SAN PAULO (BRAZILIAN) RAILWAY COMPANY, Ltd v CARTER (Surveyor of Taxes)
| Jurisdiction | England & Wales |
| Judgment Date | 14 February 1895 |
| Date | 14 February 1895 |
| Court | Court of Appeal |
No. 172.-COURT OF APPEAL,
Income Tax. - Schedule D. First case. - English Company. - Railway abroad. - Profits. - Remittance. - An English Company is formed for the purpose of making and working a railway in Brazil. The Company is resident in England, and the business is carried on under the control and direction of the Directors here. The accounts are kept in London, where all the meetings are held, and the dividends are declared. The Directors appoint a Superintendent who resides in Brazil. He is a salaried officer of the Directors, removable at their pleasure, and bound to obey and execute their orders. A portion of the profit made is retained in Brazil to pay the dividends due to the shareholders residing in that country.
Held, that the Company is chargeable under the first case of Schedule D., 5 & 6 Vict. c. 35. s. 100, upon the whole of the profits made, and not under the fifth case, upon only the amount of profits remitted to England.
At a meeting of the Commissioners for the Special Purposes of the Income Tax Acts, held at Somerset House, on Monday, the 5th March 1894, the San Paulo (Brazilian) Railway Company, Limited, appealed against an assessment of 370,122l. made upon the Company by the Commissioners for the General Purposes of the Income Tax Acts for the city of London, under Schedule D. of the Act 16 & 17 Vict. c. 34, for the year ending 5th April 1894.
The San Paulo (Brazilian) Company, Limited, is an English Company, registered on the 24th December 1859, under the Joint Stock Companies Acts, with memorandum and articles of association, and having its registered office at No. 111, Gresham House, Old Broad Street, in the city of London.
A print of the memorandum and articles of association of the Company is hereto annexed and forms part of this case. The more important of the articles as bearing upon the question at issue, are as follows, viz.:-
Article 4.-The original business of the Company shall be confined to the making, maintaining, managing, and working of the Railway from Santos by San Paulo to Jundiahy.
Article 5.-The Company, from time to time, on the recommendation of the Board and with the sanction of a special resolution, may undertake any extensions of, or additions to, their original business.
Article 7.-The general direction of the Company shall be in London, but the Company may have agencies in Rio de Janeiro and San Paulo and any other places in Brazil.
Article 8.-The business shall be carried on by or under the management of the Directors, but subject to the control of general meetings, in accordance with these presents.
Article 9.-No person, except the Directors, and persons thereunto expressly authorised by the Board, shall have any authority to make, accept, or indorse any promissory note or bill of exchange on behalf of the Company, or otherwise to pledge the credit of the Company.
Article 10.-No person, except the Directors and persons thereunto expressly authorised by the Board, and acting within the limits of the authority conferred on them by the Board, shall have any authority to enter into any contract so as to impose thereby any liability on the Company.
Article 12.-All moneys payable to the Company shall be received by the Directors or by the Bankers, or by some person authorised by a Board, and shall be paid to the account of the Company with the Bankers.
Article 15.-The receipts of two of the Directors, countersigned by the Secretary, or of the Bankers, or of a person authorised by the Board, countersigned by the Secretary, shall be effectual for all moneys therein expressed to be received, and from all liability, claims, and demands in respect thereof.
Article 16.-All payments of the Company (except on petty cash account) shall be made by cheques on the Bankers drawn in pursuance of a resolution of the Board, and signed by two of the Directors, and countersigned by the Secretary.
Article 17.-The registered office of the Company shall be at , or such other place in London or Middlesex as the Board from time to time appoint.
Article 32.-The ordinary meetings shall be held half-yearly, at such places in London or Middlesex..... as the Directors from time to time appoint.
Article 37.-Every general meeting shall be held at such convenient place in London or Middlesex as the Directors or the requisitionists calling the meeting appoint.
Article 45.-The Directors calling any general meeting and the shareholders calling any extraordinary meeting shall respectively give at least 7 days' and not more than 15 days' notice of the meeting.
Article 48.-Notices calling general meetings shall be given by advertisement, and if and when the Board think fit, also by circulars to the shareholders whose registered addresses are in the United Kingdom, and shall respectively express the time and place of meeting.
Article 52.-Any ordinary meeting without any notice in that behalf may elect Directors and auditors and may receive and either wholly or partially reject or adopt and confirm the accounts, balance-sheets, and reports of the Directors and auditors respectively, and may decide on any recommendation of the Directors of or relating to any dividend, and subject to the provisions of these presents may generally discuss any affairs of or relating to the Company.
Article 110.-The Board, in addition to their other powers, shall have full powers for the following purposes, and shall exercise the same when necessary
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3. The entering into any contracts for the construction or service of the railway or the supply of the necessary funds in order to put the works into activity and either for a lump sum or for estimates in detail.
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4. The making and carrying into effect any agreements, contracts, or conventions for the purchase of lands and the supply of materials, labour, plant, rolling stock, and other effects.
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7. The general conduct and management of the business of the Company.
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8. The appointment and removal and the determination of the duties and salary of the secretary, superintendents, clerks, agents, and servants of the Company, and the securities to be taken from them respectively.
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21. The keeping of proper accounts of the receipts, credits, payments, liabilities, profits, losses, property, effects, claims, and demands of the Company.
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32. The controlling, managing, and regulating in all other respects, except by these presents otherwise provided, of all other matters relating to the Company and the affairs thereof.
Article 130.-The Secretary shall keep the records, books, and papers (not being securities) of the Company, allowing such inspection as required by the Statute between the hours of 11 in the forenoon and 3 in the afternoon to every shareholder who signs his name in a book kept for the purpose.
Article 137.-The Board shall appoint a Superintendent in Brazil in order that he may there administer the Company's affairs and represent the Board, and communicate directly with the Government and the Provincial Government of San Paulo and other authorities, and shall determine his salary and the security to be taken for his duly accounting for all moneys of the Company coming to his hands and for the faithful performance of the duties of his office.
Article 138.-The Superintendent may at any time be dismissed by the Board, and must obey and execute the orders and instructions of the Board.
Article 139.-He shall make to the Board...
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