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The claimant company, Teesside Powers Holdings sold shares under a share purchase agreement. In addition, a tax deed was drawn up whereby any tax rebate made to the purchaser would be passed on to the claimant company.
The question arose as to whether the purchaser was obliged to pass on to the claimant company any interest relating to the repayment.
The High Court judge noted the problem was effectively caused by no mention of interest having been included in the tax deed.
He said the word ‘interest’ did not appear in the deed: there had been no apparent consensus between the parties about it.
The judge concluded that ‘the consequence must be that the clause does not apply to such interest with the result that there is no obligation on the buyer to account for it’.
