England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(Mr Justice Laddie)

		Royal Courts of Justice Strand, London WC2
		26th July 1999

Monday, 26th July 1999

LORD JUSTICE ALDOUS:

Mr Palmer, the appellant, claimed against his accountants for damages for breach of contract and negligence in respect of advice given which he said resulted in him failing to obtain retirement tax relief under the Taxation of Chargeable Gains Act 1992. It was his case that he was entitled to relief as he was at the relevant time a full-time working officer of Autofreight (UK) Ltd in that he was "required to devote substantially the whole of his time to the service of that company ... in a managerial or technical capacity.". Mr Justice Laddie in his judgment of 20th January 1998 upheld the submissions of the respondents that Mr Palmer was not a full-time working officer of the company and therefore their advice to that effect was correct in principle. He therefore dismissed the action.

The Facts

Mr Palmer has worked in the motor trade for many years. In about 1977/1978 he set up in business as a forwarding agent specialising in world-wide movement of motor vehicles and their parts. In 1979 he decided to give the business an identity and registered "Autofreight" as a business name and from March 1979 carried on business under that name. The name caused problems with certain of his clients who did not wish to supply him with goods destined for a foreign market. To overcome that problem and to take advantage of VAT relief he registered in 1979 "G.P. Enterprises" as a business name. G.P. Enterprises was from November 1979 used as a purchasing facility for overseas clients. All items purchased by G.P. Enterprises were exported through Autofreight.

In June/July 1985 Autofrieght (UK) Limited was formed to take over the business of Autofreight. To facilitate the transfer they both traded until April 1989. From that date Autofreight (UK) Limited carried on its forwarding business alongside Mr Palmer's purchasing business, carried on as before, under the name G.P. Enterprises.

Autofreight (UK) Ltd was controlled by Mr Palmer. He owned 93% of the shares with the remaining 7% belonging to his wife. She did not work in the company, but their daughter, Mrs Denise Saunders, joined the business in 1982 and like her father worked for Autofreight (UK) Ltd during and after the take over period.

In 1991 Mr Palmer read an article which indicated that retirement relief from capital gains tax could be obtained by persons aged 55 and over. At that time he was 57 and wished to reduce his involvement in the everyday activities of the business, if that could be done in a tax efficient way whilst at the same time preserving the business for his daughter. He consulted the respondents. Pursuant to their advice a new company, Autofreight Limited, which I will call Limited, was registered in November 1992. Mrs Saunders owned 60% of the shares and the balance was owned by Mr Palmer and his wife. Limited started trading in 1993 and thereafter took over the business of Autofreight (UK) Limited. Also upon the advice of the respondents profits that had built up in Autofreight (UK) Limited were distributed by way of dividends. There is no dispute that if those profits had been realised by way of a capital distribution which qualified for retirement relief under the 1992 Act, Mr Palmer's tax liability would have been considerably lower than that which he incurred.

I shall come to the legislation dealing with retirement relief and the submissions of the parties, but the issue as to whether retirement relief could be claimed turned upon whether Mr Palmer was at the relevant date a full-time working officer of Autofreight (UK) Ltd as defined in the 1992 Act as amended. If he was, he should have been advised to seek retirement relief and the advice that he actually received from the respondents was, it is now accepted, misconceived. On this crucial issue the judge found the following facts:

"The documents available show that at all material times the profits of GPE have been substantial. For example, in the year ending 30 April 1990 GPE's gross profits were just over £25,000, which is to be compared with the £110,000 gross profits of Autofreight (UK) Ltd. In the year ended 30 April 1992 GPE's gross profits were just over £40,000, whereas the gross profits of Autofreight (UK) Ltd were just over £78,000. Furthermore, it appears that all Mr Palmer's drawings, to the tune of many thousands of pounds per annum, were from GPE. He drew no money from Autofreight (UK) Ltd, although he may have received dividends from time to time.

Mr Palmer's evidence is to the effect that the business of GPE was much less time-consuming than the work he did for Autofreight (UK) Ltd. Although he was not paid by the latter company, it is not in dispute that he spent the majority of his time working for it. Mr Walters said that the defendants were not in a position to dispute Mr Palmer's assessment that 85 to 90% of his working time was devoted to working for Autofreight (UK) Ltd, the remaining 10 to 15% being devoted to GPE."

The judge made no finding as to the hours worked by Mr Palmer, but he said in his witness statement that he estimated that he worked about 50 hours per week, except when they were particularly busy when he worked 7 days a week. I understand those estimates to relate to the hours worked for Autofreight (UK) Ltd and G.P. Enterprises as it seems that the two businesses were conducted from the same premises and during the hours worked by Mr Palmer and subsequently by him and his daughter. She said that at the relevant time the office was open between 9am and 5pm, five days a week (40 hours a week). It follows that the time spent on Autofreight (UK) Ltd's business ranged from 42.3 to 45 hours per week.

The Legislation

Relief for disposals by individuals on retirement from a family business were dealt with in section 163 of the Taxation of Chargeable Gains Act 1992 as amended. The relevant parts of that section at the relevant time were:

"163. Relief for disposals by individuals on retirement from family business

(1) Relief from capital gains tax shall be given, subject to and in accordance with Schedule 6, in any case where a material disposal of business assets is made by an individual who, at the time of the disposal-

(a) has attained the age of 55, or

(b) has retired on ill-health grounds below the age of 55

(2) For the purposes of this section and Schedule 6, a disposal of business assets is-

(a) a disposal of the whole or part of a business, or

(b) a disposal of one or more assets which, at the time at which a business ceased to be carried on, were in use for the purposes of that business, or

(c) a disposal of shares or securities of a company (including a disposal of an interest in shares which a person is treated as making by virtue of section 122),

and the question whether such a disposal is a material disposal shall be determined in accordance with the following provisions of this section.

......

(5) A disposal of shares or securities of a company (including such a disposal of an interest in shares as is mentioned in subsection (2)(c) above) is a material disposal if, throughout a period of at least one year ending with the operative date, the relevant conditions are fulfilled and, in relation to such a disposal, those conditions are fulfilled at any time if at that time-

(a) the individual making the disposal owns the business which, at the date of the disposal, is owned by the company or, if the company is the holding company of a trading group, by any member of the group; or

(b) the company is the individual's personal company and is either a trading company or the holding company of a trading group and the individual is a full-time working officer or employee of the company or, if the company is a member of a group or commercial association of companies, of one or more companies which are members of the group or association;

and except where subsection (6) or subsection (7) below applies, the operative date for the purposes of this subsection is the date of the disposal."

Schedule 6 as now amended contains the following relevant definitions:

""... full-time working officer or employee", in relation to one or more companies, means any officer or employee who is required to devote substantially the whole of his time to the service of that company, or those companies taken together, in a managerial or technical capacity.

.....

"personal company", in relation to an individual, means any company the voting rights in which are exercisable, as to not less than 5 per cent., by that individual."

The Judgment

It was accepted that Autofreight (UK) Ltd was a company within section 163(5)(b) of the Act and the distribution could have been a qualifying disposal under the section. In substance the only issue before the judge was whether Mr Palmer was at the relevant date a full-time working officer of Autofreight (UK) Ltd as defined in the Schedule 6. Having set out the rival submissions on this issue the judge said:

"The definition of full-time working officer in paragraph 1(2) is not couched in terms of main and subsidiary activities. It stipulates that the tax concessions are only available where the Director or officer devotes in substance the whole of his time to the service of the company. It seems to me that the intention behind these provisions is to encourage the tax payer to concentrate all his hours of work in supporting the company. To obtain the favourable tax treatment he must in substance have remained wedded to the company or group of companies alone. He must have forsaken all others. It is only that loyalty which is rewarded under the 1992 Act. The use of the word "substantially" therefore in my view means "in substance". As Mr Walters puts it: the Act sets a high test; entitlement will not be excluded by de minimis considerations. But subject to that, the whole of a person's working time must be devoted to the company if the retirement relief is to be secured. Mr Walters was right in my view also to point out that the Act requires the tax payer to devote substantially the whole of his time, not merely a substantial portion of his time, to the service of the company." `

The judge went on to set out the facts. He then said:

"Although the amount of time spent on other activities is to be taken into consideration in deciding whether the tax payer devoted substantially the whole of his time to the service of the company, in my judgment it is no more than one of the factors to be borne in mind. Though this split of timing is not disputed, it does not mean that the work done by Mr Palmer for GPE was insubstantial or of little commercial significance. On the contrary, on the basis of the evidence given by Mr Palmer, I have come to the conclusion that GPE was conducting a significant stand-alone business of substantial value in its own right and which ran in parallel with, and of significant assistance to, the business of Autofreight (UK) Ltd.

As Mr Palmer accepted that in a number of cases, if GPE had not contracted with customers Autofreight in its turn would have lost business. Furthermore, the activities of GPE helped to build up good will for customers of Autofreight (UK) Ltd. Mr Palmer's activity in running GPE as a sole trader was significant. In my view it cannot be said that in substance Mr Palmer devoted the whole of his time to the service of Autofreight. The significance of GPE activity is consistent with, though not proved by, its profits and the sizeable drawings on it made by Mr Palmer. Indeed, even if I had accepted Mr McKay's construction of these provisions of the 1992 Act, I would still have found against his client. I do not accept that Mr Palmer's activity on behalf of GPE could be described as "very minor" (to use Mr McKay's words). It follows that, on the crucial issue in this case, I find against the plaintiff."

The Submissions and Conclusions

The issue raised in this appeal is basically one of construction with thereafter a judgment to be made based upon the facts. I will deal with the question of construction first.

Mr Sherry who appeared for the appellant submitted that the definition in Schedule 6 of "full-time working officer" laid down an objective quantitative test. Its purpose was to prevent part-time workers obtaining relief. The word "substantially" should be construed as meaning "in the main" or "for the greater part". To give it a more limited meaning so that it would only exclude insubstantial periods of non-qualifying work was not appropriate as that would not give it any effect, because a requirement that the employee should devote the whole of his time would be construed so as to exclude de minimis or insubstantial deviation. The words "his time" must, he submitted, refer to the time appropriate for the particular person to work during normal full-time employment, namely 35 to 40 hours. That, he submitted, was supported by the judgments of Black LJ in CIR v Devine [1963] 41 TC 210 and Croome-Johnson J in Smart v CIR [1949] 29 TC 334. He also drew our attention to the guidance in the Inland Revenue Manual and certain extracts from Hansard and a letter from the Inland Revenue dated 12th May 1999 setting out the Revenue's practice which he submitted supported that construction of the definition. Mr Sherry went on to submit that Mr Palmer was a full-time officer of Autofreight (UK) Ltd at the relevant time. He worked in all for about 50 hours per week and about 85-90% of that time (at least 42.5 to 45 hours per week) was spent on the business of the company. That exceeded the amount of time necessary to be considered full-time. If Mr Palmer had had no other business activities, it could not be doubted that he would have been seen as a full-time officer and would have been entitled to retirement relief. It was irrelevant that in addition to working a normal working week for Autofreight (UK) Ltd, Mr Palmer undertook further duties on behalf of G.P. Enterprises, a business complimentary to that of Autofreight (UK) Ltd.

Mr John Walters QC who appeared for the respondents submitted that the definition had to be construed as a definition of full-time working. The common sense meaning of the words in the definition, read in context of the purpose of the legislation, required an officer in the company to devote to the service of the company "in substance and reality the whole of his time available for work" before he satisfied the definition of full-time working in the Schedule. Thus the appropriate test was to ascertain what time was spent by the person upon the company's business and then to ask the question: was that time substantially the whole of his time available for work? That question should be answered objectively having regard to all the circumstances which could include the significance or quality of any time spent working for another company or enterprise. He submitted that the judge was right to accept that construction. The policy of the legislation was that entitlement to the relief depended on the taxpayer working in substance and reality the whole of his time available for work, for one or more companies within the descriptions set down in the Act. It followed that, as Mr Palmer worked for a substantial period for G.P. Enterprises, he could not be a full-time working officer of Autofreight (UK) Ltd. To support his submission he referred us to Inland Revenue v Alexander Stirling Limited [1994] SLT 79.

Those summaries of the submissions of counsel show a clear difference between the parties on the way the definition of full-time working should act. Mr Palmer's case in a nutshell is - I worked at least 42.5 hours for Autofreight (UK) Ltd: that is a full-time devotion to the company's business measured against an objective criteria as required by the definition. The Respondents contend that whatever the length of time Mr Palmer worked, he would not become a full-time working officer as defined of Autofreight (UK) Ltd, as he also worked for another business for a period which was substantial in context of the total hours worked. I will come later to the wording of the definition, but first turn to the material cited as supportive of the parties' submissions.

In Devine the Northern Ireland Court of Appeal was concerned with relief from the National Defence Contribution for "full-time working directors". The company carried on business for about 48 hours a week. Mrs Devine, a director, worked 8 hours a day on 3 days of the week. The Court of Appeal held that she only worked part-time. That was a clear case. Its only relevance is to emphasise, what was agreed between the parties, that the definition in Schedule 6 of the 1992 Act excluded part-time workers such as Mrs Devine. Smart was concerned with a claim by Mrs Smart to be a working proprietor. That was a materially different matter to that which arises in this case. The judgment of Croome-Johnson J was directed to a different issue and it would not be right to extrapolate his reasoning to solve the questions raised in this case. Stirling was also concerned with the meaning of "working proprietor" and for the same reason is of no assistance.

The practice of the Inland Revenue, which is set out in the Capital Gains Tax Manual produced by the Board of Inland Revenue, and in the letter of 12th May 1999, is said to be of long-standing and to have been in the public domain since at least March 1995. It is:

"In practice, you should consider whether someone devotes substantially the whole of his time to the service of the company by reference to the normal working week. For a company which has other full-time employees this can be taken to mean at least three quarters of the full normal working hours."

The stated practice is of assistance to the public and the Inland Revenue to provide consistent application of the law, thereby enabling the public to plan ahead. However I do not believe that it should be assumed that the practice states the law. That must be determined from the words used in the statute in the context in which they are used.

To understand the definition in Schedule 6 three matters, not in dispute, have to be kept in mind. First the task of the court is to determine the meaning of "full-time working officer or employee of the company" in section 163(5)(b) of the 1992 Act as amended. Second, the definition in Schedule 6 is concerned with time that a director or employee is required to devote to the company in a particular capacity. The amount of hours worked may or may not equate with that which is required. Third, a part-time worker is not within the definition. The parties agree, rightly in my view, that a person who works a full day for three days a week, as in Devine, does not come within the definition; nor does a person who works half a day for five days a week. It is the conclusion to be reached from that agreement which is I believe important and requires analysis.

The definition in Schedule 6 defines which directors and employees are to be taken as full-time working directors and employees. It would be ridiculous and contrary to the purpose of the section to give the definition a meaning that would include part-time workers. Such workers can be exemplified as those that only work a full day three days a week or half a day five days a week. Such persons are required to devote the whole of their time that they work to the service of the company which employs them, in say a managerial capacity. But they are part-time workers and therefore cannot come within the definition. Why not? Mr Walters submitted that they did not come within the definition because of "impression". Such persons were only part-time workers and would be recognised as such. If recourse to the wording of the definition was required, then the reason came from the words being defined namely "full-time working officer or employee". I cannot agree with the reasoning by which Mr Walters arrived at his conclusion. To decide whether a worker is a part-time worker and not a full-time worker requires a comparison of the facts relating to the person being considered with hours worked by other workers. To decide whether a person's work is sufficient to be termed full-time work, it is necessary to start with knowledge of the length of time a comparable worker would work who was required by his company to work full-time. It is only when that is ascertained can the judgment be made as to whether the particular person is a part-time worker or a full-time worker. The definition in Schedule 6 places no restriction upon the words "his time". If read literally and without recourse to the purpose of the definition, those words would encompass 24 hours, 7 days a week. That was accepted by Mr Walters. He sought to restrict the ambit of those words by use of the word "substantially". Thus time spent sleeping, eating, and resting, would be considered to be insubstantial. That places an unnecessary strain upon the word "substantially". Clearly the words "his time" must be referring to working time. To read the definition in that way is still not sufficient. An employee who only works three full days a week "is required to devote the whole of his (working) time to the service of the company ... in a managerial or technical capacity." However, it is agreed that he does not qualify for relief as he is only a part-time worker and is excluded from the definition. The reason for such exclusion is that the definition presupposes a comparison to be made between the actual work of a person and that considered normal full-time working for such an employee. Thus only an employee who is required to devote substantially the whole of his time (being full working time) to the service of the company in the relevant capacity will qualify for relief. Thus the words "his time" have to be read as meaning his time being that of a full-time working employee. In essence the word "time" means "full-time" that has to be used in the appropriate capacity. What that time will be may perhaps depend upon the nature of the employment, but in general will be the normal hours worked by full-time managerial and technical employees. In this case there is no need to come to any definite decision as to what that would be, as it is accepted that the time spent by Mr Palmer in the service of Autofreight (UK) Ltd exceeded the time that a full-time officer would be required to work so as to be considered a full-time officer of the company.

During argument, the position of an employee who had two jobs was canvassed. Mr Sherry submitted that what a man did in his spare time was irrelevant and therefore it was only necessary to consider what the man was required to do for the company in respect of which relief was claimed. Mr Walters submitted, as the judge held, that the definition was concerned with working time and was intended to encourage tax payers to concentrate all their hours of working in supporting a particular company. Thus a man who worked 42 hours for one company could qualify for relief, but he would not do so if he supplemented his income by also working 15 hours for another enterprise. If that be right, the section would appear to penalise the industrious which would seem odd.

Mr Walters's extreme position disregards the true construction of the word "time" and results in the difficulties to which I have already referred. It is also contrary to section 163, which restricts relief to officers and employees who work full-time for the company. It is work for the company that is relevant: not work for other enterprises. Thus if the work done for the relevant company qualifies, it is irrelevant that the person carries out non-qualifying work for another company.

In the present case, Mr Palmer carried out potentially qualifying work for Autofreight (UK) Ltd and non-qualifying work for G.P. Enterprises. In all he worked 50 hours of which at least 42.5 hours were spent working for Autofreight (UK) Ltd in a managerial capacity. The fact that he also worked 7.5 hours for G.P. Enterprises is in my view irrelevant. He devoted the whole of his time amounting to full working time to the services of Autofreight (UK) Ltd in a managerial capacity and therefore Mr Palmer was entitled to retirement relief upon capital distribution by that company.

Mr Sherry sought to introduce pursuant to Pepper v Hart [1993] AC 593 extracts from Hansard relating to the 1984 Finance Bill and the 1998 Bill which deals with the new capital gains tax tapering relief. I have no doubt that it is not permissible to seek help from the extract relating to the 1984 Finance Bill as it does not contain statements directed to the very point in question in this litigation (see Melhuish (Inspector of Taxes) v BMI (No.3) Ltd [1995] STC 964 at 978). I also believe that the 1998 statements in Hansard are not admissible as they are not statements made upon the meaning of the definition in the Bill that lead to Schedule 6. They are statements of what the Inland Revenue and therefore the Minister consider in retrospect to be the correct interpretation of the words in the Schedule.

In view of the conclusion I have reached it is not necessary to consider the ambit of the word "substantially". For my part I do not believe that Mr Sherry is right that it should be interpreted as widely as meaning "in the main". The decision as to whether the time required to be worked is worked substantially in the appropriate capacity is a jury-type question to be decided upon the facts of each case. The level of at least three quarters of the full normal working hours referred to by the Inland Revenue in their Manual may well be appropriate as a matter of pragmatism. However I do not believe that a person who works as a manager only 75% of the time required by his contract could be said to have worked substantially the whole time required as a manager.

For the reasons I have given I have come to the conclusion that Mr Palmer was entitled to retirement relief under section 163 of the 1992 Act. As it is agreed between the parties that a decision to that effect results in the plaintiff succeeding in the action, I would allow the appeal and make an appropriate order for damages in favour of Mr Palmer.

LORD JUSTICE CLARKE:

I agree with Aldous LJ that this appeal should be allowed for the reasons which he has given. I only add a few words of my own because I have found the definition of "full-time officer or employee" in paragraph 1(2) of schedule 6 to the Taxation of Chargeable Gains Act 1992 as amended difficult to construe. Aldous LJ has set out the relevant provisions in full. It is I think important to have in mind that the question under section 163(5)(b) as amended is whether the individual is at the material time a "full-time working officer or employee of the company". So, in the present case the question is whether Mr Palmer was a full-time working officer or employee of Autofreight (UK) Ltd ("Autofreight").

If I were asked whether on the facts found Mr Palmer was a full-time officer of Autofreight, without reference to any particular definition of full-time working officer or employee, I would unhesitatingly answer that he was. He worked for over 42 hours a week for Autofreight. No-one else worked longer hours for them than he did. He could not possibly be said to have been only a part-time officer or employee. So I would expect him to fall within any reasonable definition of full-time officer or employee.

It seems to me that any construction of the definition must be wide enough to include people who work the same number of hours for an employer as other full-time employees. Thus if persons employed full-time by a company work say eight hours a day five days a week from 9 am to 5 pm, any particular employee who works those hours must be regarded as a full-time employee regardless of what he or she does in the evening. Such a person might do nothing in the evening or he or she might have another part-time job in the evening. As I see it, if the definition in the schedule is to be construed consistently with the purpose of the Act, in either such event it must be apt to include such a person as a full-time employee. Equally, as Aldous LJ points out, the definition must be construed so as to exclude the part-time employee, and that must I think be so even if the company only employs part-timers.

These considerations make the expression "his time" in the phrase "devote substantially the whole of his time" difficult to construe. It cannot mean all of his time in the sense of twenty-four hours a day seven days a week since no-one would satisfy the test because no-one could devote substantially the whole of that time to a company. Equally it cannot have any of these further meanings. It cannot mean all the time he spends working for the company concerned because he might only work for one employer and do so only part-time so that he could not be a full-time employee. It cannot mean all the time he spends working for his employer as compared with other workers without more because the employer might only employ part-timers in which case he again could not be said to be full-time. It cannot mean all his time working for anyone because of the example given in the last paragraph of the person who works full-time like everyone else but has another job in the evening or at week-ends.

In these circumstances I agree with Aldous LJ that only an employee who is required to devote substantially the whole of his time (being full working time) to the service of the company in the relevant capacity will qualify for relief and that the words 'his time' must thus be read as meaning his time being that of a full-time working employee of the company. I also agree that it is work for the particular company, here Autofreight, that is relevant and not work done for others . That is I think so whether the work for the other company is done in the evening or at week-ends (as in the above examples) or work done during the same time as the work done for the company in question (as here). I see no logical basis for treating the two situations differently.

This approach leads to the conclusion that Mr Palmer was a full-time working officer of Autofreight within the meaning of the definition in the schedule, which is the conclusion which (for the reasons already given) I would expect to reach in the light of the fact that he worked more than 42 hours a week for them, which no-one else did. The fact that he worked about seven and a half hours a week for GP Enterprises is no more relevant than if he had worked in a bar or in some other capacity for someone else say for two hours every evening.

For these reasons, which are essentially the same as those given by Aldous LJ, I agree that the appeal should be allowed. I also agree that is not necessary to consider the meaning of the expression "substantially the whole" save to say that there seems to be to be much to be said for a rule of thumb such as that adopted by the Inland Revenue.

LORD JUSTICE NOURSE:

I regret that I am unable to agree with the judgments of Lords Justices Aldous and Clarke. I think that the decision of Mr Justice Laddie was correct.

Where the outcome of a case depends on whether a statutory provision applies or not, the first step is to give the words of the provision their natural meaning and the second is to ask whether the facts are or are not within it. It is not usually necessary, and it is often unhelpful, to seek the natural meaning of the words by speculating as to whether other facts would or would not be within it. Inherent in that process is the danger, apparent in the present case, that a question which is both short and simple will be made to look both long and difficult.

One of the conditions of Mr Palmer's obtaining retirement relief from capital gains tax under section 163 of the Taxation of Chargeable Gains Act 1992 as amended was that he was a "full-time working officer or employee" of Autofreight (UK) Ltd within section 163(5)(b). That expression was defined by paragraph 1(2) of schedule 6 to the 1992 Act to mean, in relation to one or more companies:

"Any officer or employee who is required to devote substantially the whole of his time to the service of that company, or those companies taken together, in a managerial or technical capacity."

In regard to that provision, it is not in dispute that Mr Palmer's service to Autofreight (UK) Ltd was in a managerial or technical capacity. The question is whether he was required to devote substantially the whole of his time to the service of Autofreight (UK) Ltd.

The answer to that question is best approached by asking what is meant by "his time". In my view it can only mean his working time. It would be absurd if it meant 24 hours a day or even his waking time. But then it is said, first, that on its bare wording the definition could embrace a part time worker who was required to devote substantially the whole of his (part time) working time to the service of the company and, secondly, that Parliament cannot have intended that the relief should be available in such a case. I agree with both those propositions, to which the answer is that it would be equally absurd for the bare wording of the provision to rule the day. That wording must be read in the light of the expression defined; sc. "full-time working officer or employee". This is one of those cases, not unknown in statutory construction, where the expression which is defined illuminates the definition. So the natural meaning of the definition is "any officer or employee, being someone who works full-time, who is required to devote substantially the whole of his working time to the service of that company etc".

On the facts found by the judge or admitted, Mr Palmer worked about 50 hours a week (except when particularly busy he worked seven days a week) and of those 50 hours he worked 42.5 to 45 hours for Autofreight (UK) Ltd and the remainder for GP Enterprises. On those facts it is clear to me both that Mr Palmer was someone who worked full-time and that he did not devote substantially the whole of his working time to the service of Autofreight (UK) Ltd. As to the latter point, I agree with Mr Justice Laddie that "substantially the whole of his time" is equivalent to "in substance the whole of his time". But I would not go so far as he did and say that the officer or employee must be wedded to the company or companies alone, forsaking all others. "Substantially" and "in substance" are expressions whose meaning varies with the context in which they are found. While I would accept that the test would not cease to be satisfied simply because someone worked in another enterprise to an extent which was something more than de minimis, the 5 to 7½ hours a week which Mr Palmer worked for GP Enterprises were in my view enough to take him outside the statutory definition.

For my part, I would dismiss this appeal. But since the other members of the court are of the contrary opinion it will be allowed.

Order: appeal allowed with costs here and below; appellant's claim against respondents in negligence allowed and respondents to pay damages of £49,472.67 together with interest thereon (from date the appellant paid the tax referred to at para 24(B) of statement of claim) to appellant; leave to appeal to the House of Lords refused.