CL-2018-000297, CL-2018-000404, CL-2018-000590, - [2025] EWHC 2364 (Comm)

Fecha: 02-Oct-2025

F.1.6 The Alleged Dividend Representations

F.1.6 The Alleged Dividend Representations:

the Tax Agent’s named client had (a) received the dividend described in the CAN (for Danish tax law purposes) by being the shareholder (for tax purposes) on the dividend declaration date, and (b) received a payment, net of tax, in respect of that entitlement to a dividend, either as a legal shareholder on the dividend record date or as the recipient, directly or indirectly, of a payment by such a shareholder

502.

The essence of that was said by Mr Graham KC to be that SKAT was told that “the named client (a) was entitled as a matter of Danish tax law to the dividend referred to in the CAN and (b) had received directly or indirectly from the Danish company a payment net of tax in respect of that entitlement”. Part (a) of that is to the same essential effect as part (a) of my longer formulation, above, distilled from the pleadings. I agree with the submission that was made, in explaining the formulation I have just quoted, that part (b) is also essentially the same: the primary element is still the receipt of a payment, net of tax, in respect of the entitlement referred to in part (a); the additional detail is essentially the same, although quite different words are used, because the fuller formulation reproduced in the heading above merely spells out how it is that dividend payments from the dividend declaring company are distributed.

503.

I agree with a submission by Mr Head KC that there is a mis-match between part (a) and part (b). Depending on the detail of their transactions: on the one hand, a party in receipt, directly or indirectly, of a dividend payment from the company, might or might not have been the shareholder entitled to the dividend in the eyes of Danish tax law; and on the other hand, that shareholder might or might not receive such a payment. That incongruence is relevant to whether the alleged representations were made, but it is not a reason to reject Mr Graham KC’s simplified formulation as in any way unfair or materially inaccurate as an encapsulation of the essence of the pleaded case.

504.

I did not find SKAT’s argument that the dividend entitlement representation was conveyed by the tax reclaim documents persuasive. The main flaw, once again, was its reliance on the non sequitur I identified in paragraph 441 above. SKAT submitted that:

(i)

It was receipt of a dividend on the declaration date, in the sense understood by Danish tax law, which gave rise to a liability to taxation in respect of which Danish companies were required to withhold tax. Accordingly, the only people who could have a right to relief from Danish dividend tax were those people who had received dividends as a matter of Danish tax law.

(ii)

By asserting a right to relief from Danish dividend tax, and seeking a refund of such tax “in the context and based on the documents” that were submitted, each tax reclaim “expressly or impliedly represented that the [Tax Agent’s client] was entitled to such a dividend”.

505.

The key point, once again, is that the making of a claim, or even the assertion by one party to another of a right against them, is not by nature a representation. Even if there might be situations where that does not hold, it is in my view true of the presentations of claims here, to SKAT as a national tax authority with responsibility for deciding for itself on what basis or bases it was willing to recognise a claim, and what information or evidence it required to receive in order to make a decision. If SKAT meant, by its reference to “asserting a right”, a statement by the Tax Agent to the effect that “our named client is entitled to a tax refund”, the simple fact is that SKAT did not ask for or receive any statement of that kind, and did not allege that a representation to that effect was made to it.

506.

SKAT developed, or unpacked, that basic submission, as set out below, but did not improve it by doing so. In what follows, I have removed reliance SKAT sought to make in closing upon specific aspects of the language of Form 06.008 not found in Form 06.003 (see again paragraph 437 above):

(i)

“90.1 The Tax Refund Forms asserted a right to “[R]elief from Danish [D]ividend [T]ax” … . Since the tax in question was withheld in respect of dividends it was implicit that anyone who had suffered such withholding of dividend tax must have received dividends within the meaning of Danish tax law, which (as a matter of Danish tax law) required that the person on whose behalf a WHT ‘refund’ was sought was entitled, as against the dividend-declaring Danish company, to the dividend when it was declared.”

That again, in terms, is the false logic of saying that to make a claim is to make a representation to the recipient that the claim is sound and, therefore, an implied representation that whatever facts would have to exist for it to be a sound claim do indeed exist.

(ii)

“90.2 This was reinforced by the “obligatory” requirement stated on … Form 06.003 that a “dividend advice” be enclosed (as to which see the next paragraph) … .

90.3

It was further reinforced by the cover letters, …, for example, the cover letters from Acupay, Koi and Syntax that referred to enclosing a “Claim to Relief from Danish Dividend Tax Form” and “Dividend Credit Advices” (emphasis added).”

It obviously adds nothing, to a claim submitted by a Form entitled “Claim to Relief from Danish Dividend Tax”, to mention in the covering letter that such a Form is enclosed; and likewise it adds nothing to enclosing with the claim a CAN, where the Form says that a “dividend advice” is required, to mention in the covering letter that a “Dividend Credit Advice” is enclosed. The additional point raised by SKAT, therefore, was just that for each reclaim, SKAT would naturally be expected to understand that the CAN had been submitted as the “dividend advice” called for by Form 06.003. Given the matters of context summarised in paragraphs 453 and 454 above, in my view it reads far too much into that label to say that a statement to the complex effect of the dividend entitlement representation was made by use of it.

(iii)

“91.1 The DCAs issued by SCP were titled “Dividend Credit Advice”. They stated that “we have credited your account” with a specific payment which “represents the dividend” and gave details of the “Gross Dividend” and “Net Dividend” on a stated “No of shares” in a named Danish company. From 2014, SCP DCAs also stated the “Ex Date”, being the date on and from which shares traded no longer carried any right to a dividend.

91.2

The DCAs issued by OPL, WPD, Telesto, Lindisfarne and Indigo referred to a “Dividend per Share” on a stated “No. of Shares” or “Number of Securities” in the named Danish company (specifying an “Ex-date” or “Ex-dividend Date”), producing a “Gross” and “Net” total dividend. WPD and Lindisfarne DCAs were titled “Dividend Credit Advice”, Indigo DCAs were titled “Credit Advice – Dividend”, Telesto DCAs were titled “Credit Advice” and OPL DCAs were titled “Income Advice”.

91.3

The DCAs issued by NCB were titled “Dividend credit for non-resident taxpayer status”. They stated an amount of “Dividend income” on a stated number of shares in a named Danish company, corresponding to a “Dividend per unit” on those shares. The NCB DCAs also stated the “Holdings as at” the Declaration Date, being the date shares needed to be owned under Danish tax law in order to be entitled to a dividend (which was prior to the “Ex-date” which was also stated separately).

91.4

The DCAs issued by Salgado referred to a “DPS” (i.e. dividend per share) on a stated “Number of shares” in a named Danish company as well as a “Gross dividend” and “Net dividend”, and the “Ex-date”.”

Those paragraphs summarise accurately certain features of the various forms of CAN in the case. But SKAT’s own case as to what CANs purported to state was not that they purported to make the dividend entitlement representation (see paragraph 17(c)(ii) of the Particulars of Claim, quoted in paragraph 456(ii) above). I did not accept even that case, and not because I concluded instead that CANs made some statement about Danish tax law entitlement (see paragraph 495 above). In my view, the CANs themselves indeed did not make a statement to the effect that the client had received the dividend described, for Danish tax law purposes, by being the shareholder for tax purposes on the dividend declaration date, or any statement similar to that.

(iv)

“92. In the circumstances, each WHT Application – and each DCA – represented expressly or impliedly that the WHT Client was entitled, as against the Danish company identified in the DCA, to the dividend described in the DCA when it was declared and therefore had “received” the dividend as a matter of Danish tax law.”

This states the conclusion that may have followed if the preceding points put forward by SKAT had merit. As I have explained above, however, in my view they did not; and the conclusion was not justified.

507.

For those reasons, in my judgment the dividend entitlement representation was not made to SKAT as it alleged. For completeness, it should be clear from my reasoning, above, that SKAT’s reliance on the contents of the Tax Agent’s cover letters in the argument for the dividend entitlement representation did not affect the conclusion.

508.

The dividend payment representation, as alleged, supplemented the dividend entitlement representation, if made, and could not stand alone. It therefore falls away, as I explained in paragraph 458 above. For completeness only, I add that even if the dividend entitlement representation had been made, I would have rejected the argument that the dividend payment representation followed. It did not, because of the mis-match correctly identified by Mr Head KC (paragraph 503 above).