Football Management

Commentary on the management of over 160 English football clubs by Dr John Beech, winner of the FSF Writer of the Year Award 2009/10 Twitter: @JohnBeech Curator of Scoop.it! Football Finance

Portsmouth’s latest day in court

Posted by John Beech on March 2, 2010

If you were hoping that the latest confrontation between Pompey and HMRC in the High Court might bring resolution, or even clarity, then I’m afraid you were in for disappointment (the best coverage of events was by the Portsmouth Evening News with its live blog and here).

As Gregory Mitchell for HMRC put it: “‘The question which we and indeed supporters of the club and members of the public ask is how is it possible that this once great club has become insolvent so that its liabilities its assets by £65 million“.  Good question, but was the High Court really the place to ask it?

He conceded that HMRC supported Administration in principle (well, he would, HMRC having provoked it, and having much to lose by the alternative, liquidation) but stated that HMRC had three issues:

  1. the validity of Administration
    His case did not strike me as clear from what was reported, and seem to really be a summary of the other two issues.

  2. the independence of the Administrators
    This was an unusual point to raise.  With the increasing occurrence of both Pre-Pack Administration (2) and instances where the original owner has bought the company back from the Administrator (e.g. at Leeds United and Chester City), it is certainly an interesting point to raise, but quite why the case of Portsmouth should be chosen for some kind of test-case is far from obvious.

  3. the feasibility of Administration
    Again, an unusual and interesting point, but was this court appearance the right place to raise a matter with such wide possible ramifications?

The difficulty he found in putting his case was summarised thus: “‘We accept that there may be a valid appointment. It would be wrong for the court to proceed today and hear our petition. But the question of validity is a matter that requires very urgent determination.  If there’s no valid appointment then the court would go on to hear the petition“.  This comes across to me as if he was more interested in investigating legal precedent than in pursuing Portsmouth.

Simon Barker QC, for Portsmouth, almost seemed to share this measure of uncertainty about moving into uncharted territory, preferring to stick to a predictable assessment of the situation from Portsmouth’s perspective: “‘There is no reason to impugn the conduct of these Administrators at all… The Administrators are independent. There’s absolutely no basis upon which the court should have any scepticism about their independence.

The stage was then set for some decisions that could appear in future legal text books as ‘case law’, but Judge Alastair Norris was not too keen to reach that stage just yet.  He said “There is a shadow over the administration that must be removed… There is a prospect, but no more than a prospect, that funding for Administration is available.”  With an increasing predictability he moved to his ruling – a hearing in the week commencing March 15, by when Portsmouth has to lodge papers clarifying their financial support from Balram Chainrai and the payments between the club and Portapin, Chainrai’s company.  This will at least clarify ownership of Fratton Park.

All in all, a bit of a damp squib for Pompey fans, and, I suspect, for legal buffs who had hoped for a definitive ruling.

Tomorrow we have HMRC v. Cardiff City, Southend United and Burscough, plus Chester City 2004 on the 10th.  Whether these cases will shed any light on how HMRC really sees the way forward in its pursuit of recidivist football clubs we shall have to wait and see.

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3 Responses to “Portsmouth’s latest day in court”

  1. TonyM said

    Well at some point a professional club is going to push HMRC too far and they will oppose an administration order properly and Portsmouth must have got pretty close to that today. HMRC are getting more and more forceful in their dissatisfaction of the status quo and given that the FA seem in no mood to get their house in order (or rather force their clubs to get their respective houses in order) then all I can say is good luck to HMRC.

    • John Beech said

      It certainly seems to be Portsmouth at the moment, and understandably so. The problem for them though in Pompey’s case is that if they push too hard, the club will be liquidated, which would be in nobody’s interests, including HMRC’s.

  2. John Beech said

    UPDATE

    Courtesy of Tony Mowles, news that Burscough have managed to pay off their outstanding debt to HMRC (1).
    Cardiff City are due in court on 10 March, but have an issue with money due to FAW (2).
    Southend United are also due on 10 March.

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