Winding up whilst appeal is pending

 

Winding up petition for debt disputed in good faith on substantial grounds will be dismissed

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"[36] The existing law is unsurprisingly not much in dispute between the parties. Both sides refer to a series of cases that endorse the long-established principle that there is a well-settled rule of practice that a winding-up petition based on a debt that is wholly disputed in good faith on substantial grounds will ordinarily be dismissed (see Mann v. Goldstein [1986] 1 WLR 1091 per Ungoed-Thomas J at pages 1098-9, Arena supra at paragraph 53, HMRC v. Rochdale Drinks Distributors Limited [2011] EWCA Civ 1116 at paragraphs 79-80 per Rimer LJ, and Re SED Essex Limited [2013] EWHC 1583 (Ch) at paragraph 4 per John Randall QC). The question of whether a winding-up order should be made or the petition should, in a particular case, be dismissed, is a matter for the discretion of the Companies court (see section 125(1) of the Insolvency Act 1986 and, for example, Lord Brightman in the Privy Council in Brinds Limited v. Offshore Oil N.L. [1986] 2 BCC 98,916 at page 98,921, and Lord Hoffmann in the Privy Council in Parmalat Capital Finance Limited v. Food Holdings Limited [2009] 1 BCLC 274 at paragraphs 9-11) ." (Changtel Solutions UK Ltd (formerly Enta Technologies Ltd) v HMRC [2015] EWCA Civ 29, Vos LJ - FTT had held that appeal was not “hopeless” in admitting a late appeal))

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Companies court does not have to defer to FTT

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"[71] For the reasons I have tried shortly to express, I think the judge was wrong to say that the Companies court must defer to the tax tribunal in a case of this kind. That does not mean that the tax tribunal will not normally be the appropriate forum to determine whether an appeal against a VAT assessment has a real prospect of success. Moreover, when the tax tribunal has reached a conclusion on such an issue, that decision is normally likely to be a compelling factor in the Companies court's exercise of discretion. That discretion is not, however, completely abrogated by the jurisdiction of the tax tribunal. It need not defer to the tax tribunal in every case, though it may often choose to do so.
[72] Here, the facts are quite exceptional, and in my judgment, the judge ought, after a full consideration, to have concluded that they showed that the debts represented by the dispatch assessments were not disputed by the company in good faith and on substantial grounds." (Changtel Solutions UK Ltd (formerly Enta Technologies Ltd) v HMRC [2015] EWCA Civ 29, Vos LJ)

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Discrepancies in evidence making company's position unsustainable

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"[57] To put the matter shortly, the discrepancies that HMRC has highlighted in relation to the supposed export transactions are simply too numerous and too clear to admit of any conclusion other than that the export did not take place as the company contends. There is, moreover, no real issue as to whether the company is implicated in the fraud, because it is the company that has put forward the evidence that, in my judgment, must be regarded as false. The company cannot say it does not know that the goods were not exported in the manner that it claims they were, because it has promulgated documents and evidence that can be shown to be simply unsustainable. In that situation, the principles enunciated in Teleos supra upon which the judge relied cannot avail the company.

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[69] The judge described HMRC’s case as ‘prima facie formidable’. I agree. In my judgment, that should have led him to conclude that the dispatch assessments were not disputed in good faith on substantial grounds. Accordingly, he ought to have exercised his discretion to wind up the company" (Changtel Solutions UK Ltd (formerly Enta Technologies Ltd) v HMRC [2015] EWCA Civ 29, Vos LJ)

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