SR/017/2020

IN THE MATTER OF AN EFL DISCIPLINARY COMMISSION

BEFORE:

Graeme McPherson QC Robert Englehart QC James Stanbury

BETWEEN:

The Limited Claimant

and

Derby County Football Club Limited Respondent

DECISION

Dates: 14-17 & 21 July 2020 Venue: Remotely, by Zoom Appearances: For the EFL Mark Phillips QC, James Segan QC and Andrew Shaw Instructed by Solesbury Gay For the Club Nick De Marco QC and Tom Richards Instructed by Geldards

Index

Section Pages A Introduction 3-11 i) Summary of the First Charge ii) Summary of the Second Charge iii) The hearing iv) Introductory observations about the documents before us v) Introductory remarks about the factual witnesses v) Introductory remarks about the expert evidence B The P&S Rules 12-15 C FRS 102 16-20 D Factual background and findings 21-54 i) The Club’s approach to amortisation prior to the y/e 30 June 2016 ii) The Club’s approach to amortisation in and after the y/e 30 June 2016 iii) Did the policy described in (ii) represent the amortisation policy in fact operated by the Club in and after the y/e 30 June 2016 ? iv) Did the Club in fact apply that amortisation policy in practice ? v) Events leading up to the sale of vi) Events after the sale of Pride Park vii) The EFL reviews the consideration paid for Pride Park viii) The 6 January 2020 meeting of the EFL Executive ix) A discrete factual matter – the Middlesbrough FC proceedings E The First Charge: the question for us to determine 55-61

F The First Charge: the Club’s Procedural Defences 62-76 i) Procedural Defence 1: EFL had already determined Fair Market Value prior to January 2020 ii) Procedural Defence 2: the First Charge is ultra vires iii) A further Procedural Defence relying on Ultra Vires: the 14 day period iv) Procedural Defence 3: Contractual Estoppel v) Procedural Defence 4: Estoppel by Convention vi) Procedural Defence 5: Legitimate Expectation vii) Procedural Defence 6: No Annual Accounts viii) Procedural Defence 7: Abuse of Process ix) Conclusions on the Procedural Defences to the First Charge G The substance of the First Charge 77-99 i) Background information about Pride Park ii) Some further words about the valuation experts generally

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iii) The valuation history of Pride Park iv) The expert reports in the proceedings: the starting point v) The expert reports: approach to valuation vi) The first principal issue between the experts: Actual Capacity v Average Attendance vii) The second principal issue between the experts: build cost per seat as at June 2018 viii) Working through a DRC valuation of Pride Park using appropriate inputs ix) What that means for the First Charge H The Second Charge: the Club’s Procedural Defences 100-107 i) Procedural Defence 1: there is no breach of any substantive P&S Rule even on the EFL’s case ii) Procedural Defence 2: Ultra Vires for previous determination iii) Procedural Defence 3: Inconsistency of the Charges iv) Procedural Defence 4: Legitimate Expectation – previous determination v) Procedural Defence 5: Legitimate Expectation – Sanctioning Guidelines vi) Procedural Defence 6: Abuse of Process vii) Conclusions on the Procedural Defences to the Second Charge I The substance of the Second Charge 108-121 i) The precise terms of the Second Charge ii) Consideration of the Club’s approach to amortisation iii) A preliminary matter iv) The starting point v) Was the Club’s approach ‘systematic’ ? vi) Consideration of section 18.22 of FRS 102 vii) Conclusions viii) Returning to the Particulars of the Second Charge J Summary of Findings 122

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(A) Introduction

1) The Football League Limited (‘the EFL’) brings 2 charges against County Football Club Limited (‘the Club’). Each Charge is brought under the Championship Profitability and Sustainability Rules (‘th