Williams and Humbert Ltd v W and H Trade Marks (Jersey) Ltd: HL 1986

There had been an expropriation by Spanish decrees of shares in a Spanish company whose English subsidiary had rights in trade marks which it had sold to a Jersey company. The Spanish and English companies sought certain relief in relation to the trade marks, but the dispossessed proprietors sought to argue that the Spanish decrees should not be recognised because they were penal or confiscatory. The defence was rejected on the ground that the claimants’ case did not depend on the Spanish decrees, but arose under the general law. The House considered the rule that an English court could not be used to enforce the collection of foreign taxes. Lord Mackay looked at the authorities: ‘From the decision in the Buchanan case [1955] AC 516 counsel for the appellants sought to derive a general principle that even when an action is raised at the instance of a legal person distinct from the foreign government and even where the cause of action relied upon does not depend to any extent on the foreign law in question nevertheless if the action is brought at the instigation of the foreign government and the proceeds of the action would be applied by the foreign government for the purposes of a penal revenue or other public law of the foreign State relief cannot be given. It has to be observed that in the Buchanan case the action was being pursued by a person whose title as liquidator of the company depended on his having been appointed by a petition to the court in Scotland on behalf of the Inland Revenue, that the ground of action was that the transactions being attacked in the proceedings in Dublin were ultra vires and dishonest because there existed at the time that they were effected in Scotland a claim by the Inland Revenue which the transactions were designed to defeat, and that if no such claim existed the defendant would have been entitled to retain the subject matter of the claim. Most important there was an outstanding revenue claim in Scotland against the company which the whole proceeds of the action apart from the expenses of the action and the liquidation would be used to meet. No other interest was involved. That this was regarded as of critical importance appears from what was said in the decision on appeal by Maguire CJ, at p.533
Having regard to the questions before this House in Government of India v Taylor [1955] AC 491 I consider that it cannot be said that any approval was given by the House to the decision in the Buchanan case except to the extent that it held that there is a rule of law which precludes a state from suing in another state for taxes due under the law of the first state. No countenance was given in Government of India v Taylor , in Rossano’s case [1963] 2 QB 352 nor in Brokaw v Seatrain UK Ltd. [1971] 2 QB 476 to the suggestion that an action in this country could be properly described as the indirect enforcement of a penal or revenue law in another country when no claim under that law remained unsatisfied. The existence of such unsatisfied claim to the satisfaction of which the proceeds of the action will be applied appears to me to be an essential feature of the principle enunciated in the Buchanan case [1955] AC 516 for refusing to allow the action to succeed.’
Lord Templeman said: ‘This rule with regard to revenue laws may in the future be modified by international convention or by the laws of the European Economic Community in order to prevent fraudulent practices which damage all States and benefit no State. But at present the international law with regard to the non-enforcement of revenue and penal laws is absolute.’
Lord Templeman said that the striking out of a pleading was discretionary, and: ‘if an application to strike out involves a prolonged and serious argument, the judge should, as a general rule, decline to proceed with the argument unless he not only harbours doubts about the soundness of a pleading but, in addition, is satisfied that striking out will obviate the necessity for a trial, or will substantially reduce the burden of preparing for a trial, or the burden of the trial itself.’


Lord Mackay of Clashfern, Lord Templeman


[1986] AC 368, [1986] 1 All ER 129, [1986] 2 WLR 24


England and Wales


CitedPeter Buchanan Limited and Macharg v McVey 1954
(Supreme Court of Ireland) The plaintiff was a company registered in Scotland put into compulsory liquidation by the revenue under a substantial claim for excess profits tax and income tax. The liquidator was really a nominee of the revenue. The . .
CitedGovernment of India v Taylor HL 1955
The Government of India sought to prove in the voluntary liquidation of a company registered in the United Kingdom but trading in India for a sum due in respect of Indian income tax, including capital gains tax, which arose on the sale of the . .

Cited by:

CitedQRS 1 APS and others v Frandsen CA 21-May-1999
The appellants were all Danish companies put into liquidation for asset stripping in contravention of Danish law. The respondent was resident in the UK and had owned them. The Danish tax authorities issued tax demands and the liquidators now sought . .
CitedMbasogo, President of the State of Equatorial Guinea and Another v Logo Ltd and others CA 23-Oct-2006
Foreign Public Law Not Enforceable Here
The claimant alleged a conspiracy by the defendants for his overthrow by means of a private coup d’etat. The defendants denied that the court had jurisdiction. The claimants appealed dismissal of their claim to damages.
Held: The claims were . .
CitedBelhaj and Another v Straw and Others SC 17-Jan-2017
The claimant alleged complicity by the defendant, (now former) Foreign Secretary, in his mistreatment by the US while held in Libya. He also alleged involvement in his unlawful abduction and removal to Libya, from which had had fled for political . .
Lists of cited by and citing cases may be incomplete.

Taxes Management, International, Litigation Practice

Updated: 19 May 2022; Ref: scu.225458