Revenue and Customs Commissioners v Maxwell [2010] EWCA Civ 1379 is a UK insolvency law case, concerning pre-pack insolvencies.
HMRC argued that at a creditorsâ meeting to approve a prepack insolvency for the Mercury Tax Group Ltd it should have been given ã8m worth of votes, rather than ã1.5m admitted by the chairman, Edward Klempka. He was an insolvency practitioner appointed by MercuryâÂÂs directors, and was attempting to effect a sale of the business to the management. They argued there were impermissible deductions for payments to employee benefit trusts and substantial loans to directors.
The Judge held that only the liquidated debts had to be counted for the purpose of assessing the votes at the meeting, and it was within KlempkaâÂÂs discretion to not count the HMRC debts.
Lord Neuberger MR allowed the appeal. The judgeâÂÂs role was to form her own view, not merely review the chairmanâÂÂs decision under IR 1986 r 2.39, and had been wrong to make up his mind based on what Klempka had seen and the judge had not. The chairmanâÂÂs power of quantification had to take account of events occurring since the date of administration and before the meeting. Once the HMRC had amended its notices and given sums even though they came after the administration date and even though they could be challenged, they should be counted.