TMI Blog1955 (11) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... venue Commissioners [1921] 12 T.C. 427 ; Henderson v. Meade-King, Robinson Co. Ld. [1938] 22 T.C. 97 ; Van den Berghs Ld. v. Clark [1935] A.C. 431; 51 T.L.R. 393; 19 T.C. 390; 3 I.T.R. Suppl. 17 ; British Insulated and Helsby Cables Ld. v. Atherton [1926] A.C. 205; 42 T.L.R. 187; 10 T.C. 155 ; Henley v. Murray [1950] W.N. 241; [1950] 1 All E.R. 908; 31 T.C. 351 ; Calvert v. Wainwright [1947] K.B. 526; 63 T.L.R. 199; [1947] 1 All E.R. 282; 27 T.C. 475; [1948] 16 I.T.R. Suppl. 54 ; Short Bros. Ld. v. Inland Revenue Commissioners [1927] 21 T.C. 955 ; Inland Revenue Commissioners v. Newcastle Breweries Ld. [1927] 42 T.L.R. 185, 609; 12 T.C. 927 Cur. adv. vult. November 23. HARMAN J. The facts of this case a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly true. But when you look at that question from what is described as the point of view of the recipient, that sends you back again, looking, for that purpose, to the point of view of the payer: not from the point of view of compellability or liability, but from the point of view of a person inquiring what is this payment for; and you have to see whether the maker of the payment makes it for the services and the receiver receives it for the services. To alike effect are the observations of Jenkins L.J. twenty-five years later in Henley v. Murray [1950] 31 T.C. 351, 367 : As the many cases on this topic show, it is often very difficult to determine the character of a payment made to the holder of an office when his tenure of the offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Northfleet Coal and Ballast Co. Ld. [1927] 12 T.C. 1102, 1108. as to which Lawrence J., in Bush, Beach Gent Ld. v. Road, [1939] 22 T.C. 519, 524. says this: The sum paid, in my view, represented profits which the appellant company would or might have made under the contract, not the purchase price of the contract itself, and then he referred to Rowlatt J.'s judgment in the Northfleet case(2). I do not think that this distinction, if it be a true one, is relevant to the facts of the present case. On the one hand there is a line of cases such as Van den Berghs Ld. v. Clark [1935] A.C. 431 and Barr, Crombie Co. Ld. v. Inland Revenue Commissioners 26 T. C. 406 which seem to show that a sum of money paid to a company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment in respect of breaking an agreement which had some time to run--would be taxable profits. But at any rate it does seem to me that compensation for loss of an employment which need not continue, but which was likely to continue, is not an annual profit within the scope of the Income-tax at all , and if this were the law the question would perhaps be easier to answer, but this statement has been criticized in two later cases, namely, Hunter v. Dewhurst [1930] 16 T.C. 605, 653 and Bush, Beach Gent, Ld. v. Road, 22 T.C. 519 as going too far, so that it is not open to me to decide the case with that guide. It seems to me that the task of the court is to analyse the real nature of the payment and to judge by the result wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing finance company and its stock-in-trade consisted of shares in other companies which it bought and sold. It also had another branch to its business which consisted in the performance of duties as secretary or registrar for a fee to a number of companies in some of which it held shares and in others it did not. It was no part of the day-to-day business of the appellants to buy and sell these secretaryships. They are not indeed things which can be bought and sold in the ordinary sense. The reasons why the company was able to realize this sum is to be found in its peculiar situation. It held, together with another friendly shareholder (the estate of the late Sir George Farrar) a majority of the shares in this company. It also held a contrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 shares, but that the directorships of the two main vendors and the secretaryship of the appellants were to be given up on delivery of 43,000 shares. A curious position might thus have arisen if more than 43,000 and less than 70,000 shares had been offered. This did not arise, but it shows that the payment cannot be correctly described as compensation for loss of office. Thus, in fact, the two main shareholders were able to obtain something more than the 35s. a share which the other shareholders received. The parties, however, agreed that these moneys should not be treated as part of the consideration for the shares, and I think I must proceed on that footing. Even so, this payment was a sum which the appellants were able to exact fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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