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TMI Blog1944 (10) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... ns in law to the assessment it does not now dispute that the amount is correct. 2. The assessment was made in respect of a dividend amounting to $1,207,817.06 declared by the appellant in favour of the Barber Asphalt Corporation of New Jersey, U.S.A. (hereinafter called Barber ) as the holder of 499,992 shares out of 500,000 shares constituting the issued capital of the appellant. The business of the appellant was to win and refine asphalt in the colony and sell and deliver it to purchasers, including Barber. The dividend was declared in accordance with a resolution of the appellant's directors dated 24th November 1989, on which date Barber owed to the appellant $1,207,817 for asphalt purchased by it from the appellant. The resolution was in the following terms: Resolved that a dividend in the amount of $1,207,817 be declared payable by cancellation of the Trinidad Lake Asphalt Company's claim in a like amount against Barber Asphalt Corporation and that in addition a cash dividend of equal proportion amounting to $12.10 be paid to local share-holders making a total of $1,207,829.16. 3. It was not in question that the resolution ought properly to be construed as co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny person accruing in or derived from or received in the Colony in respect of (inter alia) dividends, interest or discounts. The authorities referred to show that there is no general rule of international comity which renders such taxation on non-residents incompetent. Equally, in their Lordships' judgment, it is not incompetent by reason of the circumstance that the Colony cannot pass extra-territorial legislation. A tax in this form is not extra, territorial, so long as it does not affect to tax property not situate in the Colony. On the ground that this rule was infringed it was held in (1927) 1 Ch. 107: 96 L.J. Ch. 58: 136 L.T. 436, London and South American Investment Trust v. British Tobacco Co. (Australia) that the legislation there in question was extra-territorial inasmuch as it sought to impose or enforce taxation on a non-resident shareholder in respect of property not situate in the Colony, namely, dividends which were an English debt due in respect of shares locally situate in England. This decision was prior to the Statute of Westminster of 1931, the effect of which was discussed in MANU/PR/0099/1935 : (1935) A.C. 500('35) 22 : A.I.R. 1935 P.C. 158:157 I.C. 57 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the Ordinance was invalid but he sought to impose a narrow construction which he said was necessary to avoid the objection. In their Lordships' opinion, the whole objection is baseless and the section must be construed according to its natural meaning whenever it applied. That left the substantial question whether it did apply on the facts in this case. It will now, in order to decide the question, be necessary to examine the facts more closely, with particular reference to the question whether the appellant transmitted the dividend to Barber in New Jersey. That is the second question of law stated for the opinion of the Court, and is in their Lordships' view the only one now material. 7. The dividend declared in the resolution of the appellant's Board created a debt due from the appellant to Barber. It was so far as local situation may be attributed to a debt, a debt which was locally situated in Trinidad. 8. It was a debt due from a Trinidad Company created and payable in Trinidad. The share-holder, Barber, was it is true resident in New Jersey, and the debt to him might in normal course have been paid by sending a dividend warrant or similar credit instrume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transmitted by a banker's draft sent by the appellant to Barber, it could not have been questioned that the dividend had been transmitted. But the two companies might do their own banking transactions between themselves, and dispense with the intervention of banking facilities. The transaction involved the sending to Barber by the appellant and receipt by Barber from the appellant of the dividend. This was effected by the agreement that payment should be made by cancellation of the debt for goods supplied. This method had been mutually agreed before the dividend was declared. The agreement was carried out by each party making corresponding entries in its books. These were not merely bookkeeping entries. They represented the actual receipt of the dividend by Barber, and the actual payment of it by the appellant to Bar-bar, and concurrently the actual receipt by the appellant from Barber of payment of his debt for goods supplied. The composite and joint transaction in principle satisfies the description of a payment given by Mellish L.J. in (1873) 8 Ch. A. 407: 42 L.J. Ch. 488, Spargo's case. at page 414. Nothing is clearer, he said: than if parties account with each ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be a person to receive and a person from whom he receives, and something received by the former from the latter and in this case that something must be a sum of money. A mere entry in an account which does not represent such a transaction does not prove any receipt, whatever else it may be worth. 11. In the present case, no one could say that the entries in the books of the two companies did not represent a genuine transaction and a receipt of money in the form in which money is transmitted and received as between business men. Since 1902, the transmission of funds has become still more divorced in the minds of business men, and even of lawyers, from the idea of any material embodiment. No document is necessary. Two companies separated by the ocean, may orally agree over the wireless telephone that one's debt may be set against a debt of the other, and both cancelled. The only evidence or material embodiment of the transaction may consist of entries in the books on each side made in pursuance of their agreement. But what baa happened is, if so intended, equivalent to a receipt of money, in Lord Lindley's words, and a receipt of anything by a person who is at a distance f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... And the same would be true if the settlement in account were treated as taking place within the Colony, as involving the cancellation of a debt namely the dividend, locally situate in the Colony, in return for the cancellation of another debt also so situate, namely the debt for goods supplied. The difficulty which their Lordships feel about applying this view to the facts is that Barber, a necessary party to the transaction, was out-aide the Colony. They, however, construe S. 80 as at least including transmission outside the Colony 15. Section 30 was treated throughout the proceedings below as a self-contained section, defining the complete scope of its own operation. Before this Board, however, the appellant sought to raise the further points that S. 30 only authorised an assessment on a person who can be deemed to be an agent within the meaning of S. 26(1) and only if an assessment on that footing is otherwise competent. It was further contended that S. 30 must also be read as qualified by S. 26(4) which prohibits the making of an assessment on any person who is not an authorised person carrying on the regular agency of a non-resident person. Their Lordships find themselves u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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