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:
- 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.
- 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.
- 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.