COUNSEL: Sir Andrew Clark Q.C,, Nelson Mustoe Q.C., Robert Phillipsand J. H. C. Morris for the appellant.

J. Millard Tucker Q.C., Raymond Jennings Q.C. and Oliver Smith for the respondents.

 

SOLICITORS: Stanley Johnson & Allen; Sanderson, Lee, Morgan, Price & Co.

 

JUDGES: Vicount Simonds, Lord Morton of Henryton, Lord Reid, Lord Keith of Avonholm and Lord Somervell of Harrow.

 

DATES: 1954 Nov. 23, 24, 25, 29.

1955 Jan. 20.

 

The government of India sought to prove in the voluntary liquidation of a company registered in the United Kingdom but trading in India for amounts claimed as income tax due to the Indian Government, including capital gains tax that arose on the sale of the company’s business in India.

 

Held, claims on behalf of a foreign State to recover taxes due under its laws were unenforceable in English courts, and there was no valid distinction for this purpose between foreign States and State adhering to the British Commonwealth.

 

(Per Viscount Simonds, Lord Morton of Henryton and Lord Reid concurring): “liabilities” for which a liquidator is required to provide in the liquidation of a company by section 302 of the Companies Act, 1948 did not include claims unenforceable in the English courts.

 

[*503] Their Lordships took time for consideration.

 

VISCOUNT SIMONDS stated the facts and continued: The questions raised in the appeal to this House are two: (a) whether there is a rule of law which precludes a foreign State from suing in England for taxes due under the law of that State, and (b) whether (assuming the first question to be answered in the affirmative) a claim for Indian taxes is nevertheless a “liability” within the meaning of section 302 of the Companies Act, 1948, which the liquidators are bound to discharge. The Court of Appeal agreed with Vaisey J. in answering to the first question “Yes” and to the second question “No” and I have no doubt that they were right.

 

My Lords, I will admit that I was greatly surprised to hear it suggested that the courts of this country would and should entertain a suit by a foreign State to recover a tax. For at any time since I have had any acquaintance with the law I should have said as Rowlatt J. said in the King of the Hellenes v. Brostron1: “It is perfectly elementary that a foreign government cannot come here - nor will the courts of other countries allow our Government to go there - and sue a person found in that jurisdiction for taxes levied and which he is declared to be liable to in the country to which he belongs.” That was in 1923. In 1928 Tomlin J. in In re Visser, Queen of Holland v. Drukker,2 after referring to the case of Sydney Municipal Council v. Bull,3 in which the same proposition had been

1 (1923) 16 Ll.L.Rep. 190, 193.

2 [1928] Ch. 877, 884; 44 T.L.R. 692.

3 [1909] 1 K.B. 7; 25 T.L.R. 6. [*504]

unequivocally stated by Grantham J., and saying that he was bound to follow it, added: “My own opinion is that there is a well-recognized rule, which has been enforced for at least 200 years or thereabouts, under which these courts will not collect the taxes of foreign States for the benefit of the sovereigns of those foreign States; and this is one of those actions which these courts will not entertain.” My Lords, it is not seemly to weigh the pronouncements of living judges, but it is, I think, permissible to say that the opinions of few, if any, judges of the past command greater respect than those of Lord Tomlin and Rowlatt J., and what appeared to one of them to be a “well-recognized rule” and to the other “elementary” law cannot easily be displaced.

 

My Lords, the history and origin of the rule, if it be a rule, are not easy to ascertain and there is on the whole remarkably little authority upon the subject. I am inclined to agree with the Court of Appeal that the early cases of Attorney-General v. Lutwydge4 and Boucher v. Lawson,5 to which some reference was made, do not give much help. It is otherwise when we advance a few years to the age of Lord Mansfield C.J. That great judge in a series of cases repeated the formula “For no country ever takes notice of the revenue laws of another.” See Planché v. Fletcher,6 Holman v. Johnson7 and Lever v. Fletcher.8 The last-named case I find only in a textbook, Park on Marine Insurance, which in its day ran through many editions. I am myself referring to the 8th edition, vol. I, pp. 506-7. The author James Allan Park, himself a distinguished judge of the Common Pleas, states the rule as I have cited it from Planché v. Fletcher9 and then proceeds: “In another case, a short time afterwards, at Guildhall, Lord Mansfield, in his charge to the jury, advanced the same doctrine which had been established by the whole court in the preceding case.” He then refers to Lever v. Fletcher.10 It is true that Lord Mansfield was not directly concerned with the case of a foreign power suing in an English court to recover revenue, but with the validity of a contract made abroad where the seller was not implicated in smuggling operations which contravened the revenue laws of this country or with the rights of insurers where a ship which had cleared for Ostend went direct to Nantes thereby affecting the

4 (1729) Bunb. 280.

5 (1735-6) Cunning. 144.

6 (1779) 1 Doug. 251, 253.

7 (1775) 1 Cowp. 341, 343.

8 (1780) Unrep.

9 1 Doug. 251.

10 Unrep. [*505]

customs dues payable abroad. But in each case he could not have reached his conclusion but for the fact that he applied the rule that no country ever takes notice of the revenue laws of another. Where Lord Mansfield led, Lord Kenyon C.J. followed, though he was not a judge who followed blindly. I agree with the learned Master of the Rolls11 that it is clear from such cases as Clugas v. Penaluna,12 Bernard v. Reed13 and Waymell v. Reed14 that Lord Kenyon accepted without qualification the broad rule which Lord Mansfield had formulated. I pass over a number of cases where the question was as to the admissibility of documents made in a foreign country and not stamped according to the law of that country, pausing only to remind your Lordships that in James v. Catherwood15 Lord Tenterden (then Abbott C.J.) said: “This point is too plain for argument. It has been settled, or at least considered as settled, ever since the time of Lord Hardwicke that in a British court we cannot take notice of the revenue laws of a foreign State.” The learned Chief Justice went on to apply the rule in a manner that may not have been justified but that does not detract from the importance of his unqualified assertion of it.

 

Here, my Lords, is a formidable array of authority. It is possible that the words “take notice of” might, if applied without discrimination, lead to too wide an application of the rule; for as Lord Tomlin pointed out in In re Visser16 there may be cases in which our courts, although they do not enforce foreign revenue law, are bound to recognize some of the consequences of that law, and for this reason the terms of Lord Mansfield’s proposition have been criticized. But in its narrower interpretation it has not been challenged except in the three cases mentioned earlier in this opinion and in them it was unequivocally affirmed.

 

Nor does the matter rest there. For Sir Andrew Clark, who argued the case for the appellant with equal vigour and candour, admitted that he knew of no case in which a foreign State had recovered taxes by suit in this country nor of any case in any foreign country in which the government of this country had done so. And in this connexion it is worthy of note that, as my noble and learned friend, Lord Somervell of Harrow, has by his independent researches discovered and will presently tell

11 [1954] Ch. 131, 147-9; [1953] 2 All E.R. 1452.

12 (1791) 4 Term Rep. 466.

13 (1794) 1 Esp. 91.

14 (1794) 5 Term Rep. 599.

15 (1823) 3 Dow. & Ry.K.B. 190, 191.

16 [1928] Ch. 877, 883.

your Lordships, this same rule is stated in at least one French textbook of high authority.

 

The matter is carried one step further by the fact that the rule appears to have been recognized by Parliament. For I see no other reason for the exclusion from the advantages of the Foreign Judgments (Reciprocal Enforcement) Act, 1933, of a judgment for “a sum payable in respect of taxes or other charges of a like nature or in respect of a fine or other penalty” (section 1 (2) (b)), except that it was regarded as axiomatic that the courts of one country do not have regard to the revenue laws of another and therefore will not allow judgments for foreign taxes to be enforced.

 

It may well be asked, then, upon what grounds this appeal is founded. I think that counsel relied upon two main grounds, first that Lord Mansfield’s proposition, which I have more than once quoted, extended to revenue law a doctrine properly applicable only to penal law and (I think it must be faced) that Lord Mansfield was wrong in so extending it and everyone who has since followed him was wrong: and secondly that, whatever may have been the rule in the past, there ought to be and is a trend towards a mitigation of the rule, particularly as between States which are united by the bonds of federal union or by such looser ties as bind the British Commonwealth of nations.

 

My Lords, these seem to me frail weapons with which to attack a strong fortress. The suggestion that Lord Mansfield’s proposition was too wide was supported partly by the fact that in Huntington v. Attrill17 the proposition was somewhat more narrowly stated, as it was also in the case of the Attorney-General for Canada v. William Schulze & Co.18 In those case the question was of enforcement of a penalty imposed by a foreign State and the observations of the court were directed to that question. This seems to me an inadequate reason for challenging a wider statement in regard to a different subject-matter. Further, upon the assumption which must be made, that the decision in Huntington v. Attrill19 was correct, it was conceded that it must cover not only a penalty strictly so-called but also any tax which could be regarded as penal or confiscatory. This seems to me to create a difficult task of discrimination, which is not made easier by the test suggested by counsel. “If a tax,” he said, “is the sort of tax which is recognized in this country, it is not penal.”

17 [1893] A.C. 150; 8 T.L.R. 341.

18 (1901) 9 S.L.T. 4.

19 [1893] A.C. 150. [*507]

I am little disposed to introduce so nice a refinement into a rule which has hitherto been stated in terms that are easy to understand and to apply.

 

Then some reliance was placed on the fact that in earlier editions of Dicey’s Conflict of Laws the relevant rule was thus stated: “The court has no jurisdiction to entertain an action for the enforcement, either directly or indirectly, of a penal law of a foreign country”; and that it was only after the decision of Sydney Municipal Council v. Bull20 that in later editions the words “or revenue” were added after “penal.” (Later the words “or political” were also added.) This seems to me a worthless argument, for already in the earlier editions it was Said that the “essential characteristic, in short, of a penal action is that it should be an action on behalf of the government or the community, and not an action for remedying a wrong done to an individual” (see, e.g., 2nd ed., at p. 208), an apt description, as it seems to me, of a suit to recover taxes.

 

The second branch of the argument for the appellant was directed to showing that in the United States of America there had been in certain States a disposition to relax the rigidity of the rule, and counsel was able to point to certain cases not cited to the Court of Appeal where the courts of one State had admitted and enforced claims for revenue by another State, notably in the States of Missouri and Kentucky. And reference was made also to the fact that in the 1948 supplement to the well-known Restatement” some doubt was cast upon the rule (Conflict of Laws, section 610). But it was conceded that this was not the trend in all States, the States of New York and of Delaware continuing to apply the old rule. My Lords, I do not think it necessary to occupy your time by an examination of the American cases. I am ever willing to get help from seeing how the law, which is our common heritage, has developed on the other side of the Atlantic, but a development which is not universal, and is in any case confined to relations between State and State within the Union, can have no weight in determining what the law is in this country.

 

Finally, it was urged that, whatever might be the position as between this country and a foreign country, it was not the same as between different members of the British Commonwealth, including those members which, though within the Commonwealth, do not acknowledge the sovereignty of the Queen. For

20 [1909] 1 K.B. 7. [*508]

such a distinction there is no authority and I can see no reason. If such a change is to be made, it is not for the courts to make it. It will be the task of Governments and perhaps of Parliaments. I do not think that it will be an easy task.

 

I must add that since writing this part of my opinion I have learned from my noble and learned friend, Lord Keith of Avonholm, that he has discovered a case in the courts of Eire which confirms the view I have expressed.

 

I come then, my Lords, to the second question and will not detain you long, for, with all deference to those who have thought otherwise, I find it an easy one to answer.

 

We proceed upon the assumption that there is a rule of the common law that our courts will not regard the revenue laws of other countries: it is sometimes, not happily perhaps, called a rule of private international law: it is at least a rule which is enforced with the knowledge that in foreign countries the same rule is observed. And since it is a rule which operates equally in regard to natural and artificial persons, the company, with which we are here concerned, could not on the day before its resolution to wind up became effective have been sued by the Indian Government for the recovery of tax in the courts of this country. But it is said that from the moment that the company went into liquidation the situation changed, the old rule of law was abrogated, and our courts became the means of collecting the taxes of a foreign power. This may seem the more surprising when it is remembered that the winding up of a company, whether voluntarily or by the court, is only the machinery by which an entity, which can no longer, or at least no longer usefully, carry on its business, is brought to its statutory end. It is difficult to see why such a process should create new rights in foreign powers hitherto unknown in this or any other country. But it is said that under section 302 of the Companies Act, 1948, the “liabilities” which the liquidator in a voluntary winding up is bound to discharge include an obligation to pay tax due to a foreign State. All turns on the meaning of the word “liabilities” in this section. On the one hand it is said by the respondents that it means only those obligations which are enforceable in an English court, and on the other hand that its meaning is extended - I do not know how far - but at least so far as to cover liabilities for foreign tax in respect of which the company might have been sued in the courts of the country imposing it.

 

My Lords, I have no hesitation in adopting the former of [*509]

 

these meanings. I conceive that it is the duty of the liquidator to discharge out of the assets in his hands those claims which are legally enforceable, and to hand over any surplus to the contributories. I find no words which vest in him a discretion to meet claims which are not legally enforceable. It will be remembered that, so far as is relevant for this purpose, the law is the same whether the winding up is voluntary or by the court, whether the company is solvent or insolvent, and that an additional purpose of a winding up is to secure that creditors who have enforceable claims shall be treated equally, subject only to the priorities for which the statute provides. It would be a strange result if it were found that the statute introduced a new category of creditors to compete with those who alone, apart from it, could enforce their claims.

 

It was urged upon your Lordships that in certain other sections of the Act, notably sections 278 and 283, “liabilities” must include obligations not enforceable in this country. That may well be, but, though I accept the proposition that a word should be used in the same sense throughout a statute, it is by no means a universal rule and I am not pressed by it in construing a section of an Act so long and complex as the Companies Act, 1948, where a word may be and, in the case of “liabilities” in fact is, used in many different contexts.

 

I am, on the other hand, satisfied that the case of a statutebarred debt presents a very close analogy and that in concluding that the present claim cannot be admitted your Lordships are assisted by such cases as In re Lorillard21 and In re Art Reproduction Co. Ld.,22 which were in my opinion rightly decided.

 

I would dismiss this appeal with costs.

 

LORD MORTON OF HENRYTON. My Lords, I had prepared some observations on the important questions which arise on this appeal, but I have formed the view that these observations add nothing of value to the speech which has just been delivered by my noble and learned friend on the Woolsack. I shall, therefore, say only that I agree with his reasoning and with his conclusion.

 

LORD REID. My Lords, I concur.

 

LORD KEITH OF AVONHOLM My Lords, on the first issue raised in this appeal I am in full concurrence with the opinion of my

21 [1922] 2 Ch. 638; 38 T.L.R. 666.

22 [1952] Ch. 89; [1951] 2 T.L.R. 979; [1951] 2 All E.R. 984. [*510]

noble and learned friend Viscount Simonds. Such additional observations as I make under this head are due to the fact that I have had access to a judgment delivered by Kingsmill Moore J. in the High Court of Eire on July 21, 1950, in the case of Peter Buchanan Ld. v. McVey.23 This admirable judgment, which somehow has escaped the notice of the reporters, covers all the points raised under this head of the appeal and was affirmed by the Irish Court of Appeal on December 19, 1951. It illustrates two propositions: (1) that there are circumstances in which the courts will have regard to the revenue laws of another country; and (2) that in no circumstances will the courts directly or indirectly enforce the revenue laws of another country. We are not concerned to consider in this case the validity of the first proposition or the limits to be put upon it. But it is interesting to notice how it was applied in the case cited. The plaintiff company was a company registered in Scotland which had been put into liquidation by the revenue authorities in Scotland under a compulsory winding-up order in respect of a very large claim for excess profits tax and income tax. The liquidator was really a nominee of the revenue. The defendant held 99 one pound shares of the capital of the company and the remaining share was held by a confidential cashier and bookkeeper as trustee for him. These two sole shareholders were also sole directors. The defendant having realized the whole assets of the company in his capacity as a director and having satisfied substantially the whole of the company’s indebtedness, other than that due to the revenue, by a variety of devices had the balance transferred to himself to his credit with an Irish bank and decamped to Ireland. The action was in form an action to recover this balance from the defendant at the instance of the company directed by the liquidator. The first answer of the defendant was that, as he had received the money from the company in his capacity as a shareholder in pursuance of an agreement between all the corporators, the company could not now ask to have it back. The judge held that the transaction was a dishonest transaction designed to defeat the claim of the revenue in Scotland as a creditor and was ultra vires of the company and accordingly rejected the defendant’s submission. On the other hand, he held that although the action was in form an action by the company to recover these assets it was in substance an attempt to enforce indirectly a claim to tax by the revenue authorities of another State. He accordingly

23 Post, p. 516. [*511]

dismissed the action. The judgment contains an able and exhaustive examination of the authorities.

 

One explanation of the rule thus illustrated may be thought to be that enforcement of a claim for taxes is but an extension of the sovereign power which imposed the taxes, and that an assertion of sovereign authority by one State within the territory of another, as distinct from a patrimonial claim by a foreign sovereign, is (treaty or convention apart) contrary to all concepts of independent sovereignties. Another explanation has been given by an eminent American judge, Judge Learned Hand, in the case of Moore v. Mitchell,24 in a passage, quoted also by Kingsmill Moore J. in the case of Peter Buchanan Ld.25 as follows: “While the origin of the exception in the case of penal liabilities does not appear in the books, a sound basis for it exists, in my judgment, which includes liabilities for taxes as well. Even in the case of ordinary municipal liabilities, a court will not recognize those arising in a foreign State, if they run counter to the ‘settled public policy’ of its own. Thus a scrutiny of the liability is necessarily always in reserve, and the possibility that it will be found not to accord with the policy of the domestic State. This is not a troublesome or delicate inquiry when the question arises between private persons, but it takes on quite another face when it concerns the relations between the foreign State and its own citizens or even those who may be temporarily within its borders. To pass upon the provisions for the public order of another State is, or at any rate should be, beyond the powers of the court; it involves the relations between the States themselves, with which courts are incompetent to deal, and which are intrusted to other authorities. It may commit the domestic State to a position which would seriously embarrass its neighbour. Revenue laws fall within the same reasoning; they affect a State in matters as vital to its existence as its criminal laws. No court ought to undertake an inquiry which it cannot prosecute without determining whether those laws are consonant with its own notions of what is proper.”

 

On either of the explanations which I have just stated I find a solid basis of principle for a rule which has long been recognized and which has been applied by a consistent train of decisions. It may be possible to find reasons for modifying the rule as between

24 (1929) 30 F. (2d) 600, 604.

25 Post, p. 516. [*512]

States of a federal union. But that consideration, in my opinion, has no relevance to this case.

 

On the second question in this appeal I have come with reluctance to the view that the distribution sections of the winding-up provisions of the Companies Act are controlled by the same considerations. I do not find it necessary to give the word “liabilities” different meanings in the various sections. In particular in sections 278 (1) (c), 283 and 302 it can, in my opinion, bear the same meaning. I find it impossible to hold that assessment to Indian income tax does not impose a liability on the company. From the point of view of the Indian Government it obviously is a liability. If there were assets of the company in India attached or attachable for the tax no one could doubt that it was a liability. It cannot cease to be a liability because the Indian assets have all been brought to this country. It is, in my opinion, a liability within the meaning of section 302. But the section is speaking in general terms. When the liquidators come to distribute the assets in satisfaction of the liabilities they find that this particular liability is unenforceable. It is as if it were written down to zero. Let me take the position before the date of the resolution for winding up. The company could have paid the tax if so minded. Equally it could have refused to pay the tax. If it had been sued the action would have been dismissed. That would not have extinguished the liability. The liability would have remained exactly as before. But if after the dismissal of the action the company went into liquidation, can it be that a duty then emerges on the liquidators under section 302 of the Act to pay the tax which has been successfully resisted by the company before the winding up started? I can see no ground for so holding.

 

I was impressed for a time by the reference made by counsel for the appellant to the rule of In re Condon, Ex parte James.26 Counsel stressed that he could not appeal to the rule as directly applicable, for it applied only to an officer of the court, which the liquidator in a voluntary winding up was not. But as I understood him, the suggestion was that the court, in a compulsory winding up, would direct a liquidator to pay the tax on the ground of honesty and fair dealing and it would be impossible to follow one line in a winding up by the court and another in a voluntary winding up, a view, I may observe, taken in another connexion by Wynn-Parry J. in In re Art Reproduction Co. Ld.27

26 (1874) L.R. 9 Ch. 609.

27 [1952] Ch. 89. [*513]

The rule, however, which at best is exercised as a discretionary power by the court, appears to have been exercised only in cases where there has been some form of enrichment of the assets of a bankrupt or insolvent company at the expense of the person seeking recoupment. No case has been brought to our notice of the application of the rule where there has been no enrichment of one party with corresponding loss to the other.

 

While, then, this is a liability in the sense of section 302 of the Act, it is not a liability which the liquidators were bound to pay. This, in my opinion, is not to contradict the section. The same situation could arise where there was a debt statute-barred in this country, but not statute-barred in another country. If there were assets in that other country sufficient to meet the debt, a liquidator might be compelled to recognize the debt as a liability that had to be discharged. If there were no assets in that country and recovery had to be sought in this country, the liquidator could not be compelled to pay it out of assets in his hands: In re River Steamer Co., Mitchell’s Claim,28 In re Art Reproduction Co. Ld.29 The reasons given in the passage already cited from Judge Learned Hand’s judgment in Moore v. Mitchell30 are as cogent, in my opinion, against a liquidator in this country recognizing a claim for taxes demanded by a foreign country as they are against the enforceability of such a claim in a court of law. It is not for a liquidator to discriminate between the merits or demerits of the claim. He must allow all such claims, or none. The liquidators here could pay the Indian tax with the consent of the contributories, as there are no other creditors who could be prejudiced. But they cannot be compelled to pay it if the contributories withhold their consent.

 

For these reasons I agree the appeal should be dismissed.

 

LORD SOMERVELL OF HARROW. My Lords, the facts and the circumstances in which the present issue came before our courts have already been stated.

 

The first issue in the present appeal is whether a foreign State can use the courts of this country for the collection of its taxes. The statement by Lord Mansfield in Holman v. Johnson31: “For no country ever takes notice of the revenue laws of another,” may include the present issue but goes beyond it and is, I think, directed to a different problem. The plaintiff claimed the price of tea delivered in Dunkirk. The

28 (1871) L.R. 6 Ch. 822.

29 [1952] Ch. 89.

30 30 F. (2d) 600.

31 1 Cowp. 341, 343. [*514]

defendant intended, as the plaintiff knew, to smuggle the tea into England. Lord Mansfield uses the words cited in considering the lex loci contractus. He is stating that the courts there would in no circumstances have regard to any illegality arising under the revenue laws of this or any other country. He then proceeds to consider the alleged illegality under our law. The question whether today our courts would as between parties enforce a contract to break the revenue laws of another country has little if any relevance to the issue which we have to decide. In Ralli Brothers v. Compania Naviera Sota y Aznar32 Scrutton L.J., in a passage cited by the Master of the Rolls, reserved that issue for consideration should it arise. What I desire to make clear is that I am not dealing with that issue.

 

There is no decision binding on your Lordships’ House and the matter therefore falls to be considered in principle. If one State could collect its taxes through the courts of another, it would have arisen through what is described, vaguely perhaps, as comity or the general practice of nations inter se. The appellant was therefore in a difficulty from the outset in that after considerable research no case of any country could be found in which taxes due to State A had been enforced in the courts of State B. Apart from the comparatively recent English, Scotch and Irish cases there is no authority. There are, however, many propositions for which no express authority can be found because they have been regarded as self-evident to all concerned. There must have been many potential defendants.

 

Tax gathering is an administrative act, though in settling the quantum as well as in the final act of collection judicial process may be involved. Our courts will apply foreign law if it is the proper law of a contract, the subject of a suit. Tax gathering is not a matter of contract but of authority and administration as between the State and those within its jurisdiction. If one considers the initial stages of the process, which may, as the records of your Lordships’ House show, be intricate and prolonged, it would be remarkable comity if State B allowed the time of its courts to be expended in assisting in this regard the tax gatherers of State A. Once a judgment has been obtained and it is a question only of its enforcement the factor of time and expense will normally have disappeared. The principle remains The claim is one for a tax.

32 [1920] 2 K.B. 287, 300; sub nom. Sota y Aznar v. Ralli Brothers, 36 T.L.R. 456. [*515]

That fact, I think, itself justifies what has been clearly the practice of States. They have not in the past thought it appropriate to seek to use legal process abroad against debtor taxpayers. They assumed, rightly, that the courts would object to being so used. The position in the United States of America has been referred to, and I agree that the position as between member States of a federation, wherever the reserve of sovereignty may be, does not help.

 

The following passage from Pillet’s Traité de Droit International Privé, 1924, paragraph 674, confirms the negative result of counsel’s researches in respect of French law: “Les jugements rendus en matière criminelle ne sont pas les seuls qui soient soumis à la loi de la territorialité absolue. Les jugements rendus en matière fiscale ne sont eux non plus susceptible d’aucune execution à l’étranger, et l’on n’a même jamais song&ecute; à la possibilité de faire exécuter sur le territoire de l’un d’eux une sentence relative aux droits fiscaux de l’Etat qui aurait été rendue sur le territoire d’un autre.”

 

The appellant is asking the English courts to do what the courts of no other country have done. In some fields this might commend the argument but here, for the reason which I stated at the outset, it is fatal.

 

Some tentative suggestion was made that some different principle should apply as between members of the Commonwealth. No ground which I could follow was put forward in support.

 

On the question of the construction and application of section 302 of the Companies Act, 1948, I think that the appeal also fails. For myself, assuming that the word “liabilities” should have regard to the law of the country in which the company had been doing business, I would not have regarded this as sufficient to overrule the special principle that foreign States cannot directly or indirectly enforce their tax claims here.

 

Appeal dismissed.