manufacturing chemists on the continent of Europe and, also, through the medium of United Kingdom Government Departments, with the Association of the British Pharmaceutical Industry and finally treated with three leading firms of manufacturing chemists in the United Kingdom of which the Company is one. There was keen competition with several continental firms and the British Government was anxious that a British firm should, if possible, come to terms with the Burmese Government. Negotiations were opened between the Company and the Trade Mission on behalf of the Burmese Government, and the Company at first suggested a lump sum of £350,000 for the sale of drawings, designs, plans, and technical and other data, and 'know-how' necessary for the establishment, erection and installation of the factory and the commencement of production, and for management services for a period of years. The Burmese Government were unwilling to agree upon a single lump sum, but desired that part of the consideration should take the form of fees based on production. The Company then made fresh proposals, which were accepted on behalf of the Burmese Government and embodied in the Agreement of 20th October, 1953 (Exhibit A)."
I come, then, to the Agreement, and as I regard it as the vital point of this case I must refer to it at length. The recitals have rightly been regarded as of importance. They are as follows:—
"(1) The Government of the Union of Burma proposes to build in Burma a factory and laboratories (hereinafter together referred to as 'the factory') for the purpose of establishing an industry there for the production of...
To continue reading
Request your trial
-
Commissioners of Inland Revenue v Rolls-Royce Ltd
...at least the most advantageous, way that was open to it. I must add a word on the case of Evans Medical Supplies, Ltd.v. Moriarty(4) , [1958] 1 W.L.R. 66, since I was a party to the majority decision in this House. In the Court of Appeal in the present case, Upjohn, L.J., who had given the ......
-
Commissioners of Inland Revenue v Rolls-Royce Ltd
... ... In Evans Medical Supplies Ltd. v. Moriarty , 37 Tax Cases, at page 552 , Mr ... ...
- Jeffrey v Rolls-Royce Ltd
-
Wilcock v Frigate Investments Ltd
...case I am content to quote only what was said by Lord Denning, the Master of the Rolls, in Moriarty v. Evans Medical Supplies Ltd. WLR[1958] 1 W.L.R. 66 at p. 88: The general rule of every appellate court is not to allow a new point to be raised except on a question of law which no evidence......