Bluebottle UK Limited v Deputy Commissioner of Taxation [2007] HCA 54

HIGH COURT OF AUSTRALIA

GLEESON CJ,

GUMMOW, KIRBY, HAYNE AND CRENNAN JJ

BLUEBOTTLE UK LIMITED & ORS APPELLANTS

AND

DEPUTY COMMISSIONER OF TAXATION & ANOR RESPONDENTS

Bluebottle UK Limited v Deputy Commissioner of Taxation [2007] HCA 54

5 December 2007

S302/2007

ORDER

Appeal dismissed with costs.

On appeal from the Supreme Court of New South Wales

Representation

D F Jackson QC with A J Sullivan QC, S H Steward and S A Goodman for the appellants (instructed by Clayton Utz Lawyers)

A Robertson SC with S W Gibb SC and J H Momsen for the first respondent (instructed by Australian Government Solicitor)

Submitting appearance for the second respondent

Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Bluebottle UK Limited v Deputy Commissioner of Taxation

Taxes and duties – Income tax and related legislation – Collection and recovery of tax – Collection of tax due and payable by a non-resident from a third party – Two non-resident shareholders in Virgin Blue Holdings Limited ("Virgin Blue") allegedly derived income or profits or gains of a capital nature from a source in Australia – Directors of Virgin Blue declared a dividend due for payment on 15 December 2005 to those who were shareholders on a specified record date of 28 November 2005 – After the record date but before the date for payment of the dividend, the Deputy Commissioner of Taxation ("the Commissioner") issued notices to Virgin Blue pursuant to s 255 of the Income Tax Assessment Act 1936 (Cth) ("the Act") purporting to require Virgin Blue to retain an amount from the dividend owed to each shareholder to meet the shareholder's tax liability – The following day, which was before the date for payment of the dividend, the shareholders agreed to assign their rights to the dividend to a third party and informed Virgin Blue of that agreement – The following day, which was still before the date for payment of the dividend, the Commissioner issued tax assessment notices to the shareholders and further notices to Virgin Blue pursuant to s 255 of the Act – Whether Virgin Blue was required to retain the dividend to pay the shareholders' tax liability.