20
THE SCOTTISH PREMIER LEAGUE LIMITEDREASONS
for Decision dated 12September 2012
by
THE RT HON LORDNIMMOSMITH,
NICHOLAS STEWART QC
and
CHARLES FLINT QC
the Commission appointed by Resolution of the Board of Directors of the Scottish Premier League Limited dated 1August 2012 in relation to RFC 2012 Plc and Rangers FC
______
Our remit
[1] By Resolution of the Board of Directors ("the Board") of The Scottish Premier League Limited ("the SPL") dated 1August 2012 we were appointed respectively as Chairman and members of a Commission in terms of a Notice of Commission, a draft of which was on that date approved by the Board, all in terms of sectionG of the Rules of the SPL (“the Rules”).
RulesG1.1 and G1.2 provide:
"G1.1 The Board and, where appointed by the Board, a Commission, shall have the power of inquiry into all financial, contractual and other arrangements within, between and/or amongst Clubs and Players and all matters concerning compliance with the Financial Disclosure Requirements and into all matters constituting or pertaining to any suspected or alleged breach of or failure to fulfill the Rules by any Club, Club Official and/or Player or any matter considered by the Board or, where appointed by the Board, a Commission, to be relevant to an Adjudication or an Appeal and every Club and Club Official and Player shall be liable to and shall afford every assistance to the Board or, as the case may be Commission, as may be requested or required of it or him.
G1.2 Subject to Rules G1.3 and G1.4, the Board and, where appointed by the Board, a Commission, shall (i) have the power of determination as to whether there has been a breach of and/or failure to fulfil the Rules and in Adjudications and Appeals; and (ii) may exercise such of the powers set out in Rules G6.1 and G6.2 as it shall think appropriate."
[2] RulesG1.3 and G14 are not relevant for present purposes. AnnexB to the Rules sets out Rules of Procedure which govern the proceedings of this Commission and other bodies appointed in terms of the Rules (any such body being referred to as a "Tribunal").
History
[3] Rangers Football Club was founded in 1872 as an association football club. It was incorporated in 1899 as The Rangers Football Club Limited. In recent years the company’s name was changed to The Rangers Football Club Plc, and it is now called RFC 2012 Plc (in administration). In line with the terminology used in the correspondence between the parties, we shall refer to this company as “Oldco”.
[4] The SPL was incorporated in 1998. Its share capital consists of sixteen shares of £1 each, of which twelve have been issued. Oldco was one of the founding members of the SPL, and remained a member until 3August 2012 when the members of the SPL approved the registration of a transfer of its share in the SPL to The Dundee Football Club Limited. Each of the twelve members owns and operates an association football club which plays in the Scottish Premier League (“the League”). The club owned and operated by Oldco played in the League from 1998 until 2012 under the name of Rangers Football Club (“Rangers FC”).
[5] When the SPL was first formed, a controlling interest in Oldco was held by David (later Sir David) Murray through the medium of Murray MHL Limited. On 6May 2011 the controlling shareholding was acquired by Wavetower Limited, a newly incorporated company formed for the purpose of the acquisition, and controlled by Craig Whyte. On 19 March 2012 the Court of Session made an administration order in respect of Oldco, and Paul Clark and David Whitehouse, both of Duff & Phelps Limited, were appointed joint administrators, all with effect from 14 February 2012.
[6] On 14June 2012 a newly incorporated company, Sevco Scotland Limited, purchased substantially all the business and assets of Oldco, including Rangers FC, by entering into an asset sale and purchase agreement with the joint administrators. The name of Sevco Scotland Limited was subsequently changed to The Rangers Football Club Limited. We shall refer to this company as Newco.
[7] Newco was not admitted to membership of the SPL. Instead it became the operator of Rangers FC within the Third Division of the Scottish Football League ("the SFL"). It also became a member of the Scottish Football Association (“the SFA”), the governing body of the sport in Scotland. These events were reflected in an agreement among the SFA, the SPL, the SFL, Oldco and Newco which was concluded on 27July 2012 and in this Commission’s proceedings is referred to as “the 5-Way Agreement”.
The Notice of Commission
[8] The Notice of Commission sets out lists of players, referred to as "Specified Players", and "Issues for Enquiry into and Determination by the Commission" (“the Issues"). It is not necessary for present purposes to explore the terms of the Issues in detail, so we shall confine ourselves to a summary of them. It is however, necessary, to quote the definition of the expression "EBT payments and arrangements":
"Payments made by or for [Oldco] into an employee benefit trust or trusts for the benefit of Players, including the Specified Players, employed by [Oldco] as Professional Players, Registered and/or to be Registered as Professional Players with the Scottish Premier League and Playing and/or to Play for Rangers FC in the Scottish Premier League and payments made by or for [Oldco] into a sub-trust or sub-trusts of such trust or trusts of which such Players were beneficiaries, payments by such trust or trusts and/or sub-trust or sub-trusts to such Players and/or for the benefit of such Players and any and all arrangements, agreements and/or undertakings and the like or similar relating to or concerning any of such Players and payments."
[9] The Issues may be divided into four main chapters, the first three of which relate respectively to the period from 23November 2000 to 21May 2002, 22May 2002 to 22May 2005 and 23May 2005 to 3May 2011. We understand that the division into those three chapters within that period 2000-2011 reflects changes in the Rules of the SPL and the SFA in force from time to time. The fourth chapter alleges that during the period from 15March 2012 Oldco (then in administration) and Rangers FC, in breach of the relevant Rules of the SPL, failed to co-operate and to respond to requests for documents. Broadly speaking, the Issues in the first three chapters allege that Oldco and Rangers FC breached the relevant Rules of the SPL, and also those of the SFA (breach of which constitutes a breach of Rules of the SPL), by failing to record EBT payments and arrangements in the contracts of service of the Specified Players and/or other Players and by failing to notify them to the SPL and the SFA. We also note one Issue in the third chapter (Issue 3(c) in the Notice of Commission), directed only against Rangers FC, alleging that the club was in breach of the Rules by playing ineligible players. The fourth chapter alleges that during the period from 15March 2012 Oldco (then in administration) and Rangers FC, in breach of the relevant Rules of the SPL, failed to co-operate and to respond to requests for documents. The Notice of Commission was served on Oldco, Newco and Rangers FC by letters dated 2August 2012.
Our Independence
The Commission
[10] In most cases, it would not be necessary to discuss this topic, but in the circumstances of the present case we think it appropriate to do so. It is fundamental to the constitution of a body with investigatory and disciplinary powers, such as the present Commission, that it must act independently of the person or body appointing it. We must of course operate within the terms of our remit, and apply any rules which are applicable, but in reaching our final determination of the Issues, and in making any incidental decisions, we shall exercise our own judgement, on the basis of the evidence which is adduced, in accordance with the principles of natural justice, and unfettered by the influence of the Board or of anyone else. None of us would have accepted his appointment on any other basis. We have the use of SPL premises and are assisted by SPL staff, but this is because we have given instructions to that effect; the members of staff, in particular, act under our instructions.
[11] What we have just said is borne out by a passage in the Minute of the SPL Board meeting on 1August 2012:
"The Board was advised by the Secretary that the proposed Commission would inquire into the Issues to determine if there had been any breach or breaches of or failure or failures to fulfil Rules and that in the event that the Commission did so determine then it would be for the Commission to exercise such powers under Rules G6.1 and G6.2 as it deems appropriate. The Secretary advised that once appointed a Commission is wholly independent from the SPL and SPL Board and manages its own process.
It was agreed unanimously that the draft notice be approved and that a Commission be appointed in terms of that notice."
Finally, we would add that an appeal lies to the SFA against an adverse determination by this Commission.
The Chairman
[12] It is appropriate at this point to mention the position of the Chairman. By resolution of the Board of Directors of the SFA dated 23February 2012 he and three others were appointed members of an Independent Committee established pursuant to Article63.1 of the Articles of Association of the SFA for the purpose of ascertaining if there was any prima facie evidence to support the institution of disciplinary proceedings against Oldco and/or any of its officials in respect of possible breaches by Oldco (and/or any of its officials) of those Articles and all associated statutes, regulations and directives of whatever nature in the period from 6May 2011 to 14February 2012. This of course was the period during which Craig Whyte held a controlling interest in Oldco.
[13] On 6March 2012 the Independent Committee reported in confidence to the Board of Directors of the SFA. As is public knowledge, the report (1)recommended that the Board of the SFA decide the question whether MrWhyte was a fit and proper person within the meaning of SFA Article10.2, and (2)stated that in their opinion there was prima facie evidence to support charges that both MrWhyte and Oldco had acted in such a way as to bring the game into disrepute, within the meaning of SFA Article94.1. They recommended that the whole matter be referred to the Compliance Officer of the SFA to consider commencement of proceedings against both MrWhyte and Oldco. The report concluded the work of the Independent Committee. The recommendations were acted upon, with consequences for MrWhyte and for Oldco, but the Special Committee had no further part to play after completion of the report.
[14] The topic of the employee benefit trust (“EBT”) referred to in the Issues before this Commission was touched upon in two paragraphs (and only those two) of the report of the Special Committee of the SFA, but no recommendation was made to the Board in that regard. The main reasons for not making a recommendation were: (1)the EBT came into existence several years before the period with which the Special Committee was concerned; and (2)there was in any event no sufficiently clear evidence of a breach of SFA Article12.3 to justify any further action at that stage. Now that the present Notice of Commission has been prepared, it can be seen that there is no overlap between the period with which the Special Committee was concerned and either the period to which the first three chapters of the Issues relate or the subsequent period to which the fourth chapter relates.
[15] In a letter dated 23August 2012 (referred to below) solicitors for Newco expressed concerns about the appointment of the Chairman to this Commission. In short, while it expressly did not allege actual bias on his part, it suggested that by reason of his previous Chairmanship of the SFA Special Committee the Chairman might not be seen to be impartial. Following receipt of this letter authorisation was obtained from the Board of the SFA - to whom the Special Committee's report remained confidential - to disclose to the solicitors the terms of the two paragraphs of the report in which reference was made to the EBT, together with two preceding formal passages to explain the context in which it was discussed. Newco did not respond to the Commission on this point, and in the event no application has been made that the Chairman should recuse himself from these proceedings.
[16] It is well understood that the rules of natural justice require that a judge, or a person performing a quasi-judicial function, such as the Chairman of this Commission, must be free not only from actual bias but also from apparent bias in his determination of the Issues before him. The test for establishing apparent bias is authoritatively laid down in Porter v Magill [2001] UKHL 67, [2002] 2 AC 357, in which LordHope of Craighead said at paragraph143:
"The question is whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased."
To this may be added that the "fair-minded and informed observer" is "neither complacent nor unduly sensitive or suspicious": Johnson v Johnson (2000) 201 CLR 488, paragraph53.
[17] Bearing this test in mind, the Chairman, in consultation with the other two members of the Commission, has given careful consideration to this question, and has concluded that the fair-minded and informed observer, having considered the facts, and in particular the terms of the SFA Special Committee report quoted above, would not conclude that there was a real possibility that the Chairman was biased. The main reasons are, as already indicated, that: (1)those of the present Issues which relate to the EBT arise from a period which ended before the period with which the SFA Special Committee was concerned; and (2)not only did the SFA Special Committee not reach any conclusion about the EBT, it did so because there was insufficient material to enable it to reach any conclusion. The mere fact that the Chairman has reached conclusions adverse to Oldco on another occasion in respect of other issues does not preclude him from continuing to act as Chairman of this Commission, any more than a judge would be precluded in comparable circumstances in court. The Chairman therefore sees no need to recuse himself and that view is shared by the other two members of the Commission.