Scottish Court of Session Decisions

The Standard Life Assurance Company was assessed to inhabited-house-duty for the year 1893–94 on £1100, the annual value of premises belonging to and occupied by them in George Street, Edinburgh. They appealed against the assessment to the Commissioners for General Purposes, who held that the premises fell within the exemption provided by sub-section 2 of section 13 of the Act 41 Vict. cap. 15, and section 24 of the Act 44 and 45 Vict. cap. 12. The Surveyor of Taxes being dissatisfied with this decision, the present case was stated for the opinion of the Court of Exchequer.

It appeared from statements made in the case that the premises consisted of the adjoining houses, Nos. 3 and 5 George Street. There was internal communication between the houses, and owing to structural alterations the entrance to the premises were from No. 3 George Street only. Two messengers employed by the company resided on the premises, one in the attic flat of each house.

The case further contained the following statements—“The appellants explained that their company practically consisted of two offices, viz.—(1) The Standard Life Assurance Company, which since its foundation in 1825 occupied the premises No. 3 George Street, and (2) The Colonial Life Assurance Company, which was founded in 1845, and occupied the premises No. 5 George Street, and which was amalgamated with the Standard Company in 1865. Although since the amalgamation there is only one board of directors, and one manager for both, there is a separate staff of clerks for each, and the books and funds of the two companies are kept quite distinct and separate. They further explained that the two offices had separate messengers prior to the amalgamation, and that as the duties of both are distinct from one another, the appointments have been kept seperate ever since. The appellants therefore contended that the two messengers residing in the attic flats of Nos. 3 and 5 George Street were absolutely necessary for their business, and must be held to be servants in the sense of the Acts 41 and 42 Vict. cap. 15, section 13, and sub-section 2; and 44 and 45 Vict. cap. 12, section 24; and that as no other person resided therein these premises should be exempted from inhabited-house-duty… It was explained that the duties of the two messengers were … to lock up the premises at night and open them in the morning, and in the day time to go errands, deliver letters, attend in the lobby, and perform various miscellaneous duties of a similar nature.”

“They (the appellants) rested their appeal on the fact that the messengers were servants absolutely necessary for their business (not merely for the protection of the premises).” …

Section 13 of the Customs and Inland Revenue Act 1878 provides—“With respect to the duties on inhabited houses, … the following provisions shall have effect—(2) 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, shall be exempted from the duties by the said Commissioners upon proof of the facts to their satisfaction, and this exemption shall take effect although a servant or other person may dwell in such house for the protection thereof.”

Section 24 of the Customs and Inland Revenue Act of 1881 provides—“With reference to the exemption from the duties on inhabited houses given by sub-section 2 of section 13 of the Customs and Inland Revenue Act 1878, the term ‘servant’ shall be deemed to mean and include only a menial or domestic servant employed by the occupier, and the expression ‘other person’ shall be deemed to mean any person of a similar grade or description not otherwise employed by the occupier, who shall be engaged by him to dwell in the house or tenement solely for the protection thereof.”

Argued for the Surveyor of Taxes—The company's premises were to be treated as one assessable subject, and the question was whether they were entitled to exemption as being occupied solely for the purposes of business. The Act under which inhabited-house-duty was charged was 14 and 15 Vict. cap. 36, and that Act referred back to the earlier Act 48 Geo. III. cap. 55. By rule 5 of Schedule B of the earlier Act duty was charged on the offices of companies. The statutes under which exemption was claimed by the Standard Company were 41 Vict. cap. 15, sec. 13, sub-sec. 2, and 44 and 45 Vict. cap. 12, sec. 24. The latter Act was merely interpretative, and declared that the word “servant” in the Act of 1878 should include only a “menial or domestic servant” employed by the occupier, and the expression “other person” any person of a similar grade or description not otherwise employed by the occupier. The objections to the company's claim for exemption were these—In the first place, the messengers who resided in the premises did not come within the description “menial or domestic servant,” and in the second, even if they did, they were not there to protect the premises, but for the purposes of the company's business. Even if these two objections were ill-founded, the exemp

Page: 665↓

tion did not apply where more than one person lived in the premises. The exemption of business premises was first introduced by the Act 57 Geo. III. cap. 25, sec. 4. It applied only where premises were used solely for the purposes of business without further qualification. By 6 Geo. IV. cap. 7, sec. 7, the Commissioners were empowered to grant licences authorising the occupiers of business premises to appoint any one of his servants to watch there during the night, and it was provided that the abiding of such licensed servant should not render the occupier liable to duty. That provision only allowed one watchman to be so licensed, and the later Acts, while allowing the servant to reside on the premises without the necessity of a licence, were not intended to extend the exemption to cases where more than one servant lived on the premises—32 and 33 Vict. cap. 14, sec. 11; 41 Vict. cap. 15, sec. 13, sub-sec. 2.

Argued for the Standard Company—The first question was, whether the exempting clause in the Act of 1878 covered the case of a messenger employed by a company such as this, and it was clear that it did. A messenger was a servant, and was clearly within the description “menial or domestic servant” in the later Act. The residence therefore of a messenger on the premises did not disentitle the company to claim the exemption. Nor was it an essential that the messenger, who was the servant of the company, should reside there solely for the protection of the premises, for a distinction was drawn, especially in the later Act, between the “servant” of the occupier and the “other person” who might be employed by him to look after the premises. The latter must be engaged “solely for the protection” of the premises, but that condition did not apply to the servant of the company. But if it were held that the words “for the protection thereof” referred both to “servant” and “other person,” the company could still claim the exemption, because looking to the size and character of the premises, two persons were necessary for their protection, and the messengers were there for their protection. It would be unreasonable to construe the exempting clause as only allowing one person to reside on the premises for their protection. There were many buildings where the protection afforded by the presence of only one person would be quite inadequate, and the general rule of interpretation was that words in the singular included the plural—Interpretation Act 1889 (52 and 53 Vict. cap. 63), sec. 1. It was also open to question whether Nos. 3 and 5 George Street could really be taken as one house. They had been separate until recently, and were not necessarily one house although they had internal communication— Corke v. Brims, July 7, 1883, 10 R. 1128; Falconer v. M'Guffie, December 10, 1891, 19 R. 295.

At advising—