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Mr Justice Mann's judgment in HMRC v Portsmouth City Football Club Ltd & Ors  EWHC 2013 (Ch) (05 August 2010) has now been published. Following a long and exhaustive judgment the learned judge concludes:
"It follows, therefore that the application and appeal of HMRC fail and fall to be dismissed. In the course of arriving at that conclusion I have not dealt with all the points and submissions made because it was neither possible in the time available nor strictly necessary. I have, however, borne them all in mind. By way of tidying up I would add the following:
i) In my view this is a case which, in the circumstances, had to turn on the commercial realities, and not the validity of the football creditor rules. Nor can it be allowed to turn on the stance of principle that the Revenue takes in relation to CVAs that do not treat all unsecured creditors equally. Those two factors plainly motivate HMRC in its decision-making, but in the context of these applications they tend to recede into the background when the matter is properly viewed.
ii) As Mr Sheldon emphasised from time to time, the commercial realities (or, as he would put it, living in the real world) point all one way. Unless there is a successful attack in the near future which brings into the insolvency of this club all the moneys which the Premier League would otherwise pay to football creditors, and which successfully attacks the insolvency policies under which the Leagues procure payment in full for football creditors, there is no way in which worthwhile money is likely to flow into this insolvency, or in which asset values can be preserved other than via the CVA.
iii) Mr Mitchell pointed out what are undoubted problems with the commercial deal. He sought to cast doubt as to whether the money would come in from Newco over the next 4 to 5 years, as promised. One can see why HMRC might be concerned about that. However, that is a commercial risk which a creditor might feel justified in taking in the interests of the chance of some extra money. Obviously a lot of them did. He also pointed to the fact that Mr Chainrai was the owner of the club at the time of its administration, and further that complaint had been made that he had not established himself as a fit and proper person in the eyes of the Football League (which an owner has to do). That again is true, and might make the deal less attractive than it would have been had the purchaser been a new, untainted fit and proper third person (which apparently HMRC would have found more palatable). However, if those facts come with the only deal which is on the table, then that is that. They do not render the deal so wrong as to make it unfairly prejudicial for HMRC to be bound into it. I would also observe that these are problems with the particular deal in question, and not problems inevitably flowing from the CVA, so in theory they are irrelevant to the questions I have to decide.
iv) Mr Mitchell sought to convince me that if this CVA were revoked, and the present deal went away, that was not necessarily an end of the matter because the club could soldier on and it was not impossible that a fresh deal would become available. I am afraid that on the evidence that is not a realistic scenario. The present purchaser is the only one who progressed materially beyond the level of a mere expression of interest. There is no reason to suppose that there is anyone else interested at all, let alone who would pursue their interest into a binding deal that would preserve the club's status in the Championship."
"This is the ultimate statement of where the law on IVAs is to be found in our great common law...