Stainer's Executors v Purchase (Inspector of Taxes)
| Jurisdiction | England & Wales |
| Judge | The Lord Chancellor,Lord Normand,Lord Morton of Henryton,Lord Tucker,Lord Asquith of Bishopstone |
| Judgment Date | 29 November 1951 |
| Judgment citation (vLex) | [1951] UKHL J1129-3 |
| Date | 29 November 1951 |
| Court | House of Lords |
[1951] UKHL J1129-3
House of Lords
Lord Chancellor
Lord Normand
Lord Morton of Henryton
Lord Tucker
Lord Asquith of Bishopstone
After hearing Counsel as well on Monday the 22d, as on Tuesday the 23d, days of October last, upon the Petition and Appeal of Florence Gospel, of Caeburn, Park Gate Road, Newdigate, in the County of Surrey and Harold Woosnam Morgan, of 86 Eccleston Square, in the County of London (Executors of Leslie Howard Stainer deceased), praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of His Majesty's Court of Appeal of the 5th of April 1950, might be reviewed before His Majesty the King, in His 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 His Majesty the King, in His Court of Parliament, might seem meet; as also upon the Petition and Cross Appeal of Henry Rucher Purchase (His Majesty's Inspector of Taxes), of Turret House, Jenner Road, Guildford, Surrey, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of His Majesty's Court of Appeal of the 5th of April 1950, so far as therein stated to be appealed against, might be reviewed before His Majesty the King, in His Court of Parliament, and that the said Order, so far as aforesaid, might be reversed, and that the Petitioner might have the relief prayed for in the Cross Appeal, or such other relief in the premises as to His Majesty the King, in His Court of Parliament, might seem meet; as also upon the printed Case of Henry Rucher Purchase (His Majesty's Inspector of Taxes), and also upon the printed Case of Florence Gospel and Harold Woosnam Morgan, 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 His Majesty the King assembled. That the said Order of His Majesty's Court of Appeal, of the 5th day of April 1950, complained of in the said Original and Cross Appeals, be, and the same is hereby. Reversed, and that the Judgment of the Honourable Mr. Justice Croom-Johnson of the 1st day of November 1949, be, and the same is hereby, Restored: And it is further Ordered, That the said Petition and Cross Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the said Henry Rucher Purchase (His Majesty's Inspector of Taxes), do pay, or cause to be paid, to the said Florence Gospel and Harold Woosnam Morgan (Executors of Leslie Howard Stainer deceased) 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 High Court of Justice, to do therein as shall be just and consistent with this Judgment.
My Lords.
The question in this appeal is whether the Appellants, who are the executors of the late Leslie Howard Stainer, are assessable to income tax on certain sums which had been earned by him in the course of his profession as a film actor and producer but in the events that happened fell due for payment after his death. A cross appeal was presented on behalf of the Crown in respect of certain other sums which in the Courts below were held not to be assessable to tax, but it was withdrawn at the Bar of Your Lordships' House.
Leslie Howard Stainer, who was professionally known as Leslie Howard, was killed by enemy action on or about the 1st June, 1943. He had in the exercise of his profession entered into certain contracts, current at his death, under which the sums in question were paid, and about them I must say a few words. I need not state them at length as they are set out sufficiently in the judgment of Jenkins L.J. in the Court of Appeal.
The relevant contracts were:
( a) an agreement of the 31st October, 1940, made between British National Films Ld. and Mr. Howard under which he was to act as producer and associate director and take the leading part in a film called "Mr. Pimpernel Smith". He was also to assign to the company the story and the "shooting script" of which he was the owner. It was expressly provided that the picture when completed and all rights therein were to be the sole property of the company and that nothing in the agreement was to constitute a partnership between the parties. For his services in producing directing and acting in the picture Mr. Howard was to be paid by way of remuneration a sum of £5,000 payable during production and a certain proportion of the gross receipts from the distribution after certain agreed deductions. This proportion was to be paid to him monthly by the company as the gross receipts came in.
Mr. Howard fully performed the services required of him, the film was made in 1940 and he duly received the sum of £5,000. No question arises in regard to this sum. But during the years ended the 5th April, 1945, 1946 and 1947 sums were received by the company from the distribution of the picture and sums representing the proportions due to Mr. Howard were paid to the Appellants as his executors without any deduction for income tax. These sums were included in the assessments now in dispute.
( b) An agreement of the 13th December. 1940, made between Ortus Films Ld. and Mr. Howard under which he was to perform in a film to be called "the 49th parallel". the full copyright in which was to belong to the company. As remuneration Mr. Howard was to receive, and duly received, the sum of £2,000 (as to which no question arises) and he was also to receive a sum equal to l4/49ths of the company's share in the ultimate net profits of the distribution of the film. Under this agreement also sums were paid to the Appellants in the years ended 5th April, 1945 and 1946 and were included in the disputed assessments.
( c) An agreement of the 18th September, 1940, made between Misbourne Pictures Ld. and Mr. Howard under which he was to act as producer-director of, and perform in, a film to be called "the First of the Few", the full copyright of the work being vested in the company. Under this agreement Mr. Howard's remuneration was to be (1) a sum of £5,000 during the making of the film, (2) a sum of £10,000 to be paid within two years and six months after the trade show of the film, and (3) a sum equal to two-thirds of the actual sums from time to time received by the company in respect of the exploitation of the film, such two-thirds share to be paid within one year from the receipt by the company from time to time of such sums. This film was made in 1941 and 1942 and the trade show was in August 1942. No question arises with regard to the sum of £5,000 which was duly paid to Mr. Howard in his lifetime. Mr. Howard appears to have agreed with the company in his lifetime that there should be a variation of the remuneration secondly and thirdly provided for but...
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Alloway v Phillips
...it had no independent vitality. For that proposition he referred us to a case corcerning Mr. Leslie Howard, the actor, see Stainer's Executors v. Purchase (1952) Appeal Cases 280. Mr. Leslie Howard was a film actor, acting for money. He was paid lump sums, and a share of the profits, under ......
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...contending that it governed the present case, the Appellant that it was distinguishable. I refer to Stainer's Executors v. Purchase [1952] A.C. 280. In that case I said that I agreed with and adopted every word of the judgment of Lord Justice Jenkins in the Court of Appeal, and I repeat wha......