ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
MRS JUSTICE GLOSTER
Strand, London, WC2A 2LL
B e f o r e :
THE RIGHT HONOURABLE LADY JUSTICE BLACK
THE RIGHT HONOURABLE SIR DAVID KEENE
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Mr Pushpinder Saini QC & Mr Fraser Campbell (instructed by Paul Hastings (Europe) LLP) for the Respondents
Hearing dates: 23rd November 2011
Crown Copyright ©
Lord Justice Longmore:
"6.1 Each of the Purchasers warrants, represents and undertakes to the Sellers:
6.1.1 that the consideration price stated in Clause 3 above represents and amounts to three fifths or more of the sum which the Purchasers are to and will receive for the sale by the Purchasers of the entire issued share capital of the Company.
6.1.2 that the Purchasers will immediately after Completion provide to the Sellers' solicitors a certified copy of the agreement for the sale by the Purchasers of the entire issued share capital of the company.
6.1.3 that the sum to be received by the Purchaser for the sale by the Purchasers of the entire issued share capital of the Company is $21,000,000 (Twenty One Million United States Dollars."
"the transaction to be structured as an acquisition by TSYS of (1) all of the issued and outstanding stock of the companies or (2) all of the assets of the company."
It was at this stage recognised by both the claimants and the defendants (who made it clear also to TSYS) that a sale which included a sale of assets would give rise to different and more serious tax considerations from a sale of shares on its own. In August 2005 TSYS confirmed a bid of $54.5 million. In October 2005 the defendants made clear to TSYS that they would require an indemnity in respect of their increased tax liability. The claimants and the defendants had also discussed between themselves the principle that, if there was to be an asset sale, TSYS would have to indemnify the sellers for any increased tax liability.
The submissions and the judgment
"namely to indemnify the defendants and the relevant Card Tech companies in respect of additional tax liabilities arising out of the restructuring of the deal."
Mr Saini submitted that that purpose described by the judge was a finding of fact which this court should not go behind and was determinative of the appeal. Mr Charlton countered by saying that that purpose was merely a description of the way in which the defendants intended to use part of the price which was paid and, as such, was irrelevant to the construction of clause 6.
Lady Justice Black:
Sir David Keene: