TaxTMI 
TaxTMI 
1954 (12) TMI 25
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....It follows that Mr. Dooland's liability has to be tested having regard to the well-known language of rule 1 of Schedule E "......all ......fees, wages, perquisites or profits arising therefrom," that is, from the employment concerned. The Crown have not relied upon any of the special words, for example, particularly "perquisites" in this rule. This, in the event, is not therefore a case related to any of the peculiar differences between the terms of Schedule D and Schedule E or their respective rules. The question is whether, upon the whole facts of the case as proved and found, these collections were in truth and in substance part of Mr. Dooland's earnings as a professional cricketer and taxable as such: whether they fall fairly within the words which are found in the rule applicable to Case II of Schedule D, "all profits and earnings of whatever value arising from" the employment, a formula which for present purposes may be taken as synonymous with that quoted from the rule applicable to Schedule E. Since all cases of comparable character must, in my judgment, turn upon their exact facts, I find it desirable to quote at some length from the ....
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....med to be incorporated herein." There was in fact, no express obligation on Mr. Dooland's part to play in the matches to the best of his ability ; but it may no doubt be assumed from the nature of the engagement and of the game of cricket that he would do so, and that he would be encouraged to such efforts by the provisions for talent money and collections in clause 3. The relevant rules of the league are also set out in the case. At the date of the contract, 1949, rule 33 was, as set out in paragraph 3(2)(b) of the case: "Each club must play one professional, but not more than one, in league matches; the whole of a professional's remuneration must be in the form of a weekly wage plus usual talent money and collections, and all other forms of payment such as benefit matches, commission on gate money, agreement signing fee, etc., are strictly forbidden. All professional agreements must be deposited with the league secretary within 14 days of completion thereof, and shall then be examined by him to see that they conform to the league rules. The knowledge of any part of the agreement shall be confined to the President and Honorary Secretary, unless they decide th....
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....refore distinct from and outside the scope of his employment and the sums collected represented (unlike talent money) not earnings, but the spontaneous expression by way of gift on the part of members of the public of their grateful pleasure in witnessing Mr. Dooland's skill. This argument was (according to Mr. Bucher) strongly reinforced by the facts: (i) that amateurs could qualify like professionals (albeit by reference to a somewhat less exacting standard) for the making and taking of collections, the true character of which could not differ from those taken for professionals but which, in the case of an amateur, could not constitute professional earnings; (ii) that the sums collected were small in comparison with the regular salary; and (iii) that there was no finding and no evidence that the possibility or expectation of collections had played any part in influencing Mr. Dooland to make the contract which he did. On these grounds, therefore, Mr. Bucher contended, applying the principle which has found similar judicial expression, including the language of that very experienced judge, Rowlatt J., in the cases to which I shall later refer, that these collections were "....
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....ave fallen short of the truth. I have said "unless I am precluded by a contrary finding of the Commissioners," and it will be convenient for me to dispose at once of this point made by Mr. Bucher. I cannot myself assent to the view advanced by Sir Reginald Hills that it is "dangerous" to leave matters of this kind-the discrimination between earnings arising from an employment on the one hand and mere personal presents on the other -to the commissioners as questions of fact. No doubt problems of this character commonly involve mixed questions of fact and law. But as Viscount Cave L.C. observed in Seymour v. Reed [1927] A.C. 554, 559; 11 T.C. 625, 646; 43 T.L.R. 584, the Kent County cricketer: "The question to be answered is, as Rowlatt J. put it, 'Is it in the end a personal gift or is it "'remuneration?'" And in many cases, at least-and more particularly perhaps where the sum involved is small-provided that the Commissioners have been properly instructed upon the principles to be applied, the question will, as Rowlatt J. said, "in the end" be one to be answered, in my judgment, as a matter of substance, of common sense and t....
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....owlatt J. approved and adopted by Lord Cave in Seymour's case [1927] A.C. 554. I quote by way of further example language used by Lord Collins M.R. in Herbert v. McQuade [1902] 2 K.B. 631, 641; 18 T.L.R. 728; 4 T.C. 489, 493, which related to the so-called Clergy Sustentation Fund for augmentation of the stipends of the clergy: "If, as was contended by the incumbent, it was in fact a gift personal to himself, I do not think it would fall within the provisions of Schedule E; if, on the other hand, it accrued to him by virtue of his office as incumbent, the respondent himself could hardly dispute his liability." In the context of the facts of those cases the contrast thus simply expressed was sufficient. I observe only that the alternatives were intended to be mutually exclusive-if the sum in question was a mere personal gift, then, ex necessitate rei, it was not received by way of earnings of the office or employment; and vice versa. But the attempt to apply the antinomy to the facts of the present case seems to me to have produced the result of an over-simplification or over-statement on each side of their respective cases. Mr. Bucher did not, of course, seek to co....
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....ntary, in the sense that it was a "mere present" on his part, nevertheless if the fact of the payment was essentially attributable to the circumstance that the payee was his employee, it followed that the sum so paid was part of the employee's earning and taxable as such. On this view Christmas boxes paid by an employer to an. employee would or might be taxable. It is not necessary for me in the present case to decide whether such Christmas boxes are or are not taxable. But I am unable to assent to the wide proposition that if it be shown of a voluntary payment to an employee-whether a Christmas box, a wedding present or any other kind of gift-made by the employer or by a third party, that it was only made because the recipient was the employer's servant or that it would not otherwise have been made, therefore the sum is taxable; and accordingly that the collections in this case are taxable, because they owe the fact of their having come into existence to Mr. Dooland's contract with the East Lancashire Club. In my judgment, such a proposition is inconsistent with the decision in Seymour's case [1927] A.C. 554; 11 T.C. 625; for it is clear that the renowned....
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....s, was naturally much referred to, being clearly upon its facts most akin of the decided cases to the present. In that case, the claim of the Crown to tax the benefit subscribed for Seymour was confined to that part of the total (in sum about half) which had in effect been contributed by the Kent County Club as representing the gate money paid at the benefit match which in the ordinary course belonged to the club. The Crown made no claim to-in the words of Rowlatt J. they "shied atthat part of the fund which had been subscribed independently by members of the public. It was a point much stressed, and naturally, by Mr. Bucher, who referred to the Lord Chancellor's language [1927] A.C. 554; 560; 11 T.C. 625, 646...... those subscriptions, which are the spontaneous gift of members of the public, are plainly not income or taxable as such." In truth, as was observed passim in the judgments and speeches in Seymour's case [1927] A.C. 554; 11 T.C. 625 there was no valid distinction in principle between the two kinds of contribution for the purpose of taxability; and the Crown, who have displayed no similar "shyness" in the present case, were disposed, as I under....
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.... such a kind, as, for example, the making of 50 runs and taking all 10 wickets in an innings in the same match, so that their achievement or repeated achievement could be regarded as altogether exceptional, the result might be different. I base my decision on, and limit it to, the particular facts proved and found in the case before us. In the Easter offerings case-Blakiston v. Cooper, [1909] A.C. 104, 107; 5 T.C. 347, 355 Lord Loreburn L.C. said: "In my opinion, where a sum of money is given to an incumbent substantially in respect of his services as incumbent, it accrues to him by reason of his office. Here the sum of money was given in respect of those services. Had it been a gift of an exceptional kind, such as a testimonial, or a contribution for a specific purpose, as to provide for a holiday, or a subscription peculiarly due to the personal qualities of the particular clergyman, it might not have been a voluntary payment for services, but a mere present." I observe that Lord Loreburn L.C. said "might not." Applying that language to the present case, although no doubt the collections were "testimonials" "peculiarly due to the great quali....
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....ipends of the clergy. On the other hand, offerings made to a particular clergyman out of regard for and in relief of his particular circumstances may well still not be taxable (see Turton v. Cooper [1905] 21 T.L.R. 546; 5 T.C. 138). In any case, the clergyman, unlike the professional cricketer, is the holder of an office. In the case of the clergy the office (that is, that of the incumbent of a particular living) and its holder for the time being are clearly distinguishable. Easter offerings (as ordinarily understood) are contributions made to the holder of the office as such, so that (as has been observed) if a particular incumbent should die before the time arrived for payment of the offerings, they would go to his successor. Such considerations have no place in connexion with an employment such as that of a professional cricketer. In my judgment, the authority of Blakiston v. Cooper [1909] A.C. 104; 5 T.C. 347 is necessarily limited by its own particular facts. The court, however, is not concerned with anomalies--save at least in those cases (of which the present is not one) in which it will tend to favour an interpretation of a doubtful matter of law or an obscure passage in ....
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....ts...therefrom" within the meaning of rule 1 of the rules applicable to Schedule "E" as applied to his case by section 18 of the Finance Act, 1922. The circumstances in which voluntary payments may be made to the holder of offices or employments are obviously capable of widevariation from case to case, and each case must be judged by reference to its own facts; but the authorities indicate certain general principles to which regard should be had in determining whether the circumstances of a particular case are or are not such as to bring it within the line of tax liability. In Herbert v. McQuade, [1902] 2 K.B. 631; 4 T.C. 489 which concerned the liability of the vicar of a certain parish to tax on sums granted to him by the Queen Victoria Clergy Sustentation Fund, Collins M.R. said [1902] 2 K.B. 631, 649; 4 T.C. 489, 500: "Now that... is certainly an affirmation of a principle of law, that a payment may be liable to income tax although it is voluntary on the part of the persons who made it, and that the test is whether, from the standpoint of the person who receives it, it accrues to him in virtue of his office; if it does, it does not matter whether it was ....
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....on'? If the latter, it is subject to the tax: if the former, it is not. Applying this test, I do not doubt that in the present case the net proceeds of the benefit match should be regarded as a personal gift and not as income from the appellant's employment. The terms of his employment did not entitle him to a benefit, though they provided that if a benefit were granted the committee of the club should have a voice in the application of the proceeds. A benefit is not usually given early in a cricketer's career, but rather towards its close, and in order to provide an endowment for him on retirement; and, except in a very special case, it is not granted more than once. Its purpose is not to encourage the cricketer to further exertions, but to express the gratitude of his employers and of the cricket-loving public for what he has already done and their appreciation of his personal qualities. It is usually associated, as in this case, with a public subscription; and, just as those subscriptions, which are the spontaneous gift of members of the public, are plainly not income or taxable as such, so the gate moneys taken at the benefit match, which may be regarded as the cont....
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....plying these principles to the facts of the present case, I find: -(i) that under his contract of service with the East Lancashire Cricket Club Mr. Dooland was entitled to make, or have made on his behalf, collections from spectators on the ground, whenever he achieved one of the performances in batting or bowling which carried the right to a collection according to the rules of the Lancashire Cricket League; and (ii) that occasions on which he attained one or other of the stipulated performances, and enjoyed a collection accordingly, recurred with considerable frequency, there having been no less than eleven such occasions during the 1951 season. According to the principles above stated, these facts afford cogent grounds for holding that the present case falls within the line of tax liability. On the other hand it is to be observed:-(i) that m order to earn the right to a collection Mr. Dooland had not only to play in a given match, but also to achieve in the course of play one or other of the stipulated performances, and (ii) that according to the rules of the Lancashire Cricket League amateurs were entitled to make, or have made on their behalf, similar collections whenever the....
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....ment entitled him, as of right, to collect what he could. True it is, also, that his right to collect depended on his achieving one or other of the stipulated performances; but that condition was itself a term of the contract. His right to talent money likewise depended by the terms of his contract on his attainment of specified feats in batting or bowling; but it could hardly be maintained that whatever talent money he might earn would not be profits of his employment. The term of his contract, giving him the right to collect, cannot be regarded as nugatory. It gave him a contractual right to do something which he could hardly have done without the permission of the club-that is to say, to solicit contributions from spectators on the ground. If the club had prevented him from collecting on attaining one or other of the stipulated performances, he could, I take it, have sued them in damages. Even in the case of an "away" match, where it was necessary for the club oil whose ground the match was played to permit the making of a collection, Mr. Dooland's own club were, I take it, under a contractual obligation to him to apply for, or at all events to support his applicat....
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....d the case in Mr. Dooland's favour, Speaking of the collections which the Grown sought to tax he said: "In what capacity does (the money) come to this recipient? Does it come to him because lie is the professional employed by the East Lancashire Club, or does it come to him because he strikes the person who pays it as being a very brilliant cricketer on that particular Saturday afternoon? Those are the questions the commissioners had before them....The commissioners, came to the view that these were personal testimonials to the skill of the respondent as a cricketer, and were not paid to him because he was the professional employed by the East Lancashire Club. They did not, in other words, arise out of his office or employment but were personal tributes to him." The judge then went on to treat the findings of the commissioners as findings of fact which they were entitled to make, and with which he would not interfere. But as I read paragraphs 8 and 10 of the case stated, the commissioners did not purport to make the findings of fact, but expressed an opinion, and stated the question of law for this court "whether they were entitled to hold that opinion on the ....