Burmarsh Ltd v Walters

Burmarsh Ltd v Walters

The Court held that Clause 2.6 of the Deed of Assignment referred only to a final determination of the quantum of the Loss as defined in the recital, not to the commercial benefit obtained by the Assignee. The compromise with the Inland Revenue was not a final determination of quantum, so the full amount of the second instalment was payable.

Parties
Claimant/appellant: Burmarsh Ltd; Defendant/respondent: Robert Walters
Jurisdiction
England and Wales
Judgment Date
14 February 2007
Procedural Posture
Civil Appeal / Court of Appeal Judgment
Outcome
Appeal allowed
Legal Topics
Construction of Commercial Contracts, Capital Gains Tax, Assignment of Contingent Interests, Tax Avoidance Schemes
Contract Law Tax Law Construction of Commercial Contracts Capital Gains Tax Assignment of Contingent Interests Tax Avoidance Schemes

Case Brief

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Parties

Burmarsh Ltd

Claimant/appellant

Robert Walters

Defendant/respondent

Procedural Posture

Civil Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether Clause 2.6 of the Deed of Assignment required reduction of consideration based on the Inland Revenue's settlement
  2. 2 Proper construction of 'Loss' as defined in the Deed
  3. 3 Whether the compromise with the Inland Revenue constituted a final determination of quantum under Clause 2.6

Ratio Decidendi

The Court held that Clause 2.6 of the Deed of Assignment referred only to a final determination of the quantum of the Loss as defined in the recital, not to the commercial benefit obtained by the Assignee. The compromise with the Inland Revenue was not a final determination of quantum, so the full amount of the second instalment was payable.

Court Disposition

Appeal allowed

Orders

  • Judgment entered for £305,900 with interest at LIBOR plus 1 per cent from 19 January 2005 to payment
  • Repayment of £126,000 paid re costs with interest at same rate from date of payment to repayment