PART X X Y I.
No. 64.—I n t h e H o u s e o f L o r d s .— June 26 and 28,
1883.
M e r s e y D o c k s a n d H a r b o u r B o a r d v . L u c a s . d o c k s a n d
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LUCA8.
Income Tax.—Profits. Corporation. A harbour board is empowered by A ct of Parliament to levy dock dues, Sfc., to be applied
in maintaining the concern, and in paying interest on moneys
borrowed; any surplus income remaining after meeting these
charges is directed to be applied in forming a sinking fund to
extinguish the debt incurred in the construction of the docks.
Held, that the surplus is profit assessable to the income tax.
This was an appeal by the Mersey Docks and H arbour Board
from the decision of the Court of Appeal reported in
Volume I. of these Reports at page 305.
W ebster, Q.C. (Bigham with him), for the Appellants.—Two
points were argued in the Courts below, (1) W hether th e sum
carried to the sinking fund, and the surplus carried to the
following year’s accounts, were “ profits ” within the meaning of
the Income Tax Acts, and (2) If they were “ profits ” whether
there was anything in the local Act of the H arbour Board to
relieve the Corporation from the paym ent of the tax.
In the Divisional Court the judgm ent proceeded upon the
second ground, b ut in the Court of Appeal the attention of the
Judges was directed to the opinion delivered by Lord Blackburn
(y) in the House of Lords in the case of Mersey Docks and H arbour Board v. Cameron, and the Master of the Rolls and the
Lords Justices sitting with him, at once assented to the doctrine
enunciated in th a t opinion, and the second point was disposed of
in th a t way.
W ith regard to the first point.—By the 3rd Rule of No. II I.,
Schedule A ., sec. 60., 5 & 6 Viet. c. 35., the “ annual value ” of
docks for the purposes of income tax assessment is understood to
be the full am ount of the profits received therefrom in the year
preceding the year of assessment. Here there is no “ produce or
value,” or to use the more accurate word no “ profits,” which
(y) See Vol. /., p. 460, at line 23.
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are liable to income tax at all. Where a corporation is authorised by Act of Parliam ent to carry on an undertaking, the
earnings of which are only to be sufficient to meet the outgoings
of th at particular undertaking, there can be no profit. Glasgow
Corporation W aterworks v. Commissioners of Inland Revenue
(z). The Mersey Dock rates are levied simply for the purpose
of repaying moneys borrowed; when the debt is paid oil the
Board will be obliged to collect only just sufficient to keep the
concern going. Probably th a t could not be done m athem atically; too much m ight be raised in one year, but, if so, less
would be collected in the following year. The Acts did not
intend th a t the Board, qua trustees, should ever have in their
hands anything th at could be called profit, or produce, or gain.
Sir H. Jam es, A.G . (Sir F. Herschell, S.G ., and Dicey with
him), for the Respondent, was not called on.
Lord Chancellor.—My Lords, the circumstances under which
this case came before your Lordships are these. The question is
whether income tax is chargeable upon a sum which on the one
side is alleged to be the annual profits of the Mersey Docks and
H arbour Board of Liverpool, and which is denied on the other
side to be of th a t character. The Divisional Court (the Queen’s
Bench Division) determined th a t question upon a ground which,
I may say, I think is practically now abandoned at the B ar as
untenable, th a t ground being th at in a local Act, the Mersey
Docks Act of 1858, the appropriation of the receipts of the Dock
Board is directed, and, after enum erating the purposes there
mentioned, these words follow :—“ And, except as aforesaid,
“ such moneys shall not be applied by the Board for any other
“ purpose w hatsoever.” I t appears to have been thought by the
two learned Judges who took p art in the judgm ent in the
Queen’s Bench Division, th a t those negative words excluded any
application of the moneys to income tax , because among the
enumerated purposes to which the proceeds of the concern were
to be applied, income tax was not mentioned. N either, my
l ords, were poor rates, excepting th a t there was a saving clause
th at nothing in the Act contained should “ alter or affect the
“ question of the liability ” “ to parochial or local rates.” I t
may be th a t th a t is a distinction Which from some points of view
might be of im portance with respect to taxes and rates.
However, I find, my Lords, th at in advising this House in the
case of the Mersey Docks v. Cameron, and Jones v. The Mersey
Docks (a), my noble and learned friend (Lord Blackburn) who
then delivered the opinion of the Judges which was adopted by
the House, said this, the learned Judge did not rely upon this
special clause which I have just read, b ut he said :—“ There
“ are no negative words prohibiting the application of the rates
“ to paym ent of the poor r a te ; and we think, in conformity with
(:) Vol. / . , p . 28. 12 Sco. L. R. 466. («) 11 H. L. C. 443.
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“ the decision in The Tyne Commissioners v. Chirton (b), th at
“ enactments directing th a t the revenue shall be applied to
“ certain purposes and no others are directory only, and mean
“ th at after all charges imposed by law on the revenue have been
“ discharged, the surplus or free revenue which otherwise might
“ have been disposed of at the pleasure of the recipients, shall be
“ applied to these purposes.” My Lords, if it were not superfluous now to express concurrence in an opinion which I think
m ay be taken to have been approved by the House of Lords in
the year 1864, I should express my full concurrence in th at
opinion, and it has been very candidly adm itted at your Lordship’s B ar th at th a t opinion seems not to have received the attention due to it when this case was before the Queen’s Bench
Division. B ut I will add further th a t, even independently of
th at sound general doctrine laid down in the passage which
I have read from the opinion of the Judges delivered in 1864,
it seems to me th at the view expressed in the Court of Appeal
is perfectly right, and th at it would be a very strange thing
indeed, and wholly inconsistent with the principles which are
well established as to the construction of Acts of Parliam ent,
and I m ay say more especially of local and personal Acts of
this nature, if duties given to the Crown, taxes imposed by the
authority of the Legislature by public Acts for public purposes,
were held to be taken away by general words of this kind in a
local and personal Act, and an Act in which the Crown is nowhere mentioned as to be bound by it.
For this purpose it seems to me to be really quite immaterial
whether we regard this question as governed in substance by the
Income Tax Acts which were passed before the year 1858 or by
the Income Tax Acts, or any of them , which were passed since.
If by those passed since, then it would be an extravagant proposition indeed to say th a t a subsequent public Act imposing duties
is not to operate because a prior local and personal Act contained negative words of this kind. B ut if you look to the Act
which had been passed before, to any mind the argum ent is
exactly the same. A public Act had imposed duties. There is
not a word in this private Act about those duties, nor taking
them away from the Crown, nor could these negative words
possibly have th a t effect. In tru th , my Lords, the income tax
stands in the singular position of being in one sense imposed
after and in another sense before this A ct; after, because the
present rate of income tax is governed by the continuance Acts
or by the Acts which have varied the rate from time to time and
which are later; but all those Acts refer to the earlier Act and
incorporate its provisions, and it is perfectly manifest as a m atter
of construction th a t what was taxed by the earlier Acts was
m eant also to be taxed by the later. I think, my Lords, th at
this was felt at the B ar, and the consequence has been th a t the
case has been in substance argued before your Lordships upon
other grounds.
(b) 1 E. & E. 516.
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M e r s e y Then, my Lords, I come to examine those other grounds-
* H a r b o u r D ° f a ^ > I think the more convenient m ethod of proceeding is
B o a r d v . to look at the term s of the Acts before one goes a t all beyond
L u c a s , them . Now, the Income Tax Act th a t we have to construe expressly imposes the tax upon “ the annual value of all the
“ properties herein-after described ” which is to be “ understood
“ to be the full am ount for one year or the average amount
“ for one year therefrom within the respective times herein
“ lim ited.” Then it goes on to say th a t this is to be understood, as to the annual value or the yearly profit amongst other
things of “ docks.” The tax is to be upon the profits, as I
said before, of the year preceding, and it is to be charged
amongst others upon every “ corporation carrying on the concern,” and it is to be charged “ on the am ount of the produce or
value thereof.” W hat is “ thereof ” ? Of the concern which
the corporation carries on. If we had nothing more th an th a t,
I should have thought th a t we were to consider not the application of the moneys which the Mersey Board received when they
had received them , b u t the ft profits of the concern ” in the sense
of the “ produce or value ” which could properly be described as
“ profit of the concern,” and th at surely would be all the net
proceeds of the concern after deducting the necessary outgoings
without which those proceeds could not be earned or received.
B ut, m y Lords, the Act does not stop there, it goes on and
says th a t this charge is to apply “ before paying, rendering, or
“ distributing the produce or the value either between the
“ different persons or members of the corporation, company, or
“ society engaged in the concern ” (those are words which would
not apply here, because the proceeds of this undertaking are not
so distributable) “ or to any creditor or other person whatever
“ having a claim on or out of the said profits.” Therefore, so far
as these words go, they distinctly exclude from deduction as
regards the question of priority over the tax payable to the
Crown all paym ents “ to any creditor or other person whatever
“ having a claim on or out of the said profits.” Now, your Lordships will observe th a t th a t proves distinctly th a t the word’
“ profits ” as here used does mean the incomings of the concern,
after deducting the expenses of earning and obtaining^ them ,
before you come to an application of them even to creditors, who
are of course creditors of the concern. W ith regard to this
particular case, the whole application in respect of which it is
contended th a t the character of profits is taken away from the
subject m atter, is application to creditors. This does not say
“ dividends or interest payable to creditors ” but it says, “ before
“ paying, rendering, or distributing the produce or the value to
“ any creditor or other person whatever having a claim on or out
“ of the said profits.” No doubt it does on to say th a t a proportionate deduction of duty is to be allowed by a creditor, th a t is
to say th a t the duty which is imposed also upon himself, if paid
in this m anner by the company, and charged upon the company,
is to be allowed by him as a deduction in their favour; b u t th a t
does not take away from the force of the generality of the words
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which precede it and which say th a t no deduction is to be allowed
in respect of the application of the “ said profits ” in the sense I
have mentioned, to any creditor or other person having a claim
upon them.
Now, my Lords, 1 should have said th a t th a t is quite sufficient
to settle the whole m atter, because it shows th a t in these cases
you are to charge the corporation or company upon its entire net
receipts for the purpose of duty, and to disregard every application which m ay have to be made, whether in favour of creditors
o r others, of any p art of those receipts. I t is clear th a t in this
case it is not under the latter section -that the officers of the
company pay other men s income tax , but they pay their own,
and in paying their own they cover for a certain extent th a t of
other men, and therefore they are perm itted to deduct it.
B ut, my Lords, I will go further, and say th a t it appears to
me th at the rules in Schedule D ., which are introduced and made
applicable by the later Act, entirely confirm this view, which is
the natural and prim a facie view of the meaning of the words
which I have read, which apply to the earlier Schedule. When
we come to the later Schedule D ., the rules of which are by the
later Act applied to this particular class of undertakings, the
same reasoning is confirmed. The Rules are these :—“ First
case : Duties to be charged in respect of any trade, manufac-
■“ ture, adventure, or concern in the nature of trade not con-
“ tained in any other schedule of this A ct.” “ F irst, the duty
■“ to be charged in respect thereof shall be computed on a sum
■“ not less than the full amount of the balance of the profits or
gains of such trade, m anufacture, adventure, or concern.”
Now I pause there to observe, th a t although in the Act of
Parliam ent “ profits ” and “ gains ” are really equivalent term s,
yet the use of the word “ gains ” in addition to the word
“ profits ” furnishes an additional argum ent for excluding the
contention of the Appellants, th at you are to introduce into the
word “ profits ” some ideas connected not with the nature of the
thing, but with the manner and rule of its application. W hat
-are the gains of a trade ? If it could be reasonably contended
th at the word “ profits ” in these Acts has reference to some advantage which the persons carrying on the concern are to derive
from it, it might be said, perhaps, th at the same argum ent might
hav” been raised upon the word “ gains,” but to my mind it is
reasonably plain th a t the gains of a trade are th a t which is
gained by the trading for whatever purposes it is used, whether
it is gained for the benefit of a community or for the benefit of
individuals : whether the benefit is to be obtained by dividends
■or whether it is to be obtained by lightening and dim inishing,
public burdens, it is all the same.
Then the Schedule goes on to say th at it allows an average of
three years to be taken where the business has been carried on
for three years, and then it says th at it “ shall be assessed,
“ charged, and paid w ithout other deduction than is herein-after
allowed.” So th at the Act specifies w hat deductions are to be
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M e b s e y allowed. The first p art of the Act has excluded deductions for
H a r b o u r 1* crec^ ors and persons having claims, and this goes on to allow
B o a r d v. some particular deductions which are not m aterial here, and also
L u c a s . to speak of some th a t are not to be allowed. “ Third, in esti-
“ mating the balance of profits and gains chargeable under
“ Schedule D ., or for the purpose of assessing the duty thereon.”
First, no sum shall be deducted “ for repairs of premises occupied
“ for the purpose of such trade, m anufacture, adventure, or
“ concern.” Then, secondly, “ nor for any sum expended for the
“ supply or repairs,” or keeping up the plant and stock-in-trade
beyond what has been usually expended on the average of three
years. T hat, at all events, goes strongly against the notion th at
you are to go afield and enquire into the benefits to be derived
by one person or another, and the mode of deriving them in the
m anner which the argum ent at the B ar requires. Then it goes
on to say, “ nor on account of loss not connected with or arising
“ out of such trade, m anufacture, adventure, or concern; nor on
“ account of any capital withdrawn therefrom , nor for any sum
“ employed, or intended to be employed, as capital in such trade,
“ m anufacture, adventure, or concern; nor for any capital
“ employed in improvement of premises occupied for the pur-
“ poses of such trade, m anufacture, adventure, or concern.” T hat
is to say, no addition to capital, no improvement made out of
capital at all events of premises are to be allowed; and although
all those particular things are enum erated, yet they are enumerated after a general provision th a t the ta x is to be paid w ithout
any other deduction than th a t which is afterwards allowed. I t is,
therefore, quite impossible th a t according to the principle of th e
Income Tax Acts these paym ents to creditors can be taken into
consideration.
Then, m y Lords, w hat remains of the argument. Merely this,
th a t a local and personal Act has regulated the application of th e
gross receipts of the undertaking, and has said th a t they m ay be
applied to the expenses of collection, to the paym ent of interest,
which it is adm itted (at least it m ust be adm itted) is excluded by
the Income Tax Act from being taken into account. Then to th e
construction of works, which would fall within the principle of
some of those deductions which are expressly excluded by
Schedule D ., and in supporting and m aintaining the works and
the general managem ent of the estate, and all reasonable* expenses for m aintaining and protecting the same, and then in
extinguishing debt, and ultim ately the rates are to be reduced.
Those applications m ay be made by the Board “ in any order
“ with respect to priority of such application as they shall deem
“ expedient;” and it is quite plain, when you look at it, th a t
some of them are expenses which m ust be incurred in order to
earn any gain or profit from the undertaking, and others of them
are application of the gain or profit when earned. The expenses
of the general m anagem ent of the estate, and the expenses and
charges of collecting rates are m anifestly antecedent to the
earning of any profit. The rest, the construction of new works,
the paym ent of interest, and the re-paym ent of principal, all pre-
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suppose th a t the profits have been earned, and th a t there is a
clear fund which can be so applied. To m y mind it is exactly
the same thing as is there had been a declaration th a t, after paying the current expenses and all other necessary out-goings,
w ithout which nothing could be earned, the clear surplus profits
and gains of the undertaking should be applied in a certain
maner, th a t is the substance of it. The mode of the application
makes no difference whatever to the question of w hat is “ profit ”
and w hat is “ gain.”
My Lords, th a t appears to me to be the plain and simple view
of the case. I t is the same view as has been taken by the Court
of Appeal, and, therefore, I move your Lordships th at this
appeal be dismissed with costs.
Lord Blackburn.—My Lords, I am of the same opinion, and I
think th a t when the m anner in which the case is raised and the
point in the case itself are understood, it is obvious th a t th at
point lies in a very short compass indeed.
The Mersey Docks and H arbour Board, who are the creature
of an Act of Parliam ent, as we are told at page 3 of the point
case, obtain a revenue from a variety of sources. I need not go
through them all. The Board are proprietors of docks, and in
respect of those docks they receive a revenue from exactly the
same sources from which any private dock com pany, say the St.
K atherine Dock Company, in -London, would receive them .
They receive a revenue from dock tonnage, from dock dues,
from charges for loading and unloading, from quay rents, from
paym ents made by shipowners for the appropriation of quay
space to them and from charges made for the use of cranes and
machinery. All those, as I say, are exactly the things from
which a private dock company would receive its revenue. Besides those, they have three items of revenue, which are mentioncl in the lower p art of page 8, nam ely, “ town dues on goods
‘* imported into or exported from the p o rt of Liverpool,” “ anchor-
“ age dues on vessels anchoring in the Mersey,” “ harbour rates
“ paid by vessels entering or leaving the Mersey, b ut not using
“ the Appellants’ Docks.” Those items are of a different nature.
I believe they have been modified and altered and extended by
an Act of Parliam ent, but in their nature they were ancient harbour dues such as any one who refers to H argrave’s Tracts, where
there is a great deal about them , will find were enjoyed by a
private person in Tynem outh H arbour under an ancient grant.
These dues in the case of the Mersey were granted by King
Charles the Second to the ancestor of the E arl of Sefton, and by
the Earl of Sefton sold to the Corporation of Liverpool, and from
the Corporation of Liverpool they have been transferred to the
Mersey Docks and H arbour Board. I t is enough to say of them
th a t they are property arising from petty customs and harbour
dues which might belong to a private person, but as the case
states in fact do belong to the Mersey Docks and H arbour Board.
Besides th a t, the Board derive a revenue from the rental of
various properties, th a t is mentioned on page 4.
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Now, when we see how the question arose between the parties
we find what is the real point in the case. The Mersey Docks
and H arbour Board returned their assessment for the income tax
as they ought to do, and they stated the am ount upon which they
considered themselves assessable thus, “ the am ount due and pay-
“ able by them for interest on the debt during the year of assess-
“ m ent being the sum of 532,2522.” The Surveyor of Taxes
surcharged them , and by such surcharge the sum was increased
to the amount of 697,9642., as the profits for the year preceding
“ of the concern under the managem ent of the A ppellants.” On
appeal to the Commissioners of Income T ax the contention was
“ that their liability to income tax (if any) did not extend beyond
“ the sum which was paid as interest upon the debt and ought
“ not to extend to the said sum of 100,0001., carried from the
“ revenue to the sinking fund account or to the surplus carried
“ forward to the next year’s account. On the other hand, it was
“ contended on behalf of the Respondent th a t under the pro-
“ visions of the Income Tax Acts the Appellants were liable to
“ assessment to income tax in respect of the profits arising or
“ accruing to them from the concern under the m anagem ent
“ and not in respect of interest due or payable by them , and th a t
“ for the purpose of ascertaining the am ount for such assessment
“ the total am ount of their receipts should be taken from which
“ there should be deducted the cost of working, m aintaining, and
“ repairing the sources of revenue, b ut not the interest payable
“ upon the debt nor the said sum of 100,0002. The Commissioners
“ concurred in the view put forward on behalf of the Respondent,
“ and having satisfied themselves th a t allowance had been made
“ in respect of rents for warehouses, &c. (th at is their real
“ property) already charged under Num ber 1 of Schedule (A),
“ confirmed the surcharge in the sum of 697,9642.” So th a t there
never was any real dispute at all th a t H er M ajesty, whether she
got it in one way or got it in another, was to have income tax
upon the 532,2521., which goes in paym ent of the interest on the
d e b t; but the contest was, and is, whether under the peculiar local
Acts of this Mersey Board there was anything to say th a t they
were not to pay income tax on the residue which, after deducting
all the expenses of earning it, and after taking away all th a t was
chargeable under Schedule (A) has in fact been found to be
165,7122. The real question in dispute is whether income tax
is payable upon th at sum.
The first ground upon which the case of the Appellants was
put was, th a t by the term s of the local and personal Acts of the
Mersey Docks and H arbour Board, it was enacted th a t they were
to pay this sum in reducing debt (I am putting it roughly) and
nothing else whatever, and th at th a t m eant th a t they were not to
pay income tax upon it. T hat seems to have been the opinion to
which Mr. Justice Grove and Mr. Justice Lindley came in the
Divisional Court, and they decided upon th a t ground. Their
attention was not called either to the arguments which were used,
nor to the authority in the cases of Cavieron v. The Mersey Docks
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and Harbour Board and Jones v. The Mersey Docks and Harbour Board (c) upon these very same Acts, and with regard to
this very same body, it was decided th a t this very same provision
did not am ount to an enactm ent forbidding them to pay poor
rate. B ut as soon as it was made clear to the Court of Appeal
th a t th a t had been the decision, they said “ T h at point will not
do a t all,” and there was a further reason which was given,
namely, even if it had been said th a t they were not to pay poor
rate, the income tax stood in a m uch better situation. For all
those reasons, in fact, th a t ground has been substantially abandoned in the argum ent at your Lordships’ B ar, and after w hat
the noble and learned Lord on the woolsack has said I will say
no more about it.
Then comes the second point which was argued, and which was
in effect this. A fter the Mersey Docks and H arbour Board have
done all th a t would have been done by the St. K atherine Docks
Company, or any other private Dock company who own docks in
order to receive their incom e; after they have done all th at
would have been done by Lord Sefton, if his ancestor has not,
unfortunately for him, sold the town dues and the Mersey anchorage dues a t a time when they were of much less v alu e; after
having done all this, the Act of Parliam ent says, you m ust apply
the surplus to reducing debt, and when the debt is paid you m ust
diminish your dock rates, and of course when you have paid off
your debt your rates will be reduced (if you or your successors
do your duty) by the am ount of 500,000i. odd, and then there will
be in future less revenue raised, and of course less income upon
which to pay income tax. And the argum ent which is endeavoured to be urgsd is this, th a t, inasmuch as they are ordered to
apply to th a t purpose the sum which remains after all those expenses have been deducted, therefore the Queen is not to have
income tax upon it. W ith reference to th a t I have endeavoured
in vain to grapple with w hat the Counsel for the Appellants were
saying, in order to bring it to a definite point. There is no
ground whatever for saying it, th a t I can see; there is nothing in
the nature of things, there is nothing in the words* of the Act, to
say th a t when an income has been actually earned, when
an actual profit upon which the tax is p ut has been earned
and received by any person or corporation, H er M ajesty’s
right to be paid the tax out of it in the least degree depends
upon w hat they are to do with it afterwards, unless there is
an express enactm ent, which I think there is in some cases,
th at they are to apply it to charities and other purposes. If
the am ount thus received is to be applied at their pleasure,
they m ust pay the tax. If it is to be paid over to shareholders
or to creditors, or to anybody else, the Queen is still to have
her tax. Although it is expressly said th a t she is to be paid
“ before ” they pay it over to any such person, it does not mean
th at she is not to be paid unless they are going to pay it over
to any such person. I t is impossible to construe it in th at
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way. W hether it is to be applied in one way or the other, the
Queen is to have her tax upon it. The question, therefore, is
solely whether or no the sources which produce this revenue are
among those things which are enum erated (I care not whether in
Schedule A. or Schedule D.) as those upon which the ta x has
been granted to H er Majesty. I t appears, as I have already
pointed out, th a t in thip particular case every one of these things
is a thing in which a private person m ight have property and
from which a private person m ight receive revenue just as the
Mersey Board does; and, if so, a private person would certainly
be taxable upon it, and I see no reason whatever why the Mersey
Board should not be taxable.
There was a case cited from the Scotch Courts which was
relied upon by the Appellants, nam ely, the case of the Corporation of Glasgow, or the Glasgow W aterworks, I think it was, v.
The Inland Revenue (d). T hat case was decided by the Court of
Session. I have looked at it.. I have not looked at the Acts
relating to the Glasgow W aterworks, or the Acts under which
th a t particular point was raised, and I am not com petent to form
an opinion upon them ; b ut knowing perfectly the general very
great care and accuracy of the Lord President, I have no doubt
th at he construed those Acts rightly in construing them as he
did. He decided upon a different principle, and in th a t I am
inclined to think he was right. There the Appellants relied very
much upon some dicta (they were only dicta) in the case of The
Attorney General v. Black (e), where the question was this. The
Corporation of Brighton had become entitled to a considerable
income raised from duties on coals imported into Brighton, and
th a t income they were obliged to bestow upon their corporate
purposes and bring into their borough funds. I t was held there
th at they were liable to pay income tax upon th a t as being an
income derived from coal duties. B ut in the course of the
discussion it was said, amongst others, I see, by myself, in the
Exchequer Chamber, th a t this was because it was an income, or
profit, or revenue within the meaning of the Income T ax A ct,
and th a t it die! not apply in such cases as th a t of a poor rate,
where the overseers levy a large rate, or a highway rate, where
the surveyors of the highway levy a rate for the purpose of the
highway, or in the case of a municipal corporation who levy a
borough rate for the purpose of spending the money upon borough
objects. It was said th a t these were not in the nature of
“ profits ” or income a t’a ll, and th a t they would not be taxable.
I t was a mere dictum , b ut the Lord President thought th a t it
was rig h t; and with reference to the Glasgow case he said, construing the Glasgow Acts, and looking at their provisions, “ This
“ is not income at all, it is not a profit at all, it is not a revenue
“ of the sort which is mentioned. In this particular case,” said
he, and the other judges too, “ it is merely a rate upon the in-
“ habitants of Glasgow which is approprated for the purpose of
(il) Vol. /., v. 28. 12 Sen. L. R. 456. (r) Vol. /., p. 52. L. I?. 6 Ex. 308.
UNDER THE TAXES MANAGEMENT A C T , 1 8 8 0 . 8 5
“ doing various things, and is not in the nature of a profit or
“ gain at all.” Now, as I said before, I have not looked at the
Glasgow Acts and I have no m aterial before me with reference
to th a t case, therefore I express no opinion as to whether
th a t was a right construction of the effect of the Glasgow Acts or
not, b u t if it was, the principle on which the Court of Session
there acted was one with which I am not at all prepared to
quarrel. I t is not necessary to say w hether th a t decision was
right or wrong, but it is ceretainly in conformity with the dictum
which, as I said before, I seem myself to have expressed some
years prevously, and, whether it was right or wrong, it does not
apply to the present case.
Now th a t was the only authority cited or referred to at all in
support of the argum ent for the Appellants, and it does not seem
to me to be applicable. The consequence is th a t I quite concur
with w hat has been proposed, nam ely, th a t, w ithout hearing the
counsel for the Respondent, your Lordships should dismiss this
appeal with costs.
Lord Fitzgerald.—My Lords, I entirely concur in the judgment which has been announced, and I desire to add a few words.
The principal question for your Lordships’ decision seems to
me to be whether the sum of 697,964i., being the am ount of the
n ett receipts of the Appellants for one year and arising out of
their corporate estates, constituted “ profits received therefrom ”
within the meaning of No. 8, Schedule A ., of the Income Tax
Act of 1842. The statute, it will be observed, does not speak of
“ profit ” received by any particular person or body for their own
benefit or th a t of any other person or body, or of its purpose or object or application, b ut simply of “ profits received
therefrom ,” and seems to me to use “ profit ” in the sense of
income acquired from the estate, of whatever character it may
be, over and above the costs and expenses of receipt and
collection.
It is not unim portant in the particular case before us to look
to the constituent p art of the corporate estate of the Appellants,
which are thus stated. “ 1. Dock tonnage rate on ships enter-
“ ing into or leaving the docks. 2. Dock dues on goods imported
“ into or exported from the port of Liverpool, and brought into
“ the docks or landed at, or deposited upon, or carried over
“ any of the Appellants’ quays, piers, landing stages, or land.
“ 8. Town dues on goods imported into or exported from the port
“ of Liverpool. 4. Anchorage dues on vessels anchoring in the
“ Mersey. 5. H arbour rates paid by vessels entering or leaving
“ the Mersey, but not using the Appellants’ docks. 6. Charges
“ for unloading and housing in and delivering from the Appel-
“ lants’ warehouses goods from vessels. 7. Quay rents levied in
“ respect of goods not removed by the owners from the quay
“ within the prescribed tim e, and rents for quay space occupied
“ by owners of goods by permission of the Board. 8. Rental
“ of various properties belonging to the Board and occupied for
M e r s e y
D o c k s a n d
H a r b o u b
B o a r d v .
L d c a s .
3 6 TAX CASES
M e e s e y “ the storage of timber, as shipbuilding yards, stores, coal yards,
IJUbboubD “ ^ c” Payments made by ship owners for the special approB o a b d V% “ priation to their use of quay space. 1 0 . Charges made for the
L u c a s “ u s e Q f cranes and machinery, and tolls levied for the use of the
“ Appellants’ dock railwaysand it is to be observed that the
income embraces, in addition to rates on ships using the docks on
the river Mersey, and dues on goods imported or exported, also
warehouse and quay rents, charges for use of machinery, railway
tolls, and rentals of various properties enumerated in No. 8. A
portion of this property the Appellants derive from the old
Corporation of Liverpool; and I apprehend it would not be contested that so much of the income would have been liable in the
hands of the old corporation had it remained in their hands
(See Attorney-General v. Black (/)). There is nothing to be
found in this income in the nature of a district or local rate, or of
a rate or tax which could be considered as a payment by which
the inhabitants of the locality procure for themselves some local
benefit. The dues are in effect levied on the whole world coming
to the Mersey or to Liverpool, and on those taking advantage of
the docks or other property of the Appellants. In this respect
the case is so distinguishable in its facts from the Glasgow case
that it seems to me unnecessary to consider the authority of that
case.
My Lords, on this question I adopt the language, of Sir George
Jessel, in the Court below, “ I have so clear an opinion that I can
“ entertain no doubt whatever,” and of Mr. Justice Blackburn in
the Brighton case (g).
The remaining questions in the case have been satisfactorily
disposed of in the Court of A ppeal,, in accordance with the
opinion of the judges as delivered in. your Lordships’ House in
The Mersey Docks v. Cameron (h), and with the principles laid
down in that case.
My Lords, I entirely concur in the decision now announced,
and in the reasons expressed by the Lord Chancellor and by the
noble and learned Lord opposite (Lord Blackburn) for that
decision.
Appeal dismissed with costs.
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