192 / 328
rehearing.
(D.
v.
D.
Solicitors'1 Journal,
November
3Oth, 1962.)
Computing profitsfor income tax—cash basis and earnings
basis
The profits of a partnership firm, consisting of
two chartered accountants, carrying on the business
of general accountancy and auditing practices,
formed in 1932, were assessed
throughout the
period of 1932 to 1953 inclusive on a cash basis for
income tax purposes.
The assessments for the
years 1954 to 1958 were made on an earnings basis,
and on a cash basis for the subsequent year. The
firm's profits for the years in question as computed
on a cash basis differed from the same profits as
computed on an earnings basis. The Commissioners
decided that, in computing for income tax purposes
the profits or gains of an accountant, the earnings
basis was to be preferred by reason of its greater
accuracy. The firm appealed against the assessments
for the years 1954 to 1958.
Ungoed-Thomas, J., said that he had to consider
only the particular years before him and to decide
whether for those years an earnings basis was or
was not the appropriate method of computing
profits for tax purposes.
On the evidence, the
earnings basis appeared to be the more accurate
and better method of assessing
the profits of
accountants.
It was also clear from the decided
cases that, although only one method of assessment
should be used for any one tax year, there was
nothing to prevent different methods of assessment
from being used for different years.
It was held,
accordingly, that the change to the earnings basis
in 1954 was properly made, and it could not be
overridden by reason of the further change back to
the cash basis in 1958.
The appeal against the
assessments was dismissed.
(Wetton, Page & Co.
v.
Attwooll (Inspector of
Taxes),
Solicitors' journal,
November 3oth, 1962 and
[1963] i All. E.R. 166).
Payment into court offixed costs
The plaintiff sustained injuries when she fell off
a moving bus.
She claimed damages against the
defendants, the owners of the bus, for negligence
limited to £100. The plaintiff's solicitors instructed
counsel to draft the particulars of claim, obtained
a police report, and made inquiries as to witnesses.
Their disbursements exceeded £2. The defendants
paid £80 into court within eight days in satisfaction
of the plaintiff's claim, together with £5 on account
of the fixed costs. The fixed costs comprised £3 for
the court fee and £3 for the costs on the summons.
The plaintiff's solicitors accepted the £80 in satis
faction of the claim but refused to accept fixed
costs only, since the £2 they would receive would be
less than their disbursements. On an application
pursuant to Ord. n, r. 7 (3) (V), of the County
Court Rules, 1936, Judge Rowe Harding ordered
that the plaintiff's costs be taxed and that the taxed
costs be paid by the defendants. The defendants
appealed.
Pearson, L. J., said that, although the judge had
a discretion to allow more than the fixed costs when
the defendants' payment in was taken out by the
plaintiff in satisfaction of her claim, it had been
clearly laid down that his discretion was only to be
exercised when there was some unusual or abnormal
feature in the case.
If, e.g., the solicitors had
incurred exceptional expense by paying 100 guineas
for medical reports, a special order as to costs
would have been justified. But the work under
taken by the solicitors was no different from that
normally done by solicitors in this type of case, and
therefore fixed costs only should have been awarded.
Accordingly, the judge had erred in principle and
the appeal would be allowed.
Ormerod and Donovan,
L.JJ., agreed.
(Herbert
v.
Rhondda Tr
ansport Co. Ltd.,
Solicitors'
Journal,
November 3oth, 1962, page 958.)
Should receipt of a disability pension be taken into account
when assessing damages for loss of earnings ?
On jth August, 1958, a technical sergeant in the
United States Air Force stationed in England was
severely injured when the motor lorry in which he
was a passenger, driven by a British employee of
the United States Air Force, collided with another
motor lorry driven by a British soldier in the course
of his military duty.
In an action by the sergeant
for damages for personal injury and financial loss,
the defendants, the War Office and the civilian
driver, admitted negligence but contended that the
veteran's benefit, amounting to $217 a month, to
which the sergeant became entitled under United
States law, on his discharge as disabled in June, 1959,
should be taken into account in assessing damages
for loss of earnings. Lawton, J., having awarded
£7,000 damages for pain, suffering and loss of
amenities, awarded in addition £25,111 for loss of
earnings, holding himself bound by Payne
v.
Railway Executive (1952) i K.B. 26, to disregard
the pension in assessing the damages; had he not
been so bound he would have awarded £14,111.
The defendants appealed.
Lord Denning, M.R.,
said
that
the general
principle, settled in British Transport Commission
v.
Gourley (1956) A.C. 185, was that a plaintiff
should recover for his loss but for no more than his
loss, and that the award of damages was to com
pensate him and not to punish the wrongdoer. He
should therefore give credit for all sums received
74