VB Football Assets (VBFA) v Blackpool Football Club (Properties) Ltd (formerly Segesta Ltd)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Marcus Smith |
| Judgment Date | 13 February 2019 |
| Neutral Citation | [2019] EWHC 530 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: CR-2015-006989 |
| Date | 13 February 2019 |
[2019] EWHC 530 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
CHANCERY DIVISION
COMPANIES COURT
Royal Courts of Justice
Rolls Building
Fetter Lane
London
EC4A 1NL
The Honourable Mr Justice Marcus Smith
Case No: CR-2015-006989
Barry Isaacs QC and Fraser Campbell (instructed by Clifford Chance LLP) for the Petitioner
Matthew Collings QC and Gareth Darbyshire (instructed by HHB Solicitors) for the Respondents
Hearing dates: 13 February 2019
This is an application by the Petitioner for the appointment of a receiver by way of equitable execution over certain assets belonging to the First and Second Respondents. I shall refer to the First and Second Respondents as the “Respondents”. These assets are listed in an annex to the fifth statement of Mr Yates, a solicitor at Clifford Chance LLP, the solicitors acting for the Petitioner.
The history of these proceedings is a long one and I will not go through it in any great detail. The material facts are that, as a result of a judgment that I handed down on 6 November 2017 (Neutral Citation [2017] EWHC 2767 (Ch)), a considerable judgment debt is owed by the First and Second Respondents to the Petitioner. It is a sum in excess of £25 million. Although, relatively early after the handing down of my judgment in November 2017, some £10 million was paid by the Respondents, that is the last payment that has been received. As I say, in excess of £25 million remains outstanding.
The Petitioner has not been inactive in seeking to enforce the judgment and there have been a series of hearings before me at which the Petitioner has sought to obtain, and has obtained, various orders intended to enable the outstanding judgment debt to be met. These orders have involved the freezing of assets held by the Respondents, charging orders and orders for sale over various assets held by the Respondents.
There are two types of assets that the Petitioner has been seeking to enforce against. First, there is real property, which are owned by the Respondents, over which charging orders and then orders for sale have been obtained. Secondly, there are shares held by the Respondents, notably shares in the First Respondent (owned by the Second Respondent) and also shares in a company called Closelink. Again, charging orders and orders for sale have been obtained in respect of these shares.
The property that I particularly want to single out for mention are the shares in the First Respondent. The First Respondent owns the assets which are provided to enable the operation of Blackpool Football Club Limited – the Fourth Respondent. Blackpool Football Club was the subject matter of my November 2017 judgment. It continues to be operated by the Respondents and the objective of the Petitioner is to seek the sale of the club as a going concern. That is because the football club is, I am told, more valuable as a going concern than the sum total of its assets if sold on a bare asset sale basis.
Despite all this activity on the part of the Petitioner, very little has been achieved by way of satisfaction of even part of the outstanding judgment debt. It is on this basis that the Petitioner now comes to seek the appointment of a receiver by way of equitable execution. The appointment of a receiver by way of equitable execution is not a usual form of order. Essentially, the appointment of a receiver by way of equitable execution enables the getting in of assets which would not otherwise be susceptible to the ordinary processes of enforcement.
There was some debate before me as to precisely what test needed to be applied and satisfied in order for the court to appoint a receiver by way of equitable execution. I am satisfied that the test is correctly stated by Males J in Cruz City 1 Mauritius Holdings v. Unitech Limited [2014] EWHC 3131 (Comm) at [47]. In essence, Males J held that the overriding consideration in determining whether the court should exercise its jurisdiction to appoint a receiver by way of equitable execution was the demands of justice. The jurisdiction, however, is not unfettered and must be exercised in accordance with established principles, although it is capable of being developed incrementally. It is not, however, limited to those situations where equity would have appointed a receiver before the fusion of law and equity pursuant to the Judicature Acts 1873. The jurisdiction will not be exercised unless there is some hindrance or difficulty in using the normal processes of execution, but there are no rigid rules as to the nature of the hindrance or difficulty required, which may be practical or legal. It is important to take account of all the circumstances of the case.
It will be just and convenient to appoint a receiver by way of equitable execution when it would be difficult for the claimant to enforce its judgment by other means and where the appointment of a receiver is the only realistic prospect available to the judgment creditor to enforce its judgment in the short term. A receiver will not be appointed if the court is satisfied that the appointment would be fruitless, for example because there is no property which can be reached either in law or equity. However, a receiver may be appointed if there is a reasonable prospect that the appointment will assist in the enforcement of a judgment or award.
It is, as it seems to me, the question of whether there is some hindrance or difficulty in using the normal processes of execution that is the critical question before me today. I remind myself that the practice direction in CPR 69 ( CPR 69 PD) states in some detail (at §4.1) what the evidence in support of an application to appoint a receiver by way of equitable execution...
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