Getty Oil Company v Steele (Inspector of Taxes) and related appeals
| Jurisdiction | England & Wales |
| Judgment Date | 07 May 1990 |
| Date | 07 May 1990 |
| Court | Chancery Division |
Chancery Division.
Vinelott J.
Mr Roger Christopher Thomas (instructed by Lovell White Durrant) for the claimants.
Mr Nicholas Warren (instructed by the Solicitor of Inland Revenue) for the Crown.
The following cases were referred to in the judgment:
Union Texas International Corporation (formerly Union Texas Petroleum Corporation) v Critchley (HMIT) TAXTAX[1988] BTC 405; [1990] BTC 253 (CA)
Valleybright Ltd (in voluntary liquidation) v Richardson (HMIT)TAXTAX(1984) 58 TC 290; [1985] BTC 31
Case stated - Transmission of case stated to High Court - Single case stated by special commissioner in respect of three appeals - One copy delivered to Chancery Registry and one fee paid within 30-day time limit - Chancery listing office required copy of case and fee to be paid for each appeal before appeals set down for hearing - By the time omission appreciated by appellant 30-day limit expired - Whether case transmitted to High Court - Whether High Court had jurisdiction to hear appeal -Taxes Management Act 1970 section 56 subsec-or-para (4)Taxes Management Act 1970, sec. 56(4).Double taxation relief - Distribution by UK subsidiaries to US corporations - Tax credit entitlement of US corporations - Whether five per cent deduction to be made from payment of tax credit - If deduction to be made what method of calculation should be adopted - SI 1980/568 section 10 subsec-or-para (2)Double Taxation Relief (Taxes on Income) (United States of America) Order 1980 (SI 1980/568), art. 10(2)(a)(i);Finance Act 1989 section 115Finance Act 1989, sec. 115.
These were three appeals by way of case stated from the decision of a special commissioner dismissing appeals by Getty Oil Co ("Getty"), Texaco Overseas Holdings Inc ("Overseas") and Texaco International Trader Inc ("International") and cross-appeals by the Crown. The Crown applied by motion as a preliminary point for an order that all three appeals be heard notwithstanding that the special commissioner had stated one case only and had given one decision in relation to the three appeals. The motion and the appeals were heard together.
On 6 February 1989 a special commissioner heard appeals by the claimants, three associated US corporations, against decisions of the Inspector of Foreign Dividends relating to tax credits payable by the UK Government under the provisions of SI 1980/568 section 10art. 10 of the Double Taxation Relief (Taxes on Income) (United States of America) Order 1980. The appeals concerned dividends paid to the three claimants by wholly-owned UK companies.
There were two main issues before the special commissioner. The first was whether under SI 1980/568 section 10 subsec-or-para (2)art. 10(2)(a)(i) the claimants were entitled to an amount equal to one-half of the tax credit that an individual resident in the UK would have received under the Finance Act 1972 section 86Finance Act 1972, sec. 86 without any deduction. The second was whether, if a five per cent deduction was to be made, it should be calculated on the basis of five per cent of the amount actually paid to the claimant or, as the Crown contended, five per cent of the amount of the dividend grossed up by one-half of the notional tax credit without any allowance for the deduction.
Those two issues were decided by Harman J in Union Texas Petroleum Corporation v Critchley (HMIT) TAX[1988] BTC 405. He held, in favour of the Crown, that a deduction was to be made from a tax credit paid under SI 1980/568 section 10art. 10.However, he held in favour of Union Texas that the deduction was to be calculated by reference to the sum actually paid taking into account the deduction itself.
Harman J's judgment, given on 31 August 1988, was followed by the special commissioner.
The claimants appealed against the special commissioner's decision on the first issue and the Crown cross-appealed on the second.
Meanwhile Harman J's decision in the Union Texas case was affirmed by the Court of Appeal on 27 February 1990 (see Union Texas International Corporation v Critchley (HMIT) TAX[1990] BTC 253).
After the present appeals were before the special commissioner the Finance Act 1989 reversed Harman J's decision on the second issue providing by Finance Act 1989 section 115sec. 115 that the deduction provided for by (amongst other provisions) SI 1980/568 section 10art. 10 of the UK/US agreement was to be calculated by reference to the aggregate of the amount of the distribution and the tax credit without any allowance for the deduction itself.
Finance Act 1989 section 115Section 115 was to apply to dividends paid before or after the passing of the 1989 Act except that it should not affect the judgment of any court given before 25 October 1988, or the law to be applied on appeal from such judgment.
A question arose as to whether the High Court had jurisdiction to hear the Crown's cross-appeals in relation to Overseas and International. If the court had no jurisdiction to hear the Crown's cross-appeals, Overseas and International might contend that under the Taxes Management Act 1970 section 46 subsec-or-para (2)Taxes Management Act 1970, sec. 46(2) the decision of the special commissioner was final and conclusive and unaffected by Finance Act 1989 section 115sec. 115.
The special commissioner had stated a single case. He signed two top copies and sent one to the solicitors for the claimants and the other to the Solicitor of Inland Revenue which was received on 30 July 1989. On 1 August a representative from the office of the Solicitor of Inland Revenue took the case stated to the Chancery Registry and handed it in with a photocopy of the case and a fee of £15.
In January 1990, when the Solicitor of Inland Revenue applied to have the three cross-appeals set down for hearing, he was met with the objection that the serial number allotted to the case stated and the fee paid related to Getty but not to t he other two claimants whose appeals had not been "transmitted" to the High Court within 30 days of receipt as required by the Taxes Management Act 1970 section 56 subsec-or-para (4)Taxes Management Act 1970, sec. 56(4).
In correspondence with the clerk of the chancery lists, the Solicitor of Inland Revenue claimed that as only one case had been stated the appropriate fee was £15. Alternatively, a case had been transmitted to the High Court on 1 August 1989 in relation to each cross-appeal and the cases could be set down for hearing if two further fees of £15 were paid. The clerk of the lists did not agree to either proposal.
The Crown contended that the single case stated related to all three cross-appeals or alternatively that new serial numbers should be allotted to the Overseas and International appeals.
The claimants did not oppose the application by motion.
Held, granting the relief sought by the Crown's application, allowing the Crown's cross-appeals and dismissing the claimants' appeals:
1. A case stated was "transmitted" to the High Court when it was received by the appropriate office of the court, and once the case stated was transmitted, the court had jurisdiction over the conduct appeal.
2. All three cases were transmitted to the High Court on 1 August 1989 within the time limit prescribed by Taxes Management Act 1970 section 56 subsec-or-para (4)sec. 56(4). It was preferable that there should be separate appeals set down for each claimant rather than one appeal relating to all three in case the subsequent history of the appeals should differ, for instance, if it were decided not to pursue one of them.
3. The court was bound by the decision of the Court of Appeal in relation to the claimants' appeals which accordingly fell to be dismissed. Union Texas International Corporation v Critchley (HMIT)[1990] 253 followed.
4. The cross-appeals by the Crown were allowed in view of the provisions of Finance Act 1989 section 115sec. 115 of the 1989 Act.
1. At a hearing on 6 and 7 February 1989 before a single commissioner for the special purposes of the Income Tax Acts, Getty Oil Co, Texaco Overseas Holdings Inc and Texaco International Trader Inc ("the claimants") appealed against decisions by the Inspector of Foreign Dividends refusing claims by the claimants to payment from the UK Government of certain amounts pursuant to the provisions of the Convention scheduled to the Double Taxation Relief (Taxes on Income) (United States of America) Order 1980 (SI 1980/568).
On 21 February 1989 the decision of the commissioner was issued. The questions for determination and issues between the parties and the contentions of Mr Thomas on behalf of the claimants and the conclusions of the commissioner are set out in that decision. In addition to making oral submissions Mr Durrans on behalf of the Revenue provided to the commissioner a document headed "contentions on behalf of the Inspector of Foreign Dividends" a copy of which is annexed to and forms part of this case.
2. No witnesses gave evidence before the commissioner.
3. There was no dispute as to the facts, and the agreed facts were embodied in a document called "statement of facts"; in addition the parties provided a bundle of agreed and admitted documents.
4. The decision of the High Court in Union Texas Petroleum Corporation v Critchley (HMIT) TAX[1988] BTC 405 was cited to the commissioner.
5. Both the claimants and the Inspector of Foreign Dividends immediately after the determination of the appeals declared to the commissioner their dissatisfaction therewith as being erroneous in point of law. Subsequently, on 9 and 17 March 1989 the Inspector of Foreign Dividends and the claimants respectively required the special commissioners to state a case for the opinion of the High Court pursuant toTaxes Management Act 1970 section 56sec. 56 of theTaxes Management Act 1970.
6. The question of law for the opinion of the court is whether, on the agreed facts, the...
To continue reading
Request your trial
-
Re McGuckian (No 1)
... ... capital or income - Income and Corporation Taxes Act, 1970, s. 478. From the date of its ... trustee of which was a Guernsey-resident company. The beneficiaries were the taxpayer and his wife ... I.R.C.ELR[1982] A.C. 300 and Furniss (Inspector of Taxes) v. DawsonELR [1984] A.C. 474applied ... tax in the circumstances to which it related. In the circumstances of the instant case that ... ...
-
Trustees of the BT Pension Scheme v Revenue and Customs Commissioners
...support for his approach in the decision of Mr Charles Potter QC sitting as a Special Commissioner in Getty Oil Co v Steele (HMIT)TAX[1990] BTC 312. Mr Potter's conclusion is highly supportive of Mr Baldry's argument. But Mr Potter did not, of course, have the benefit of the conclusions and......
-
The Trustees of the BT Pension Scheme HMRC FTC/91 & 92/2011
...Baldry finds support for his approach in the decision of Mr Charles Potter QC sitting as a Special Commissioner in Getty Oil Co v Steele [1990] STC 434. Mr Potter’s conclusion is highly supportive of Mr Baldry’s argument. But Mr Potter did not, of course, have the benefit of the conclusions......
-
The Trustees of The BT Pension Scheme v The Commissioners for HM Revenue and Customs
...Baldry finds support for his approach in the decision of Mr Charles Potter QC sitting as a Special Commissioner in Getty Oil Co v Steele [1990] STC 434. Mr Potter’s conclusion is highly supportive of Mr Baldry’s argument. But Mr Potter did not, of course, have the benefit of the conclusions......