Petition By Michael Ashley For Judicial Review Of Determinations Of A Judicial Panel And Appellate Tribunal Of The Scottish Football Association Limited
| Jurisdiction | Scotland |
| Judge | Lord Brodie |
| Neutral Citation | [2016] CSOH 78 |
| Year | 2016 |
| Published date | 10 June 2016 |
| Date | 10 June 2016 |
| Court | Court of Session |
| Docket Number | P989/15 |
OUTER HOUSE, COURT OF SESSION
[2016] CSOH 78
P989/15
OPINION OF LORD BRODIE
in the petition
by
MICHAEL ASHLEY
Petitioner;
for Judicial Review of determinations of a Judicial Panel and Appellate Tribunal of The Scottish Football Association Limited
Petitioner: Sandison QC; Brodies LLP
Respondents: O’Neill QC; Burness Paull LLP
10 June 2016
Parties and their relationship
[1] The petitioner is a businessman. He is concerned in the business of football. He controls MASH Holdings Limited (“MASH”). MASH has interests in Newcastle United Limited (“NUL”). NUL operates a professional football club.
[2] The respondent is the Scottish Football Association Limited. The respondent acts as the governing body of Scottish football and exists to promote, foster and develop the game of football at all levels in Scotland. It is constituted by Articles of Association (“the Articles”) which impose certain obligations on those subject to its jurisdiction. The Articles make provision for a Judicial Panel and Judicial Panel Protocol (“the Protocol”). In terms of Article 65 of the Articles alleged breaches of the Articles which fall under the jurisdiction of the Judicial Panel shall be dealt with and be construed in terms of the Protocol. The Protocol includes at annex A the respondent’s Disciplinary Rules, certain of which apply to persons and bodies under the jurisdiction of the respondent. The Protocol makes provision for the enforcement of the Articles and the Disciplinary Rules and the determination of matters arising from alleged breaches. That provision includes the appointment of a Compliance Officer who has general responsibility for observance of the Disciplinary Rules and the pursuit of proceedings before the tribunals appointed under the Protocol and the power to represent the respondent in such proceedings. The tribunals which may be appointed from the Judicial Panel established under the Protocol include a Disciplinary Tribunal for consideration and determination of cases at first instance and an Appellate Tribunal of consideration and determination of appeals.
[3] On 6 August 2012 the pursuer gave a letter of agreement to the respondent. In that letter he confirmed:
“I am (i) a shareholder; (ii) a director; (iii) involved in the management or administration of; and/or (iv) have the power to influence the management or administration of:
(i) Newcastle United Limited (Company Number 02529667) whose registered office is at St James’ Park, Newcastle-upon-Tyne, NE1 4ST (“NUL”); and
(ii) SDI Retail Services Limited (Company Number 08143303) whose registered office is at Unit A Brook Park East Road, Shirebrook, Mansfield, NG20 8RY (“SDI”), or of their respective parent companies”
Further, the petitioner stated that he intended to become a shareholder of The Rangers Football Club Limited (“RFCL”) “which owns and operates the associated football club known as Rangers FC.” The petitioner then went on to acknowledge the Articles and to agree to abide by the Articles for so long as he was a shareholder of RFCL and a shareholder, director, involved in the management or administration of and/or having the power to influence the management or administration of NUL. The letter then stated that for the avoidance of doubt it was acknowledged by the respondent that ownership by the petitioner of less than 10% of the issued share capital in RFCL should not constitute a breach of the Articles.
Article 13 and Disciplinary Rule 19
[4] Among the Articles by which the petitioner agreed to abide in terms of the letter of 6 August 2012 was Article 13 and among the Disciplinary Rules which applied to the petitioner was Rule 19. Rule 19 is essentially in the same terms as Article 13.1. As far as is material Article 13.1 provides:
“Except with the prior written consent of the Board:-
(a) no club or nominee of a club; and
(b) no person, whether absolutely or as a trustee, either alone or in conjunction with one or more associates or solely through an associate or associates (even where such person has no formal interest), who:-
(i) is a member of a club; or
(ii) is involved in any capacity whatsoever in the management or administration of a club; or
(iii) has any power whatsoever to influence the management or administration of a club,
may at the same time either directly or indirectly:-
(a) be a member of another club; or
(b) be involved in any capacity whatsoever in the management or administration of another club; or
(c) have any power whatsoever to influence the management or administration of another club.”
RFCL is a full member of the respondent and “a club” within the meaning of Article 13.1, as is NUL.
The Credit Facility Agreement
[5] RFCL was formed (as Sevco Scotland Limited) in 2012. The petitioner became a shareholder in RFCL in October 2012. On 18 December 2012 the shareholders of RFCL exchanged their shares for shares in Rangers International Football Club Plc (“RIFC”). As a result of this exchange RIFC became the sole shareholder in RFCL. On 1 October 2014 the pursuer transferred his shares in RIFC to MASH.
[6] On 26 October 2014 MASH (as “Lender”) and RFCL (as “Borrower”) entered into a Credit Facility Agreement whereby MASH undertook to make a loan of £2 million available to RFCL subject to the condition, among others, that “the Lender has appointed the Lender’s Director in accordance with clause 13”. Clause 13 of the Credit Facility Agreement provided:
“Immediately prior to first drawdown under the Facility, and at all times whilst any amount is outstanding under any Finance Document, the Lender shall have the right to appoint up to 2 directors (the “Lender’s Director”) on the board of directors of the Borrower. The Lender shall be entitled to remove and replace any Lender Director from time to time.”
[7] On 5 November 2014 Mr Derek Llambias was appointed as a director of RFCL. On 2 November 2014 he had been appointed a director of RIFC.
The disciplinary proceedings against the petitioner
[8] On 15 December 2014 the petitioner was served with a complaint under the Protocol alleging breaches of Disciplinary Rules 19 and 77. The libel of the complaint was in the following terms:
“…in that already having an interest in Newcastle United FC as a controlling party of MASH Holdings Limited, you did on 26 October 2014 enter into a Credit Facility Agreement with Rangers Football Club Limited, and thereafter MASH Holdings Limited did nominate Derek David Llambias to Rangers FC for appointment as a Director, resulting in his subsequent appointment as a Director of both Rangers International Football Club Plc and Rangers Football Club Limited upon 2 and 5 November 2014 respectively. These acts being breaches of article 13 of the Articles of Association of the Scottish FA…”
In addition, the alleged breach of Rule 77 stated a breach of the undertaking provided by the petitioner to the respondent on 6 August 2012.
[9] The matter proceeded to a full hearing before a Disciplinary Tribunal appointed from the Judicial Panel on 2 March 2015. The respondent was represented by its Compliance Officer. The petitioner was represented by a solicitor. By prior agreement, both parties lodged detailed written submissions. Neither party led oral evidence. Written statements from a number of witnesses were produced.
[10] Following the hearing the Disciplinary Tribunal determined, on 17 March 2015, inter alia that the petitioner was in breach of Article 13 of the Articles and Disciplinary Rule 19 and imposed a fine of £7,500. It did not find the petitioner in breach of Disciplinary Rule 77. The Disciplinary Tribunal’s factual findings included the following:
“The Panel was satisfied, on a balance of probabilities, that the factual basis of the charges in the Notice of Complaint had been proved. Mr Ashley’s controlling interest in Newcastle United FC was not disputed. While the Credit Facility had been agreed with the Club by MASH Holdings Limited, rather than with Mr Ashley personally, it was effectively Mr Ashley who provided the Credit Facility. While only the nomination of Mr Llambias by MASH Holdings Limited to the PLC had been confirmed in statements and documents, the Panel, in the absence of any other clear evidence, was satisfied that the inference could be drawn in the whole circumstances, that the arrangements put in place between Rangers FC and MASH Holdings Limited effectively led to Mr Ashley’s nomination of choice being nominated for and appointed to both boards.
Turning to the question of whether a breach of Rule 19 was incurred, the Panel took the view that, even applying a purposive approach, the intention of the Rule and of Article 13 was to prohibit Dual Interests, except with the prior consent of the SFA. The question of whether any power or influence was actually exercised, or whether it was for the benefit rather than the detriment of the clubs involved, was not relevant. The Panel was satisfied, as previously stated, that the arrangements gave Mr Ashley a choice over who became a director of Rangers FC and, accordingly, a degree of power to influence the management or administration of that club.
On a balance of probabilities, the Panel was satisfied that the first charge on the Notice of Complaint had been proved.”
The Disciplinary Tribunal went on to find that a second charge, a breach of Rule 77, had not been proved.
[11] Paragraph 14.2 of the Protocol provides that a party in breach has the right to appeal under the Protocol to the Appellate Tribunal against a determination of a Disciplinary Tribunal in respect of first instance proceedings. Paragraph 14.8 provides in respect of any such appeal that findings on fact at first instance should be final and an appeal shall only be permitted on specified grounds, one of which (paragraph 14.8.3) is that the Disciplinary Tribunal has issued a determination which it could not properly have issued on the facts of the case.
[12]...
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