Commissioners for Special Purposes of Income Tax v Pemsel

[1891] A.C. 531

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(Decision by: Lord Herschell)

Between:Commissioners for Special Purposes of Income Tax - Appellants
And: John Frederick Pemsel - Respondent

Court:

Judges: Lord Halsbury LC
Lord Watson
Lord Bramwell

Lord HerschellLord MacNaughten
Lord Morris

Subject References:
REVENUE
INCOME TAX
Allowances
'Charitable Purposes'
Certificate
Procedure
Mandamus to Commissioners
5 & 6 Vict. c. 35, Sched. A, s. 61, No. VI., s. 62

Judgment date: 20 July 1891

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Decision by:
Lord Herschell

My Lords, two points were made on behalf of the appellants, the Commissioners of Income Tax, at your Lordships' bar. It was said, first, that the respondent was not entitled to the allowance which he claimed under sect. 61 of the Income Tax Act; and it was next contended that even if entitled to that allowance mandamus was-not the proper remedy for a refusal to grant it.

At the close of the arguments on behalf of the appellants, all your Lordships were of opinion that the latter point had not been made good. I confess it appears to me very clearly to be a case for a mandamus if the commissioners have wrongly refused to grant the allowance and to give the certificate provided for by the statute. The duty of granting the allowance in certain specified cases is imposed upon the commissioners by the statute in unequivocal terms, and no reason was assigned why the ordinary remedy by mandamus was inapplicable in the case of a breach of this statutory duty, except the suggestion that the respondent should have proceeded by petition of right. The case of Re Nathan was relied on in support of this position. But that was a very different case. It was sought by that proceeding to compel the Commissioners of Inland Revenue to make payment of a certain sum of money to the applicant for the mandamus; and it was held that for such a purpose recourse must be had to a petition of right. Here the applicant seeks that the appellants should be compelled to grant an allowance and certificate, which it is necessary for him to obtain before he is in a position to require payment of the sum which it is no doubt his ultimate object to recover. Until he obtains this allowance and certificate, he is not in a position to maintain a petition of right.

The main, and indeed the only question, arising on this appeal, apart from the objection to the form of procedure with which I have already dealt, is to my mind one of very considerable difficulty. The Income Tax Act provides that allowances shall be granted by the commissioners

"on the rents and profits of lands, tenements, hereditaments, or heritages belonging to any hospital, public school, or almshouse, or vested in trustees for charitable purposes, so far as the same are applied to charitable purposes."

The question in controversy is, what is the scope of the term "charitable purposes" in this enactment? The respondent is the treasurer of the Church of the United Brethren, commonly called Moravians. He claimed an allowance in respect of certain lands vested in trustees for objects connected with that community. Two-fourths of the rent of these lands are by the trust deed directed to be applied to objects of an eleemosynary and educational character, which were admitted by the appellants at your Lordships' bar to be "charitable purposes" within the statute. It is only necessary, therefore, to consider the application of the remaining moiety. The trust is in these terms:

"As to two equal fourth parts thereof for the general purposes of maintaining, supporting, and advancing the missionary establishments among heathen nations of the Protestant Episcopal Church, known by the name of Unitas Fratrum, or United Brethren."

The question at issue may be shortly stated thus: Are lands which are vested in trustees for the purpose of maintaining and advancing missions among the heathen, vested in them for "charitable purposes," within the meaning of the statute? This is all that your Lordships have to determine, but it is impossible to determine it without arriving at a conclusion as to the construction to be put upon the words "charitable purposes" in the statute with which we are concerned. The question is consequently one of far reaching importance.

It is said by the respondent that the expression "trust for charitable purposes" is well known to the law of this country, and has acquired, by a current of decisions in the Court of Chancery, a clearly defined meaning which has been recognised and adopted by the Legislature in numerous enactments, and that the same meaning ought to be attributed to it in the Income Tax Act. There can be no doubt that the words in question have, in the law of England, and of Ireland also, the well-defined meaning alleged. And if the Income Tax Acts applied to England and Ireland alone, I do not think there could be any ground for hesitation in adopting the construction contended for, and interpreting the words in the sense in which they have been again and again employed by the Legislature.

But it is said on behalf of the appellants, that the Income Tax Acts extend to Scotland also, and that the suggested construction is on that account inadmissible, inasmuch as the words "charitable purposes" have, in Scotland, a much more limited meaning. The exemption, it is said, must have been intended to be co-extensive in the three countries, and therefore a meaning of the words must be sought for which obtains in all. If the words had a technical meaning in Scotland different from that prevailing in this country, I think the argument would be irresistible, and I should feel a difficulty in resisting it, if they had a well-defined and recognised meaning, even though it were a popular and not a technical one.

The construction to be put upon the enactment under consideration came before the Court of Session in the case of Baird's Trustees v. Lord Advocate. The learned judges were of opinion that the words "charitable purposes" must be read in their popular signification, and could not have the comprehensive meaning attached to them in the English law. The Lord President said, "Charity is relief of poverty, and a charitable act or a charitable purpose consists in relieving poverty; whatever goes beyond that is not within the meaning of the word 'charity,' as it occurs in this statute." Lord Shand took the same view, but apparently limited the application of the term to the relief of physical necessities resulting from poverty. He said, "I think the term 'charitable purposes only,' used in a modern statute, in the absence of any other terms indicating that a wider meaning is intended, is to be taken in its ordinary sense, as referring to funds given for the relief or pecuniary assistance of persons in poverty. I think it relates to funds dedicated to the relief of physical necessity or want, to funds given as alms, or as a provision for the relief of persons from physical privations or suffering arising from poverty."

I am unable to agree with the view that the sense in which "charities" and "charitable purpose" are popularly used is so restricted as this. I certainly cannot think that they are limited to the relief of wants occasioned by lack of pecuniary means. Many examples may, I think, be given of endowments for the relief of human necessities, which would be as generally termed charities as hospitals or almshouses, where, nevertheless, the necessities to be relieved do not result from poverty in its limited sense of the lack of money. Take, for example, an institution for saving the lives of shipwrecked mariners. Its object is to render assistance to those in dire want of it, to meet a form of human need which appeals to the benevolent feelings of mankind, but not one which has its origin in the lack of money. Nevertheless, I do not believe that any one would hesitate to call it a charity, or to say that money expended in rescuing drowning men was applied to a charitable purpose. Or again, what of a society founded for the protection of children of tender years from cruelty? Would not this be commonly described as a charitable purpose? And yet it is not pecuniary destitution that creates the necessity which such a society is designed to relieve. It is the helplessness of those who are the objects of its care which evokes the assistance of the benevolent. I think, then, that the popular conception of a charitable purpose covers the relief of any form of necessity, destitution, or helplessness which excites the compassion or sympathy of men, and so appeals to their benevolence for relief.

Nor am I prepared to say that the relief of what is often termed spiritual destitution or need is excluded from this conception of charity. On the contrary, no insignificant portion of the community consider what are termed spiritual necessities as not less imperatively calling for relief, and regard the relief of them not less as a charitable purpose than the ministering to physical needs; and I do not believe that the application of the word "charity" to the former of these purposes is confined to those who entertain the view which I have just indicated. It is, I think, constantly and generally used in the same sense quite irrespective of any belief or disbelief in the advantage or expediency of the expenditure of money on these objects. It is a mistake to suppose that men limit their use of the word "charity" to those forms of benevolent assistance which they deem to be wise, expedient, and for the public good. There is no common consent in this country as to the kind of assistance which it is to the public advantage that men should render to their fellows, or as to the relative importance of the different forms which this assistance takes. There are some who hold that even hospitals and almshouses, which are specially mentioned by the Legislature, discourage thrift, and do upon the whole harm, rather than good. This may be an extreme view entertained by few, but there are many who are strongly convinced that doles, and other forms of beneficence, which must undoubtedly be included, however narrow the definition given to the term "charitable purpose," are contrary to the public interest; that they tend to pauperise and thus to perpetuate the evil they are intended to cure, and ought to be discouraged rather than stimulated. It is common enough to hear it said of a particular form of almsgiving that it is no real charity, or even that it is a mischievous form of charity. I think, then, that a purpose may be regarded by common understanding as a charitable purpose, and so described in popular phraseology even though opinions differ widely as to its expediency or utility.

The truth is, that the word "charity" has no sharply-defined popular meaning. It is used at different times in varying senses, broader or narrower. Sometimes, no doubt, it is employed in the limited sense adopted by the Court of Session, but at others it serves to embrace all expenditure which motives of benevolence induce men to make for the benefit of their fellows.

If, then, one were driven to interpret the words under construction according to their popular signification, I think the proper course would be to prefer the broadest sense in which they are employed, and that such an interpretation would embrace the case with which your Lordships have to deal. But an examination of the statutes referred to by my noble and learned friend Lord Watson, has satisfied me that in the language of Scotch legislation they have been employed in a sense practically coextensive with that attributed to them by the law of England, and there are, so far as I know, no decisions of the Courts of Scotland, prior to the case of Baird's Trustees, which have put a narrower interpretation on them.

Under these circumstances, I think the proper course is to interpret the words in the Income Tax Act in the sense in which they have been used alike in the law of both countries.

I ought, perhaps, to notice the argument presented to your Lordships, that some more limited meaning of these words is suggested by the provisions in connection with which they are found, and the specific exceptions contained in the statute. I think that an argument derived from the specific mention of certain subjects in the exemptions found in a taxing Act is of little weight. Such specific exemptions are often introduced ex majori cantelâ to quiet the fears of those whose interests are engaged or sympathies aroused in favour of some particular institution, and who are apprehensive that it may not be held to fall within a general exemption.

I concur in thinking that the judgment appealed from ought to be affirmed.