Edwards (Inspector of Taxes) v Bairstow [1956] AC 14

Key point

  • A decision may be subject to judicial review for material error of fact if it is based on an inference from primary facts that no reasonable person could come to


  • B bought a spinning plant for £12k and sold it in several lots for £18k
  • The tax inspector claimed that the deal was an ‘adventure or concern in the nature of trade’ and that B was liable for tax
  • The tax commissioners found that that the deal did not count as trade in favour of B
  • In the High Court and Court of Appeal, the decision of the tax commissioners were affirmed

Held (House of Lords)

  • Appeal allowed
  • The decision of the tax commissioners was set aside as it could not be justified by the facts

Viscount Simonds

Was there an error of fact?

  • The determination of the commissioners was a ‘pure finding of fact’, that may be set aside ‘if it appears that the commissioners have acted without any evidence or upon a view of the facts which could not reasonably be entertained.’: p. 29
  • On the facts, the ‘primary facts’ do not justify the inference or conclusion of the commissioners: p. 29

Distinction between law and fact

  • Whether the transaction was an ‘adventure or concern in the nature of trade’ is ‘no more than an inference from the facts previously found’, provided that the tribunal is rightly directed in law on what the characteristics of an adventure in the nature of trade: p. 30 – 31
  • ‘It is a question of law what is murder: a jury finding as a fact that murder has been committed has been directed on the law and acts under that direction.’: p. 31

Lord Radcliffe

  • ‘I do not think that inferences drawn from other facts are incapable of being themselves findings of fact, although there is value in the distinction between primary facts and inferences drawn from them.’
  • ‘If the case contains anything ex facie which is bad law and which bears upon the determination, it is, obviously, erroneous in point of law. But, without any such misconception appearing ex facie, it may be that the facts found are such that no person acting judicially and properly instructed as to the relevant law could have come to the determination under appeal. In those circumstances, too, the Court must intervene. It has no option but to assume that there has been some misconception of the law. So there, too, there has been error in point of law.’: p. 36


  • Viscount Simmonds and Lord Radcliffe both found that that there was an unreasonable factual inference that was reviewable by the courts, but while Viscount Simmonds was content to describe it as an error of fact, Lord Radcliffe thought that such a material error of fact in fact amounted to an error of law