Blackpool Football Club (Properties) Ltd v Paul Cooper
| Jurisdiction | England & Wales |
| Judge | Mr Justice Snowden |
| Judgment Date | 15 April 2021 |
| Neutral Citation | [2021] EWHC 910 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: BL-2020-MAN-000014 |
| Date | 15 April 2021 |
[2021] EWHC 910 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST
Civil Justice Centre
Manchester
Mr Justice Snowden
(Vice-Chancellor of the County Palatine of Lancaster)
Case No: BL-2020-MAN-000014
Matthew Collings QC (instructed by Fieldfisher LLP) for the Claimant
David Mohyuddin QC (instructed by BLM) for the Defendants
Hearing date: 9 February 2021
Approved Judgment
Introduction
This is an application brought by Blackpool Football Club (Properties) Limited (“the Claimant”) in respect of proceedings (“the Proceedings”) it has issued against Paul Cooper and David Rubin (“the Defendants”) who were at one time appointed by the court as receivers over the assets of the Claimant by way of equitable execution. The issue I have to determine on this application is whether the Claimant requires the permission of the Court to bring the Proceedings and if it does, whether it already has that permission. If I decide that permission is required and has not been obtained, the question of whether it should be granted would fall to be decided at a later hearing.
Background
The background to the Proceedings is an unfair prejudice petition presented by VB Football Assets (“VBFA”) against the Claimant, Mr. Owen Oyston and Mr. Karl Oyston in respect of Blackpool Football Club Limited (“the Football Club”). On 6 November 2017, Marcus Smith J made an order requiring the Claimant and Messrs Oyston to buy VBFA's shares in the Football Club (“the Buy Out Order”).
After some time, the Buy Out Order remained unsatisfied and VBFA sought the appointment of receivers by way of equitable execution. Marcus Smith J appointed the Defendants as receivers on 13 February 2019 (“the Receivership Order”).
On 5 June 2019, Marcus Smith J approved the Defendants' proposal to sell, in one transaction, Mr. Owen Oyston's shares and VBFA's shares in the Football Club, so that the purchaser would acquire the overwhelming majority of the shares in the Football Club. The sale completed on 13 June 2019.
The sale still left a sum outstanding on the Buy Out Order. However, on 16 December 2019, VBFA reached a confidential settlement with the Claimant and Messrs Oyston (“the Settlement”).
The Discharge Hearing and Order
On 17 December 2019, Marcus Smith J heard an application to discharge the receivership following the Settlement. It appears this hearing had originally been scheduled to deal with other matters relating to the receivership. The Claimant was represented at that hearing (as before me) by Mr. Matthew Collings QC. The Defendants were represented at the hearing by Mr. Mark Phillips QC, rather than by Mr. Mohyuddin QC who appeared before me.
At that hearing Marcus Smith J discharged the Receivership Order (“the Discharge Order”). The Defendants also sought a discharge from liability in reliance on IRC v Hoogstraten [1985] QB 1077, CA. The following passage from the transcript deals with the bringing of proceedings against the Defendants:
“MR JUSTICE MARCUS SMITH: … before I hear [Counsel for the Defendants]. It seems to me that there are two issues regarding the receivership, which is their expenses and the question of their release. You haven't addressed me on that. What is the likelihood of claims against the receivers emerging?
[Counsel for the Claimant]: I don't know because we haven't had visibility of the receivership. We have limited reports, limited receipts and payments.
…
MR JUSTICE MARCUS SMITH: I understand that you want to scrutinise the expenses of the receivership. My other point was: what do you say not about the negative point of scrutiny, but the positive question of whether there is a claim? You have no idea, but—
[Counsel for the Claimant]: That is right.
MR JUSTICE MARCUS SMITH: do you have any question regarding the sort of timeframe within which the claim should be made.
[Counsel for the Claimant]: Yes, my Lord. Plainly this is not something that can drag on forever.
MR JUSTICE MARCUS SMITH: No.
[Counsel for the Claimant]: But also, it would in these circumstances be inappropriate for there to be a release because of these questions that there are. They may go nowhere, but they may, on the other hand, and we shouldn't be shut out of that, and it would also be quite inappropriate for receivers to have a release when they have a continuing function to perform. To have a release now would mean that we couldn't take any point upon the final receipts and payments account which we haven't even seen…”
Counsel for the Defendants then addressed the Judge on the terms of the release they sought:
“[Counsel for the Defendants]: In relation to the accounts and payments, we will do that by Friday, and we are then going to invite your Lordship to make an order similar to the order that was made in IRC v Hoogstraten, that unless Mr. Oyston commences proceedings 28 days after that, we have our release. That is what I am going to invite your Lordship to do. Your Lordship may take the view that, given it's Christmas, that should be 31 January, which, as it happens, accords precisely with the proposal that was put to my learned friend's instructing solicitors—
[Counsel for the Claimant]: Yes, no objection to that.
…
[Counsel for the Defendants]: That is the direction I am inviting your Lordship to make, and it is that if Mr. Oyston does not institute proceedings to establish whatever claims he may seek to bring by the end of January or within – and I would include “within such longer period as the court may in its discretion allow” because your Lordship may be persuaded that, for whatever reason—
MR JUSTICE MARCUS SMITH: You haven't provided the information that Mr. Oyston needs.
[Counsel for the Defendants]: — something hadn't come up.
MR JUSTICE MARCUS SMITH: Yes.
[Counsel for the Defendants]: But that's the direction that we are seeking in relation to the release…”
After the Judge had heard from counsel, there was a discussion on the terms of the order:
“[Counsel for the Defendants]: The third is the release in the same terms and conditions.
MR JUSTICE MARCUS SMITH: Contingent release, yes, 31 January, but just to be clear, subject to the court's ability to extend.
[Counsel for the Defendants]: Yes, absolutely, and I have written down, “or such longer period as the court may in its discretion allow”, which is tracking the Court of Appeal language.
MR JUSTICE MARCUS SMITH: Yes…
[Counsel for the Defendants]: … The “unless claims are made” is important because if Mr. Oyston wishes to bring claims against receivers for something we have done, we need to know what it is.
MR JUSTICE MARCUS SMITH: Yes.
…
MR JUSTICE MARCUS SMITH: It's a semi-hard date. That's what it is.
[Counsel for the Defendants]: But I think Mr. Oyston needs to understand that it may be semi-hard, but raising frivolous points is not going to extend it, so it has to be real.
…
[Counsel for the Defendants]: Let me make it crystal clear to my learned friend: claims means claims… I accept that claims doesn't cover what might be raised on the accounting, but I have used claims deliberately. What I do not want is my learned friend to write letters saying “We intend to claim against you, transaction – that you have sold at an undervalue” or any of the above. If he wants to do that, he needs to issue a claim…
[Counsel for the Claimant]: That I completely understand…”
The relevant terms of the Discharge Order are as follows:
“1. The Receivership Order be discharged at 12.39pm on 17 December 2019 save for paragraphs 8, 10 and 16 thereof and the Receivers shall vacate office forthwith.
2. The Receivers shall be at liberty to register a caution against the property Travelodge, Seasiders Way, Blackpool FY1 6JJ in respect of the lien securing the fees, liabilities, costs, expenses and disbursements of the Receivers.
…
5. Other than in respect of matters arising on the Final Account, the Receivers shall be released and discharged from all claims arising out of or in connection with the Receivership on 31 January 2020 unless such a claim is commenced by claim form before that date, or within such longer period as the Court may in its discretion on application allow.
6. The Receivers shall be released and discharged from all claims and issues arising out of their Final Account on 31 January 2020 unless a claim is brought for surcharge and falsification before that date. If a claim is brought for surcharge and falsification the Receivers shall be released and discharged from such claims upon the finalisation of the Final Account or upon such date as the Court may in its discretion direct…”
The Proceedings
The Claim Form in the Proceedings was issued on 30 January 2020. The main allegation is that the Defendants were negligent in the performance of their functions as receivers by selling assets at an undervalue of some £78 million.
The Claim Form and Particulars of Claim in the Proceedings were served on the Defendants on 29 May 2020. After service, the Defendants suggested a stay should take place to comply with the Pre-Action Protocol. District Judge Bever made a consent order staying proceedings on 25 June 2020. On 25 September 2020, District Judge Carter made a consent order extending the stay to 30 October 2020.
On 6 August 2020, the Defendants raised an objection that the Claimant required permission to bring the Proceedings and asked for evidence that the same had been obtained. The Defendants' evidence is that...
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