Corporate applicants sought equitable rectification of directors’ resolutions relating to the redemption of preference shares in a corporate reorganization.
The redemption had triggered an unintended foreign exchange gain and resulting tax assessment due to a mistaken belief that earlier tax planning steps had been implemented.
The applicants argued the transactions were always intended to be tax‑neutral, while the respondent contended the request amounted to impermissible retroactive tax planning.
The court held that a common continuing intention that transactions occur on a tax‑neutral basis was sufficient even if the precise mechanism had not been determined at the time.
Rectification was granted to replace the share redemption with loan transactions consistent with the original tax‑neutral objective.
