WESTMINSTER BANK EXECUTOR AND TRUSTEE COMPANY (CHANNEL ISLANDS) LTD. Vs. NATIONAL BANK OF GREECE S. A.

JUDGEMENT

(1.) GAVE judgment on July 24, 1968, in the course of which he said that the plaintiffs had asked for and had been supplied with particulars of the facts and matters and of the statutory provisions on which the defendants relied as authorising the deduction of income tax; the defendants had replied that the interest payments satisfied the description of 'interest of money' and were therefore charged to income tax under Case III of Schedule D by section 123(1) of the Income Tax Act, 1952; that under section 169 (1) (c) of the Act they were empowered to make such deduction and that paragraph (d) of the subsection required the plaintiffs to accept; and that under section 170 the defendants were obliged to make such a deduction.

(2.) HIS Lordship added that the defendants had not committed themselves on whether the section applicable was section 169 or section 170, though that matter might be of importance as between them and the Inland Revenue but not as between them and the plaintiffs. It had been contended for the defendants, he said, that if the payments were not 'interest of money' they were an 'other annual payments' within the meaning of Case III with the like consequence as if they were 'interest of money.' Both parties agreed that if the payments fell within Case III the deduction was rightly made. The judge continued :

(3.) THE judge further held that a payment by the defendants and a receipt by the plaintiffs in discharge of the defendants obligation under the guarantee did not involve the payment of receipt of 'interest of money' within the meaning of section 122(1) (b) or 123(1) Case III of the Act of 1952, and that though any payment by the defendants to the plaintiffs pursuant to the guarantee in respect of the interest coupons would be a pure income profit in the hands of the plaintiffs, the coupons were bearer documents and the necessary element of recurrence which would make them 'annual payments' within Case III was lacking. Accordingly, he held that deduction of the income tax should be made; and he gave judgment for the plaintiffs with costs. During the hearing the issue was raised that if the defendants failed to deduct income tax they might have to pay income tax in the United Kingdom twice and for that reason the Solicitor to the Inland Revenue instructed counsel [Mr. J. P. Warner] as amicus curiae. The plaintiffs opposed his being heard. The judge in the course of his judgment said :