Oppenheimer v Cattermole

[1976] AC 249, [1975] 1 All ER 538, [1975] 2 WLR 347, [1975] STC 91, [1975] TR 13
Court: HL
Judgment Date: circa 1976
Catchwords & Digest
INCOME AND CORPORATION TAXATION - RELIEFS AND EXEMPTIONS - RELIEFS - DOUBLE
TAXATION - IN GENERAL - GERMAN NATIONALITY -- EFFECT OF GERMAN DECREE
The taxpayer was born in Germany in 1896 and was therefore a German national by birth. He was a Jew
and for many years was a teacher at a Jewish orphanage in Bavaria. In 1939, after a period of detention in a
concentration camp under the Nazi regime, he came to live in England where he remained during the war. A
German decree enacted on 25 November 1941 provided, inter alia: 'A Jew loses his German citizenship (a) if
at the date of entry into force of this reg, he had his usual place of abode abroad ...' The decree also
provided for the confiscation of the property of Jews thus deprived of their nationality and for the use of that
property 'to further aims connected with the solution of the Jewish problem'. Hostilities between UK and
Germany ceased on 8 May 1945. On 24 May 1948 the taxpayer became a British subject by naturalisation.
The German nationality law of 1913 provided that a German who had neither his habitual residence nor his
permanent abode in Germany lost his nationality when he acquired a foreign nationality if such acquisition
was made on application by him unless he had the written permission of the competent authority of his native
country to retain his nationality. In May 1949, on the founding of Federal Republic of Germany, a Basic Law
was enacted which, by article 116(2), provided that former German citizens who had been deprived of their
German nationality during the period from 1933 to 1945, were to be 'renaturalised' on application and,
furthermore, were to be considered as not having been deprived of their nationality if they took up residence
in Germany after 8 May 1945 and did not express any wish to the contrary. The taxpayer, however,
remained resident in UK. The war between UK and Germany officially ended on 9 July 1951. In 1953 the
Federal Government of Germany awarded the taxpayer, as an employee of a Jewish religious community, a
pension from 1 October 1952 to compensate for his persecution under the Nazi regime. He was given a
second pension by the German authorities in 1961 when he attained the age of 65. Both pensions were
payable out of public funds of the Federal Republic. In 1968 the German Federal Constitutional Court held
that article 116 of the Basic Law had been formulated on the assumption that the 1941 decree 'was void ab
inito' but that the effect of article 116(2) was that 'persecutees' who had acquired a foreign nationality could
regain their nationality by taking up residence in Germany or by making an application but that for
persecutees who had not acquired a foreign nationality the effect of article 116(2) was that the German state
'does not treat them as Germans unless they assert their German nationality by taking up residence or
making an application'. The taxpayer was assessed to income tax in respect of the pensions paid to him by
the German government for each of the years of assessment 1953-54 to 1967-68 inclusive. The taxpayer,
who had continued to be resident in UK during those years and had made no application to be renaturalised
under article 116(2) of the Basic Law, appealed against the assessment, claiming exemption under double
taxation conventions concluded between UK and Germany in 1954 and 1964. Under the provisions of each
of those conventions, the pensions were exempt from UK income tax if during the relevant years the
taxpayer was a 'national' both of UK and Germany, but they were not exempt if he was a national of UK only.
The taxpayer contended that during the relevant years of assessment he had retained his German nationality
since (1) the 1941 decree could not be recognised by English Law, (2) the 1913 nationality law had not
operated to deprive him of his German nationality when he became a British subject in 1948, and (3) after
the enactment of article 116(2) of the Basic Law he continued to be a German national even though, in
default of an application for renaturalisation, he was not treated as such by the German state: Held the
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question whether under German law the taxpayer had retained his German nationality was to be determined
by the English courts as a question of fact. The evidence showed that, on the assumption that the taxpayer
had not lost his German nationality on becoming a naturalised British subject in 1948, he had nevertheless
lost it in May 1949 when the Basic Law was enacted. Since he had neither applied for renaturalisation nor
taken up residence in Germany during the relevant years of assessment, he was not treated by German law
as a German national and no distinction could be drawn between a person who was not a German national
and a person who was in law 'not treated' as a German national; it was, furthermore, immaterial that the
taxpayer had an automatic right to acquire German nationality on application or on returning to live in
Germany. It followed that the taxpayer was not, during the relevant years of assessment, a German national
and accordingly was not entitled to relief under the relevant conventions.
WAR AND ARMED CONFLICT - ALIEN ENEMIES, TRADE AND PROPERTY - TRADING WITH THE
ENEMY - DEFINITIONS - 'ENEMY' -- FACTORS DETERMINING STATUS
Taxpayer was born in Germany in 1896 and was therefore a German national by birth. He was a Jew and for
many years was a teacher at a Jewish orphanage in Bavaria. In 1939, after a period of detention in a
concentration camp under the Nazi regime, he came to live in England where he remained during the war. A
German decree enacted on 25 November 1941 provided inter alia: 'A Jew loses his German citizenship (a) if
at the date of entry into force of this regulation, he has his usual place of abode abroad ...' The decree also
provided for the confiscation of the property of Jews thus deprived of their nationality and for the use of that
property 'to further aims connected with the solution of the Jewish problem'. Hostilities between UK and
Germany ceased on 8 May 1945. On 24 May 1948 taxpayer became a British subject by naturalisation. The
German nationality law of 1913 provided that a German who had neither his habitual residence nor his
permanent abode in Germany lost his nationality when he acquired a foreign nationality if such acquisition
was made on application by him unless he had the written permission of the competent authority of his native
country to retain his nationality. In May 1949, on the founding of Federal Republic of Germany, a Basic Law
was enacted which, by art 196(2), provided that former German citizens who had been deprived of their
German nationality during the period from 1933 to 1945, were to be 'renaturalised' on application and,
furthermore, were to be considered as not having been deprived of their nationality if they took up residence
in Germany after 8 May 1945 and did not express any wish to the contrary. Taxpayer, however, remained
resident in UK. The war between UK and Germany officially ended on 9 July 1951. In 1953 Federal
Government of Germany awarded taxpayer, as an employee of a Jewish religious community, a pension
from 1 October 1952 to compensate for his persecution under the Nazi regime. He was given a second
pension by the German authorities in 1961 when he attained the age of 65. Both pensions were payable out
of public funds of the Federal Republic. In 1968 the German Federal Constitutional Court held that art 116 of
Basic Law had been formulated on the assumption that the 1941 decree 'was void ab initio' but that the effect
of art 116(2) was that 'persecutees' who had acquired a foreign nationality could regain their nationality by
taking up residence in Germany or by making an application but that for persecutees who had not acquired a
foreign nationality the effect of art 116(2) was that the German state 'does not treat them as Germans unless
they assert their German nationality by taking up residence or making an application'. Taxpayer was
assessed to income tax in respect of the pensions paid to him by the German government for each of the
years of assessment 1953-54 to 1967-68 inclusive. Taxpayer, who had continued to be resident in UK during
those years and had made no application to be renaturalised under art 116(2) of Basic Law, appealed
against the assessments, claiming exception under double taxation conventions concluded between UK and
Germany in 1954 and 1964. Under the provisions of each of those conventions, the pensions were exempt
from UK income tax if during the relevant years taxpayer was a 'national' both of UK and Germany, but they
were not exempt if he was a national of UK only. Taxpayer contended that during the relevant years of
assessment he had retained his German nationality since (1) the 1941 decree could not be recognised by
English law; (2) the 1913 nationality had not operated to deprive him of his German nationality when he
became a British subject in 1948; and (3) after the enactment of art 116(2) of Basic Law he continued to be a
German national even though, in default of an application for renaturalisation, he was not treated as such by
the German state: Held the question whether under German law taxpayer had retained his German
nationality was to be determined by the English courts as a question of fact. The evidence showed that, on
the assumption that taxpayer had not lost his German nationality on becoming a naturalised British subject in
1948, he had nevertheless lost it in May 1949 when Basic Law was enacted. Since he had neither applied for
renaturalisation nor taken up residence in Germany during the relevant years of assessment, he was not
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treated by German law as a German national and no distinction could be drawn between a person who was
not a German national and a person who was in law 'not treated' as a German national; it was, furthermore,
immaterial that taxpayer had an automatic right to acquire German nationality on application or on returning
to live in Germany. It followed that taxpayer was not, during the relevant years of assessment, a German
national and accordingly was not entitled to relief under the relevant conventions.
Per curiam. (1) The English courts will only refuse to recognise a change in the status of an enemy alien
effected under the law of the enemy country during wartime so long as the war subsists. Once the war is
over the courts will recognise and give effect to the change. For that purpose 'wartime' is to be regarded as
coming to an end when fighting ceased and not as continuing until UK government declares officially that the
state of war is over.
(2) Where a national of an enemy state becomes a British subject by naturalisation in time of war it does not
follow that he thereby ceases to be a national of the enemy state.
(3) The fact that legislation by which a foreign state deprives a man of his status as a citizen of that state can
be described as 'confiscatory' does not necessarily entail the consequence that English law should deem him
to remain a citizen of that state for the purpose of deciding whether or not he is entitled to property in
England, his right to which depends on his being or not being a citizen of that state at some point in time.
Per Lord Hodson, Lord Cross of Chelsea and Lord Salmon (Lord Hailsham of St Marylebone and Lord
Pearson dissenting): legislation enacted by a foreign state, such as the 1941 decree, which takes away
without compensation from a section of the citizen body singled out on racial grounds all their property on
which the state can lay its hands and, in addition, deprives them of their citizenship is contrary to
international law and constitutes so grave an infringement of human rights that the English courts ought to
refuse to recognise it as law at all.
Case History
Annotations Case Name Citations Court Date Signal
--
Oppenheimer v Catter-
mole
[1976] AC 249, [1975] 1
All ER 538, [1975] 2
WLR 347, [1975] STC
91, [1975] TR 13
HL circa 1976
Affirming
Oppenheimer v Catter-
mole
[1973] Ch 264, [1972] 3
All ER 1106, [1972] 3
WLR 815, 116 Sol Jo
802
CA 20/07/1972
Reversing
Oppenheimer v Catter-
mole
[1972] Ch 585, [1972] 2
All ER 529, [1972] 2
WLR 1045, [1971] TR
507, 116 Sol Jo 256
Ch D circa 1972
Cases considered by this case
Annotations: All CasesCourt: ALL COURTS
Sort by: Judgment Date (Latest First)
Treatment Case Name Citations Court Date Signal
Explained Lowenthal v A-G
[1948] 1 All ER 295, 65
RPC 126, 92 Sol Jo
141, 64 TLR 145
Ch D circa 1948
Explained
R v Home Secretary,
ex p L
[1945] KB 7, 114 LJKB
229
KBD circa 1945
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