ON APPEAL FROM CHANCERY DIVISION COMPANIES COURT
THE HONOURABLE MR JUSTICE PETER SMITH
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE SEDLEY
LORD JUSTICE TOULSON
| Swindon Town Football Co Limited
|- and -
WordWave International Limited
A Merrill Communications company
165 Fleet Street, London EC4A 2DY
Tel No: 020 7404 1400 Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
The Respondent did not appear and was not represented.
Crown Copyright ©
Lord Neuberger, MR:
"2. The grounds for the application are that the Petition is an abuse of the process of the Court and the company is able to pay its debts as they fall due. It is contended by the company that there is a bona fide and substantial dispute as to the Petition Debt. Further the company contends that it has a counterclaim against the Petitioner.
3. The company is Swindon Town Football company Ltd (company Number 0053100) ('the company').
4. The company is not to be confused with Swindon Town FC Ltd ('STFC') and Swindon Football Holdings Ltd ('SFH'). Part of the issues arise out of a share purchase agreement ('the SPA') whereby STFC agreed to sell 75% of the shares in the company to SFH. The latter company is controlled by a Mr Fitton and others.
5. STFC was put in to administration on 8th March 2008 and is now in liquidation. The Petitioner was a major shareholder in STFC. He ceased to have any involvement in Swindon Town Football Club after the restructuring in January 2008 after the SPA took effect.
6. The Petitioner for many years was involved in marketing and promotion in the sports industry. He was the managing director of Dunwoody Marketing Communications Ltd which carried on the business of marketing, design and advertising consultants with a focus on the sports industry. For many years he acted as an advisor to Sir Seton Wills and his son James in connection with dealings with STFC and the company. Dunwoody Marketing Communications Ltd is now in liquidation."
"7. The Petitioner claims that the company is indebted to him in the total of £249,475. That falls in to 3 categories:
1) Outstanding trade debts of Dunwoody for the period 30th April 2003 to 30th December 2007 paid by him for goods and services supplied to the company (£66,475).
2) Accrual of Management Fees of the Petitioner pursuant to his employment as Manager of the company from the commencement of employment until 2004 (£123,000).
3) Personal loans from the Petitioner to the company dated 5th and 26th November 2007 (£60,000)."
"Just to confirm your recent appointment of managing the Football Club on behalf of the Wills family, and your company's involvement in supporting the Club, and I would like to confirm that you have agreed with the Wills family that you will receive a fee of £80,000 per annum…"
And then there is a reference to other activities and separate fees, and the letter ends up with this sentence:
"I would just like to say on behalf of the Board and the Wills family how pleased we are with the progress the Club has made."
"When it was agreed between myself and the Wills family that I remain involved with the Club we agreed that I would be paid a fee of £80,000 per annum which was subsequently approved by the Board."
The first sentence undoubtedly suggests that with the agreement of the Wills family; the second sentence suggests that it might have been, as it were, in some way underwritten or transferred to the company.
"According to the evidence, Mr Diamandis was authorised generally to act on behalf of holdings, ie not the company. Accordingly, the management agreement had the effect of enabling Mr Diamandis to act on behalf of the club."
As Mr Armstrong points out, this does not mean that the agreement to pay Mr Diamandis cannot have been the liability of the company, but it casts a certain amount of doubt on the proposition that that was the arrangement
"…the Holding Company has in its accounts a liability of £120,000 to Mike Diamandis for uninvoiced services."
That again is not a conclusive observation, but it is another indication, consistent with what Mr Kealey said in his judgment, that the liability was not that of the company but was that of the holding company referred to.
"agreement for the transfer of the liability […] and that it was agreed with the Board members"
The judge went on to point out that, the Petitioner said at that time the board members of the company were Ms Gray, James Wills and Robert Holt.
"I am sure that the sum set out in the email at that time [was] properly due [from the company] to Dunwoody Marketing and had there been any disputes on any of these invoices I would not have agreed them…"
Ms Stonefrost seems to me to be right that Ms Gray does not confirm that the benefit of the invoices or debts had been transferred to the Petitioner.
Lord Justice Sedley:
Lord Justice Toulson:
Order: Appeal allowed