Wilkins v Rogerson
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE HARMAN,LORD JUSTICE DONOVAN |
| Judgment Date | 13 December 1960 |
| Judgment citation (vLex) | [1960] EWCA Civ J1213-2 |
| Court | Court of Appeal |
| Date | 13 December 1960 |
[1960] EWCA Civ J1213-2
In The Supreme Court of Judicature
Court of Appeal
The Master of the Rolls (Lord Evershed)
Lord Justice Harman and
Lord Justice Donovan.
Mr H.B. MAGNUS, Q.C., Mr E. BLANSHARD STAMP and Mr ALAN ORR (instructed by The Solicitor of Inland Revenue) appeared on behalf of the Appellant.
Mr F. HEYWOHTH TALBOT, Q.C., and Mr C.N. BEATTLE (instructed by Messrs Slaughter & May) appeared on behalf of the Respondent.
The point involved in this appeal falls indeed within the narrowest compass; but it is, or appears to be, novel in the sense that no strictly comparable case some to have come before the court before.
Mr Rogerson, the respondent, at the relevant date in 1955/56 was in the service of a company known as the Anglo-Oriental & General Investment Trust Limited. As the season of goodwill approached in the year 1955 the company of which he was the servant wrote to him, and to some twenty or twenty-one follow servants, a letter which, so far as material, was as follows: "The Board have decided to make a Christmas present to all male members of the staff of clothes suitable for wear at the office up to the value of £15. Arrangements have been made with Messrs Montague Burton Limited, 112 Cheap side, E.C.2. for you to be able to acquire from them a choice from or combination of the following; Suit, overcoat, raincoat. The bill will be sent to the Trust, and it is stressed that no cash payment either way can be made between £15 and the actual cost of the goods.
"Please take this letter with you when you visit Messrs Montague Burton, which can be done on or after Thursday, 10th November 1955. Messrs Montague Burton will provide a fitting if this is required and asked for. They will also make alterations if required. Both fittings and alterations will take additional time".
On the same date the company wrote to Montague Burton Limited of 112 Cheapside, and the letter is as follows; "We write with reference to the visit of Mr W. Peter Spens on 4th November 1955. This company, a subsidiary of London Tin Corporation Limited, has decided to give its male staff a Christmas present (purchased from Messrs Montague Burton Limited) up to the value of £15 of clothes suitable for wear at the office drawn from a choice from or combination of a suit, overcoat or raincoat. We enclose a copy of a letter which we will write to each male member of the staff whose names are given below", and then there follows the list of names. "Please supply them with suits, overcoats or raincoats as above, and send us your account in due course. We stress that the bill will be paid by this company, and no cash payment other way can be made between £15 and the actual cost of the clothes. We have advised the staff to call on you on or after Thursday 10th November, 1955" etc.
The only other document to which I need refer is the receipt in February of the following year for a total sum of £311. 12s. 6d which was the cost of the suits, overcoats or raincoats which had been supplied to the various member of the company's staff.
It has boon necessary to read in full those documents be cause in the end much turns upon the exact nature of what was done. Mr Rogerson availed himself of the generosity of his employers, and acquired clothing from Montague Burton for which the bill was delivered to the company, the price in his case being not quite £15, but £14.15s.
The claim of the Crown has been that that figure, £14.15s., is to be treated as part of the taxable income of Mr Rogerson for the tax year in question. It is said that it falls within the terms of paragraph 1 of the Ninth Schedule to the Income Tax Act 1952; "Tax under Schedule E. shall be annually charged on every person having or exercising an office or employment of profit mentioned in Schedule E., or to whom any annuity, pension or stipend chargeable under that Schedule is payable, in respect of all salaries, fees, wages, perquisites or profits whatsoever therefrom for the year of assessment". It is the Crown's case that the £14.15s, must be treated as perquisites or profits from the employment for the year of assessment 1955/56.
On behalf of Mr Rogerson it was said that any perquisite or profit was limited in this case to the value expressed in money of the thing which he got, namely, the clothing. For the purposes of this case, the value of the clothing, treated, of course, as see end hand the moment it has been delivered, has been agreed it £5. Let me say at once that this involves no reflection upon Messrs Montague Burton Limited, who are not before the court; and it should not, of course, be assumed for a moment that goods which they supply are worth only one-third of the price which they charge. But it is, of course, notorious that, apart from purchase tax, the value of clothing is very much reduced the moment it can be called secondhand. In any case the value is one which has been mutually accepted and agreed, and nothing turns upon it. It may have been agreed at a low figure to discourage any cross-appeal by Mr Rogerson. If so, it has achieved its purpose, for it is now accepted on his behalf that he is rightly taxed, as the learned Judge in the court below held, upon the money value of what he got.
I can now state again the point: What must be regarded for the purpose of the paragraph in the Ninth Schedule of the Act as the perquisite or profit from Mr Rogerson's employment? The case for the Crown, which Mr Magnus presented with clarity and attraction, can I think be summarised in the way in which he put it at the end of his argument: "I say" (and I read from my note of the argument) "that where the employee accepts an offer from his employer to spend money on his behalf, then he is chargeable on the money spent, and not on the value of the thing bought for him".
If that is a correct statement of the true nature of this transaction, it may be that the conclusion follows. Mr Magnus referred to a few cases - gratefully, may I say, we were not given a great many to read - one of which is the case of ( Nicholl v. Austin volume 19 Tax Cases, page 531) before Mr Justice Finlay. In that case a director of a company was told that, in order to do justice to his standing in the company, he should continue to live at a place called Debden Hall, but his employer, as part of the bargain of service, promised to pay the charges incurred for its use, such as rates and telephone charges, and also the cost of maintaining the gardens. In that case it was hold that what Mr Austin had got from the arrangement in money's worth was the sums which were paid for rates and telephone charges, and also the sums paid for the gardener's wages and the like as regards the gardens.
In the case of Hartland v. Diggines, reported in 1926 Appeal Cases at page 289, an employing company had agreed to pay the income tax on its employee's salary; and there the House of Lords likewise held that the tax so paid must be treated as within the scope of the paragraph of the Schedule. Mr Magnus's argument was that when this case is viewed according to his argument (as I have stated it) the same reasoning would compel a similar answer to that given in Nicholl v. Austin and Hartland v. Dignities.
I have said that the point is a very short one, and I think it does not lend itself to elaboration. I reject the premise involved in Mr Magnus's formulation. It is no doubt true in a sense to say that the letter of the 7th November was an offer, and one which the person to whom it was addressed was not bound to accept. Indeed, anyone who proposes to give a present to somebody else may find that the somebody else says: "I will not have it". But in the submission which Mr Magnus has formulated, the word offer, I think, is used in a sense in which it would be used in a legal context. The suggestion is that here was an offer which, on acceptance, created some right; and it is at that point that I venture to part company with Mr Magnus.
It seems to me that Mr Rogerson never acquired any rights against anybody. He received this letter; armed with it he went to Messrs Montague Burton's establishment, and Montague Burton expressed themselves as willing to supply him with the clothes he ordered. When the clothes were delivered, then (and then only) Mr Rogerson got something which was his own. He acquired at that point of time a suit, albeit ho had no right against anyone to get the suit. Nor had he, as I conceive, any right against the company, though as a matter of ordinary decency as between...
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