Charterhouse Investment Trust Ltd v Tempest Diesels Ltd: ChD 1986

When looking at transactions challenged under the Act, the court must look to the ‘commercial realities’ of what had taken place. ‘There is no definition of giving financial assistance in the Section although some examples are given. The words have no technical meaning and their frame of reference is in my judgment the language of ordinary commerce. One must examine the commercial realities of the transaction and decide whether it can properly be described as the giving of financial assistance by the company bearing in mind that the section is a penal one and should not be strained to cover transactions which are not fairly within it ‘

Hoffmann J
[1986] BCLC 1
Companies Act 1985 54
England and Wales
Cited by:
CitedMT Realisations Limited (In Liquidation) v Digital Equipment Co Limited CA 10-Apr-2003
The company was insolvent, depending upon loans to it from its parent company. In the liquidation, it was claimed that in a scheme for the acquisition of the shares, the assumption of liability to repay a loan amounted to unlawful financial . .
CitedAnglo Petroleum Ltd v TFB (Mortgages) Ltd ChD 24-Feb-2006
The company sought to say that loans of 15 million pounds were void under s151 of the 1985 Act. It was said that the loans infringed the provisions of s151 being unlawful financial assistance.
Held: The loans were valid: ‘if it is lawful for a . .

Lists of cited by and citing cases may be incomplete.


Updated: 20 January 2022; Ref: scu.181075