Wisdom v Chamberlain (Inspector of Taxes)
[1969] 1 All ER 332(Judgment by: Cairns J)
Between: Wisdom
And: Chamberlain (Inspector of Taxes)
Judges:
Harman J
Salmon LJ
Cairns J
Subject References:
INCOME TAX
Casual profit on hedge against devaluation
Purchase of silver bullion
Profit on re-sale
Finding that other considerations influenced purchase unsupported by evidence
Whether adventure in the nature of trade
Legislative References:
Income Tax Act 1952 - (15 & 16 Geo. 6 & 1 Eliz 2 c 10), Sch D, Case I
Case References:
Edwards (Inspector of Taxes) v Bairstow - [1955] 3 All ER 48; [1956] AC 14; [1955] 3 WLR 410; 36 Tax Cas 207; 28 Digest (Repl) 396, 1763
Inland Revenue Comrs v Livingston - (1927) 11 Tax Cas 538; 1927 SC 251; 28 Digest (Repl) 45, 121
Jenkinson (Inspector of Taxes) v Freedland - (1961) 39 Tax Cas 636; Digest (Cont Vol A) 850, 173n
Leeming v Jones (Inspector of Taxes) - [1930] 1 KB 279; 99 LJKB 17; 141 LT 472, affd HL, sub nom
Jones (Inspector of Taxes) v Leeming - [1930] AC 415; [1930] All ER Rep 584; 99 LJKB 318; 143 LT 50; 15 Tax Cas 333; 28 Digest (Repl) 22, 87
Judgment date: 8 November 1968
Judgment by:
Cairns J
The General Commissioners found that:
"The transaction (or transactions) was (or were) in the nature of trade."
If this was a conclusion that they could reasonably reach on the evidence before them, the court must accept it, unless it was reached by an inference not justified by the primary facts proved.
It is conceded on behalf of the Crown that one of the findings of the commissioners was not supported by any evidence before them-the finding that at the time of the second transaction considerations other than providing a hedge against devaluation influenced the purchase and that at the time of that transaction the fear of devaluation had subsided. If that finding was a necessary step in the reasoning by which the commissioners reached their final conclusion, then that conclusion would not bind the court; but in my view the final conclusion was reached quite independently of this particular finding. I say that for these reasons. The commissioners did not decide whether the whole enterprise involved one transaction or two. Their eventual conclusion was that "The transaction (or transactions) was (or were) in the nature of trade". The commissioners were therefore saying: If there was one transaction it was in the nature of trade; if there were two transactions they were both in the nature of trade. In relation to the first transaction, their finding was that the silver was bought as a hedge against devaluation; yet they found it to be a transaction "in the nature of trade". This being so, I do not see that their finding that the second transaction was also in the nature of trade can be said to be dependent on their finding that that second transaction was influenced by other considerations. Alternatively, if there was only one transaction, the commissioners found that it as a whole was a transaction in the nature of trade-not that it began as a non-trading transaction and then later became a trading transaction in the spring of 1962. The commissioners' reasons for finding the transaction or transactions to be in the nature of trade are contained in para 9(c) of their findings, the contents of which cannot be impugned and which in my view form a quite adequate foundation for their conclusion.
For these reasons, I agree that the commissioners' final conclusion on the facts was binding on the court. The learned judge held ([1968] 2 All ER at p 720, [1968] 1 WLR at p 1240.) that as a matter of law these were not trading transactions. I cannot agree with that view. In my opinion, the question was one of fact: the commissioners were entitled on the facts to find that it was a trading transaction; and that finding is not one that the court is entitled to set aside. If, however, I had considered that the court could set aside that finding of the commissioners, the problem would then have arisen whether the right course would be for this court itself to apply its mind to the question "Was this a trading transaction?" or whether the right course would have been to have remitted the case to the commissioners for them to consider it again in the light of the opinion of the court.([1968] 2 All ER at p 720, [1968] 1 WLR at p 1240.)
Counsel for the taxpayer invited this court itself to decide the question. Counsel for the Crown says that the only proper course would be for us to remit the matter to the commissioners. I express no opinion as to which would have been the right course in that event; but I do say that, if we had yielded to the entreaty of counsel for the taxpayer that the court should itself decide the facts, I for my part would have reached the same conclusion as the commissioners, for reasons which have been adumbrated in the judgments of my Lords. I agree that the appeal should be allowed.
Appeal allowed. Leave to appeal to the House of Lords refused.