Out-Law News 3 min. read

Scottish court rejects judicial review of Mike Ashley SFA fine


The Court of Session in Scotland has dismissed Rangers Football Club shareholder Mike Ashley's legal challenge to a fine imposed by the Scottish Football Association (SFA), ruling that the body had grounds to find that its rules on 'dual interest' had been breached.

However the judge, Lord Brodie, rejected a complaint by the SFA that the court had no jurisdiction over challenges to its decisions based on errors of law. The SFA had attempted to argue that as the decision which Ashley had challenged had its source in a "purely private law" relationship between them, the court was not entitled to intervene as part of the "supervisory" judicial review process.

Scottish litigation expert Craig Connal QC said that the case contained "a useful discussion of the roles of the courts in sporting regulatory bodies generally".

"The SFA tried to argue that the court had no jurisdiction at all to deal with the challenge to the decision of its tribunal, but in that argument it was unsuccessful," he said. "While the details are of interest to students of judicial review, the essential point was that the court held that judicial review of a private body which was otherwise within the ambit of judicial review in Scotland could be successful on the ground of an error of law by that body."

In Scotland, unlike in England and Wales, judicial review may be used to challenge the decisions of private bodies in certain circumstances, rather than just those that are public or perform public functions. However, judicial review is not an appeal process, but rather exists to ensure that a decision-maker does not exceed or abuse the jurisdiction that has been delegated or entrusted to it.

In this case, the SFA had attempted to argue that the scope of any judicial review challenge brought by Ashley had to be limited to "whether or not either of the tribunals [including an appeal tribunal] had exceeded the jurisdiction with which they had been invested by the parties". This jurisdiction "simply did not extend to a consideration of supposed errors of law on the part of decision-makers whose powers were conferred by contract", it argued.

However, Lord Brodie agreed with Ashley that he had not come to the court to simply appeal the SFA's decision, but rather to "have it reviewed as an abuse of jurisdiction".

"Of course the distinction between appeal and review begins to blur when one turns to consider the grounds upon which that application for review is presented," he said.

"[The SFA's] plea of no jurisdiction is based on a distinction which has not been expressly recognised in the authorities and which relies upon a supposed dichotomy which is slippery at best and in practice has increasingly been ignored. I shall therefore repel it. In doing so I recognise that this is to give [Ashley] what [the SFA] described as 'a third bite of the cherry', in other words this is the third occasion on which [Ashley] has had the opportunity to deploy the same arguments in relation to the same issue," he said.

Ashley had been fined £7,500 by the SFA for breaching the 'dual interest' rule in its articles of association, which prevents the owner of a football club from "being a member of another club or otherwise being in a position to influence the management or administration of another club". This was reduced to £1,000 on appeal. Ashley owns the English Championship team Newcastle United as well as 8.9% of the shares in Rangers. This is not itself enough to breach the dual interest rule. However, the SFA had found that a loan to Rangers by Ashley's company, MASH Holdings, which as a condition allowed MASH to appoint Ashley's business associate Derek Llambias as a director of Rangers, breached the rules.

Challenging this decision, Ashley argued that MASH Holdings was legally distinct from him personally and that there was "no direct evidence" that either he or the company had nominated Llambias as a director. The court rejected both of these "technical points", finding that Ashley's actions were "within the ambit of the rule about influence in another club", which was drawn fairly broadly, Connal said. The tribunal was also entitled to come to the view that it did about the link between Llambias, Ashley and MASH, given the written evidence available which included statements made to the Stock Exchange, according to the judge.

A third ground of challenge brought by Ashley was of "more general interest", because it "went to the substance of the particular prohibition" on dual interest, Connal said. However, the court rejected this point too.

"Ashley argued that any director appointed was under the usual collection of statutory and other duties and there was no reason to assume that that director would not act in accordance with those duties so there could therefore be no issue over inappropriate influence," Connal said.

"However, the judge said that there was no 'need to posit misconduct' on the part of the director. The appointment as director of 'a particular candidate in whom the appointer has confidence because of his particular qualities is one way of influencing the direction which a company will follow ... that the person appointed is someone of independent mind is beside the point', according to the judge. It was the ability to appoint which mattered - not a discussion of whether as a matter of fact influence, positive or negative, had taken place," Connal said.

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