In this article, we highlight several recent civil law judgments of particular legal and commercial significance.
Tax - Methanex Trinidad (Titan) Unlimited v The Board of Inland Revenue (2025) UKPC 20
On April 22, 2025, the Privy Council delivered a landmark judgment confirming the right of a taxpayer to structure their affairs in order to benefit from the provisions of the double taxation treaty made among the member states of the Caribbean Community (“the Caricom Treaty”).
In this case, the taxpayer relied upon the provisions of the Caricom Treaty which provided that withholding tax on dividends paid by one company resident in a Caricom Member State to its shareholder who was resident in another Member State (here Barbados) was to be taxed at 0%.
The BIR claimed that the dividends were paid at the direction of the ultimate parent and were immediately on-paid up the corporate chain. The BIR therefore applied Section 67 of the Income Tax Act of Trinidad and Tobago, which permitted them to disregard a transaction which in their opinion was artificial or fictitious and designed to reduce tax. In addition, the BIR asserted that the Caricom Treaty did not apply as the Barbadian entity was only subject to a limited form of taxation in Barbados and therefore did not pay the same tax as other residents in that territory.
The taxpayer challenged the BIR’s assessment.
Each of the courts unanimously held that the BIR’s position regarding the applicability of the Caricom Treaty was incorrect. However, both the Tax Appeal Board and the Court of Appeal agreed with the BIR that the payment of the dividends was artificial and fictitious and therefore upheld the assessment on this basis.
The Privy Council disagreed and set aside the assessment. In so doing the Privy Council confirmed the applicable test and found that there was nothing abnormal about the payment of dividends up a corporate chain.
Instead the Court confirmed that such a practice was commercially commonplace and was the only lawful means by which distributable profits could be brought up from subsidiaries.
Accordingly, the dividends were not subject to withholding tax in Trinidad and Tobago.
The Privy Council’s ruling clarifies several important principles of international tax law, including the proper legal characterisation of commercial payments made within multinational groups, such as cross border payments made in the context of international tax treaties and domestic anti-avoidance laws. It also represents an important shift in the pendulum towards the right of taxpayers to structure their affairs in a tax efficient manner.
Intellectual Property - CA P-297 of 2018 Caruth v The Tobago House of Assembly
On July 22, 2025, the Court of Appeal delivered an important judgment for copyright law which clarified, in particular, the neighbouring rights of performers.
The appellant, Sean Caruth, wrote and recorded a song popularly known as “Coal Pot”. An excerpt of this song was used by the Respondent in an advertisement designed to promote a tourist event, without the appellant’s permission. The appellant claimed that the respondent had infringed his intellectual property rights
The dispute ultimately came before the Court of Appeal, which considered the appellant’s right to enforce different intellectual property rights subsisting in his composition. As the author of the song, the Appellant was entitled to the “copyright” in the musical work. It was not in dispute that he had assigned his copyright to the Copyright Music Organisation of T&T (“COTT”) under a deed of assignment. This meant that only COTT (and not the appellant) could bring a claim for copyright infringement.
As the performer of the song, the appellant was also entitled to “neighbouring rights”. Neighbouring rights are separate and distinct from copyright. While copyright protects composers and creators, neighbouring rights protect performers. The court had to determine whether the appellant had also assigned his neighbouring rights to COTT under the deed of assignment.
After reviewing the deed, the court found that it applied only to copyright and not to neighbouring rights. The court recognised that at the time the parties had entered into the deed, the Copyright Act did not address the distinct nature of these two rights – copyright and neighbouring rights. Notwithstanding, the court helpfully clarified the law in that it observed that an assignment of neighbouring rights ought to be made expressly in writing in order to be effective. It found that the respondent had breached the appellant’s neighbouring rights by using his recording of the song without his permission.
The court also considered the appellant’s “moral rights” in relation to the song. Moral rights are non-economic, personal rights that protect an author’s link to his work, such as the right to claim ownership of a work and the right to object to changes which may be harmful to his reputation. The court found that the respondent had breached the appellant’s moral rights by not crediting him in their advertisement.
The Court then had to consider the amount of damages that the appellant was entitled to. It held that the appellant was entitled to recover pecuniary loss such as loss of profits or goodwill, as well as non-pecuniary loss such as distress and inconvenience.
The pecuniary loss suffered by the Appellant was the use of his recording without a licence. While there was no evidence of the value of such a licence, the Court awarded reasonable charges for the use of the work, which it quantified at $100,000. It also awarded a further $100,000 for non-pecuniary loss, including hurt feelings, distress and outrage.
The Court of Appeal’s judgment is a significant one for intellectual property, clarifying the neighbouring rights of performers as well as the principles governing the assessment of damages for infringement.
Directors’ duties - CV2016-04365 SporTT v Paddington and 0thers
On July 23, 2025, the Justice Rahim delivered an important oral decision clarifying the duties of directors serving on the boards of state enterprises. While a full written judgment has not yet been made available, the court highlighted certain key points in a written summary of reasons.
The case dealt with the duties and obligations of directors of “state enterprises”, ie private limited for-profit entities owned and incorporated by governments for the purpose of putting policy decisions into operation. The company at the core of the case - Sports Company of T&T (“SporTT”) - was one such entity.
SporTT was the key implementation agency for the Ministry of Sport and Youth Affairs (“the Ministry”) in relation to a government programme known as “LifeSport”.
The ministry identified a particular contractor as its preferred supplier for certain aspects of the LifeSport programme and effectively instructed SporTT to enter into a contract with that contractor. SporTT’s Board of Directors accordingly took the decision to award a contract to that contractor. It ultimately transpired that there were serious problems with the delivery of the works by the contractor. A claim was brought against the directors for breach of their fiduciary duty to the company.
The directors argued that SporTT was simply implementing a decision that had been taken by the ministry. However, the court noted that notwithstanding the Ministry’s directives, the directors still owed a fiduciary duty to act honestly and in good faith with a view to the best interests of the company.
The court observed that the directors seemed to have taken the view that they were there to abide the decision of the Ministry and so approved the selection of the contractor without full and proper consideration. It found that if the Directors had properly considered the information and documentation available to them at the time, they would have noted material errors that would have spoken to the contractor’s competence. By failing to do so, they had breached their fiduciary duties.
The court appeared to recognise the inclination of some directors of state enterprises to view their role as being to facilitate and not frustrate the government’s objectives and policy decisions. However, it cautioned directors against abdicating their fiduciary duties, noting that they serve as an important check and balance, and were not merely “rubber stamps”.
This judgment is a notable one, clarifying the duties of directors serving on the boards of state enterprises.
Disclaimer: This Column contains general information on legal topics and does not constitute legal advice.
