Wing v O'Connell

JurisdictionIreland
Judgment Date21 December 1927
Date21 December 1927
CourtSupreme Court (Irish Free State)

High Court.

Supreme Court.

Wing v. O'Connell
M. A. WING
Appellant
and
H. J. O'CONNELL, Inspector of Taxes, Respondent (1)

Revenue - Income tax - Professional jockey - Gift of sum of money from owner of horse after winning race - Whether profit or gain arising from vocation or mere present - Meaning of "annual profits or gains" - Income Tax Act, 1918 (8 & 9 Geo. 5, c. 40), Schedule D, Clause 1 (a) (ii);Clause 2, Case II; Rule applicable to Case II; Schedule E, Rule 1.

Case Stated under the Income Tax Act, 1918, sect. 149, by the Commissioners for the Special Purposes of the Income Tax Acts for the opinion of the High Court of Justice.

The case stated was as follows:—

"1. At a meeting of the Commissioners for the Special Purpose of the Income Tax Acts, held on the 18th March, 1924, at Dublin, for the purpose of hearing appeals, Mr. M. A. Wing,

of Walshestown House, Newbridge (hereinafter called the appellant) appealed against estimated assessments to income tax in the sum of £1,000 for each of the years of assessment, 1922-23 and 1923-24, made upon him in respect of his emoluments as jockey, under Schedule D of the Income Tax Act, 1918.

2. The following facts were admitted or proved:—

The appellant earns his livelihood as a jockey. His emoluments consist mainly of fees. The practice obtaining in Ireland in regard to the remuneration of jockeys is that for each horse a jockey rides at a public race meeting he receives a fee regulated by a scale framed by the Turf Club, and varying according to whether he has been successful or not in winning the race and according to the value of the stake for which the race is run. On some occasions, as a consequence of agreements made beforehand between the owners of race horses and a jockey, the latter may receive from such owners sums in excess of the scale fee for riding their horses in races.

3. Occasionally a jockey is retained for a definite term by a particular owner or a particular trainer, and, in addition to the fees mentioned in the preceding paragraph, he receives a retaining fee, in return for which he rides the horses belonging to the owner, or the horses being trained by the trainer, at exercise and at trials and at race meetings.

4. When a jockey is engaged to ride a horse at a race meeting he is only subject to the orders of the owner and trainer from the time when he dons the racing colours of the owner and proceeds to weigh in for the race until he weighs in upon the completion of the race. His engagement is then at an end, and the fee he has earned is credited to him in the books of the Turf Club, and subsequently paid to him.

5. The appellant, like other jockeys, sometimes receives a present from the owner by or for whom he is engaged, either in money or money's worth (often in the form of jewellery) when he has been successful in winning a race for such owner. Such present is usually made within a week or a fortnight after the race has been won, and may represent a share of the stake for which the race has been run, or a portion of the owner's betting winnings upon the race.

6. It was contended upon behalf of the appellant that each of his engagements to ride a horse in a race was a separate employment, and that presents received by him and not paid under any contracts, express or implied, were not profits and earnings of such employments, as they were only received when the relationship of employer and employee had ceased to exist.

7. The Inspector of Taxes resisted this contention on the ground that the appellant followed the vocation of a jockey, and that presents were part of the emoluments of such vocation.

8. We, the Commissioners who heard the appeal, determined that presents received by the appellant from owners of race horses for winning races for such owners were profits or gains arising from his vocation as jockey, and were accordingly properly chargeable to income tax under Schedule D of the Income Tax Act, 1918.

9. Counsel for the appellant, immediately upon the determination of the appeal, declared to us his dissatisfaction therewith, as being erroneous in point of law, and in due course required us to state a case for the opinion of the High Court, pursuant to the Income Tax Act, 1918, sect. 149, which case we have stated, and do sign accordingly.

10. The question of law for the opinion of the High Court is whether the appellant is chargeable to income tax upon presents received by him in the course of his occupation as jockey from owners of race horses for winning races for such owners.

11. Should the answer be in the affirmative, the case is to be remitted to us in order that we may fix the amount of the appellant's liability.

Dublin, 13th January, 1925."

This case stated was remitted to the Special Commissioners for further findings and statement of facts by order of the Court (as stated in the judgment of Sullivan P.), and accordingly the following "Amendments to Special Case" were signed by the said Commissioners:—

"1. At meetings of the Commissioners for the Special Purposes of the Income Tax Act, held on the 26th January, 1926, and the 23rd February, 1926, at Dublin, for the purpose of complying with an order of the High Court of Justice, dated Thursday, the 14th day of May, 1925, the said Commissioners having heard the respective parties, submit as follows by way of addition to, and amendment of, the special case stated herein, and dated the 13th January, 1925:—

II. It is agreed—

(a) That for each of the four years from 1919 to 1922, inclusive, the appellant received retaining fees and riding fees and incurred expenses as jockey, and that profits or gains arose or accrued to him in respect of such retaining fees and riding fees, as set out hereunder:—

Retaining Fees.

Riding Fees.

Total of Columns 2 and 3.

Expenses incurred.

Profits or gains.

Difference of Columns 4 and 5.

1. 2. 3. 4. 5. 6.

Year ended in

Oct. 1919

Nil £772 £772 £921 Loss £149
,, Do. 1920 £1000 £245 £1245 £842 Profit £403
,, Do. 1921 £800 £603 £1403 £832 do. £571
,, Do. 1922 £1200 £588 £1788 £832 do. £956

The retaining fee of £1,000 received in the year ended in October, 1920, was paid by Mr. W. H. Dixon, and the retaining fees of £800 and £1,200 received in the years ended in October, 1921 and 1922 respectively, were paid by Captain F. E. Bald.

(b) That no presents were received by the appellant in any of the years ended in October, 1919, 1920, and 1922.

(c) That in the year ended in October, 1921, in addition to the retaining fees and riding fees received in that year, the appellant received a cheque for £400 in the following circumstances:—

On the 22nd June, 1921, the appellant rode a horse called Ballyheron, owned by Colonel Richard B. Charteris, in a race known as the Irish Derby, at a race meeting held at the Curragh, and won the race. On the 4th July, 1921, Colonel Charteris wrote to the appellant as follows:—

27 Curzon Street, Mayfair,

London, W. 1.

Dear Sir,

Please accept the enclosed present, with my very best thanks, for your very fine riding of Ballyheron in the Irish Derby. It was a very fine performance, and did you the greatest credit. I hope you will soon ride him again to victory.

A cheque for £400, drawn and signed by Colonel Charteris, was enclosed with the above letter.

(d) That the only question now in dispute arising out of the assessments upon the appellant for 1922-23 and 1923-24 is the liability to assessment of the present of £400 received in the year ended in October, 1921.

(e) That, if the present of £400 be excluded from the computation, the appellant's liability to income tax in respect of his emoluments as jockey should be based upon all assessment, £275, for the year of assessment 1922-23, and of £643 for the year of assessment 1923-24.

(f) That if the present of £400 be included in the computation, the assessment for the year of assessment 1922-23 should be £408, and for the year of assessment 1923-24 £777.

III. We, the Commissioners who heard the appeal, find that the present of £400, referred to in paragraph II of this amended case, was an emolument which arose or accrued to the appellant by reason of his vocation as jockey, and that it was an annual profit or gain within the meaning of Rule 1 (a) (ii) of Schedule D of the Income Tax Act, 1918.

We accordingly reduce the estimated assessments of £1,000 for each of the years of assessment 1922-23 and 1923-24 to £408 for the year of assessment 1922-23, and £777 for the year of assessment 1923-24.

IV. The question of law for the opinion of the High Court is whether we were right in deciding as set out in paragraph III of the amended case.

V. Except so far as any statement made in the original case herein is modified or added to by amendments herein, we confirm the said case, and find further as stated herein.

Dublin, 19th April, 1926."

The respondent appealed to the Supreme Court (3).

W. earned his livelihood as a jockey, his emoluments consisting mainly of fees. The practice in Ireland as to the remuneration of jockeys is that for each horse a jockey rides at a public race-meeting he receives a fee regulated by a scale framed by the Turf Club, and varying according to whether he has been successful or not in winning the race, and according to the value of the stake. When a jockey is engaged to ride a horse at a race-meeting, he is only subject to the orders of the owner and trainer from the time he dons the racing colours of the owner and weighs in for the race until he weighs in upon the completion of the race. His engagement is then at an end, and the fee he has earned is credited to him in the books of the Turf Club, and subsequently paid to him. W., like other jockeys, sometimes received a present from an owner by whom he was engaged, either in money or money's worth (often in the form of jewellery) when he had been successful in winning a race for such owner. W. rode a horse...

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