Park Promotions Ltd t/a Pontypool Rugby Football Club v Welsh Rugby Union

19 Jul 2012

[2012] EWHC 1919 (QB), Sir Raymond Jack sitting as a Judge of the High Court, 11 and 16 July 2012

1. The High Court has given judgment in a sports law dispute between Pontypool Rugby Club and the Welsh Rugby Union (“WRU”) concerning its relegation from the Principality Premiership with effect from September 2012 and the interpretation of League Rules setting out three criteria for qualification: an A Licence, signing a Participation Agreement and “meritocracy”. Pontypool were required to undertake substantial works to their grandstand by the WRU, removing seats and installing crush barriers. This involved considerable expenditure by Torfaen Council as well as private funds, working closely with the WRU Compliance Department. The works had to be completed by the League Rules deadline of 31 August 2011 in order to be awarded an A Licence, which Pontypool achieved just in time. Pontypool were denied a place in the new ten Club League and were later informed by the WRU that in fact it could never have been eligible in any event by reason of the WRU’s interpretation of “meritocracy”. Pontypool brought an appeal on the basis that other Clubs did not have covered terracing for 1000 spectators (“Criterion 7”), which is a mandatory A Licence requirement, and that the WRU had not followed its own Rules which stated, in relation to the assessment of Criterion 7, “Independent assessor to be appointed – Survey, led by Green Guide requirements.” Nearly three months after the WRU announced the outcome of the selection process, it announced that two other Clubs would be added to the League: Bridgend and Carmarthen Quins. This was the result of pressure from third parties linked to these Clubs who agreed to fund them. There was to be no possibility of promotion to the new Premiership for at least two years and Pontypool became the only applicant Club excluded from the semi-professional game.

2. The case has established the following points upon which Pontypool now rely in its claim to be selected for the Premiership in accordance with the League Rules as the WRU informed the Court they would be varied:-

(i) Pontypool does have a contractual right to be admitted to the Premiership if the Club satisfies the three criteria, rejecting the WRU’s argument that there is no contract;

(ii) Pontypool’s interpretation of the “meritocracy” criterion is the correct one: if more than 10 Clubs achieved an A Licence and signed the Participation Agreement, selection of the 10 Clubs would be decided in the order of the meritocracy rankings. The WRU argued that the meritocracy criterion means that if a Club finished outside the top ten in its meritocracy rankings, then it was necessarily ineligible for the Premiership;

(iii) the WRU had “developed” the contrary argument “in the light of the dispute” with Pontypool, a founder member of the WRU;

(iv) the WRU’s appeal body decision was consistent with it having misdirected itself as to the proper meaning of the meritocracy provision and the basis for its decision was unclear. The Court declined to find a breach of duty and considered that the point had not been pleaded, although Pontypool had in fact pleaded that the appeal body “proceeded on the basis of a misdirection as to the operation of the meritocracy criteria”;

(v)  The WRU’s Board had no power to act in the way it did in relation to the appeal body’s decision. The appeal body recommended that all Clubs’ grounds be independently assessed immediately, given the evidence produced by Pontypool from local authorities which it relied upon to show that Swansea, Bedwas and Cross Keys did not have the required covered terracing safely to accommodate 1000 spectators (required to obtain an A Licence) and that their statements of truth in support of their applications were therefore false. The appeal body’s decision was not communicated to Pontypool until the Board had intervened and reviewed it. The Board overturned the recommendation for independent assessments but otherwise upheld the dismissal of the appeal;

(vi) The WRU argued that Pontypool could not complain about the WRU’s treatment of another Club in relation to the A Licence assessment, but again the Court found in favour of Pontypool, implying terms to the broad effect that there should be fairness as between clubs as they are treated by the WRU. This permitted such a challenge to be made both in contract and under the non-contractual supervisory jurisdiction of the courts over sports governing bodies.

(vi) If the allegations against the three Clubs, based on independent evidence from the local authorities for the three Clubs, are correct, the Court held it would be “a matter of concern”. The WRU sought formal responses from Swansea, Bedwas and Cross Keys only after dismissing the appeal of Pontypool (some ten months after they were drawn to the WRU’s attention by Pontypool). The WRU delayed announcing the outcome until after the trial. The Court held that it is now for the WRU to determine the consequences of its enquiries into the three Clubs. Pontypool had been found in breach of its A Licence shortly after it appealed. Its A Licence was summarily revoked without a hearing and it took six months for it to be reinstated on appeal. The Court has held that an A Licence is a mandatory requirement for selection. The WRU will now proceed to determine the consequences for the three Clubs in accordance with the judgment and the League Rules.

(vii)  the Board’s reversal of its position to accede to the Ospreys and Scarlets’ requests to choose a Club of its choice to add to the Premiership after the selection process was completed was “unfortunate” and “a result of pressure” from those Clubs. They agreed to pay for these Clubs, to which they were linked. The Court accepted Pontypool’s argument that this decision was not in accordance with the League Rules, and that the WRU would have to vary the contract if it wished to give effect to this decision.

3. At trial the WRU produced and relied upon draft rules to vary the League Rules. However, the proposed rules merely increase the number of Clubs in the Premiership from 10 to 12, and otherwise continue to provide that selection is to be determined by the existing three criteria.

4. The judgment binds the WRU in its application of the League Rules – henceforth to be properly interpreted by the WRU – to determine the composition of the Premiership. It enables the parties to work out their respective legal rights in light of the correct interpretation of the League Rules and in the knowledge that their relationship is subject to contractually enforceable rights, as Pontypool contended. As Pontypool has an A Licence and Carmarthen Quins does not, Pontypool is the 12th highest ranked Club in order of meritocracy and claims to take its place in the Premiership when fixtures are shortly announced, on the basis of the findings in the judgment as applied to the Rules as the WRU informed the Court they would be varied. The Court considered that it did not need to determine this issue, but found that Pontypool’s success on the meritocracy issue was an important point for the Club which might have consequences for the future.

5. Pontypool have openly called for an immediate mediation with the WRU and the affected Clubs to reach an agreement as to the application of the League Rules in accordance with the judgment.

Click to read the judgment in Park Promotion Pontypool Rugby Club