T6a. Voluntary arrangements

Not ususally open to chairman of meeting to go behind assessment

 

Assessment debt is not contingent

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"[32] I am unable to accept Mr Jones' submission that this was a contingent debt. It is clear that the applicant is correct that once an assessment has been issued the tax shown over the assessment is due and owing and, in the absence of evidence of fraud or collusion or some other exceptional circumstance which does not arise in this case, it is not open to the chairman of the meeting or to the court to go behind it. In my judgment, Mr Sharp should have admitted this debt in full and that the fact that the payment of the debt had been postponed does not mean that the debt ceased to be due and owing. I accept the submission made by Mr Mullen that the issue of the postponement is not material to this case." (HMRC v. Sharp [2015] EWHC 4272 (Ch), Sutcliffe QC)

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Assessment debt is decisive in the absence of fraud, collusion or exceptional circumstances

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"[33] In the alternative to his submission that this was a contingent unascertained debt, Mr Jones submits that the chairman was exercising the power under Rule 4.70(1) to admit or reject the whole or part of the applicant's proof and he referred me to the decision of Re a Debtor No. 222 (1990), ex parte The Bank of Ireland[1992] BCLC 137, a decision of Palmer J and to the passage at page 144 f-h which stated as follows:

“The scheme is quite clear. The chairman has power to admit or reject. His decision is subject to appeal and if in doubt he shall mark the vote as objected to and allow the creditor to vote. That is easily carried out upon the basis advanced by Mr Moss QC, Mr Mann and Mr Trace. It provides a simple clear rule for the chairman, not a lawyer, faced at a large meeting with speedy decisions necessary to be made to enable the meeting to reach a decision. On that basis the chairman must look at the claim. If it is plain or obvious that it is good, he admits it, if it is plain or obvious that it is bad, he rejects it. If there is a question, a doubt, he shall admit it, but mark it as objected.”

[34] On the evidence in this case Mr Jones submits that Mr Sharp was justified in his decision to exclude that part of the alleged debt exceeding £6,960 as obviously bad and he relies on the following matters. He submits that the applicant's claim is based on an assessment dated 27 November 2013, which relied on an unascertained estimated profit figure of £250,000, which seems to have been based on the applicant's view that the company had significantly understated its turnover for the year ending 29 September 2011 by providing a turnover figure of £115,765. He says it is very clear that the applicant's view was erroneous because in the company's CT 600 and in its accounts, that figure of £115,765 was clearly expressed as the operating profit on a turnover of about £467,000. Mr Jones submits that the company accurately declared the net profit of £115,765 on turnover of £467,336 and moreover, the company has paid the tax due on those figures.

[35] I am unable to accept this alternative submission of Mr Jones for a number of reasons. First, it is clear that the assessment is not solely based, if indeed it is based at all, on a mix up by either the applicant or the company's agent (which filed the CT 600) of the turnover and profit figures. It is clear from Mrs Roberts' letters, which I have recited at length earlier in this judgment, that the applicant was relying on other information in making the assessment. Second, it is clearly, in my judgment, the case that the company has not helped itself by being so reluctant to provide the information requested by the applicant on numerous occasions. That resistance to providing the information requested only confirms my view that it is impossible for this court to say that the assessment is obviously wrong and misconceived. Finally, and in any event, I am persuaded by Mr Mullen that the issue of the assessment itself is decisive and that the chairman should have admitted it in its entirety. There is no evidence of fraud or collusion or some other exceptional circumstances such as would undermine that assessment." (HMRC v. Sharp [2015] EWHC 4272 (Ch), Sutcliffe QC)

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