Legal Argument on Damages to Haulier
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ARE damages awarded to a limited haulage company as the result of an accident to one of their vehicles subject to income tax? linot, is the defendant entitled to deduct an equivalent amount before paying the damages?
These were the questions argued before Judge E. G. H. Beresford at Wolverhampton County Court last Friday when R. Durham and Sons Ltd., of Newcastle upon Tyne, claimed £134 16s. agreed damages from Mr. R. Wootten, a farmer, of Willenhall, Staffs. The defendant had paid £56 into court with an admission of liability, having made a deduction of The circumstances of the action were that one of the plaintiff's vehicles was involved in an accident with a tractor belonging to Mr. Wootten in 1961.
At the end of nearly an hour's legal argument, Judge Beresford said he was satisfied that as the plaintiff was a limited company, the damages would be liable to tax. He was also satisfied that the plaintiff was entitled to the Tull amount of the claim and entered judgment accordingly, with costs.
Mr. Richard Yorke, appearing for Durham and Sons. said that as the defendant admitted liability, the only matter at issue was whether the damages in the hands of the plaintiff were liable to tax.
If they were not, then the defendant was entitled to deduct the tax equivalent before paying damages, otherwise the plaintiff would be making a profit out of his misfortune, submitted Mr. Yorke. However, the damages asked for represented a trading loss and were therefore liable to Schedule D tax. Thus the defendant had no ground for making the tied tuij on. For Wootten, Mr. A. R. Arneil contended that it was a matter of evidence. not law, as to whether the damages were ha ble to tax.