Stevens v Britten

JurisdictionEngland & Wales
CourtCourt of Appeal
Judgment Date18 October 1954
Judgment citation (vLex)[1954] EWCA Civ J1018-1
Date18 October 1954

[1954] EWCA Civ J1018-1

In the Supreme Court of Judicature

Court of Appeal


The Master of the Rolls (Sir Raymond Evershed),

Lord Justice Hodson and

Lord Justice Romer


MR L. B. SCHAPIRO (instructed by Messrs Gregory, Rowoliffe & Co., agents for Messrs Gilbert H. White & Co., Guildford) appeared on behalf of the Appellant (Plaintiff).

MR G. BLLENBOGEN (instructed by Messrs Gibson & Weldon, agents for Messrs Macpherson & Lawson, Hindhead, Surrey) appeared on behalf of the Respondent (Defendant).


The point involved in this appeal is indeed a short one. Mr Stevens, the Plaintiff Appellant, and Mr Britten, the Defendant Respondent, were, prior to the execution of a Deed on the 26th February, 1951, partners together in a trade or business the nature of which is not relevant. By a Deed of Dissolution dated the 26th February, 1951, they dissolved their partnership on the terms there set out. The effect was that the Appellant retired altogether from the business and the whole of the business with its goodwill and the rest of it was taken overby the Respondent. In consideration of the agreement in that Deed there was a cash payment by the Respondent to the Appellant. Clause 4 of the Deed was as follows so far as is relevant: "The continuing partner" which means the Respondent "hereby covenants with the retiring partner" videlicet the Appellant "that he will duly pay and satisfy all debts and liabilities of the said partnership and will at all times hereafter keep the retiring partner indemnified against the said debts and liabilities". The actual dissolution was by the Deed expressed to have taken effect from the 10th December, 1950, but both that date and the date of the Deed itself fall within what is commonly called the income tax year which ended on the 4th April, 1951. But in respect of that year it appears that an assessment was made upon the firm for income tax. I say "it appears" because we have had handed to us a receipt from the Collector of Taxes which shows on the face of it that the name of the person assessed was Stevens & Britten, that being the firm name under which these two gentlemen had carried on their partnership business. The receipt to which I have alluded is a receipt given to the Appellant for the sum of 37. 9s. 6d. which was a share of the total assessment which the Appellant appears to have paid and, as I understand, it was in fact one half of the tax. I notice that under the last heading on the receipt "Paid by cash" in the handwriting of the Collector is the observation, somewhat inappropriate to the heading, that the sum paid was "on account". Mr Stevens, the Appellant, having paid that sum of tax, claimed that by virtue of clause 4 of the Dissolution Deed which I have read he was entitled to be indemnified by the continuing partner Mr Britten. Mr Britten having denied liability under the covenant this action was brought.


I think I have stated already that the assessment was in respect of the year 1950/51. I observe (and this is not said with the intention of being critical of anybody) that the payment was made in fact in March, 1954. For the purpose of ourconsideration of this case we have been referred to sections of the Income Tax Act 1952. Whether the provisions of that Act in strictness would be applicable to all the various problems which arise when the tax was assessed and eventually paid I do not think matters because it appears from what we have been told that section 144 of the 1952 Act is a re-enactment of what previously was Rule 10 of the Rules applicable to Cases I and II of Schedule D in the 1918 Act; and if the case is not strictly within section 144 of the Act of 1952 it would fall within Rule 10 of the Schedule I have mentioned. It seems quite plain from a perusal of section 144 that in the case of persons carrying on business in partnership it is an obligation of what is called "the precedent acting partner" to make a return of the income tax for which the firm is chargeable in respect of the firm's profits: "Where a trade or profession is carried on by two or more persons jointly, the tax in respect thereof shall be computed and stated jointly and in one sum, and shall be separate and distinct from any other tax chargeable on those persons or any of them, and a joint assessment shall be made in the partnership name". From that it seems, I confess, to follow as the night the day that the precedent partner having fulfilled his obligation of making his return there is then an assessment in the name of the partnership firm, a joint assessment for the tax chargeable in respect of the trading profits. By what is now section 223 of the Act of 1952 the partners in a firm may, if they so desire, for the purpose of their partnership assessment claim any relief to which they are entitled under any other parts of the income tax legislation in so far as those reliefs have not been already allowed to them under what I will call their private or individual assessments; and if that be done the result is to reduce by the total of the reliefs of all the partners the amount for which the partnership is chargeable. I have used the word "partnership" because that is the word which is to be found in section 144, but it is axiomatic that generally speaking a partnership in English law ismerely a compendious description of the...

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4 cases
  • Re Hollebone's Agreement
    • United Kingdom
    • Court of Appeal
    • 23 March 1959
    ...liability to income tax on the profits of the business is to be found in the case in this Court of Stovens v. Britten, 1954, 3 All England Reports, p.385, to which reference was made by the learned Judge. That was, it is true, a partnership case and the words to be construed, which were co......
  • Harrison (HM Inspector of Taxes) v Willis Bros
    • United Kingdom
    • Chancery Division
    • 27 October 1965 regarded as an entity distinct from the individual partners. In this connection reliance is placed on Stevens v. Britten[1954] 1 W.L.R. 1340 and Income Tax Commissioners for the City of London v. Gibbs [1942] A.C. 402; 24 T.C. 221(1). It is said that s. 47(1) of the Act is applicable to ......
  • Harrison v Willis Bros
    • United Kingdom
    • Chancery Division
    • Invalid date regarded as an entity distinct from the individual partners. In this connection reliance is placed on Stevens v. Britten[1954] 1 W.L.R. 1340 and Income Tax Commissioners for the City of London v. Gibbs [1942] A.C. 402; 24 T.C. 221(1). It is said that s. 47(1) of the Act is applicable to ......
  • Goh Hooi Yin v See Geok Heoh and Another
    • Malaysia
    • High Court (Malaysia)
    • 1 January 1994

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