DAVID HARDY GLYNN v. COMMISSIONER OF INLAND REVENUE

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J U D G M E N T

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Cons, V.-P.:

1. We heard this appeal for four days from the 8th to 11th November last year and restored it for further argument on the 9th December in respect of an authority introduced by this Court. We handed down our judgment on the 23rd December. To it we appended an Order Nisi that the successful Appellant should have his costs in the court below and of the appeal.

2. We have before us this morning two applications, one to vary the Order Nisi as to costs and the other for leave appeal to Her Majesty in Council.

3. It may be useful very briefly to remind ourselves of the history of this matter. The case turned upon particular arrangements that the taxpayer had made with regard to the payment of his daughter's school fees by the company which employed him. He was assessed to salaries tax upon those fees. He took the matter to the commissioner and then appealed to the Board of Review. In both instances he was unsuccessful in having the assessment set aside. On subsequent appeal to the High Court Rhind J. reversed the decision of the Board of Review. By a majority decision of this Court we reinstated the assessment.

4. Mr. Payne, who has appeared throughout for the taxpayer, has spoken with feeling of the position in which the taxpayer now finds himself with regard to costs, but as I see it, there are only two considerations which should incline us to vary our provisional decision. The first is that, if the majority of this Court is correct, Rhind J. should have dismissed the appeal, but would have done so upon a construction point which was raised for the first time only in the High Court. In those circumstances it would be normal for the judge to have made no order as to the costs before him.

5. The second consideration is that a certain amount of time was taken up in this Court in argument upon the "novation" aspect of the appeal, a point on which the taxpayer was found to be correct. For myself do not accept that as much time was taken upon it as Mr. Payne would have us believe, but it is a consideration that should weigh to some extent.

6. Mr. Payne also speculated upon what the position might have been had the Armstrong authority, - which is the authority upon which we invited comment on the 9th December been made known to Rhind J., or even to the taxpayer at an earlier stage of the proceedings. For my part I would hot wish to lay blame upon anybody in particular for not having brought that decision up for consideration but in any event it seems to me that speculation of that kind does not help on the question of costs.

7. Mr. Payne has also referred us to a fairly ancient case of The Mersey Railway Company (1988) 17 Ch. 610 in which the English Court of Appeal refused costs to a successful appellant upon the grounds that it had been a new and a difficult point. That was an unusual case dealing with an application for the appointment of a second receiver. Their Lordships did not explain why the factors of novelty and difficultly should detract from the normal principle that costs follow the event; nor why perhaps, the Railway Company (or in our case the Commissioner of Inland Revenue,) should be treated other than as a normal litigant. With very great respect to that decision, and to the acknowledged authority of the judges who gave it, I am not prepared to follow suit.

8. For these reasons I would suggest that we vary our Order Nisi and make an order that there be no costs in the court below and that the Commissioner should have three-quarters of his costs of the appeal.

9. As to the application for leave to appeal to Her Majesty in Council, the sum involved is not sufficient to give the taxpayer a right to appeal. We can only give leave if we are satisfied that the appeal should go to Her Majesty by reason that the question involved is one of great general or public importance.

10. For my part I am satisfied that it is. Mr. Payne has queried whether in the circumstances of a judgment handed down some time ago, although not complete as to costs, he is still in time to make the application or whether he needs an extension. I express no considered opinion as to that, but if an extension is necessary, then I would grant it.

11. We are required by the rules which govern appeals to Her Majesty in Council to impose conditions as to security and as to the time within which the record should be despatched to England. When I suggest that we follow the usual practice and require security in the sum of $200,000, I do not do so because I fear that the taxpayer is likely to default upon obligations which may be imposed should he fail in the appeal. I do so because the rule requires "good and sufficient security". We are bound to comply with the rule.

12. The normal time for making the record available is three months. I see no reason in this instance why that should not be followed as well. It will not be a difficult record to produce. Even if the taxpayer needs time to consider whether he will take advantage of the leave given, there will still be ample opportunity to have the record properly prepared and dispatched.

Clough, J.A.:

13. I agree with all my Lord has said and with the orders which he proposes.

Hunter, J.A.

14. I also agree.