Petch v Gurney (Inspector of Taxes)
| Jurisdiction | England & Wales |
| Judgment Date | 27 May 1994 |
| Date | 27 May 1994 |
| Court | Court of Appeal (Civil Division) |
Court of Appeal (Civil Division).
Henry and Millett L JJ.
The taxpayer appeared in person.
Launcelot Henderson (instructed by the Solicitor of Inland Revenue) for the Crown.
The following cases were referred to in the judgment:
Barker v Palmer ELR(1881) 8 QBD 9
Brassington v Guthrie (HMIT) TAX[1992] BTC 34
Grainger v Singer ELR[1927] 2 K B 505
Howard v Bodington ELR(1877) 2 PD 203
IR Commrs v McGuckian; McGuckian v IR Commrs TAX[1994] BTC 374
Liverpool Borough Bank v Turner (1861) 30 LJ Ch 379
Pepper (HMIT) v Hart and related appeals ELRTAX[1993] AC 593; [1992] BTC 591
R v General Commrs for Freshwell, ex parte Clarke TAX(1971) 47 TC 691
Valleybright Ltd (in voluntary liquidation) v Richardson (HMIT)TAXTAX(1984) 58 TC 290; [1985] BTC 31
These were appeals by the taxpayer against an order made by Harman J ([1992] BTC 620). By one order the judge granted an application by the Revenue to strike out the taxpayer's appeal on the ground that he had not transmitted the case stated by the special commissioner to the High Court within 30 days of receiving it as required by the Taxes Management Act 1970 section 56 subsec-or-para (4)Taxes Management Act 1970, s. 56(4). The taxpayer also appealed against the judge's refusal of his application to strike out the appeal lodged by the Revenue.
Both the taxpayer and the Revenue had appealed against the decision of a special commissioner. On 6 December 1990 the commissioner stated a single case in respect of both appeals which was sent to the taxpayer and to the Revenue. The Revenue sent their copy of the case to the High Court within the 30-day time limit in January 1991 but the taxpayer's copy was sent a week too late.
The substance of the taxpayer's appeal concerned the commissioner's determination in relation to assessment of post-termination receipts from his employment as a civil servant in the Department of Health and Social Security ("DHSS"). The Revenue's appeal concerned the commissioner's determination in relation to an assessment arising out of a loan made to the taxpayer by the DHSS.
By a notice of motion dated 2 September 1992 the Revenue sought an order striking out the taxpayer's appeal on the ground that it had not been transmitted to the High Court in time. The taxpayer responded by serving a notice of motion seeking an order striking out the Revenue's appeal on the grounds that the appeal showed no cause of action and was frivolous and vexatious.
Held, dismissing the taxpayer's appeals:
1. The transmission of a case from the appeal commissioners to the High Court within 30 days as required by the Taxes Management Act 1970 section 56 subsec-or-para (4)Taxes Management Act 1970, s. 56(4) was a mandatory requirement. It was an essential step in the proceedings and was the means whereby the appellant could invoke the jurisdiction of the court. It could not therefore be dispensed with, so that if the requirement was not complied with the court had no jurisdiction to hear an appeal. Valleybright Ltd (in voluntary liquidation) v Richardson (HMIT) TAX[1985] BTC 31 andBrassington v Guthrie (HMIT) TAX[1992] BTC 34approved.
2. It made no difference that the High Court had received from the Revenue an identical copy of the case stated before the time limit had expired. Although the two appeals were dealt with in the same document, the parties had expressed their dissatisfaction with different determinations of the commissioner on different facts.
3. The Revenue's delay in taking the point from January 1991 to September 1992 was unjustifiable but the court could not exercise a jurisdiction which it did not possess for that reason.
4. Although the court had an inherent jurisdiction to strike out a case stated, such a course would be exceptional. The provisions of the Rules of the Supreme Court, O. 18, r. 19, on which the taxpayer relied, dealt with the striking out of a pleading or an indorsement of a writ if no cause of action was disclosed. A case stated was a creature of statute, neither a pleading nor an indorsement of a writ, and was not intended to disclose a cause of action. A case stated was only required to set forth the facts found by the appeal commissioners and their determination.
Millett LJ: This is an appeal by the taxpayer brought with the leave of the judge from two orders of Harman J dated 5 November 1992. By one order the judge struck out a case stated which had been lodged by the taxpayer because of his failure to comply with the time limit imposed by Taxes Management Act 1970 section 56 subsec-or-para (4)s. 56(4) of the Taxes Management Act 1970 ("the 1970 Act"). By the other order the judge refused the taxpayer's application to strike out a case stated which had been lodged by the Revenue. The judge made no order on the taxpayer's application.
The facts are as follows. In February 1980 a single special commissioner heard appeals by the taxpayer against two assessments to income tax for the year 1985-86. The two assessments in question were:
(2) an assessment of income chargeable under Sch. E in the sum of £24,158 (including a sum of £22,047 in respect of income from the taxpayer's employment by the DHSS) raised on 1 May 1987; and
(3) a further assessment raised on 23 January 1989 which assessed a sum of £2,777 under the beneficial loan provisions then contained inFinance Act 1976 section 66s. 66 of the Finance Act 1976 in respect of a loan of £53,000 made to the taxpayer by the DHSS.
On 1 March 1990 the special commissioner gave a written decision in principle. He found that the taxpayer's employment as a senior civil servant with the DHSS had ended on 2 August 1985 but that the monthly payments which he received thereafter until 31 January 1986 from the DHSS were nevertheless emoluments of that employment withinIncome and Corporation Taxes Act 1970 section 181s. 181 of the Income and Corporation Taxes Act 1970. He also held that Finance Act 1976 section 66s. 66 of theFinance Act 1976 did not apply to the loan of £53,000 made to the taxpayer by the DHSS on or about 10 August 1985, because by then he was no longer employed by the DHSS.
At an adjourned hearing on 13 August 1990 the taxpayer raised further arguments, including the question whether there should be an apportionment of the sums paid to him between August 1985 and January 1986. The special commissioner rejected these arguments, and in accordance with his written decision affirmed the main assessment but discharged the further assessment.
Both parties expressed dissatisfaction with the special commissioner's determination as being erroneous in point of law, and within the 30-day time limit laid down by Taxes Management Act 1970 section 56 subsec-or-para (2)s. 56(2) of the 1970 Act required the special commissioner to state and sign a case for the opinion of the High Court.
On 6 December 1990 the special commissioner stated and signed two cases in identical form and sent one copy to each of the parties. The questions of law which the special commissioner stated for the opinion of the court were whether, on the facts found, he had erred in holding that:
(2) the taxpayer's employment as a civil servant ended on 2 August 1985; and
(3) the monthly payments which he received thereafter until 19 January 1986 were emoluments of his employment; and
(4) there should be no apportionment of the sums of money so paid to the taxpayer; and
(5) the loan or advance of £53,000 made to the taxpayer on 10 August 1985 was outside the terms of Finance Act 1976 section 66s. 66 of the Finance Act 1976.
The taxpayer's copy of the case stated was sent to him under cover of a letter from the clerk to the...
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