Fernandes (Insurance) Ltd v Commissioner of Inland Revenue and Attorney General

• Jurisdiction: Guyana
• Judge: Persaud, J.A.,LUCKHOO, C.,HAYNES, J.A.
• Judgment Date: 02 September 1975
• Neutral Citation: GY 1975 CA 20
• Docket Number: Civil Appeal No. 19 of 1974
• Court: Court of Appeal (Guyana)
• Date: 02 September 1975

Court of Appeal

Luckhoo, C.; Persaud, J.A.; Haynes, J.A.

Civil Appeal No. 19 of 1974

Fernandes (Insurance) Ltd.

and

Commissioner of Inland Revenue and Attorney General

Appearances:

M.S. Fitzpatrick for the appellants.

M. Robinson for the respondents.

Company Law - Insurance Companies — Taxes

Statute - Interpretation — Meaning of se. 19 of Tax Act — Whether the section allows an insurance company to take out a separate licence in respect of each company which it represents when such a company has already taken out a licence and paid the duty.

Persaud, J.A.

1 The appellants are a company incorporated in Guyana under the Companies Act (Cap. 89:01) with their registered offices in Georgetown. They are the agents in Guyana of the Caledonian Insurance Company and the Liverpool & London & Globe Insurance Company Limited, two foreign insurance companies operating in Guyana and carrying on the business of motor insurance and other insurance. In fact, both foreign companies operate through several agents in Guyana, some of whom have been described as sub-agents, but the appellants themselves deal directly with their principals, and they collect moneys in respect of policies of insurance issued by their principals. They seek a declaration as to the true meaning of s. 19 of the Tax Act (Cap. 80:01). They claim that they should be required to take out one licence and pay one duty only under the Act as agents for the companies they represent, and that as such agents they should not be required to take out a separate licence in respect of each company they represent when such company has already taken out a licence and paid the duty.

2 The relevant portions of s. 19 of the Act are subsections (2) and (3) which provide as follows:

• “(2) Every person or company carrying on any fire and accident insurance business or any fire or accident insurance business in Guyana and any person or company who acts in Guyana as the agent of such a person or company shall take out an annual licence and shall pay a duty of one thousand dollars.

• (3) For the purposes of subsection (2), the receipt of moneys in Guyana on behalf of any person or company outside Guyana in respect of policies of insurance shall constitute the carrying on of the business mentioned in the said subsection.”

3 This has not always been the form of s. 19. It will therefore be useful to refer to the earlier legislation in an effort to arrive at the true import of the section as it now stands.

4 In 1918 an Ordinance entitled the Tax Ordinance, 1919 (No. 46) “to impose certain Taxes for the Public Use of the Colony during the year 1919, and to make provision for the Collection of such Taxes” was enacted to come into force on the 1st January 1919. Although that Ordinance expired on the 31st December, 1919 “unless otherwise enacted by the Combined Court”, it was a comprehensive piece of legislation in which it was sought to provide for the collection of taxes on several activities including even “any public or subscription billiard table or bagatelle board or table.” S. 22 of that Ordinance provided:

• “(1) Every person or Company carrying on any Fire and Life and Accident Insurance business or any Fire, or Life, or Accident Insurance business in the Colony shall take out a licence for so doing and shall pay for the same the sum of two hundred and fifty dollars.

• (2) Where any person acts in this Colony as the agent of any company carrying on any Fire and Life, and Accident Insurance business or any Fire, or Life, or Accident Insurance business in the Colony such person shall take out a licence for so doing and shall pay for the same the sum of two hundred and fifty dollars, unless the company for which he acts has taken out the licence hereinbefore required.”

5 It will be seen that both the principal and the agent were each required to take out a licence for which they were to pay $250.00, but in the case of the agent, he was not required to do so where his principal has already done so. The result was that only one licence need to have been taken out.

6 Before any amendments were effected to the 1919 Ordinance, the case of Hill v. Booker Bros., McConnell & Co. Ltd. (1919) L.R.B.G. 247, engaged the attention of the courts. In that case the defendants were charged with acting as the agent of a company carrying on accident insurance business, and with failing to take out a licence as the agent of the company. One of the submissions made on behalf of the defendants was that on a true construction of s. 22 (above) they were entitled to one general licence to act as agents for all or any companies whatever of the kind mentioned in the section. Berkeley, C.J. (ag.) rejected that contention in these words ( ibid. at p. 249):

“The last reason to be dealt with is the construction to be placed on section 22 of the Ordinance. Sub-section one deals with the person or company itself, while sub-section two deals with the agent of an company, in each case carrying on (1) any fire and life and accident insurance business', that is, where these three branches of insurance are carried on by one and the same insurance company, or (2) any ‘fire’ insurance business, or a (3) any ‘life’ insurance business, or (4) any ‘accident’ insurance business —...