and experience with a view to determining whether a particular speculation was likely to turn out profitable, or the reverse. Moreover, there was nothing whatever in the facts found by the commissioners to show that as regards the other parties to the contracts they were anything but ordinary commercial contracts.

Two questions on these facts arose for decision by the commissioners. They are thus stated in their statement of the contentions raised on behalf of the respondent. The first of those contentions is thus stated by the commissioners : **(1) That his dealings in future delivery contracts did not constitute the carrying on of a trade and the profits arising from these dealings were not assessable to income tax under case I. of Sched. D; and (2) that these dealings were gambling transactions, and as such were not assessable to income tax under case VI. of Sched. D." The findings of the commissioners were thus expressed : "We held that the respondent did not deal in future delivery contracts so habitually and systematically as to constitute these dealings the carrying on of a trade, and that the profits arising therefrom were accordingly not assessable under case I. of Sched. D. We further held that the dealings were gambling transactions, and that the profits arising therefrom were not annual profits assessable under case VI. of Sched. D." Those two findings are, in my opinion, quite separate and independent findings. The first is on what is really a question of fact, that the dealings in question did not constitute the carrying on of a trade. The second one is not so much a finding of fact as a decision of law turning upon their independent findings of fact that the dealings were gambling transactions, and, therefore, in their opinion not assessable.

Rowlatt, J., before whom the case came, came to the conclusion that the commissioners were not justified in finding that the dealings of the respondent did not amount to a trade, and on that ground, without dealing with the further question as to case VI. of Sched. D, allowed the appeal from the commissioners.

The commissioners are the judges of fact, and this court, and every Court of Appeal from the commissioners which has jurisdiction in questions of law only, is very much tempted, when it feels that it cannot agree with the commissioners in the finding of fact, to find some reason in law by which that finding can be reversed. In my opinion the Court of Appeal ought to be careful not to yield to that temptation, except in very clear cases, where either the commissioners have come to their conclusion without evidence which should support it, that is to say, have come to a conclusion which on the evidence no reasonable person could arrive at, or have misdirected themselves in point of law. I do not say for a moment that Rowlatt, J. was wrong in the conclusion at which he arrived, if he had been the judge of facts. On the contrary, although

[CT. OF APP.

it is purely irrelevant as to what my own opinion is, I should have been inclined to agree with him; but he is not the judge of facts, nor am I; and I am not prepared to go so far as to say that there was no evidence upon which a tribunal such as the commissioners could reasonably have come to the conclusion at which they arrived. It must be borne in mind that the commissioners are men of business who are for that reason selected to deal with these questions relating to income tax and, as a tribunal, particularly well qualified to decide such questions of facts, and we ought not, nor ought the King's Bench, lightly to set aside their findings on such subjects. In my opinion I do not think that this is a case in which it can be said that there was no evidence upon which the commissioners could arrive at that conclusion. I think, therefore, if it be material, that the findings of the commissioners with regard to case I. is one which ought to be accepted. But then arises the second question, and on that I think the conclusion ought to be that the profits arising from the dealings in question are annual profits or gains under 1 (b) of Sched. D, and would be classified under case VI., which is this: "Tax in respect of any annual profits or gains not falling under any of the foregoing cases and not charged by virtue of any other schedule.” The commissioners have come to the opposite conclusion, and I think they have done so on the ground, and on the ground alone, that these dealings were gambling transactions. In a sense they were gambling transactions, but in my view that circumstance, on the facts of the present case, at any rate, is irrelevant. They were gambling transactions so far as the respondent is concerned, because, as the commissioners have said, he entered into them without any intention of taking up actual cotton, or using the contracts as hedges for actual cotton transactions; but they were not wagering contracts, for the reason to which I have already alluded, that, so far as the other parties to the contracts were concerned, there was no evidence whatever that from their point of view they were not real contracts for the purchase or sale of cotton, and the question then is simply the question whether these dealings and transactions were entered into with a view to producing, in the result, income or revenue for the person who entered into them. If they are, then, in my opinion, they are annual gains and profits within the meaning of 1 (b) of Sched. D. On the findings of the commissioners themselves they were contracts entered into with a view to making a profit on a rise or fall, as the case may be, in the market price of the contracts. They extended over a considerable of number of years. There were large numbers of transactions in each of those years, from which in some years the respondent derived considerable revenue; and, for myself, I cannot see what there is to exclude that revenue from the tax which is charged under Sched. D. It seems to me, therefore, that, in this case, whatever may be the case under

different facts, at all events the profits made by these transactions are annual profits or gains, and must be assessable to income

tax.

I desire to reserve for consideration when, if at all, it ever comes before this court, the question of whether or not betting transactions which produce a revenue to the person who engages in them may not result in profits which are assessable to tax. That question, when it arises, will have to be decided on the facts of the particular case, but I think, so far as I am concerned, I should like to reserve that for consideration when the question arises. So far as this case is concerned, I think, for the reasons I have given, that the question stated by the case ought to be answered by saying that the profits arising to the respondent from his dealings in future delivery contracts are profits assessable to income tax under Sched. D., sub-clause (b), and that they should be classified under case VI.

The result is that the appeal must be dismissed, and dismissed with costs.

ATKIN, L.J.-I agree that the appeal should be dismissed with costs, and I agree it should be so for the reasons given by my brother Warrington in the judgment he has just delivered, and as, therefore, I differ from the view expressed by the learned judge below, and as I find I also differ from the reasons given by the Master of the Rolls, I think it would be desirable that I should put into words the ground for the decision I have come to.

The case, it has been said, has been coloured throughout by the view taken by the commissioners that these dealings in future contracts in cotton were gambling transactions, and as I shall point out, I think that that is true as to one of the findings of the commissioners, although I do not think that it did in fact colour their view as to their findings that this taxpayer in this case was not carrying on a trade. As I take it, the view that the commissioners formed was that the transactions were in truth gambling transactions, but whether they were gambling transactions or whether they were real transactions, you could not say that he was carrying on a trade

or

a vocation unless you proved a certain amount of habitual or systematic operations either in gambling or real transactions, and that the transactions in question did not partake of that nature, and, therefore, whatever they were, could not properly be described as a trade. But in order to dispose of the point about gambling, it appears to me it is sufficient to say that upon the evidence in this case it seems reasonably clear that all the contracts that were entered into by Mr. Stubbs, whether he entered into them through his firm or through other brokers, were in fact real transactions. They gave rise to real contractual rights: they were contracts for the purchase of cotton in the future or for the sale of cotton in the future which could be

[CT. OF APP.

enforced, and so far as the other party to the contract, who might be a dealer in this country, or a dealer in Liverpool, was concerned, he would not know whether the contract which he had entered into would be eventually closed by a contract or whether it would not; for these reasons it seems to me to be plain law that transactions such as Mr. Stubbs entered into were real transactions and were not mere bets. I think that the principle in respect of wagering is this, that it takes two parties to make a bet, and, where one party alone is being considered, you do not sufficiently consider all the elements of the case; you have to consider the other party, and unless the other party is betting there cannot be a bet. Therefore these transactions were, as I have said, real and enforceable contracts in which the differences could have been sued for on one side or the other. It is true that they were speculations, and I think myself that that may be one of the material facts to be considered in respect of the question as to whether or not this gentleman was engaged in a trade, because for my part I see some difficulty in trying to form an opinion of a trade which consists solely of entering into transactions which would merely result in differences, and when the supposed trader never intends to get possession of any commodity, so that he may in fact have the disposal of it by himself or to any third party. Although I do not say it is impossible to have a trade or an adventure in the nature of trade of that kind, I think it is a fact to be taken into account.

Now the first question is whether or not this gentleman, on the footing that he was entering into real transactions for the purchase and sale of a commodity, namely, cotton, was or was not engaged in a trade or vocation, and it seems to me that that must be in the circumstances a question of fact. Unfortunately or fortunately I do not propose to express any moral judgment about it-one knows that a great number of people whose ordinary life does not lie in the way of commerce do engage in speculations of this kind in commodities, and when a commodity is found which offers tempting fluctuations of price, so that there are good chances of a profit with equally good chances of a loss, one does find individuals from time to time coming into the market and making purely speculative purchases; and one knows that there have been, at any rate in one's own experience, three commodities in which that kind of speculation has been quite common at different times. One is this commodity, cotton; another has been in the past. and may be in the present, copper; and another has been in the past, and no doubt is in the present, rubber. There are, no doubt, laymen who do indulge in speculative purchases in these commodities, and they repeat those speculative purchases more than once, being probably buoyed up by their initial successes. Nevertheless, it seems to me to be still a question of fact whether the professional man, to quote an extreme case, who makes

purchases of that kind, and makes more than one of them in a year, can be said to be engaged in a trade or a vocation in the course of these purchases. I should think it would probably be a question of degree. Now if it is a question of degree it must be a question of fact, and there is no tribunal more competent to deal with that question of fact than the Special Commissioners; but whether they are competent or not, the point is that the Legislature has confided to them, and to them alone, the duty of determining that question of fact, and the courts of law have got no jurisdiction to deal with the matter at all. Their jurisdiction is confined to the question of law. Of course, in all these matters there may be a state of facts which can only lead to one conclusion of law, but when it is, as I have said, a question of degree, it seems to me it must necessarily be a question of fact, and I would just like to cite two passages from the case of Currie v. Commissioners of Inland Revenue (125 L. T. Rep. 33; (1921) 2 K. B. 332), which was cited to the learned judge below and which was cited before us. There the question was whether a gentleman who made it his business to advise as to income tax recovery carried on a business as an Income Taxpayers' Appeal Agency or was not within the exception of the Excess Profits Duty Act carrying on a profession.

The Special Commissioners found he was not carrying on a profession. That is not quite this case; it is rather a stronger case giving rise to possibilities of law, because there is no doubt there are certain elements of a profession which would perhaps be decided as part of their condition as a matter of law. But Lord Sterndale says it may depend upon circumstances: "There may be circumstances in which nobody could arrive at any other conclusion than that what the man was doing was carrying on a profession. That reduces it to a question of law. On the other hand, there may be facts on which the direction would have to be given the other way. But between those two extremes there is a very large tract of country in which the matter becomes a question of degree; and where that is the case the question is undoubtedly, in my opinion, one of fact; and if the commissioners come to a conclusion of fact without having applied any wrong principle, then their decision is final upon the matter." There is one further passage in Scrutton, L.J.'s judgment in which he discusses the question of whether it was a profession or not and says this man carried on a profession, and he cited the case of the photographer and whether he was an artist or not. He says: "Art is a matter of degree, and to determine whether an artist is a professional man again depends, in my view, on the degree of artistic work that he is doing. All these cases which involve questions of degree seem to me to be eminently questions of fact, which the Legislature has thought fit to entrust to the commissioners, who have, at any rate from their very varied experience, at least as

[CT. OF APP.

much knowledge if not considerably more, of the various modes of carrying on trade than any judge on the Bench." Now, in this case the commissioners without, so far as I can see, applying any wrong principle, considering the question of habitual and systematic operations, which I do not think can be disputed are relevant to the question of whether a man is carrying on a trade or not so come to the conclusion that the operations in this case are not so habitual and not so systematic as that the person can be properly said to be carrying on a trade in those particular transactions. As it appears to me that is an inference of fact pure and simple, I think that their finding must stand, and therefore it is immaterial what view I, or any judge on the Bench takes of the matter. I am not saying that I agree with them, because I think it is irrelevant. It may very well be, if one were left to oneself, one would find on these transactions that there was a vocation of speculating in these futures, or it may be a trade, but I have not formed a definite view at all about it, and I think that the commissioners' view on this matter must stand as a finding of fact.

That does not dispose of the matter, because the other question arises under par. (b) of clause 1 to Sched. D which has been referred

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to, which says: Tax under this schedule shall be charged in respect of (a) the annual profits or gains arising or accruing (i.) to any person residing in the United Kingdom from any kind of property whatever, whether situated in the United Kingdom or elsewhere; and (ii.) to any person residing in the United Kingdom from any trade, profession, employment or vocation, whether the same be carried on in the United Kingdom or elsewhere; and (iii.) to any person, whether a British subject or not, although not resident in the United Kingdon, from any property whatever in the United Kingdom, or from any trade, profession, employment, or vocation exercised within the United Kingdom; and (b) all interest of money, annuities, and other annual profits or gains not charged under Scheds. A, B, C, or E and not specially exempted from tax." Those profits and gains must include, therefore, and I think are put in to include, profits and gains which are not derived from any kind of property whatever and are not derived from any trade, profession, employment, or vocation exercised within the United Kingdom. They are something wider and larger than that. Now, what is there to prevent these from being annual profits or gains? The commissioners in this respect seem to me to have gone wrong in law. They have held that these transactions were gambling transactions by which they must have meant what I have been discussing already, that they were wagering transactions, and on that they are wrong. It appears to me that their view must be taken to be this, that they would be annual profits or gains if it were not that they were wagering transactions, and therefore in

their view not chargeable; but whether that is so or not it appears to me that in this case there can be only one inference which can be drawn in respect of them, and that is that they were annual profits or gains. For that purpose no doubt you have to consider not merely whether they are profits or gains. For my part I can see no reason to doubt that they are profits or gains. I do not think that that can be disputed. They arise from having made a real contract which gives you rights, and then, taking advantage of that contract, selling the commodity, or the right which you have acquired by contract to have delivery of that commodity, either to the person who has made the contract or to somebody else; it does not matter, you make a gain. There is no doubt that speculations in commodities of this kind are just like speculations in shares. They may under some circumstances be such as you could not reasonably call it an annual profit or gain. It may very well be that transactions may be so carried out as to be nothing but in the nature of temporary investments repeated several times over, and something in the nature of capital accretions which could not be brought within the title or meaning of "annual profit or gain" which, to my mind, must mean something which is of the nature of revenue or income, although I also think it is plain that it need not be repeated every year so as to be a continuous source of income. It may come in only as income or revenue in the one year, but still it has to be in the nature of an annual profit or gain. In this case you have to look at the facts and when you look at the facts you find that this gentleman has been making these profits or gains, not investing his capital, because he never invested any money in the matter; he made an executory contract and closed it by another executory contract. invested no money as such in the matter at all. But we have figures in the schedule to the case which show that this gentleman has been entering into these transactions every year from 1915-1915, 1916, 1917, 1918, 1919, 1920, 1921, and 1922; this is, for eight years running he has been in receipt of money from these transactions; I was going to say in receipt of revenue, but that perhaps begs the question, but it appears to me to be really expressive of the true facts. He has had an annual revenue from these transactions throughout the whole of this period.

He

Under these circumstances it appears to me there can be but one conclusion from the facts. I think the commissioners meant to find it apart from the question of gambling, but whether they did or not, it seems to me the true view is that here there were annual profits or gains and that these ought to be brought into charge. Therefore, I think that the assessment is properly made.

Like my brother Warrington, I wish to reserve the question of what the position would be if these transactions had turned out to be bets, but if the bets had proved to be as continuous as these particular bets were, I express

no opinion about it, I suppose the matter may some day arise in the courts.

For these reasons I think the appeal should be dismissed with costs.

Appeal dismissed. Solicitors for the appellant, Pritchard, Englefield, and Co., for Forwood, Williams, and Co., Liverpool.

Solicitor for the respondent, Solicitor of Inland Revenue.

Friday, May 22.

(Before Sir ERNEST POLLOCK, M.R., WARRINGTON and ATKIN, L.JJ.)

BAMFORD v. CHARLAW AND SACRISTAN COL-
LIERIES LIMITED.
KENNEDY v. HORDEN COLLIERIES LIMITED.
BEVAN U. JAMES JOICEY AND CO. (a)
APPEAL UNDER THE WORKMEN'S COMPENSATION
ACT 1923.

Workmen's compensation Accident—Partial dependency Ordinary necessaries of life suitable for persons in his class and position Standard of living-What family earning and spending Workmen's Compensation Act 1923 (13 & 14 Geo. 5, c. 42), s. 22.

The workman in each case was a miner who when killed by an accident arising out of and in the course of his employment was living at home and contributing his wages to the upkeep of the family. The father in each case claimed to be a partial dependant of the deceased workman within the meaning of sect. 22 of the Workmen's Compensation Act 1923 as being partially dependent on him for the provision of the ordinary necessaries of life suitable for persons in his class and position. The County Court judge dealt with the sums earned and spent by each family on the principle that the head of the family was primâ facie the judge of the scale of expenditure necessary to maintain the family suitably to their position, and what the family was in fact earning and what it was spending was primâ facie evidence of what was the standard of life of the family, and that the word necessaries included all such things as were necessary to maintain the family in their station and degree, and applying these principles found in each case that the income of each family was no more than was reasonably necessary and that the father was partially dependent, and made an award accordingly in his favour, making allowances for the possibility of increase in the son's contributions in the future or of their ceasing. Held, that the County Court judge had correctly stated the principles of law applicable to sect. 22 of the Workmen's Compensation Act 1923 and properly applied those principles to the cases before him, and it was a question of fact as to which there was evidence to support the finding.

66

(a) Reported by GEOFFREY P. LANGWORTHY, Esq.. Barrister-at-Law.

Peart v. Bolckow Vaughan and Co (132 L. T. Rep. 267; (1925) 1 K. B. 399) applied.

THE respondents (the employers) in each of these three cases appealed from awards made on the 15th Jan. 1925 by His Honour Judge Moore in the County Court of Durham held at Durham.

The facts in each case are fully set out in the judgment of the County Court judge. Sect. 22 of the Workmen's Compensation Act 1923 provided that for the purposes of the principal Act, a person should not be deemed to be a partial dependant of another person unless he was dependent partially on contributions from that other person for the provision of the ordinary necessaries of life suitable for persons in his class and position.

The following is the reserved judgment given by the County Court judge.

All three cases involved the consideration of the same question of principle. In each case the applicant was a father who claimed compensation under the Workmen's Compensation Acts for the death of his son, on the ground that he was partially dependent on his son's earnings, and the main question in each was whether partial dependency had been established having regard to sect. 22 of the Workmen's Compensation Act 1923. That section is in the following terms:

"For the purpose of the principal Act a person shall not be deemed to be a partial dependant of another person unless he was dependent partially on contributions from that other person for the provision of the ordinary necessaries of life suitable for persons in his class and position."

This provision is new, and in my opinion certainly introduces a new test of dependency. It seems definitely to establish the principle that in deciding the question of partial dependency the court is bound to have regard to the standard of living that obtains among persons of "the same class and position" as the person claiming to be a dependant. This appears to me to be just what under the old Act the House of Lords in the Main Colliery Company Limited v. Davies (83 L. T. Rep. 83; (1900) A. C. 358, at p. 362) said that the court should not do. In that case Lord Halsbury said: "I am quite certain that no human intellect would be able to ascertain exactly what the standard was if one had to deal with such a question-a standard dependent upon what was the ordinary course of expenditure in the neighbourhood and in the class in which the man lived. To my mind that is a problem so extremely obscure that I cannot believe that the Legislature intended it to be solved. What the family was in fact earning, what the family was in fact spending for the purpose of its maintenance as a family, seems to me to be the only thing which the County Court judge could properly regard." The contrary had previously been held in the case of Simmons v. White Brothers (80 L. T. Rep. 344; (1899) Q. B. 1005), in which the Court of Appeal expressed its approval of the following passage from Minton-Senhouse and Emery on Accidents to Workmen: "Dependant probably means dependent for the ordinary necessaries of life for a person of that class and position in life. Thus, the financial and social position of the recipient of compensation would have to be taken into account. That which would make one person dependent upon another would in another case merely cause the one to receive benefit from the other. Each case must stand on its own merits,

[CT. OF APP.

and be decided as a question of fact by the arbitrator."

This decision of the Court of Appeal was in effect overruled by the Main Collieries case, but the new Act now restores the law as laid down in Simmon's case, and renders it incumbent on the County Court judge to consider in each case what are "the ordinary necessaries of life suitable for persons of the class and position" of the applicant. This, I think is equivalent to saying that he must make up his mind as to what is the standard of living of persons of that class and position.

That is a task which, in the passage already quoted, Lord Halsbury said that no human intellect could accomplish : but the Legislature evidently thinks that it is not beyond the powers of a County Court judge, so it becomes my duty to grapple with the problem in the three cases which I have now to decide.

Before dealing specifically with those cases, however, there are a few general remarks which I desire to make as to the considerations which I think should guide me in deciding questions arising under sect. 22 of the Act of 1923. I doubt whether this new provision is likely, in practice, to make so very much difference as seems to be assumed by some people. It seems to have been thought that the section will revolutionise the practice of County Court judges in dealing with questions of "partial dependence." I think, however, that in the great majority of cases it will make no difference at all. It is only occasionally, that is to say, in more or less exceptional cases that its effect will be felt. As a general rule, when you find that the head of a family has in fact adopted a certain scale of expenditure, I think that primâ facie the scale adopted will be, and ought to be, regarded as fixing the standard of living of persons of that man's class and position. It is at any rate primâ facie evidence that the man himself considers that scale of expenditure necessary to maintain his family in the position which he considers to be his, and unless the scale is on the face of it grossly excessive, or there is evidence to show that it is in fact higher than the standard which persons of the same station in life generally and properly aim at, I think it ought to be adopted as the standard with reference to which one must determine whether the applicant was partially dependent on the deceased for the ordinary necessaries of life. In other words, the head of the family is primâ facie the judge of the scale of expenditure necessary to maintain the family suitably to their position. No doubt cases occasionally occur in which it is clear that a family's actual expenditure would not be a fair test of the standard of living of persons of the same class and position, and sect. 22 is probably intended to meet such cases; but I cannot help thinking that in the majority of cases with which County Court judges will have to deal, "what the family was in fact earning, what the family was in fact spending for the purpose of its maintenance as a family," will continue to be the principal factor in determining whether the applicant depended partly on the deceased for the ordinary necessaries of life suitable to his class and position.

It will, no doubt, often be found that the expenditure per head of the applicant's family is considerably greater than that of the majority of families, the heads of which follow the same calling as the applicant, but that, in my opinion, would not be sufficient by itself to justify one in saying that the applicant was spending more than was necessary to maintain his family in a manner suitable to his class and position. One cannot say that there is a common standard for all men engaged in the same employment; for the scale of expenditure varies