The Gazette 1961 - 64

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 Transport 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 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 The defendants appealed. Lord Denning, M.R., said that