Damages-liability for Income Tax-effect of request by Counsel for both parties that damages be assessed without deduction for Income Tax.
Case summary
The Plaintiff, a factory manager employed by the Defendant company, sued the company for damages in respect of loss of salary and cost-of-living allowance resulting from his allege wrongful dismissal. Counsel for both parties agreed that, if damages were awarded, they should be assessed without deduction for Income Tax and requested the Court to assess them on this basis.
Held (22nd June 1956):
On the facts, the plaintiff was entitled to damages in respect of loss of salary and cost-of-living allowance.
It is open to Counsel to request the Court in terms: “We are agreed that the damages awarded will (or will not) be subject to Income Tax. We ask the Court to assess damages on the basis agreed.” If this is done, the Court must not attempt to form its own view on whether or not such damages in fact are liable to Income Tax but must comply with the request.
Damages assessed without deduction for Income Tax.
Case cited: British Transport Commission v. Gourley (1956) A.C. 185; (1956) 2 W.L.R. 41.
Counsel:
Harragin for the Plaintiff.
Couldrey for the Defendant.
Reported by:
I. R. Thompson, Esq., Resident Magistrate, Nairobi.
