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TMI Blog1942 (2) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... ployment of profit." By Rule 6: "The tax shall be paid in respect of all the public offices and employments of profit within the United Kingdom...... viz., ......(h) offices or employments of profit under any company or society whether corporate or not corporate......" It is necessary to consider whether the appellant (1) held an office; (2) held a public office; (3) held a public office within the United Kingdom. On the first point there was no dispute. There is no statutory definition of office. Without adopting the sentence as a complete definition one may treat the following expression of Rowlatt, J., in Great Western Railway Co. v. Bater [1920] 3 K.B. 266 at p. 274 as a generally sufficient statement of the meaning of the word: "......an office or employment which was a subsisting, permanent, substantive position, which had an existence independent of the person who filled it and which went on and was filled in succession by successive holders......" The statement was adopted by Lord Atkinson in his judgement in the same case in the House of Lords. [1922] 2 A.C. 1 at p. 15 There can be no doubt that the director of a company holds such an office a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... think that too much emphasis may be laid upon the source from which the office was remunerated; but the fact that it was English reinforces the view that the locality of the office was in fact English. Like Lord Greene, M.R., I derive little assistance from previous cases. I consider it to be clear that the director of an English company which is resident in the United Kingdom wherever he resides and whether or not he takes any part in directing the affairs of the company, holds an office in the United Kingdom. For these reasons I am of opinion that the appeal fails and should be dismissed with costs. My noble and learned friend, Lord Roche, wishes me to state that he concurs in the order proposed. LORD WRIGHT.--My Lords, the appellant was not resident in this country during the years of charge. Accordingly, the emoluments derived from his directorship in A. Wander Ltd., are not taxable unless they fall within the words of Schedule E nor are they affected by the provisions of the Finance Act, 1922, Section 18, because they could not have been charged under Schedule D. The Crown has, therefore, to establish that they are profits of a public office or employment within the United ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttempt in Bater's Case*, i.e., an exact definition of these words. They are deliberately, I imagine, left vague. Though their true construction is a matter of law, they are to be applied in the facts of the particular case according to the ordinary use of language and the dictates of common sense, with due regard to the requirement that there must be some degree of permanence and publicity in the Office. In Bater's Case [1922] 2 A.C. 1 Lord Wrenbury seemed to disapprove of the opinion of Bankers, J., in Berry v. Farrow [1914] 1 K.B. 632 that a director held an office within the schedule but I cannot think that his disapproval was justified or has been supported. In Whatson v. Rowles [1926] 95 L.J.K.B. 959 a director of a "private" limited company was held to be taxable under Schedule E. The public character of the company is sufficiently established by its being incorporated under the statutory machinery of the companies Acts and by its being subject to the provisions of these Acts. It is, however, clear, that not all officers, and still less all employees, of a limited company or of any corporate body are holders of an office or employment under schedule E. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emained a director and as such cannot be in a different position from what he would have been in if he had not rendered those services abroad. I agree with Lord Greene, M.R., that it is in the office of director that the crucial test is to be found, because "......every right which a director has and every duty which the law, general or special, imposes on him is to be exercised in this country and nowhere else." That is the test accepted in substance by the Commissioners. It, is I think, the true test in a case like this. The appellant had or held all through the years of charge the office of director in the United Kingdom. That, in my opinion, is sufficient to satisfy the schedule. The cases cited do not afford any strict parallel. In Robinson v. Corry [1934] 1 K.B. 240, the taxpayer, who was deputy cashier at the navel base at Singapore, was not only outside the United Kingdom during the period of charge, but exercised all the duties of the employment there, as its nature required. Lord Greene, M.R., I think correctly treats the liability of the taxpayer there as depending on Rule 18(2) which relates to employment under Government. Pickles v. Foster [1913] 1 K.B. 174 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chicago or Canadian businesses, and has assisted in Canada in engaging the Canadian staff. Copies of all minutes, annual balance-sheets and managing directors' and auditors' reports of A. Wander Ltd., are sent regularly to the appellant in America but he has attended no board meetings in England except one in 1931, and only one in Chicago in 1925. He is not required to attend board meetings of the English company. Indeed, notice of such meetings are not sent to him. In these circumstances, he was assessed by the Commissioners in respect of his income as director of the English company under the Income-tax Act, 1918, Schedule E, for the years 1937-38 and 1938-39, but, being dissatisfied with the decision in point of law, required a case to be stated. The case from which the facts I have set out are taken was heard first by Lawrence, J., who overruled the Commissioners, and afterwards by the Court of Appeal, who restored their assessment. Your Lordships have to determine if they were right in so doing. The points taken on behalf of the appellant were (i) that the office was not within the United Kingdom, and (ii) that it was not public. For the first point reliance was p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kingdom. If the appellant is, as I think he is, wrong on this point, he still has a second string to his bow. Even, he says, if he has or exercises an office in the United Kingdom, it yet is not a public one. That it is an office is, I think, plain. It has permanency apart from the temporary holder and is held in one of the specified corporations. One has only to refer, for example, to the Companies Act, 1929, Sections 145 and 151, to find the phrase office of director expressly mentioned. Indeed, this is not in dispute. What is controverted is the allegation that a directorship, at any rate in a so-called private company, is a public office. The argument is put upon the ground that at worst--i.e., at worst for the appellant-directors, in the case of companies not by statute requiring any directors, if appointed at all (as they may be, but are not compelled to be in the case of a private company), are not holders of a public office. There is no magic in the phrase private company. It is true that it need not have directors or issue a prospectus; that it is not permitted to have more than 50 shareholders and may have no more than two; but it still must be registered and keep an o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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