Seymour v Reed
[1927] A.C. 554(Judgment by: Lord Phillimore)
Between: Seymour - Appellant
And: Reed - Respondnent
Judges:
Viscount Cave LC
Viscount Dunedin
Lord Atkinson
Lord PhillimoreLord Carson
Subject References:
REVENUE
INCOME TAX
Profit from Employment
Proceeds of professional Cricketer's Benefit Match
Legislative References:
Income Tax Act, 1918 (8 & 9 Geo. 5, c. 40) - Sch. E, r. 1
Case References:
Herbert v. McQuade distinguished - [1902] 2 K. B. 631
Blakiston v. Cooper distinguished - [1909] A.C. 104
Judgment date: 24 May 1927
Judgment by:
Lord Phillimore
My Lords, the result of the assessment having been made upon the appellant as a person holding an office or employment under Sch. E and not upon him in respect of his professional earnings under Sch. D has been to bring under your Lordships' notice two quite different classes of authorities: those which deal with a public officer receiving some emolument, not from his employers (if indeed he has any), but from persons with whom he has official relations, and those which deal with an employee receiving from his employers some benefit other than and additional to his contractual salary. The conditions of these two classes of case seem to me so different that very little assistance can be derived in one case from the decisions applicable to the other.
The reported cases dealing with a public officer which have been brought to your Lordships' notice are cases concerning ministers of religion. It is suggested that at any rate from these cases it can be deduced that a perquisite or profit of office is none the less a perquisite or profit because the emolument bestowed is voluntary. I doubt whether the analogy can even be carried so far. In these religious cases the offering may be voluntary, but it is not spontaneous. In the Easter offering case (Cooper v. Blakiston) [F21] the moral or religious duty to make the offering was inculcated by the bishop, and, as pointed out in the judgment of your Lordships' House, ecclesiastical machinery was set in motion to procure it.
Nor does the matter rest here. For a portion of the collection definite legal acts were required to effect the purpose. The collection at the offertory in the Communion Service is provided for by rubric, and by another rubric this offertory is to be disposed of "to such pious and charitable uses, as the minister and churchwardens shall think fit, wherein if they disagree, it shall be disposed of as the ordinary shall appoint." Moreover, though the Easter offerings collected on the occasion in question were not the fruits of legal compulsion, they did represent and supersede in respect of some of the contributions a legal due. The rubric preceding the one I have just quoted, says as follows:
"Yearly at Easter every parishioner shall reckon with the parson, vicar or curate, or his or their deputy or deputies; and pay to them or him all ecclesiastical duties, accustomably due, then and at that time to be paid."
Easter offerings or Easter dues are due of common right from the householder for every member of his family of sixteen years of age and upwards. True it is that the common law rate is 2d. per head only, though by custom it may be more. It is, I believe, not uncommon, though at the moment I cannot think of an instance, and probably was more common when more offices were paid by fees than are so endowed now, that there should be a legal fee of small amount which it was usual to augment. Such fees of office are intended to be covered by the words of Sch. E as profits or perquisites. Easter offerings along with mortuaries and surplice fees are dealt with as part of the legal income of the clergy by the Tithes Commutation Acts, the first (6 & 7 Will. 4, c. 71, s. 90) providing that a parochial agreement shall not extend to their commutation, while a later Act (2 & 3 Vict. c. 62, s. 9) allows them to be included in a parochial agreement. They are also dealt with in the New Parishes Act (6 & 7 Vict. c. 37, s. 15).
The case of Herbert v. McQuade [F22] has not the authority of your Lordships' House. But if it be taken to be law it was a case where, though the particular incumbent had no title to the annual grant, the annual income of the fund had to be distributed among selected incumbents of his class. In that case, too, there was an element of periodicity.
In fact, in these cases of ministers of religion there is always, I think, some element of periodicity or recurrence which makes another distinction between them and the cases of a single gift by an employer or employers. If they be put aside, little is left in the way of authority on which the Crown can rely except that in the case of Cowan v. Seymour [F23] the Court of Appeal thought it important to point out that the gift to the liquidator did not come from his employer, the incorporated company, but from the several shareholders who in combination made up the company.
My Lords, I do not feel compelled by any of these authorities to hold that an employer cannot make a solitary gift to his employee without rendering the gift liable to taxation under Sch. E. Nor do I think it matters that the gift is made during the period of service and not after its termination, or that it is made in respect of good, faithful and valuable service.
During the course of the argument, however, a subtler consideration seemed to emerge. It was suggested that the hope or chance of a benefit match was part of the inducement to a man to become a professional cricketer in the service of the Kent County Cricket Club, and I suppose it must be put as one of the terms under which he was engaged. This line of argument is a departure from that hitherto put forward by the Crown. On the part of the Crown it has been accepted that the grant of the benefit match was voluntary; and the whole weight of the contention has been, that though voluntary, it was still a profit or perquisite.
Anyhow the materials for this contention are wanting. The case stated by the Commissioners does not find any facts to support it. The contentions on behalf of Seymour were either that the money which he received came from the general public and not from his employers or that if it came from his employers, it was to be treated as a donation or gift, and the Commissioners accepted these contentions. If it had been otherwise, a number of facts ought to have been found which we have not before us. The case would probably have stated the number of benefit matches which were usually held yearly, the number of professional cricketers in the service of the club, the usual duration of the tenure of office, or at least the percentage of cricketers in the service of the club who got benefit matches; and I think it would be defective if it did not state that the expectancy of such a benefit was part of the inducement to Seymour to take his post. I am not sure that it would not be necessary to find further that this inducement was held out to him by his employers. The case does not, either in its narrative or in its extracts from the regulations of the club, show that there is any provision in the rules for granting benefit matches. All that it shows is that there are such matches of sufficient frequency to make it desirable to frame rules as to the distribution of the proceeds of such matches when they occur.
In my judgment this is a case of a plain gift not taxable as a profit or perquisite of employment, and I think that this appeal should be allowed.