(1) A question has arisen whether the conditions specified in paragraphs (a) and (b) of Sub-section (1) of Section 39 of the War Damage Act, 1941, are satisfied as respects certain land in Trumpington Street, Cambridge, owned and occupied by Cambridge University.
(2) The premises in question are in fact used by the University for the printing works and offices of the Cambridge University Press.
(3) The University contends that the conditions in Section 39(1) are satisfied as respects this land, whereas the Commissioners of Inland Revenue contend that the conditions are not satisfied.
(4) Is the condition in Sub-section (1)(a) of Section 39 satisfied? The premises are owned and occupied by the University which is a corporate body entitled to hold land for the purposes for which it was incorporated. The University is entitled to use these premises for any University purpose at its discretion - until recently part of the premises in question was in fact used for a University purpose other than the Press Syndicate. As with many bodies incorporated by Act of Parliament or by Royal Charter the precise objects of the University are nowhere exactly defined. The purposes of the University can, however, be deduced from the statutes and the Commission is of opinion that the governing object can be summarised as being for the advancement of education and learning generally. The methods by which this object may be achieved or promoted have been left by the legislature very largely to the discretion of the corporate body itself, which is given power to enact such Ordinances and issues such Orders for managing its affairs as it thinks right, so long as these Ordinances and Orders are not outside the scope of the general purpose of the body or in contravention of any of the statutes.
(5) One of the methods (recognised by the statutes) by which the University may carry out or promote its main object was the setting up of a Press Syndicate through which the printing, publishing and selling of books may be carried on. The Press Syndicate is not a separate or independent body but a department or agency of the University, the Syndicate consisting of the Vice-Chancellor, the Treasurer and fourteen members of the Senate elected from time to time by Grace of the Regent House of the University and giving their services voluntarily. The printing plant and machinery belong to the University and the Syndicate are directly responsible to the University for the administration of the Press. The functions of the Syndicate are not rigidly regulated by statute but are left to be assigned to it by Ordinance enacted by the University. The accounts of the Press are inspected annually by the Financial Board of the University and any profits belong to the University. During recent years the Financial Board have insisted that a reserve fund should be built up out of profits, but this reserve fund is invested in the name of the University and can be (and it is stated, in fact), used when occasion requires for any University purpose. Even if the premises in question had, therefore, been held for no other purpose than for the purposes of the Press Syndicate the Commission would have thought that they would have been held only for charitable purposes. Since, however, the premises are held (as distinct from used) for any University purpose, i.e. for any purpose which the University Authorities may in the reasonable exercise of the discretion given to them consider to be for the advancement of education and learning, the Commission are satisfied that the premises are held only for charitable purposes within the meaning of Section 39(1)(a).
(6) The Inland Revenue Commissioners contend that the premises cannot be said to be held for the advancement of education and learning because by the Letters Patent of Henry VIII the University has the power to print and sell books of every kind. Such books, it is said, may well be of a kind which are not educative in any sense and the power for which the land is held must be judged by the powers which the holder has over it, namely, the use to which he may put it. The Commission feels that this contention does not give sufficient weight to the qualification the Letters Patent of Henry VIII that only books may be printed and sold which have been approved by or submitted for approval to the Chancellor or his Vice-Gerent and three Doctors. This qualification confirms the view of the Commission that the activities of the Press Syndicate are confined within the limits of the general object of the University to promote the advancement of education and learning.
(7) Is the condition in Sub-section (1)(b) of Section 39 satisfied? At the relevant date the whole of the premises were being used by the University for or in connection with the printing works and offices of the Press Syndicate. For the reasons given above the Commission is of the opinion that these purposes are charitable purposes and that, therefore, the condition in Section 39(1)(b) is satisfied.
(8) In their counter-statement the Commissioners of Inland Revenue draw attention to the fact that the University in relation to the Press Syndicate is liable to Income Tax. The fact that the activities of the Press Syndicate are in some respects a concern in the nature of a trade may be very relevant to the question of the prima facie liability to Income Tax under Schedule D on the profits made by the trading; but in the opinion of the Commission is not relevant to the question whether or not the premises occupied by the Press Syndicate are being used for or in connection with the carrying out of a particular charitable purpose. It is well established that a charity may carry on a trade and if it does, it will be liable for Income Tax under Schedule D on its trade profits and in the same way as any other trader, unless and insofar as it is expressly exempted by statutory provision (e.g. Finance Act, 1927, Section 24).
(9) It might be said that the activities of the Press Syndicate in relation to the printing of Bibles and Prayer Books is a purpose for the advancement of religion. It is however not suggested that the publication of Bibles, Prayer Books and similar books constitutes either the main purpose of the Press Syndicate or the main use of the land.
(10) The Commission's determination, therefore, is that the purposes for which the proprietary interest of the University in the premises in Trumpington Street, Cambridge, is held are either the advancement of education and learning only or charitable purposes which include the advancement of education and learning and that the use of the land is solely or mainly for or in connection with the carrying out of the purposes of the advancement of education and learning.
WAR DAMAGE COMMISSION.
20th February, 1942.