10 June, 2016

Success for SFA in Mike Ashley Judicial Review

Mike Ashley took a JR to the Court of Session to challenge the decision of the SFA Judicial Panel (which was upheld by the SFA Appellate Tribunal) which found that Mike Ashley had breached SFA rules and the undertaking given by him to the SFA that (because of his personal involvement in Newcastle FC), he would not in his capacity as a significant, if minority, shareholder in Rangers be involved in the way the Scottish club was being run.

Disciplinary Rule 19/Article 13.1(b) of the SFA Articles of Associates (read shortly and with emphasis added) states that:

“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 a person has no formal interest) who … (ii) is involved in any capacity whatsoever in the management or administration of a club …  may at the same time either directly or indirectly … (c) have any power whatsoever to influence the management or administration of another club.”

Article 13.5(c)(i)(2) notes that for the purposes of Article 13 ‘associate’ means

“any company of which that individual … is a director or over which that individual … is able to exercise control or influence.”

The SFA compliance officer alleged before its Judicial Panel that the SFA rules and undertaking had been breached on the basis that he offered to prove that:

  1. on 26 October 2014 Mike Ashley, through MASH Holdings Limited being “a company controlled by” him, had entered into a Credit Facility Agreement with Rangers Football Club)
  2. Mr. Derek Llambias was then nominated as a Rangers Director by MASH Holdings Ltd.

Mike Ashley’s legal team said in his defence (repeated before the SFA Judicial Panel, the SFA Appellate Tribunal and the Court of Session) that the SFA had to respect the “corporate veil” and recognise a distinction between Mike Ashley as an individual and the company MASH Holdings Ltd. They argued that there was no direct evidence of MASH Holdings nominating Mr. Llambias and even if Derek Llambias had been so nominated there was no evidence that any influence was exerted by Mike Ashley through Mr. Llambias to the detriment of Rangers FC. In the absence of such evidence, it has to be assumed that Derek Llambias acted independently, in accordance with his company law duties as a Director.

The Judicial Panel dealt with the defence submissions by ruling that 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. Instead 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. This analysis was essentially upheld by both the SFA Appellate Tribunal and by Lord Brodie in the Court of Session.

Lord Brodie said that in allowing the petitioner to raise precisely the same arguments before him as had been argued before the SFA Judicial Panel and Appellate Tribunal he recognised that he was giving Mr. Ashley

“’a third bite of the cherry’, in other words this is the third occasion on which the petitioner has had the opportunity to deploy the same arguments in relation to the same issue.”

He noted that this  case in a private law context, the question: how often should an issue be litigated? He quoted Lady Hale in the UKSC in In Cart at para 41 who observed:

“There must be a limit to the number of times a party can ask a judge to look at a question”.

Lord Brodie observed that:

“Equally, there must be a limit to the number of times a party has to submit to having a question looked at. Given the expertise of the Tribunals which have decided on the complaint against the petitioner and the formality of their decision-making processes, it might be suggested that by now seeking judicial review of the Tribunals’ decisions, the petitioner is pushing beyond the limit envisaged by Lady Hale.”

However Lord Brodie was unable to find, in the circumstances of this case:

“any recognised control mechanism by reference to which the petitioner might be restricted in taking his application forward”.

The full Opinion of Lord Brodie can be viewed here.

Ampersand’s Aidan O’Neill QC acted for the SFA and Craig Sandison QC for Mr Ashley.


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