City of Dublin Steam Packet Company v Revenue Commissioners (No. 2)
| Jurisdiction | Ireland |
| Judgment Date | 15 January 1930 |
| Date | 15 January 1930 |
| Court | High Court (Irish Free State) |
This company, formed in 1828, under deed of settlement, inter alia, to trade by steam vessels between Dublin and other places, took power thereunder to accumulate and invest profits in order to provide for sea losses and other contingencies. It was later incorporated by an Act of Parliament, and other Acts concerning its capital with provisions for sinking funds were obtained. For many years previous to 1920, its trading activities had been concerned mainly with the carriage of mails etc, passengers and cargo between Ireland and England. When in 1920 the company lost the contract to carry mails, it laid up and subsequently sold such ships as it then still owned.
The company having remained in existence in receipt of a large income from its investments it was decided by the High Court in 1926 that it was still carrying on business within the meaning of FA 1920 s 52(2)(a).
A petition for the compulsory winding-up of the company having been filed in the High Court on 11 August 1924, a winding-up order was granted on 18 November 1924, and a liquidator was duly appointed on 1 December 1924. By an order of 15 December 1924 all stocks and shares, assets of the company, were directed to be transferred into the names of the liquidator and two persons for his official account with a view to realisation.
Between the date of filing the petition and the winding-up order, the directors had continued to meet and transact business, and a dividend, following a special general meeting had been declared. Sanction was subsequently sought and obtained from the court in respect of the declaration of the dividend and all but one of the directors’ Acts. During the periods between 11 August 1924 and 15 December 1924, and 15 December 1924 and 28 February 1925, the income from the company’ investments continued to arise to the company, and was dealt with by the directors or the liquidator respectively.
On appeal against an assessment to corporation profits tax for the accounting period ended 28 February 1925, it was contended that by reason of the winding-up order the company had ceased to be chargeable to duty. The Special Commissioners decided that the company from 11 August 1924, to 15 December 1924, and through the official liquidator, from 15 December 1924, until 28 February 1925, was carrying on a trade or business, or an undertaking of a similar character including the holding of investments within the meaning of FA 1920 s 52(2)(a).
Held, in the High Court, dismissing the appeal, with costs, that the decision of the Special Commissioners was correct.
FA 1920 s 52(2).
Irish Provident Assurance Co Ltd v Kavanagh (Inspector of Taxes) 1 ITC 52, [1930] IR 231.
The Commissioners of Inland Revenue v Burrell 9 TC 27, [1924] 2 KB 52.
The South Behar Railway Co v The Inland Revenue Commissioners 12 TC 657, [1925] AC 476.
The City of Dublin Steampacket Co v The Revenue Commissioners 1 ITC 118 [1926] IR 436
Case stated under FA 1920 s 56(6) and ITA 1918 s 149, by the Commissioners for the special purposes of the Income Tax Acts for the opinion of the High Court of Justice
1. At a meeting of the Commissioners for the special purposes of the Income Tax Acts, held on 25 November 1926, at Dublin, for the purpose of hearing appeals, The City of Dublin Steampacket Company, (in liquidation), hereinafter referred to as “the company”, appealed against an assessment to corporation profits tax made upon the company in respect of profits which arose in the accounting period of twelve months ended on 28 February 1925, hereinafter referred to as “the accounting period”. The assessment appealed against was made upon the company under the provisions of FA 1920 Pt V, and the amount of the assessment was £3,031 13s 0d. The ground of appeal duly set out in the notice of appeal was that the company was not a company carrying on any trade or business or any undertaking of a similar character within the meaning of FA 1920 s 52(2)(a). At the hearing of the appeal, liability to corporation profits tax was not disputed in respect of the portion of the accounting period from the 1 March 1924, to 11 August 1924, in view of the judgment given by the High Court of Justice on the 30 March 1926, in the case of The City of Dublin Steampacket Co v The Revenue Commissioners 1 ITC 118 [1926] IR 436.
2. The following facts were admitted or proved:
The company was formed under a deed of settlement dated 1 January 1828, for the purpose, inter alia, of trading by means of steam vessels between the ports of Dublin and Liverpool and other places.
Several Acts of Parliament were passed in relation to the company, including the City of Dublin Steampacket Company’s Act, 1860, (23 Vic c xviii), which incorporated the company as from 24 July 1833, with perpetual succession.
Copies of 23 Vic c xcviii and of the deed of settlement are attached hereto and form part of this case [Not included in present print].
3. The company traded between Dublin and Liverpool, Dublin and Manchester, Dublin and Belfast, and Dublin and Continental ports, and also between Dublin and the Shannon (Inland Navigation) but the two latter tradings were given up many years ago.
4. The company was contractor for the carriage of mails from Dun Laoghaire (formerly Kingstown) to Liverpool from 1839 to 1849 and from Dun Laoghaire to Holyhead from 1850 to 1920 when the contract was terminated by notice on 28 November 1920.
5. In 1915 one of the company’s mail-boats was commandeered by the British Government and was sunk by enemy action in March 1917. Another of the company’s mail-boats while in the service of the company was sunk by enemy action in October 1918. In 1917, the company’s cargo steamers were commandeered and the company ceased to carry on its cargo business between Dublin and Liverpool, Dublin and Manchester, and Dublin and Belfast, and subsequently in 1919 disposed of this business. On 28 November 1920, (the date when the mail contract was determined), the company discontinued the mail and passenger services between Dun Laoghaire and Holyhead and offered its two remaining mail-boats for sale.
6. In 1921 steps were taken with the view of having the company wound up, but being a statutory company it was found that the authority of Parliament was required. A bill was accordingly promoted in the British Parliament for the purpose of winding up the company but met with opposition from the then London and North Western Railway Company and the then Dublin and South Eastern Railway Company because of the fact that the company was subject to an annual payment of £3,000 in respect of a perpetual guarantee in connection with the City of Dublin Junction Railways, known as the Loop Line. When the opposition had been overcome by the insertion of a clause in the bill to meet the wishes of the opposing companies, the provisional government established under Article 17 of the Articles of Agreement for a Treaty between Great Britain and Ireland dated 6 December 1921, was in being, and the British Parliamentary Committee to which the bill had been referred, would not pass it owing to a doubt as to jurisdiction.
7. In March 1924, the company sold its two remaining mailboats, “Ulster” and “Munster” at break-up prices.
8. Since 28 November 1920, the company has not carried on any shipping business and has had no income other than an income from interest and dividends, and a rent of £27 a year from a small freehold property at Limerick formerly used in connection with the Inland Navigation trading.
9. During the accounting period the property of the company consisted of a leasehold interest in its offices at 15 Eden Quay, Dublin, the property at Limerick mentioned in the preceding paragraph and government and other stocks, shares and securities.
10. The company’s leasehold interest in its offices at 15 Eden Quay was sold on the 14 July 1925, but the official liquidator, by permission of the High Court retained two rooms at 15 Eden Quay for the storage of books and papers paying a rent therefor to the purchaser.
11. A claim for compensation for loss incurred by the sinking of the mail-boat “Leinster” was considered by a Royal Commission appointed to enquire into claims for compensation for suffering and damage done by enemy action. On 14 April 1924, the company was informed that the Royal Commission had decided not to award any...
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