“Subject to sections 363 to 365, interest is eligible for relief under section 353 if it is interest on a loan to an individual to defray money applied – … (b) in contributing money to a partnership by way of capital or premium, or in advancing money to a partnership, where the money contributed or advanced is used wholly for the purposes of the trade, profession or vocation carried on by the partnership …”
“also represents the likely value of the Rights licensed by Disney to Eclipse 35 or, at least, the value which the parties agreed to place on those Rights in the context of the overall deal which they struck after having regard to expert advice on the estimated financial performance of the Films.”
“Drawing all these matters together, therefore, we conclude that Eclipse 35 acquired the Rights by licence pursuant to the Licensing Agreement which it then subsequently proceeded to sub-licence to the Distributor pursuant to the Distribution Agreement. Neither the substance of the Rights nor their value was materially affected or depreciated by reason of the licence being granted subject to the Prior Agreements. The consideration which Eclipse 35 gave for the Rights reflected the likely value of the Rights. The Rights gave Eclipse 35, by reason of the Distribution Agreement, the entitlement to Contingent Receipts, and at the time the transaction was entered into a payment of Contingent Receipts, although speculative, was reasonably anticipated to be possible in the course of the twenty year term of the licence.”
“356. …. we do not consider that Mr Salter’s activities establish that Eclipse 35 was, even on a collaborative basis, engaged in directing and supervising the marketing and release of the Films. Eclipse 35 cannot be said to be directing and supervising matters in circumstances where the Distributor had already come to a conclusion as to what it should do. 357. Finally, although there was undoubtedly a well-planned and well-executed regular flow of high quality and relevant information gathered by SCI and Mr Salter from the relevant Disney companies to WDMSP Ltd and Eclipse 35, with pertinent comment by Mr Salter, and although that information was considered at board meetings of WDMSP Ltd and by the Designated Members (that is, in effect, the executive Members) of Eclipse 35, that does not in itself establish the case which Eclipse 35 is asking us to accept. 358. Whilst we can conclude that, through WDMSP Ltd, Eclipse 35 monitored the activities of the Distributor with regard to the marketing and release of the Films, and was kept fully aware of the activities in that regard which the Distributor undertook and of the financial performance of the Films, we are unable to conclude that Eclipse 35 had a part, or at least a meaningful part, in directing and supervising the marketing and release of the Films by the Distributor.”
“90. Matters which were the subject of particularly intensive negotiation included the following: (1) The value to be attributed to the film rights licensed and the amount of the fixed royalties paid by the Distributor; (2) The identity of the films, and the extent of the rights in such films, to be licensed; (3) The protection of Disney’s rights in the films in the eventuality of the insolvency of the Eclipse partnership; (4) The marketing arrangements carried out through WDMSP Ltd, including the extent of WDMSP Ltd’s role and its accountability to, respectively, the Eclipse partnership which engaged its services and Disney; (5) The amount of the Studio Benefit in the case of each tranche (which was reduced from 2.5 per cent envisaged in the Term Sheet to … 1.15 per cent in the case of Eclipse 35); (6) The terms on which the Contingent Receipts were to be ascertained, and the proportion of the Contingent Receipts to which the Eclipse partnerships were entitled; and (7) The extent of the rights which the Eclipse partnership had to audit the gross income receipts earned by the films in order to monitor any entitlement of the Eclipse partnership to Contingent Receipts.”
"the driving principle in the Ramsay line of cases continues to involve a general rule of statutory construction and an unblinkered approach to the analysis of the facts. The ultimate question is whether the relevant statutory provisions, construed purposively, were intended to apply to the transaction, viewed realistically."
“A man cannot be trading or engaged in an adventure in the nature of trade unless there is someone with whom he is trading – someone to whom he supplies something such as goods or services for some return. Here there was no one with whom Mr Higgs can fairly be said to have “traded” … Mr Higgs … simply told the parties concerned to carry out the transaction which the scheme which he had adopted required them to carry out.”
“acts done or documents executed by the parties to the ‘sham’ which are intended by them to give to third parties or to the court the appearance of creating between the parties legal rights and obligations different from the actual rights and obligations (if any) which the parties intend to create.”
“The production of a film, or the completion of an uncompleted film or, I might add, the purchase of a completed film, in each case with a view to its distribution and exploitation for profit, are all typical, though highly speculative, commercial transactions in the nature of trade.”