The Curious Case of Rangers’ “Relegation”

by | Feb 8, 2017

A curious Scottish court case involving Rangers is barely news, given the events of the last decade. But the latest is, if you’ll forgive the descent into impenetrable legalese, a “doozy.”

The case’s central question looks simple. Were Rangers “relegated” in the summer of 2012? And the question remains the same, for the knee-jerk reactors out there, even if you avoid the interminable new/old club argument about Rangers (as I so intend). Even, indeed, if “the gambling industry is still acting as if Rangers is the same club,” as was suggested in court. However, this central question proved far from simple to answer in court.

A cursory glance at a dictionary tells you that relegation is from something to something else. The non-sporting and sporting definitions respectively are “the action of assigning to an inferior rank or position” and “the transfer of a sports team or player to a lower division of a league.” There cannot be an “inferior” without a “superior.” No “lower” without a “higher.”

In September 2011 one “ordinary” betting man, Arthur Kinloch (the inverted commas are appropriate) placed a £100 bet on “Rangers to be relegated from the SPL” (Scottish Premier League) at the end of season 2011/12. The bookmakers, Coral, offered odds of 2,500-1. And after Rangers Football Club plc went into liquidation, triggering a still-bewildering series of events, none of which matched the dictionary definition of “relegation,” nor followed the standard procedure by which Scottish clubs were “relegated.” Coral did not pay out on the bet.

However, Kinloch took his demand for a £250,000 pay-out to Scotland’s Court of Session (an approximate equivalent to England’s High Court), at which there was a three-day “proof before answer” hearing, defined in Scots Law procedure as “the hearing of the facts of the case before legal arguments are disposed of.”

It is worth re-capping carefully and precisely what happened in 2012 to discover if or when Rangers, in whatever form you believe them to be at the time, were relegated from the SPL. I have largely avoided reference to the afore-mentioned “still-bewildering series of events” for the sake of my sanity.

May 13th The SPL season finished. Celtic finished top and were crowned champions. Rangers finished second, 20 points behind having been deducted ten points for Rangers Football Club plc entering administration on February 14th.

Were Rangers relegated from the SPL on May 13th? Easy one to start. No. Bottom-club Dunfermline Athletic were relegated from the SPL to the Scottish Football League (SFL) First Division and replaced by SFL First Division champions Ross County.

June 14th Rangers Football Club plc entered liquidation after failing to reach a Company Voluntary Arrangement (CVA) with 276 creditors to repay its multi-million-pound debts, thereby ceasing to hold the share in the SPL (SPL Ltd), which entitled Rangers to play in the league. Its memberships of the SPL and the Scottish Football Association (SFA) were terminated. The company ceased to be “the owner and operator of a club participating in the league,” because, in accordance with SPL Ltd’s Articles of Association, Rangers “forthwith” ceased “to be a member of the league.”

Were Rangers relegated from the SPL on June 14th? No. As at June 14th, Rangers ceased to be a member of the SPL but were not yet relegated TO any league.

June 14th – July 4th On June 17th, the SPL said that a new company, Sevco 5088, had applied for “registration of transfer of Rangers’ SPL share” and that “a general meeting of all 12 member clubs has been convened for (July 4th) for members to decide whether to approve the transfer.” By July 4th, Sevco Scotland were the applicants (bewilderment-alert) and the SPL said that clubs: “voted overwhelmingly to reject the application from Rangers newco to join the SPL.”

Were Rangers relegated from the SPL on July 4th? No. The SPL specifically followed the procedure set out in SPL Ltd’s Article 11, governing transfers “except where” it is “occasioned by the promotion of an association football club from and relegation of a Club to the SFL.”

July 4th – July 13th That evening, Sevco said they would “apply for membership of the SFL.” On July 7th, the SFL called a Special General Meeting of its member clubs, on July 13th, to decide whether “to admit Sevco Scotland Limited as an Associate Member” and “permit Rangers FC to play in the League.” After the meeting the SFL announced that the clubs had “voted to willingly accept The Rangers Football Club as an Associate Member of the SFL” and would “place Rangers FC into the Third Division.”

Were Rangers relegated from the SPL on July 13th? No. Sevco were still not members of any league, so the question now was Were Rangers relegated to the SFL on July 13th? Still “no,” though. They application for SFL membership was dealt with under SFL Rule 9, which states: “The League in general meeting may upon such terms and conditions as it may think fit admit any club as an Associate Member or Member of the League.”

Dunfermline were relegated to the SFL in May 2012 but became, full, members without undergoing this procedure. Indeed, the July 13th meeting was also asked to “approve the resignation of either Dundee FC or Dunfermline Athletic FC, whichever shall be admitted to join the (SPL)” to replace Rangers. As a friend asked: “If Rangers were relegated to the SFL, why did they have to apply to join it? Dunfermline didn’t.”

July 17th – July 28th Everything depended on Sevco successfully applying for the transfer of Rangers’ SFA membership. On July 28th, the SFA announced “that agreement has been reached on all outstanding points” (bewilderment-alert) “relating to the transfer of the SFA membership between Rangers FC (In Administration), and Sevco Scotland Ltd” and that “a conditional membership” (bewilderment-alert) “will be issued to Sevco Scotland Ltd today.”

Were Rangers relegated to the SFL on July 28th? No. Relegation per se does not divest a club of SFA membership. Dunfermline’s membership survived their relegation. And Sevco’s membership was “conditional” upon matters other than league status. Indeed, “conditional” was not even a specific SFA membership category in rule and has not been conferred since.

A for betting rules, Coral’s terms and conditions state: “For settlement purposes the initial official result will be considered final, following an event’s closure. Any subsequent change to results, whether due to disciplinary hearings or otherwise, will be disregarded.” And with specific reference to “League Competitions,” they add: “Final league or tournament standings will apply for settlement purposes.”

But they do not specify relegation bets. Sky Bet rules do. “Promotion or relegation markets for a given football league” are “outright” markets. Their “Outright Market General Rules” state: “The official league table at the conclusion of the scheduled season will determine the settlement of bets. This will include any point penalties incurred at any stage before the end of the scheduled season.”

Pertinent to Kinloch’s case, they add: “Settlement will not be reversed if a team is subsequently suspended or removed from a tournament competition. Any penalties or appeals heard after the end of the scheduled season which may subsequently alter the league placings will not count for betting purposes.” As Sky Bet’s website helpfully explains: “You’re betting on which team will finish in the relegation positions over the course of the league season.”

It is clear, therefore, that Rangers, in whatever form, were neither relegated, nor treated as a relegated club, by either dictionary or football rule or available betting rule definition.

The argument and evidence in court hearing was more wide-ranging.

Coral’s counsel Chris Sandison QC sneeringly portrayed Kinloch as a professional gambler who “(concealed) his vast background in gambling” and was “carrying on an activity in pursuit of profit,” a phrase which amused the Racing Post newspaper’s David Ashforth, who thought it was assured of “a place in The Punter’s Dictionary of Quotations.”

Judge Lord Bannatyne asked if Kinloch was “a professional gambler” (“a professional gambler’s status might be different under consumer law than that of a non-professional” – Ashforth). Kinloch’s counsel, Anna Poole QC, replied: “All bets are laid to make money.”

Kinloch said he was an “ordinary punter” and that three articles by “blogger” Phil Mac Giolla Bhain “alerted him to the possibility” Rangers might “go bust” and “might be relegated.” Less credibly, given the dearth of contemporaneous major media coverage to that effect, he claimed it was “common knowledge” that Rangers were “in serious trouble,” when he placed the bet in September 2011.

Both sides referenced contemporaneous media accounts, highlighting their inconsistent references to “relegation.” A Coral website article used the word, which seemed…unhelpful. As was Sandison’s daft suggestion that “400,000” articles did not use it, which neglected the age-old advice/joke: “I’ve told you a million times, don’t exaggerate.”

However, neither side saw fit to quote from the June 14th front pages of Scotland’s major newspapers which declared “Rangers” dead. Maybe the idea that any Scottish paper was sufficiently reliable to be deemed a “newspaper of record” was already “dead” too.

But ultimately both sides agreed that the case hinged on how “relegation” was defined (please feel free to think “I could have told them that”).

Sandison said “circumstances” made Rangers “ineligible to play” in the SPL and they “were not relegated from the SPL” but “expelled from it.” He admitted he hadn’t had “much success” in explaining that relegation was a “transitive verb,” the point about being relegated “from” and “to” something. And he added that a bet “Rangers leaving the SPL for any reason” other than “on points” either “wouldn’t be accepted or would only have odds of 2/1.”

However, Coral witness, Rob McKenzie, a senior partner with SPL solicitors Harper MacLeod, was neither use nor ornament. When asked the £250,000 question, “was the football team called Rangers FC relegated from the SPL?” he “declined to answer as that would involve him making a judgement on the meaning of relegation.”

Poole said “the ultimate question is what a reasonable person would think relegation means,” rather than what it actually meant in specific circumstances, a principle of “simple language” which may appear to be a “post-truth” concept but has considerable legal precedent. “There are a number of ways a club can go down,” Poole noted. “We should not confuse the meaning of the word relegation with the mechanism.” Even if the “mechanism” was not how clubs were relegated. SPL rules were not in Coral’s terms and conditions, so “should be disregarded.”

They certainly given less “regard” than a “reasonable person” might expect in a case which “hinging” on whether Rangers were ACTUALLY relegated.

Lord Bannatyne’s judgement is due soon and indeed might be a matter of public record by the time you read this. I suspect there could be another article in that.

All quotes from the hearing are taken from the comprehensive account of proceedings tweeted by freelance legal reporter James Doleman, to whom many thanks.

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