SHOULD FINANCIAL ASSISTANCE PROVISIONS HINDER
ENTERPRISING TRANSACTIONS?
Andrew Petersen '
This article considers the effect of the financial assistance provisions currently set out in the
Companies Act 1985 on 'commercially neutral' transactions in the light of two recent Court
of Appeal decisions'^ and the recent reforms surrounding insolvency law.
THE RESCUE CULTURE
In an economic downturn, which the UK economy seems to
be embarked upon, it is not surprising to see an increase in
arrangements for a rescheduling or restructuring of a company's
assets or obligations. Lawyers and other professional advisers
at the forefront of the gradual change in attitude towards
companies in financial difficulty, have become involved in
debt equity reorganisation arrangements such as 'debt equity
swaps' which restructure the capital of a company to enable
a creditor to convert indebtedness owed to it by a company
into one or more classes of that company's share capital. In the
UK and internationally, debt equity reorganisation has become
increasingly popular as creditors realise that their recoveries
are likely to be higher if the business can be rescued rather than
closed down. There have been a number of complex corporate
restructuring arrangements which have either been completed
in recent months or are ongoing. NTL and Marconi are two
examples. These arrangements work best where a company is
in a troubled state, but its principal creditors do not feel that the
situation is bad enough to require the appointment of a receiver
or a liquidator, recognising that any such appointment means
that they are likely to receive less by way of return than if they
substitute some of their debt for equity, in the hope that with
a lower debt repayment profile they may receive an acceptable
equity return once the company returns to profitability or is
sold.
This recent approach may be contrasted with the approach
taken in the recession of the early 1990s, when principal
creditors, particularly secured lenders, preferred a more
traditional lender-borrower relationship. When faced with a
borrower failing to service its debt repayments, generally a
secured lender's first instinct was to appoint a receiver to act
on their behalf and collect whatever return they could rather
than to consider the possibility of a debt equity reorganisation.
However, in the last ten years many secured lenders, whether
banks or bondholders, have become more used to taking equity
stakes, so that today a debt equity swap has greater credence
for secured lenders when considering how best to react to a
borrower in trouble. This change in attitude has resulted in an
increasing trend in recent years, involving the Insolvency Acts
1986 and 2000, to balance the interests of competing creditors
and promote rescues and recoveries, tfu-ough a collective
distribution regime.
In line with this trend, the present government is
attempting to promote a rescue culture that will, it is said,
favour responsible risk-takers by seeking to alter the current
balance of power between creditors and debtors, with an
aim to promote a more entrepreneurial culture in the UK.
A succession of Department of Trade and Industry ('DTI')
investigations and examinations (culminating in the DTI White
Paper on reforming insolvency law in July 2001) have over the
past five or so years attempted to introduce reforms to this end.
It was initially noted that the US Ch 11 bankruptcy system was
a model which the UK should aspire to. Chapter 11 of the US
Bankruptcy Code deals with reorganisations and is similar in
many ways to administration under the Insolvency Act 1986,
Pt n except that, in most Ch 11 cases, the debtor remains in
possession, with the result that the debtor is authorised to
continue its operations and the existing or new management
remain in office. (By contrast, in a current UK administration,
a licensed insolvency practitioner is appointed to take over
the management of the business.) In moving more towards
this system, there is a real hope that companies in financial
difficulties can be nursed back to health, with protection from
individual creditor action where necessary. To further this
end, the government hopes that the Enterprise Act 2002 ('EnA
2002')'^ may have a significant impact on corporate insolvency
law when the corporate insolvency provisions come into force
(most likely in July 2003). The EnA 2002 (including individual
bankruptcy) proposals include:
• streamlining the existing court-based administration
regime, including the introduction of the new out-ofcourt route into admirustration which is open to both the
company and a qualifying floating charge holder;
• a restriction on the right of a qualifying floating charge
holder to appoint an administrative receiver (and thus
prevent an administration) in all but a few exceptions;
• the introduction of a new, three-stage statutory
administration with the main focus being on the rescuing
of companies;
• abolishing Crown preference;
• reducing the discharge period for most bankrupts;
• reviewing the relevance of statutory restrictions on
undischarged bankrupts; and
• providing a tougher regime for bankrupts whose conduct
has been irresponsible or reckless.
We are yet to see if the EnA 2002 is an example of a grossly
misguided exercise in change for change's sake. After all, the
EnA 2002 does not introduce the Ch 11 debtor in possession
procedure. Following the passing of the corporate insolvency
provisions of the EnA 2002, the management will still be
replaced by an administrator. This has given rise to the
observation that the new administration process will simply
be the same as the old administrative receivership under a
different name.
Butterworths Journal of International Banking and Financial Law - July/August 2003
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SHOULD FINANCIAL ASSISTANCE PROVISIONS HINDER ENTERPRISING TRANSACTIONS?
THE REGULATORY CULTURE
In contrast to the change in culture represented in the insolvency
laws, the general laws regulating companies, set out in various
Companies Acts, the last being the Companies Act 1985 ('CA
1985'), have remained unchanged for decades. Many would
see this as warranting no criticism: after all companies, their
directors, shareholders and advisors need to have certainty
when conducting their affairs and providing advice.
However, in conducting a restructuring of assets or
rescheduling of obligations, for example, a debt equity
reorganisation, there are a wide range of legal, accounting,
financial and commercial considerations to take into account.
In particular, from a legal perspective there are the unlawful
financial assistance provisions set out in the CA 1985, ss
151-158 that need to be considered. A specific problem with
these provisions is that they may be used by a liquidator
to review and possibly unwind commercial restructuring
arrangements which have been put in place to realise the best
possible outcome for creditors as a whole and which even
insolvency law may not disturb. A further difficulty lies when
such restructuring arrangements result in no net diminution of
assets, the so-called 'commercially neutral' transactions. There
is then a real issue as to whether such transactions should be
struck down as being unlawful financial assistance in order to
protect creditors' interests.
Using the financial assistance provisions in such a way has
attracted a great deal of criticism over the years and recently led
to one commentator describing them as 'arcane, illogical and
opaque' and called for 'a total sweeping away of the financial
assistance prohibitions'.'* Given such views, it is perhaps
beneficial to spend a moment looking at the mischief behind
the financial assistance prohibitions.
THE FINANCIAL ASSISTANCE PROVISIONS
The CA 1985, s 151 is derived from the Companies Act 1929, s
45 which was enacted as a response to the notorious scandals
surrounding the speculative activities of asset strippers after the
First World War who participated in the then common practice
of purchasing the shares of a company having a substantial cash
balance or easily realisable assets and arranging matters so that
the purchase money was lent by the company to the purchaser.
The prohibition was amended in 1948 and reformulated in the
Companies Act 1981. The general objective, however, remains
the same, namely that the resources of the target company and
its subsidiaries should not be used directly or indirectly to assist
the purchaser financially to make the acquisition.
Although the financial assistance provisions in the CA 1985
impose serious criminal penalties involving imprisonment or a
fine or both, it is unclear what is meant by financial assistance.
The report of the Company Law Committee expressed the view
that it was 'unwise' to attempt a precise definition of financial
assistance. Thus although CA 1985, s 152 prescribes a number
of forms of financial assistance, it does not define the words
'financial assistance'. What is clear, from the way in which the
CA 1985, ss 11 and 152 are drafted, is that it covers financial
258
assistance in many forms (see for example the wide wording of
s 152(3)). It is also clear from the authorities that what matters
is the commercial substance of the transaction: 'the words
'financial assistance' have no teclinical meaning and their
frame of reference is the language of ordinary commerce'.^
The Companies Act 1981 was consolidated with other
companies legislation in the CA 1985 which resulted in a
limitation of the prohibition to certain forms of financial
assistance in the form of a residual category in CA 1985, s
152(l)(a)(iv). This provision, which is drafted very widely,
incorporates, for companies with positive net assets, a de
minimis exception: the words 'any other financial assistance'
indicate when financial assistance is not financial assistance,
namely when it is de minimis. The giving of any form of
financial assistance not previously mentioned in s 152(l)(a) is
outside the categories of financial assistance for the purposes of
s 151 if it does not reduce actual net assets to a material extent.
It is unclear whether this is an absolute test or a percentage
test. The more generally held view is that a percentage test is to
be preferred. There is no authority on the relevant percentage,
but it is commonly accepted that less than 1 per cent would fall
outside the prohibition, and 1 per cent or over would amount
to a material reduction. The matter is to be judged at the time
the assistance is given, that is when the contract is entered into,
not when it is performed. This is the only de minimis rule in
s 152. For a company whose net assets are thereby reduced to
a material extent or a company which has no net assets 'any
other financial assistance' would include the case where the
company buys an asset from the third party who then uses
the proceeds of sale to acquire shares in the company. 'Net
assets' here means the aggregate of the company's assets less
the aggregate of its liabilities. Liabilities include any provision
for liabilities or charges within the CA 1985, Sch 4, para 89 that
is, amongst other things, any amount retained as is reasonably
necessary for the purpose of providing for any liability or loss
which is likely to be incurred (s 152(2)). Assets and liabilities
should be given their actual values and not their book values.
In other words, the figures shown in the accounting records
should be disregarded and the assets should be valued
according to their actual worth. Goodwill can therefore be
included if it can be sold. Tax liabilities should be taken into
account when calculating net assets.
MT REALISATIONS
The question whether to be within the CA 1985, s 152(l)(a)(iv)
financial assistance must reduce a company's net assets was
considered in the case, MT Realisations", which came before the
High Court at the end of last year. The facts in MT Realisations
equated to a conventional debt swap. In 1994 the claimant
company (now called MT Realisations Ltd ('MT')) was a lossmaking, insolvent subsidiary company in the Digital group of
companies, suppliers of Compaq computer equipment. MT
owed its parent (Digital) £8 million. The shares in MT were
purchased for £1 and the debt owed by MT to Digital was
Butterworths Journal of International Banking and Financial Law - July/August 2003
SHOULD FINANCIAL ASSISTANCE PROVISIONS HINDER ENTERPRISING TRANSACTIONS?
assigned to the buyer at the discounted price of £6.5 million
to be paid in instalments (the 'loan assignment'). A subsequent
agreement provided that sums owed by other members of
Digital's group to MT would, instead of being paid to MX in
the usual way, be set off against the outstanding portion of the
£6.5 million owed by the buyer to Digital (the 'rescheduling
agreement'). MT then went into liquidation. The liquidator,
in an action brought with the support of and for the benefit
of MT's creditors (the principal creditor being the Inland
Revenue), claimed that the setting-off of the various debts was
either void or unenforceable on the grounds that it amounted to
imlawful financial assistance given by MT in connection with
the purchase of its shares. The question then arose whether
MT's agreement to relinquish the original inter-company debt
amounted to unlawful financial assistance.
MT REALISATIONS IN THE HIGH COURT
On the issue of giving 'financial assistance'. Laddie J held that
there was no distinction between a company which had net
assets and a company, like MT, which had no net assets. What
mattered was that there was financial neutrality. He found that
the words 'the net assets of which are thereby reduced' were
intended to apply to all target companies, but the words 'to a
material extent' only apply to target companies with net assets.
Thus, where a target company has net assets, mathematical
precision is not required; as long as the transaction does not
materially reduce its assets, no breach has been committed. If
the target company has no assets, no leeway is given. It is not
open to the directors to procure it to enter into a transaction for
the purpose of assisting in the purchase of its own shares if that
transaction would reduce its assets (or increase its liabilities)
even by a small amount.
This is soimd commercial sense. In MT Realisations there
was no net flow of assets from MT to the buyer. The buyer
took an assignment of secured loans made by Digital to MT
at the same time as it purchased the shares in MT. As assignee
of the secured loans, the buyer had the right to make an
immediate demand for repayment of the loans, to enforce its
security over debts due to MT from Digital and to use those
sums to pay the debt due from it to Digital for the acquisition
of the secured loans. No financial liability was adopted by
MT for the benefit of the buyer. MT was not 'giving' anything
financial to the buyer and the buyer was not 'receiving' any
assistance from MT. For companies with no net assets there
should be no financial assistance if, looking at the transaction
as a whole, it can be shown that there was no detriment to the
company giving the assistance. Thus, MT did not give financial
assistance 'for the purpose of acquiring its own shares. The
loan assignment was not a liability incurred 'for the purpose
of the acquisition of MT's shares. There was no evidence that
the buyer could not pay the price of £1 for the shares or that
MT's shares were worth more than £1. The £6.5m was agreed
to be paid for the acquisition of the inter-company loans, not
for the acquisition of the shares in MT. For these reasons, the
loan assignment should not have, as a matter of commercial
substance and reality, constituted financial assistance by MT
to the buyer for the purpose of acquiring shares in MT. So no
financial assistance was given in breach of s 151.
The decision of Laddie J has been hailed as representing
a 'significant stride towards clarity and common sense' and
'from a wide perspective . . . underscores the need for a total
abolition of the financial assistance prohibition'./ However, it
must be noted that s 151 decisions are notoriously fact-specific
and almost immediately Laddie J's approach ran into criticism
and received judicial disapproval from the unanimous decision
of the Court of Appeal ('CA') in Chaston.
DISAPPROVAL OF MT REALISATIONS
In Chaston, the CA decided that the payment of auditors' fees
by a subsidiary of the target company in a share acquisition
in respect of services provided in reporting on a due diligence
exercise for such acquisition, constituted financial assistance
within the meaning of s 151. In a judgement handed down by
Arden LJ, it was held that the payment of fees amounted to
financial assistance because the payment constituted a material
reduction of the subsidiary's net assets. Had the fees not been
so substantial relative to the subsidiary's net assets there would
have been no financial assistance within s 152(l)(a)(iv).
In a relatively detailed judgment, Arden LJ emphasised
the importance of focusing on the 'commercial substance of
the transaction' in each case and in her discussion of the rival
submissions Arden LJ referred to the authorities in detail,
including the decision of Laddie J in MT Realisations. Arden
LJ concluded that, as a matter of the commercial substance
and reality a company may breach s 151 on the facts of the
particular case, even though:
• it could not necessarily be shown that the company being
acquired has suffered any detriment;
• the assistance was given in advance of the transaction,
rather than in the course of it;
• the assistance may merely have acted as an inducement to
the transaction;
• the assistance may have no impact on the share price;
• the assistance was given by the target company in
circumstances where its directors had acted bona fide in
the best interests of that compemy;
• the assistance was given to the parties to the transaction
rather than to the target company itself; and
• only one of the purposes for which the transaction was
carried out was to assist the acquisition of shares.
These are all clearly factual circumstances which may
exist when conducting a restructuring of assets for such a
troubled company.
Whilst giving her judgment in MT Realisations, Arden LJ
referred to her disapproval of Laddie J's approach. At para
41 of her judgment Arden LJ stated:
'in so far as in the MT Realisations case (which concerned a com-
Butterworths Journal of International Banking and Financial Law - July/August 2003
259
SHOULD FINANCIAL ASSISTANCE PROVISIONS HINDER ENTERPRISING TRANSACTIONS?
pany with no net assets) Laddie J came to a different conclusion
(judgment para 50), I respectfully disagree with him but say no
more as this court has yet to consider the appeal in that case'.
One must then turn to the latest edition of Buckley on the
Companies Acts" authored by Arden LJ, for her Ladyship's
further comments on MT Realisations. There it is submitted
that:
'no inference can be drawn from s 152(l)(a)(ii) or
(iii), as Laddie J suggested, that financial assistance
must involve a diminution in net assets since a loan
or guarantee may be granted on full commercial
terms and yet still constitute financial assistance of a
prohibited kind. Furthermore, there would seem to
be obvious policy reasons for permitting non-material assets reductions by companies with positive net
assets but proscribing them if carried out by companies who have no net assets. Notwithstanding this,
Laddie J went on to construe the words "which are
thereby reduced" as applying to all companies and
the words to a "material extent" as applying only
to companies with net assets. It is submitted that
this conclusion gives a very strained construction
to s 152(l)(a)(iv) in any event, and the better view is
that where a company has no net assets any form of
financial assistance is within s 151'.^
MT REALISATIONS IN THE COURT OF APPEAL
Given that the CA was unanimous in their findings it would
have come as no surprise if the C A had overruled Laddie J in the
High Court. However, in April 2003 the expected overruling of
Laddie J in the C A did not occur. In an appeal brought following
the CA decision in Chaston, where somewhat unusually both
sides argued that Arden LJ's judgment supported their view,
an argument was advanced on behalf of the liquidator in MT
Realisations that Laddie J approached the matter wrongly by:
• regarding it as necessary for the financial assistance to be
given 'for the purpose of the acquisition;
• treating the liability of £1 as the only liability incurred 'for
the purpose of the acquisition of the shares in MT; and
• by holding that a net diminution or reduction in net assets
had to be shown.
Counsel for the liquidator submitted that the set-off
arrangements had as their purpose the reduction or discharge
of a liability incurred for the purpose of the acquisition of
the shares; the set-off arrangements amounted to financial
assistance, being either a 'gift' or payments by MT, being a
company which had no net assets, with the result that s 151 had
been contravened and that there had been no valid discharge of
the debts in question.
The CA disagreed with these arguments and reached the
same conclusion as Laddie J, although for differing reasons,
and held that there had been no financial assistance.
260
Mummery LJ in taking the so-called 'commercial realities
approach' as first expounded in Charterhouse^^ and deciding
that no financial assistance was given by MT to the buyer for
the purpose of reducing or discharging a liability incurred
for the purpose of the acquisition of its shares, looked at the
buyer's legal rights against MT in respect of the inter-company
indebtedness as at the date of the rescheduling agreement and
held that the set-off arrangements were not a gift. For there to
be assistance 'something has to be given to someone'. •^' •^' MT did
not give anything to the buyer. The buyer had already acquired
its right as a secured creditor against MT vmder the terms of
the loan assignment. By enforcing its security rights as chargee
over the debts owed to MT by Digital's group it would recover
its legal entitlement as chargor and debtor rather than be the
recipient of financial assistance from MT. The overall effect
of the rescheduling agreement was simply to short circuit the
position by setting off amounts due to MT by Digital's group
against the amounts owed by the buyer to Digital in respect of
the loan assignment. No financial assistance was given to the
buyer by MT out of its own assets or resources.
CONCLUSION
So where has the law ended up? Under the Insolvency Act
1986, a liquidator has a duty to preserve a company's property
and if possible, to increase the assets available for creditors in a
number of ways. He may:
• attack certain transactions as being conducted at an
undervalue or preference and reclaim company property;
• disclaim onerous property;
• review extortionate credit transactions;
• allege that floating charges have been granted for no new
consideration; and
• review transactions to defraud creditors.
Some of these powers to clawback the assets of the company
are also available to administrators and administrative
receivers. These are all well-documented powers which
prevent creditors being defrauded. Despite these wide powers,
in MT Realisations the liquidator did not argue that the debt
swap constituted an unlawful preference or a transaction at an
undervalue or otherwise violated the insolvency regime. Thus
insolvency law had no role to play. A question then remains
as to whether a liquidator adopting the hindsight viewpoint
of creditors should be able to rewind a commercially neutral
transaction, put in place with the intention of nursing back
a company to financial well-being, as unlawful financial
assistance. It is submitted that both the High Court and the
CA in MT Realisations, although for different reasons, believed
that he should not. Both as a matter of the 'commercial realities
of the transaction' and of legal principle, this move should
be applauded. The arrangement in MT Realisations did not
involve MT in giving 'financial assistance' to the buyer within
the meaning of s 151(2). It did not have any negative impact
on MT's overall net balance sheet position. As the buyer was
Butterworths Journal of International Banking and Financial Law - July/August 2003
SHOULD FINANCIAL ASSISTANCE PROVISIONS HINDER ENTERPRISING TRANSACTIONS?
in the position of a secured creditor of MT, it was entitled to
help itself by exercising its security rights over the book debts
due to MT from Digital and other companies in its group. The
Federal Court of Australia (relied upon by Mummery LJ in the
CA in MT Realisations) stated in Sterileair 'assistance involves
something in the nature of aid or help. It cannot exist in a
vacuum; it must be given to someone'. In this case nothing was
given by MT to the buyer, which it had not already acquired
as its own resource by the loan assignment from Digital in
order to secure performance of the obligation to repay the
inter-company loans due on demand from MT to Digital. No
financial assistance was being given to the buyer by MT out of
its own free assets or resources.
However, one should exercise caution when relying on
decisions involving s 151. As stated in the CAby Mummery LJ
in MT Realisations:
'each case is a matter of applying the commercial
concepts expressed in non-technical language to the
particular facts. The authorities provide useful illustrations of the variety of fact situations in which the
issue can arise, but it is rare to find an authority on s
151 which requires a particular result to be reached
on different facts'.
Somewhat more importantly, MT Realisations also involved
a principal creditor, the Inland Revenue, seeking to recover
preferential claims due to it. The aggressive approach of
preferential creditors such as the Inland Revenue, may be
diluted following the abolition of preferential status of Crown
debts (ie, debts due to the Inland Revenue, Customs and Excise
and social security contributions, each of which were incurred
within a specified time period) following the passing of the EnA
2002. The EnA 2002 reduces the Crown's preferential status in
relation to VAT and PAyE/NIC to that of unsecured status,
ranking pari passu with the general body of creditors. The
effect of this is that funds previously distributed to preferential
creditors only will in the first instance now be available to
floating charge holders and unsecured creditors thereafter. The
only creditors to retain a preferential status will relate to sums
outstanding to employees in respect of arrears of wages to a
maximum of £800 and holiday pay. In theory, the reduction
of the Crown's status as a creditor will enhance the security
of floating charge holders (more often than not UK clearing
banks) as they will not, following the introduction of this
provision of the EnA 2002, be subject to potentially substantial
preferential creditor claims in priority to their own security.
However, as the government does not want the benefit of the
abolition of the preferential status of certain Crown debts to go
to the floating charge holder, as a quid pro quo for the reduction
in the Crown status, in all cases where there is a floating charge
an element of floating charge realisations known as a 'top slice'
will be ring-fenced by the receiver, liquidator or administrator
and made available for distribution to unsecured creditors. The
percentage of this 'top slice' of the company's net property
has not yet been quantified. A figure was initially mentioned
of around 10 per cent - a figure which one assumes was
taken from the Cork Committee report of some 20 years ago.
However, the government has indicated to the various parties
who took part in the consultation process that the prescribed
minimum will be set at £10,000 and the prescribed percentage
will be calculated on the basis of a sliding scale as follows:
• 50 per cent of the first £10,000 of floating charge
realisations;
• 20 per cent of floating charge realisations thereafter; and
• up to a maximum ring-fenced fund of £600,000.
This is yet to be confirmed. Net property is defined as
the property available for distribution once the fixed charge
liabilities and preferential debts have been discharged and
the costs of realising the company's property deducted and is
intended to cover the floating charge realisations. If the ringfenced fund is below a certain prescribed minimum and the
officeholder considers that the costs of distributing the fund
would be disproportionate to the benefits, the officeholder is
not required to make a distribution.
Formal insolvency procedures were originally set up
to deal with individuals or businesses unable to meet all
their contractual or legal obligations. The defining point of
insolvency law is the imposition of a collective approach to
the way in which a debtor's assets are realised and in which
they are distributed to claimants. It is hoped that the approach
of the CA in MT Realisations in emphasising a view first
expounded nearly 20 years ago by a judge of considerable
foresight, coupled with the government's aim of the EnA
2002 promoting a rescue and more entrepreneurial culture in
the UK with the role of facilitating the survival of a business
in order to maximise the value of available assets, will mean
that the practice of a liquidator using the financial assistance
provisions to challenge a commercially neutral transaction
will increasingly not be followed. As for the abolishment of
the financial assistance provisions in their entirety, this author
suspects that this is for another day. For those who believe that
a great deal of time and money is wasted on these provisions
and that they serve no real purpose in modern day commerce,
this author has a great deal of sympathy.
1
2
3
4
5
Andrew Petersen is counsel specialising in cross-border
acquisition finance and corporate restructuring in the banking department of the London office of Dechert LLP.
See MT Realisations Ltd (in liq) v Digital Equipment Co Ltd
[2003] EWCA Civ 494 and Robert Chaston v SWP Group
pic [2002] EWCA Civ 1999 CChaston').
Which received Royal Assent on 7 November 2002.
See (2002) 11 JIBFL 443 and the article written by Look
Chan Ho when commenting on the High Court decision of
Laddie J in MT Realisations.
See per Hoffman J (as he then was) in Charterhouse
Butterworths Journal of International Banking and Financial Law - July/August 2003
261
SHOULD FINANCIAL ASSISTANCE PROVISIONS HINDER ENTERPRISING TRANSACTIONS?
Investment Trust Ltd v Tempest Diesels Ltd [1986] BCLC
1 ('Charterhouse'), approved by the Court of Appeal in
Barclays Bank pic v British and Commonwealth Holdings
pic [1996] 1 BCLC 1 at 40) and again (somewhat unsurprisingly) confirmed by Lord Hoffman (with whom the other
members of the House of Lords agreed) in a recent revenue case: MacNiven (Inspector of Taxes) v Westmoreland
Investments Ltd [2001] STC 237 at 254.
MT Realisations Ltd (in liq) v Digital Equipment Co Ltd
7
8
9
10
11
[2002] EWHC 1628, (Ch) ('MT Realisations').
See(2002)llJIBFL443.
(Butterworths, 15th edn, 2000) para [152.7].
Para [152.7A].
Per Hoffman J (as he then was).
See Sterileair Pty Ltd v Papallo NG 278 of 1998,
16 November
1998, Australian
Federal
Court
('Sterileair').
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