Bluebottle UK Ltd & Ors v Deputy Commissioner of Taxation & Anor [2006] NSWSC 706

Bluebottle UK Ltd & Ors v Deputy Commissioner of Taxation & Anor [2006] NSWSC 706

The assignments of the right to dividends were effective in equity, so that at the time for payment, the equitable interest in the dividends arose eo instanti in the assignee (Bluebottle). There was no moment in time when the legal title to the dividends vested in the non-resident shareholders free of the equitable interests of Bluebottle, thus Virgin Blue Holdings Ltd was not liable to pay money to the assignors (Cricket S.A. and Virgin Holdings S.A.) for the purposes of Income Tax Assessment Act 1936 (Cth), s 255(2), nor was money coming to it on their behalf for the purposes of s 255(1). The director's resolution was a valid determination (not a declaration), so the dividend debt only...

Parties
Plaintiff/2nd Cross Defendant: Bluebottle UK Ltd; 2nd Plaintiff/3rd Cross Defendant: Cricket S.A.; 3rd Plaintiff/4th Cross Defendant: Virgin Holdings S.A.; 4th Plaintiff/5th Cross Defendant: Barfair Ltd; 1st Defendant/1st Cross Defendant: Deputy Commissioner of Taxation; 2nd Defendant/cross Claimant: Virgin Blue Holdings Ltd
Jurisdiction
Australia
Judgment Date
14 July 2006
Procedural Posture
Equity Proceeding / Judgment After Hearing of Claims and Cross Claim
Outcome
Declarations granted in favour of Bluebottle, Cricket, Virgin Holdings, Barfair, and Virgin Blue on its cross-claim; effectiveness of assignments and invalidity of the s 255 notices established.
Legal Topics
Dividends, Equitable Assignment, Legal Assignment, Debt, Income Tax Withholding, Company Constitutions
Taxation Law Company Law Equity Dividends Equitable Assignment Legal Assignment Debt Income Tax Withholding +1 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 37 Party arguments 2 Amounts and remedies 4
Sign in to unlock

Parties

Bluebottle UK Ltd

Plaintiff/2nd Cross Defendant

Cricket S.A.

2nd Plaintiff/3rd Cross Defendant

Virgin Holdings S.A.

3rd Plaintiff/4th Cross Defendant

Barfair Ltd

4th Plaintiff/5th Cross Defendant

Deputy Commissioner of Taxation

1st Defendant/1st Cross Defendant

Virgin Blue Holdings Ltd

2nd Defendant/cross Claimant

Procedural Posture

Equity Proceeding / Judgment After Hearing of Claims and Cross Claim

Legal Issues

  1. 1 Whether the directors' resolution constituted a declaration or determination of a dividend under Corporations Act 2001 (Cth), s 254V
  2. 2 Whether the assignments executed were effective in law or equity as to dividends payable
  3. 3 Whether Virgin Blue Holdings Ltd was liable to pay money to Cricket S.A. and Virgin Holdings S.A. such that the notice under Income Tax Assessment Act 1936 (Cth), s 255 had effect

Ratio Decidendi

The assignments of the right to dividends were effective in equity, so that at the time for payment, the equitable interest in the dividends arose eo instanti in the assignee (Bluebottle). There was no moment in time when the legal title to the dividends vested in the non-resident shareholders free of the equitable interests of Bluebottle, thus Virgin Blue Holdings Ltd was not liable to pay money to the assignors (Cricket S.A. and Virgin Holdings S.A.) for the purposes of Income Tax Assessment Act 1936 (Cth), s 255(2), nor was money coming to it on their behalf for the purposes of s 255(1). The director's resolution was a valid determination (not a declaration), so the dividend debt only...

Court Disposition

Declarations granted in favour of Bluebottle, Cricket, Virgin Holdings, Barfair, and Virgin Blue on its cross-claim; effectiveness of assignments and invalidity of the s 255 notices established.

Orders

  • Declarations that equitable assignments were effective and dividends are payable under the irrevocable direction.
  • Declaration that Commissioner’s notice under Income Tax Assessment Act 1936 (Cth), s 255 had no force or effect.