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You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> Grant v. Langston (Surveyor of Taxes.) [1900] UKHL 691 (28 May 1900) URL: http://www.bailii.org/uk/cases/UKHL/1900/37SLR0691.html Cite as: [1900] UKHL 691, 37 ScotLR 691 |
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Page: 691↓
(Before the
( Ante June 24, 1898, 35 S.L.R. 815, and 25 R. 1040.)
Subject_Revenue — Inhabited-House-Duty — Stat. 48 Geo. III. cap. 55, Schedule B — Stat. 57 Geo. III. cap. 25, sec. 1 — Stat. 5 Geo. IV. cap. 44, sec. 4 — Stat. 14 and 15 Vict. cap. 36, secs. 1 and 2 of Schedule — Stat. 41 and 42 Vict. cap. 15, sec. 13, sub-sec. (2).
The proprietor of premises consisting of two storeys occupied the upper storey as a dwelling-house, and in the lower storey carried on the trade of a licenced retailer of exciseable liquors. There was no internal means of communication between the two storeys, each having a separate entrance from the street. Held ( rev. judgment of the first division) that he was not liable for inhabited-house-duty in respect of the storey which was used as a public-house— per the Lord Chancellor and Lord Brampton, on the ground that it was not an inhabited dwelling-house within the meaning of 48 Geo. III. Cap. 55, and 14 and 15 Vict. cap. 36; per Lord Brampton, also upon the ground that even if it was to be regarded as a tenement severed from a larger house and assessable under 48 Geo. III. cap. 55, Schedule B, it was exempted from inhabited-house-duty by 41 and 42 Vict. cap. 15, sec. 13 (2), as being solely devoted to trade; and per Lord Macnaghten and Lord Davey, on the ground that even if it was assessable under the Act 48 Geo. III. cap. 55, it was exempted from inhabited-house-duty as being either a separate “house” or a separate “tenement” occupied solely for the purpose of trade within the meaning of 41 and 42 Vict. cap. 15, sec. 13 (2).
The case is reported ante, ut supra.
Grant appealed to the House of Lords.
At delivering judgment—
A hundred years ago there was not much difficulty in saying what was a “house,” but builders and architects have so altered the construction of houses, and the habits of people have so altered in relation to them, that the word “house” has acquired an artificial meaning, and the word is no longer the expression of a simple idea; but to ascertain its meaning one must understand
Page: 692↓
With the most sincere respect for the authority of Sir George Jessel, I cannot help thinking that his reasoning in the Westminster case is unsatisfactory. No one will doubt the soundness of the maxim which he quotes as the basis of his judgment, but as usual it is the application of it which raises the difficulty. Indeed, I think it is true to say that the judgment to which I refer proves too much for the purpose of its final conclusion. It establishes undoubtedly that the word “house” is an ambiguous word; it shows that you must search otherwise than in the word itself what is the meaning in which the Legislature has used it, since the natural and ordinary meaning of an ambiguous word cannot be ascertained without the context. Now, the instances to which the learned judge referred, such as the two temples constituting one, or houses such as Christ Church, Oxford, have as little to do with structure, architecture, form of building, or occupation, as with the complexion of the inhabitants. “House” in one sense means simply a community, ecclesiastical or secular, having common revenues, common objects, and in pre-Reformation times vows or obligations common to those who joined it. Accordingly, the word “house” has no common or ordinary meaning so fixed and definite that by the mere use of the word you can determine in what sense the Legislature has used it.
I think the original idea of an inhabited house was that of a building inhabited by one person (with his family) responsible for the tax, who was himself the inhabitant of the whole of the house. But very soon questions began to be raised as to what constituted the unity of a house; one side of a whole street is in one sense structurally one building, but the separate unity of each of the structures, with all its arrangements for occupation by one family and its head, was of course recognised as a house separately liable to the tax. Even semidetached houses were always recognised as two houses, although they were structurally one and protected by one roof; but controversies have arisen in respect of rating for the poor, for the purposes of taxation and for the franchise, and decisions have been arrived at not always satisfactory or reconcileable with each other. An outer door and a common or separate staircase have been most commonly the tests applied, and I am not myself able to see how the case of chambers in an Inn of Court and the decision of the Westminster case are reconcileable with each other. But the Legislature went further in respect of artificially creating more houses than one out of a house, which was in every ordinary sense one taxable house, by giving from time to time exemptions from taxation to parts of structures which were in every sense structures adapted and probably intended originally for the occupation of one inhabitant as head of a family. Sir George Jessel himself in the Yorkshire Fire and Life Insurance v. Clayton said— “In modern times a practice has grown up of putting separate houses one above the other; they are built in separate flats or houses,” but for all legal and ordinary purposes they are separate houses.
Now, it appears to me that apart from the exemption created by the Act 41 and 42 Vict. cap. 15, sec. 13, I should have great difficulty in holding this building to be one inhabited house within the various alterations which the Legislature has introduced into what it has for fiscal purposes called a “house.” It appears to me that, in the language of Sir George Jessel, there are two houses built one above the other; I suppose no one would dream of calling them one house if the same conditions which are found to exist here were found to exist in the same structures built side by side and not one above the other; and if it is possible to have one house built over another house, then all that has been held to constitute a separate house exists here; there is nothing which is held in common ; the one structure is superposed upon the other and that is all.
With respect to the exemption, I do not think what has been said by the Lord President in Coutts v. Bussell can be made clearer than in his own words— “The word ‘tenement’ in the statute means part of a house so structurally divided and separated as to be capable of being a distinct property or a distinct subject of lease.” There is no doubt that if this is right—and I am by no means prepared to say it is wrong—the house which is here described is undoubtedly capable of being a separate property or separately leased; but I have more difficulty in seeing that it is structurally divided if I assume that the whole building is one house.
If, as some of your Lordships seem to think, the exemption was introduced so as to alter the law as it was declared to be in the Westminster case, I cannot think it was very happily done. In this legislation “tenement,” “attached,” “property,” all require definition. I am not sure that I know what is a tenement as applied to such a subject-matter, though, as I have said, I am not prepared to differ with the Lord President; nor is it perhaps very material to consider it further, since, for the reasons I have given, I think this, i.e., the ground-floor house, is not an “inhabited house”, within the statute, and therefore I agree with your Lordships that this appeal should be allowed and the decision of the Commissioners restored.
The question seems to me to depend entirely upon the true construction of subsection 2 of section 13 of the Customs and Inland Revenue Act 1878. The argument on behalf of the Crown, as I understood it, was that sub-section 2 was to be treated for all practical purposes as part of subsection 1; that the purpose of sub-section 2 in substance was to provide that in the case of premises used for professional purposes,
Page: 693↓
I think the two sub-sections are quite independent, distinct in origin, and diverse in operation. The object of sub-section 1 was to remedy the hardship exemplified in the case of the Attorney-General v. Mutual Tontine Westminster Chambers Association, 1876, L.R., 1 Ex. Div. 469. The association had erected blocks of buildings structurally divided into separate tenements or suites of apartments. Some had been let for residential purposes, some as offices or chambers, while others were still unlet. Under Rule VI. of the Act of 1808 the association was held to be chargeable as the occupier of these buildings, and liable for duty in respect of all the separate tenements or suites of apartments, whether let or unlet.
The evolution of sub-section 2 was a more gradual process. It was marked by successive relaxations in favour of trade. Rule III. of the Act of 1808 provided that all shops which were attached to the dwelling-house or had any communication therewith should be valued with the dwelling-house. If that rule had remained unaltered there could have been, according to the decided cases, no doubt as to the appellant's liability. The first change was made in 1817. The Act of that year (57 Geo. III. c. 25, s. 1) takes note of the fact that it had become usual for tradesmen and shopkeepers to carry on their business in one house and to reside in another. It enacts that tenements or buildings, “or parts of tenements or buildings,” previously occupied as dwelling-houses by persons who since had gone to reside in taxable dwelling-houses elsewhere, should be discharged from assessment when used wholly as houses for trade, or as warehouses for goods, or as shops or counting-houses. The Act of 1824 (5 Geo. IV. c. 44) extended this exemption to persons using any house, tenement, or building, “or part of a tenement or building,” for the purpose of any profession, vocation, business or calling by which they seek a livelihood or profit. A further concession was made in 1867. By section 25 of the Inland Revenue Act of that year (30 and 31 Vict. c. 90) it was enacted that in order to entitle the occupier of “any tenement or building or any part of a tenement or building” to exemption on the ground of such premises being occupied for trade purposes only, it should not be necessary to prove, nor should proof be required, that such occupier resided in a separate and distinct dwelling-house or part of a dwelling-house chargeable with the said duties. Section 11 of the Inland Revenue Act 1869 (32 and 33 Vict. c. 14) provided that “any tenement or part of a tenement” occupied as a house for the purposes of trade only should be exempt although a caretaker dwelt in it for the sake of protection.
So far the relaxations in favour of trade introduced by the Acts of 1867 and 1869 had not been extended to premises used for professional purposes. But in 1878, when the Legislature dealt with the house-tax for the purpose of remedying the hardship which occurred in the case of the Westminster Chambers Association, occasion was taken to put premises used for professional purposes precisely on the same footing as premises used for trade purposes, and section 11 of the Act of 1869 was then repealed.
It is to be observed that while section 11 of the Act of 1869 is repealed, section 25 of the Act of 1867, though apparently superseded, is not repealed. Now, the Act of 1867, following the language of the earlier Acts, speaks of “any tenement or building, or part of a tenement or building.” The Act of 1878, section 13, sub-section 2, uses the expression “house or tenement.” I do not think that it could have been intended to cut down or narrow the concession introduced by the Act of 1867. The more compendious phraseology to be found in the Act of 1878 was, I suppose, adopted because the previous sub-section shows that the word “tenement” is used as meaning a division or part of a house.
In the present case it is not necessary to consider whether there must be a structural division or physical separation when exemption is claimed for part of a building as being used for trade or professional purposes only, because the two portions of the building belonging to the appellant are divided so completely that in fact they form separate houses. It is said they are not “distinct properties.” That is true. But there is not in sub-section 2 of section 13 of the Act of 1878, any more than in section 25 of the Act of 1867, anything requiring that when a tenement or part of a house used for trade purposes only is a portion of a building, the rest of which is used as a dwelling-house, the two portions must be “distinct properties” in order to enable the occupier of the trade premises to claim exemption. And certainly there is no reason why such a condition should be introduced if it is not prescribed in terms by the enactment.
I am therefore of opinion that the claim of the appellant ought to be allowed. In coming to this conclusion your Lordships will not, I think, be differing from the opinion of the learned Judges of the Court of Session, although in deference to previous rulings the actual decision was the other way.
My noble and learned friend Lord Morris desires me to express his concurrence.
Page: 694↓
I agree with this definition of the word “tenement” in this section of the Act, and I think it must have the same meaning in sub-section 2 as it has in sub-section 1. The second sub-section exempts “every house or tenement which is occupied solely for the purposes of any trade or business or of any profession or calling by which the occupier seeks a livelihood or profit,” and it also provides that the exemption shall take effect although a caretaker may dwell in such house or tenement. The words are perfectly general. There is nothing about letting. The owner may be the occupier of the tenement. It was argued that the words “house or tenement” are used pleonastically, because it was said these are so used in a section of an earlier Act. But it is a sound rule of construction that you must give to each word used in an Act of Parliament its significance if you can do so without violating other provisions of the Act. It was also said that the word “tenement” should be confined to the case when a tenement is separately assessable under section 14 of 48 Geo. III. I see no reason for cutting down the generality of the words in that manner. If that had been the intention it would have been easy to have expressed it. No difficulty is suggested in applying the words of the sub-section according to their literal meaning, and I think that the Legislature intended to exempt from the tax every “tenement” (in the sense which that word bears in this section) used for the purposes of trade or business, or professionally. This public-house is, in my opinion, clearly either a separate house, as some of your Lordships think, or a separate tenement within the meaning of the sub-section to which I have referred, and I therefore think that it should be declared that it is exempted from the tax.
By sec. 1 of the Act of 1851 it was enacted that in lieu of the duties then payable there should be assessed upon inhabited dwelling-houses throughout Great Britain the duties set forth in the schedule to that Act, with respect to which it was by sec. 2 enacted that the rules contained in Schedule B to the Act of 48 Geo. III. should be in full force as they were in regard to certain then already repealed duties.
By Rule III. of Schedule B all shops and warehouses which are attached to the dwelling-house or have any communication therewith, shall, in charging the duties, be valued together with the dwelling-house.
The Schedule to the Act of 1851 declared the duty of 6d. in the pound of the annual value to be payable for every inhabited dwelling-house which, with the household and other offices, &c., therewith occupied, is worth the annual rent of £20 or upwards—“Where such dwelling-house should be occupied by any person in trade who should expose for sale and sell any goods, &c., in any shop or warehouse being part of such dwelling-house, and in the front and on the ground or basement storey thereof. And also where such dwelling-house should be occupied by a person who should be duly licensed to sell therein by retail beer, ale, wine, or other liquors, although the room or rooms thereof in which such liquors shall be exposed to sale, sold, drunk, or consumed, should not be such shop or warehouse. And upon dwelling-houses not so occupied a duty of 9d. in the pound of the annual value.”
The premises, the subject of the assessment now in question, consist of a building facing Bath Street, Portobello, of two
Page: 695↓
The building formed by these two storeys ought not, as I think, to be treated as one house let in different storeys within the meaning of Rule VI. of 48 Geo. 3, c. 55, Sch. B, so as to make the landlord liable to be assessed in respect of the whole building in the event of his living in the one storey and letting the other. Nor do I think that owning and occupying as he does both storeys of the building the lower floor can be treated as a shop attached to the upper floor as a dwelling-house, and valued with it in the assessment under Rule III; and this for two reasons : 1st. Because although it might for some purpose in strictness be called a shop, because goods in the shape of beer, spirits, &c. are sold therein by retail, it is not necessarily “a shop” within the meaning of the House Tax Acts. See the Schedule to 14 & 15 Vict. c. 36, which recognises that a dwelling-house may be occupied by a person licensed to sell therein exciseable liquors without the room in which the sales take place being “a shop.” Moreover, even if the lower floor could be treated as a shop, it is not, in my opinion, attached to the dwelling-house in the sense contemplated by the Act; for in my judgment the Act did not intend the word “attached” to be satisfied by mere contact of some part of the two structures, but intended that it should be so attached for its use with the dwelling-house in the same way that by Rule II. offices and buildings “belonging to and occupied with the dwelling-house are for the purposes of the assessment to be valued with it.” It is further to be observed that no part of the trade of the public-house could be carried on in the dwelling storey, for the licence in this case is only to sell on the ground storey, and any sale elsewhere would be illegal; though in the case of the sale by retail of ordinary goods they might be sold as well in the dwelling-house as in a shop.
The cases of the Attorney-General v. The Mutual Tontine Association, L.R., 10 Ex. 395, S.C. App., Rusby v. Newson, L.R., 10 Ex. 322, and The Yorkshire Fire and Life Insurance v. Clayton, 6 QBD 557, C.A. 8 Q.B.D. 421, have no application to this case if my view is correct, for they were all clear cases of separate houses with many rooms in each let to various occupiers, the whole house being assessable upon the landlord, the structural arrangements being very different from those of the present building. The 41 and 42 Vict. c. 15, was passed for the purpose of removing the hardship which was put upon a landlord by the existing state of the law as declared by the Tontine case, and to provide for the cases in which houses are let out in separate tenements, and tenements occupied solely for trade purposes. By section 13, subsection 1, it was enacted that, “Where any house, being one property, shall be “divided into and let in different tenements, and any of such tenements are occupied solely for the purpose of any trade or business, or of any profession or calling by which the occupiers seek a livelihood or profit, or are unoccupied, the person chargeable as occupier of the house shall be entitled to relief so as to confine the amount of duty to that to which it should have been assessed, if it had been a house comprising only the tenements other than such as are occupied as aforesaid or are unoccupied.” This section applies only to houses being one property— structurally divided into and let in different tenements. That could not apply to premises like the present where the owners and occupiers are the same persons, and the building though formed of two separate and distinct tenements, is not let out as such. The second sub-section, however, applies to every house or tenement which is occupied solely for the purposes of any trade or business, or of any profession or calling by which the occupier seeks a livelihood or profit, and provides that such house or tenement shall be exempted from the duties, on proof of the facts to the satisfaction of the Commissioners,
Page: 696↓
As the result of a careful consideration of this case, I am of opinion that the appellant is entitled to relief from duty in respect of his restaurant premises, being No 49 in Bath Street, upon two separate grounds—1st. That he never was liable to be assessed in respect of it, because if it constituted in itself a separate and distinct house, it was never an “inhabited dwelling-house,” and therefore was not assessable. 2nd. That if it ought to be treated as a tenement severed from a larger house, it is by 41 and 42 Vict. c. 15, expressly exempt from assessment to the house duty on the ground that it was and is solely devoted to trade and business, and that a trade or business which was licensed to be carried on only within the licensed area of the ground storey.
The appeal therefore ought to be allowed with costs.
Appeal allowed, and judgment appealed against reversed, and decision of the Commissioners restored.
Counsel for the Appellant — Asquith, Q.C.— Roskill — F. T. Cooper. Agents— Godden, Son, & Holme, for James Purves, S.S.C.
Counsel for the Respondent— Attorney-General (Sir R. Webster, Q.C.)—Lord Advocate ( Graham Murray, Q.C.)—Solicitor-General for Scotland ( Dickson, Q.C.)— A. J. Young. Agents— J. C. Gore, Solicitor to the Board of Inland Revenue, for P. J. Hamilton Grierson, Solicitor to the Board of Inland Revenue for Scotland.