On 29 August 2007 HM Revenue & Customs obtained a County Court Judgement for £36,762 against Brogdale Horticultural Trust’s subsidiary, Brogdale Orchards Limited. At the time of writing the judgement is unsatisfied.
If Brogdale had paid the amount outstanding, it could obviously have avoided a court hearing and the judgement. Since it did not, one has to conclude that it simply did not have the cash to pay its tax bill nor could it borrow the cash to do so.
This is not the first time that Brogdale Orchards has been the subject of a County Court Judgement. On 21 March 2007 there was another County Court Judgement, this time for the smaller sum of £449 that is still registered as unsatisfied. It was a little later, in early May, that the Trust was telling the press that it had no financial difficulties and could meet its debts. Could it make that same claim today?
Defra, a government department, pays substantial public money to Brogdale (£165,395 in 2006). No doubt that sum includes an allowance for taxes. But it seems that another government department has had to go to the expense of going to court to recover the money it is owed by Brogdale.
This is a judgement against the Trust’s subsidiary Brogdale Orchards. But are there not implications for the Trust? Brogdale Orchards is 100% owned by the Trust and the Trust are clearly responsible for its actions. Why did the Trust not lend the sum due or did the Trust not have the money to do so? The Trust included in its 2006 balance sheet assets the sum of £109,185, the amount it was owed by Brogdale Orchards. But if Brogdale Orchards cannot pay £36,762, then what are the reasons for believing that it can pay £109,165 to the Trust? If one were to remove this sum from the Trust’s assets, then the Trust would have had a deficit of £(72,423) in 2006. One might further ask, what is the position for 2007?
A cash crisis and County Court Judgements such as these can be a precursor of more serious things to come – bankruptcy, for example. This County Court Judgement should lead a number of people, including Defra, to ask serious questions about Brogdale Trust’s current and future financial position.
The contract for management for the National Fruit Collections is up for tender. Surely these County Court Judgements and the implications raise serious questions as to the suitability of Brogdale Horticultural Trust as a party to any bid for this contract.
Furthermore, any Friend of Brogdale who has lent money to the Trust might wish to ask the Trust and Trustees to provide written confirmation as to the security of their loan.