Mike Ashley’s company to pay SFA and Dave King’s expenses following abandoned legal action over ‘fit and proper’ ruling

Mike Ashley has been ordered to pay the expenses of the Scottish Football Association and Dave King after his petition for judicial review of a decision of football’s governing body to approve the Rangers chairman as a “fit and proper person” to hold the position of director of Rangers International Football Club Plc was dismissed.

However, a judge in the Court of Session refused a motion by the SFA and Mr King for an award of expenses on an agent and client basis, and a claim Mr King by for an “additional fee” over the abandoned action.

The judicial review came before Lord Bannatyne on 28 April 2016 for a first hearing, but when the matter called the prayer of the petition was refused and a motion was moved on behalf of the petitioners Mash Holdings Limited to dismiss the action with no expenses due to or by any party.

Both the respondent (the Scottish Football Association Limited) and the interested party (David King) opposed this and moved counter motions: on behalf of the respondent; to find the petitioners liable to the respondent in the expenses of the petition and proceedings on an agent and client basis and on behalf of the interested party; to find the petitioners liable to the interested party in the expenses of the petition and proceedings on an agent and client basis and for an additional fee.

In support of his motion regarding expenses, counsel for the petitioners said that a number of matters which were in the public domain caused the petitioner to believe that the interested party was not a fit and proper person to be a director of RIFC.

The petitioners wrote to the respondent in June 2015 to draw these matters to its attention, but in reply the respondent in effect said the matter was “none of the petitioners’ business”.

It was the petitioners’ position that on the basis of the said public information the decision of the respondent was ex facie “irrational” or alternatively “no adequate reasons” had been given for the decision.

The petition was accordingly raised and answers lodged by the respondent and interested party, but their answers did not amplify the position.

But on 14 April 2016 the respondent substantially adjusted its answers, which set out the material it had before it at the relevant time and explained the reasoning process followed in reaching its decision on the fitness of the interested party.

Against that background, it was submitted that had the information been provided at the outset the petitioners would not have raised the proceedings, or had it been given at an earlier stage the petition would not have been proceeded with.

However, counsel for the respondent explained that the answers lodged in October 2015 had set out five lines of defence: that the petitioners lacked standing in that they were not a member of the respondent; mora, taciturnity and acquiescence; that the decision was not irrational; that there was no duty incumbent upon the respondent to provide reasons; and that even if there was such a duty proper reasons had been given.

It was submitted that the onus was on the petitioners to establish standing and irrationality, otherwise they had “no entitlement” to be given any information regarding the decision making process.

In summary it was argued that the petitioners had in effect abandoned their action and the normal rules should be followed, the party who had abandoned paid the expenses.

In seeking the award of expenses on an agent and client basis, counsel contended that the person who in practical terms stood behind the petitioners and controlled them was Mr Ashley, who was simply “continuing a vendetta” against Mr King by and therefore the proceedings were an “abuse of process”.

Counsel for the interested party also sought an award of expenses on an agent and client on the basis that the petitioners had abandoned their case at the “door of the court”, adding that an additional fee should be awarded due to “the importance of the cause or subject-matter of it to the client”, who would have been “materially adversely affected” if he had lost his role as a director.

In a written opinion, Lord Bannatyne said: “On the primary issue argued before me regarding the awarding of expenses I am clearly of the view that the petitioners’ argument should be rejected. I am persuaded that there is no proper basis for not following the normal rule that expenses should follow success.

“Where a party seeks on the morning of a first hearing to have the action dismissed then that party in my opinion must be held to have been unsuccessful. It cannot be said that in these circumstances the respondent and interested party have been other than successful in their defence of the petition.

“The argument…that the circumstances herein justified an exception to the normal rule was in my opinion misconceived.”

However, with respect to the motion for expenses on an agent and client basis, the judge was not persuaded that he should grant the respondent’s and interested party’s motion.

Lord Bannatyne said: “I do not believe that there is evidence before the court which would entitle me to hold that the present judicial review proceedings were in essence an abuse of process in that they were no more than part of an ongoing vendetta by Mr Ashley against the interested party.”

Nor was the judge convinced the he should grant the additional fee sought by Mr King.

He said: “hese are judicial review proceedings challenging the rationality of a decision and their purpose is no more than reduction of the decision of the respondent. No decision in favour of the petitioners would decide the fitness or otherwise of the interested party to be a director.

“If the petitioners were successful it would not automatically have resulted in his removal as a director, as RIFC was not a member of the respondent. At worst for the interested party if the petition were successful it would have required a new application to be made to the respondent.

“I accept the litigation was important to the interested party but no more important I believe than most litigations are to litigants. I did not believe its importance brought it into a category justifying an additional fee.”

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