Lamb v Commissioner for Inland Revenue

• Jurisdiction: South Africa
• Judge: Centlivres CJ, Greenberg JA, Schreiner JA, Van Den Heever JA and Hoexter JA
• Judgment Date: 02 December 1954
• Citation: 1955 (1) SA 270 (A)
• Hearing Date: 23 November 1954
• Court: Appellate Division

D Centlivres, C.J.:

The appellant, who carries on business in Johannesburg, received during the year of assessment ended on June 30th, 1952, a dividend of £1,575 in respect of certain stock held by him in Nchanga Consolidated Copper Mines Limited. This Company was incorporated E in England on March 8th, 1937, as a public company under the English Companies Act, 1929. The provisions of the English Companies Act 1948 (11 and 12 Geo. 6 Chapter 38) apply to the Company by virtue of sec. 377 thereof. The Company carries on the business of mining for copper in Northern Rhodesia. By sec. 110 (1) of the English Companies Act, 1948, F the Company is required to keep a register of its members and to enter therein certain particulars relating to the stock units held by each member. By sec. 110 (2) of that Act it is provided that the register of members shall be kept at the registered offices of the Company or at some place not outside England. At all material times the address of the G registered office of the Company was in London.

Secs. 119, 120 and 121 of the English Companies Act, 1948, provide, inter alia, as follows:

'119 (1)

A company having a share capital whose objects comprise the transaction of business in any part of His Majesty's dominions outside Great Britain, the Channel Islands or the Isle of Man may cause to be kept in any such part of His Majesty's dominions in which it transacts business a branch register of members resident in that part (in this Act called a 'dominion register').

(2)

H The company shall give to the registrar of companies notice of the situation of the office where any dominion register is kept and of any change in its situation, and if it is discontinued of its discontinuance, and any such notice shall be given within fourteen days of the opening of the office or of the change or discontinuance as the case may be.

120 (1)

A dominion register shall be deemed to be part of the company's register of members (in this section called the 'principal register').

Centlivres CJ

(2)

It shall be kept in the same manner in which the principal register is by this Act required to be kept . . ..

(3)

The company shall

(a)

transmit to its registered office a copy of every entry in its dominion register as soon as may be after the entry is made; and

(b)

cause to be kept at the place where the company's principal register is kept, a duplicate of its dominion register duly entered up from time to time.

A Every such duplicate shall for all purposes of this Act be deemed to be part of the principal register.

(4)

Subject to the provisions of this section with respect to the duplicate register, the shares registered in a dominion register shall be distinguished from the shares registered in the principal register, and no transaction with respect to any shares registered in a dominion register shall during the continuation of that registration, be registered in any other register.

(5)

A company may discontinue to keep a dominion register and B thereupon all entries in that register shall be transferred to some other dominion register kept by the company in the same part of His Majesty's Dominions or to the principal register.

Sec. 121.

An instrument of transfer of a share registered in a dominion register, other than such a register kept in Northern Ireland shall be deemed to be a transfer of property situate C outside of the United Kingdom, and unless executed in any part of the United Kingdom shall be exempt from stamp duty chargeable in Great Britain.'

At all material times the Company's principal register of members has been kept at its registered office in London. In 1937 the Company established a dominion register in Johannesburg. Only members of the Company with addresses in the D Union may be entered in the dominion register, whether or not they actually reside in the Union. No specific number of stock units were assigned to this register but entries arose in the first place through the removal of stock by stockholders from the principal to the dominion register. According to the stated case a member who has stock registered on the dominion register may have his holding transferred to the principal register by E lodging with the Local Committee his stock certificates together with a completed removal application form whether or not he resides or continues to reside in the Union. The Local Committee thereupon removes the stockholder's name from the dominion register, cancels the Johannesburg certificates and requests the London Transfer Office of the company to enter the F stockholder on the principal register and to issue to him appropriate certificates. The appellant had at all times up to December, 1953, had his stock in the company registered on the dominion register at Johannesburg.

The Company, having obtained the consent of the British Treasury, G transferred its management and control to Northern Rhodesia where it established its head office. Since January 1st, 1951, all meetings of stockholders and directors have taken place in that country and since that date all dividend declarations by the Company have been made there, but all dividends due to members of the Company whose names appear on the dominion register in Johannesburg are paid to those members through the Johannesburg Local Committee of the Company. During the year of H assessment under consideration the Company derived no income from sources within the Union but incurred expenditure in the Union mainly in connection with the expenses of the Johannesburg Local Committee.

The Commissioner in his determination of the appellant's liability to

Centlivres CJ

super tax for the year of assessment ended on June 30th, 1952, included the dividend of £1,575 which the appellant had received from the Company in the appellant's income subject to super tax. The appellant lodged an A objection and appeal on the ground that the...