Subject_1Proof Subject_2Diligence Subject_3Action of Damages for Slander Subject_4Defender's Right to Recover Pursuer's Income-Tax Receipts
Facts:
In an action against the proprietors of a newspaper in respect of an alleged slander in an article published in the newspaper, the pursuer averred that his business credit and reputation had been seriously injured thereby.
Held that the defender was entitled to a diligence to recover the pursuer's income-tax receipts for the last three years.
Headnote:
Charles C. Macdonald, jeweller, Glasgow and Birmingham, brought an action against Messrs James Hedderwick & Sons, publishers of the
Glasgow Evening Citizen newspaper, concluding for payment of £2000 as damages for slander.
In his condescendence the pursuer averred that he had been employed to make a sword of honour to be presented to Colonel Hector Macdonald, and that the defenders on 5th September 1900 had published an article in the
Evening Citizen stating that the sword had come to pieces in the hands of Colonel Macdonald, and was of little value. With regard to the damage he had thereby sustained he made the following averment;—“(Cond. 9) The publication of the article complained of has inflicted serious injury on the pursuer's reputation and feelings. In the pursuer's business, both wholesale and retail, the absolute confidence of the public and of his customers in his integrity and honest dealing is essential. The defenders' newspaper is widely circulated and read by a large section of the public, and the dissemination by its means of the false and slanderous statements complained of has seriously injured the business credit and reputation of the pursuer, besides injuring his feelings. The pursuer has called on the defenders to make reparation for the loss and damage thus suffered by him, but they repudiate all liability. The pursuer estimates the damage suffered by him at the sum sued for.”
After the issues for the trial of the cause had been adjusted, the defenders moved for a diligence for the recovery of,
inter alia, the receipts for income-tax paid by the pursuer for the last three years. In support of their motion they cited
Johnston v. Caledonian Railway Company, December 22, 1892,
20 R. 222.
The pursuer opposed the granting of the diligence, and argued that the proper evidence of loss to business resulting from slander was contained in the business-books kept by him.
Judgment:
Lord President—There is no doubt that there was at one time a variation in the practice as to granting a diligence for the recovery of income-tax receipts, but for a considerable time it has been settled, and it is very important to adhere to a settled rule of practice, that such a diligence may be granted in actions of damages for loss of business through personal injury. The reason for granting such a diligence must be to enable the jury to compare the earnings of the pursuer before and after the injury, and for that purpose such receipts are often used. A man's books do not form absolute proof of what his profits are, and they may be kept in such a way as not to show his profits at all. Nor are they in themselves evidence. They require to be proved, and often also explained by witnesses. Income-tax receipts are more direct as containing a man's own statement, and he cannot complain if he is
Page: 456↓
asked to explain why they show a different result from the books, if they are not in harmony. The pursuer may say that, either through mistake or otherwise, he has returned his income too low, but I can see no difference in principle between an action of damages for loss of business through personal injury and an action for loss of business in consequence of slander.
Lord Adam—I am of the same opinion. If a man's books were conclusive evidence of his profits in business it might be irrelevant to ask for diligence to recover other evidence in order to contradict them. But the books are not conclusive evidence, and they may or may not be the best evidence according to circumstances. They may be kept in such a way as not to be entitled to any credit. I think that the statement which a man gives to the Income-Tax Commissioners as to his income is relevant evidence of his profits, and may be better evidence than his books. That shows that these receipts may be of importance with regard to the cardinal fact in question,
i.e., what was the amount of the pursuer's profits. I agree that if a man chooses to make a statement of his profits less than he actually earned on his income-tax returns, though it may hurt his feelings to be examined upon them, that is no reason why these receipts should not be used as evidence.
Lord M'Laren—It must be kept in view that while one man may understate his profits for the purpose of paying income-tax on a less income, another may overstate his profits; in the case, for instance, where he proposes to take in a capitalist partner, or to turn his business into a company. Neither the books nor the income-tax receipts are evidence until proved, but if the books are proved by the testimony of the pursuer that they are correctly kept, that would not prevent the other party from leading evidence to contradict them. It seems to me that the reasons for granting a diligence of this kind in accident cases apply, though not perhaps in the same degree, to other cases in which the amount of the pursuer's income is an element in the case.
Lord Kinnear—I do not see any distinction between one case in which the pursuer complains of loss of business and another. I think the rule must be the same whether the cause of loss be personal injury or slander. I do not at all proceed on the assumption that the income-tax receipts will contradict the pursuer's books, but it appears to me, as your Lordships have explained, that though the income-tax receipts are not evidence, they may be made evidence by putting them to the pursuer and asking him whether these are the sums he paid, because the fact that he paid at a certain rate is an item of evidence tending to show what the amount of his profit really was. In that respect they stand on the same footing as the pursuer's books; they are neither of them conclusive evidence, but they may be made evidence if the pursuer is properly examined upon them.
The Court granted the diligence.
Counsel:
Counsel for the Pursuer—
Clyde. Agent—
W. C. B. Christie, W.S.
Counsel for the Defenders—
Cooper. Agents—
Millar, Robson, & M'Lean, W.S.
