WESTMINISTER BANK, LTD, Vs. RICHES.

JUDGEMENT

(1.) RULE 21(1) of the General Rule to All Schedules under the Income Tax Act, 1918, provides that : "Upon payment of any; interest of money.. charged with tax under Schedule D.. the person by through whom any such payment is made shall deduct thereat a sum representing the amount of the tax thereon at the rate of tax in force at the time of payment." Under paragraph 2 of the rule provision is made for assessment to tax of the person who is bound to deduct under paragraph 1. Under schedule D tax is to be charged on "all interest of money.. not specially exempted from tax." For the purposes of the present case, at any rate, there is nothing in the relevant legislation to qualify the generality of this provision.

(2.) IN an action brought by Mr., Riches, the present defendant, against the Westminister Bank, Ltd. (the present plaintiffs), in their capacity of judicial trustees of the will of Mr. Ridsdel, deceases, Mr. Riches established a claim to a sum of Pound 36,255. He had justly claimed to be entitled to a half share of the profits realised by Mr. Ridsdel in a certain transaction. Mr. Ridsdel had paid him a sum much less than that to which he was entitled, and Pound 32,255 was the balance which remained due. A plea of accord and satisfaction failed, because, as the judge found, Mr. Riches" consent to take the smaller sum had been induced by the fraudulent misrepresentations of Mr. Ridsdel. After giving judgment, the learned Judge exercised in favour of Mr. Riches the discretion given to him by Section 3(1) of the Law Reform (Miscellaneous Provisions) Act, 1934, which is as follows : "In any proceedings tried in lay Court of record for the recovery of any debt or damages, the Court may, if it thinks fit, order that there shall included in the sum for which judgment is given interest at such rate as it thinks fit on the whole or any part of the debt or damages for the whole or any part of the period between the date when the cause of action arose and the date of the judgment." The learned Judge awarded interest at 4 per cent. per annum from June 14, 1936, to May 14, 1943.

(3.) THE formal judgment, as it was finally drawn up after some discussion at the bar, expressed the decision of the Judge as follows : "It is.. adjudged that the plaintiff recover from the defendant Pound 36,255 with Pound 10,028 interest, making together the sum of Pound 46,283." An appeal from the judgment now under appeal was given was brought by the bank for (1) a declaration that the bank had satisfied the judgment in the earlier action by paying the amount adjudged to be due less Pound 5.014, the latter sum representing the Income Tax on the interest awarded; (2) an injection to restrain Mr. Riches from levying execution., Evershed, J., made the declaration, and the bank did not insist on lit prayer for an injection.