ALBERT IAN KINLOCH (AP) AGAINST CORAL RACING LIMITED

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OUTER HOUSE, COURT OF SESSION

[2017] CSOH 43

 

CA90/16

OPINION OF LORD BANNATYNE

In the cause

ALBERT IAN KINLOCH (AP)

Pursuer

against

CORAL RACING LIMITED

Defenders

Pursuer:  Poole QC and Van der Westhuizen; Drummond Miller LLP

Defenders:  Sandison QC;  Brodies LLP

15 March 2017

Introduction
[1]        This matter came before me for a proof in the Commercial Court.

 

Issue
[2]        The primary issue for the court was the proper construction of the bet placed by the pursuer with the defenders. 

[3]        In particular the dispute between the parties was this:  In terms of the contract between the parties had Rangers been relegated from the Scottish Premier League (“SPL”)?  Or put another way what do the words “From SPL …Rangers to be relegated” mean?

 

The Betting Slip (6/1 of Process)
[4]        The contract requiring to be construed starts with the betting slip which states the following: 

• The odds (2500 to 1);
• The stake (£100 win);
• The reference, time, date and operator;
• “From SPL … Rangers to be relegated”
• Coral Rules apply

The bet was struck on 5 September 2011 at 14:00:58. 

[5]        The betting slip it was agreed set out only part of the express terms of the contract between the parties.  Further express terms of the contract are set out in the Coral General Sporting and Betting Rules 2010 (“Coral Rules”).

[6]        Unless the context otherwise specially requires it I will refer to the team which played football in the SPL in season 2011/12 and the team which played football in the Scottish Football League (“SFL”) 3^rd Division in season 2012/13 as “Rangers”.  When referring jointly to the rules of the SPL and SFL I will use the term “football rules”.

 

The Agreed Background Surrounding the Placing of the Bet
[7]        An association football club bearing the name “Rangers Football Club” was founded in 1872.  Until 2000 Rangers Football Club was owned by the Rangers Football Club Ltd and thereafter by Rangers Football Club Plc.  A team with the name “Rangers” has played in various different football leagues, football cup competitions and football championships. 

[8]        The company operating the football team which played in the SPL under the name “Rangers Football Club” in the 2011/2012 season was The Rangers Football Club Plc.

[9]        On 27 April 2010 The Rangers Football Club Plc stated that it was under investigation by HMRC over offshore payments to players from 2001.  Those investigations resulted in HMRC issuing tax assessments which were appealed to the First‑tier Tribunal (tax).  The First‑tier Tribunal sat in private to hear the case between 25 October and 5 November 2010, 18 to 21 and 26 to 28 April, 3 to 6 May and 7 to 10 and 16 November 2011, and 16 to 18 January 2012.  A judgment against HMRC was issued on 29 October 2012 and HMRC appealed to the Upper Tribunal.  The Upper Tribunal refused the appeal on 8 July 2014. The Inner House of the Court of Session allowed HMRC’s appeal on 4 November 2015.  The decision in the Inner House of the Court of Session is currently under appeal to the Supreme Court. 

[10]      The amount at issue in the appeal to the First‑tier Tribunal (tax) referred to above was reported by Phil Mac Giolla Bhain in a blog dated 27 January 2011 as a core amount of £24 million plus interest of £12 million.

[11]      The BBC reported on 1 April 2011 that the real concern for Rangers was the judgment they awaited from HMRC over a tax issue relating to offshore payments to players and the Murray Group Management Limited Remuneration Trust.  It also reported that the club’s financial position had been hit by a separate charge from HMRC for £2.8 million relating to activities in a player compensation scheme between 1999 and 2003. 

[12]      The Rangers Football Club Plc went into administration with effect from 14 February 2012 although the relevant administration order was not made until 19 March 2012.  It entered liquidation on 14 June 2012. 

[13]      The Rangers Football Club Plc changed its name to RFC 2012 Plc on 31 July 2012.   

[14]      The administrators of The Rangers Football Club Plc sold substantially the whole of the business and undertaking of that company, including that aspect of the business which consisted of the operation of the football team named “Rangers”, to SEVCO Scotland Limited on 14 June 2012.  SEVCO Scotland Limited subsequently changed its name to the Rangers Football Club Limited.

[15]      At the end of the 2011/2012 season, which ended on 13 May 2012, Rangers finished in the second place in the SPL of 12 teams with 73 points.  It did not finish in the last place in the SPL that season.  The team that finished in last place in the SPL in that season was Dunfermline Athletic.

[16]      The football team which played in the SPL under the name “Rangers Football Club” in the 2011/2012 was, in terms of rules of the SPL docked 10 league points which it had earned from the results of its matches in the SPL because its owner and operator, The Rangers Football Club Plc, went into administration in the course of the season. 

[17]      The rules of the SPL 7/3 , 7/6 and 7/7 of process  all contain a Rule A2.1 in the following terms:

“The league shall consist of 12 leading association football clubs in Scotland.  The association football clubs eligible to participate in the league in any season, shall, subject to the articles of association and rules, be those clubs which participated in the league in the immediately preceding season, except that, subject to rules A2.2, A2.3 and A2.4 the club finishing in last place in the league in the immediately preceding season shall not be eligible to participate in the league and shall be relegated to the SFL and the candidate club shall be promoted from the SFL and admitted entry to the league”.

 

Rule 15.1 of the rules of the SFL lodged as part of the handbook of the SFL 2012/2013 (7/4) provides that:

“Notwithstanding any other provision in these rules, any football club which is relegated, in terms of the settlement agreement between the league and the SPL from the SPL, shall automatically be admitted to full membership of the league and shall in the season immediately following that relegation participate in the higher or highest division of the league”.

 

[18]      That Ross County finished in first place in SFL in the 2011/2012 season.  The following season it was playing in the SPL.

[19]      In order to play in the SPL in 2011/2012 and/or 2012/2013 seasons a football team required to be owned and operated by a person who was a member of the SPL Limited. 

[20]      During the 2011/2012 season of the SPL, the football team commonly called “Rangers Football Club” was owned and operated by The Rangers Football Club Plc, which was a member of the SPL Limited.

[21]      The Rangers Football Club Plc ceased to be the owner and operator of a football team in consequence of the sale to SEVCO Scotland Limited by its administrators on 14 June 2012 of substantially the whole of its business and undertaking, including Rangers Football Club.  Article 6 of the Articles of Association of the SPL provides:

”a share may only be issued, allotted, transferred to or held by a person who is the owner and operator of a club and if a member shall cease to be the owner and operator of a club then such member shall cease to be entitled to hold a share”.

 

The share in the SPL Limited previously owned by The Rangers Football Club Plc was not transferred to SEVCO Scotland Limited, the new owner and operator of The Rangers Football Club Plc.  Dundee Football Club was transferred a share in the SPL, and played in the SPL in the 2012/2013 season.

[22]      In respect of the 2012/2013 season, Rangers Football Club played in the third division of the SFL.

[23]      The 2011/2012 season of the SPL started in July 2011 and ended on 13 May 2012.  The 2012/2013 season of the SPL started on 4 August 2012 and ended on 19 May 2013. 

[24]      At the time the pursuer placed his bet on 5 September 2012, the 2011/2012 season of the SPL had already started, and a team called “Rangers” was playing in it, and in the 2012/2013 season of the SPL, no team called “Rangers” was playing in that league and that a team with that name was playing in the third division of the football league operated by the SFL Limited.

 

Evidence
[25]      Evidence on behalf of the pursuer was led from the pursuer himself and Mr John Graham Fox (led as the pursuer’s expert). 

[26]      Evidence on behalf of the defender was led from Simon Clare; Professor Leighton Vaughan Williams (the defenders expert) and Mr Roderick McKenzie.

 

The Pursuer
[27]      In evidence in chief he adopted his witness statement as part of his evidence.  He began by setting out the background information available to him regarding Rangers in the period before he made his bet.  He described a situation where he was following various media outlets including blogs from a Phil Mac Giolla Bhain about Rangers’ financial position.  The tenor of these reports was that Rangers were in financial troubles. 

[28]      The various media reports included 6/36 of process; 6/37, 6/38 to 6/40, 6/43 to 6/46 of process.  The reports included material regarding the tax case against Rangers.

[29]      His position as to what he understood about Rangers at the material time could be summarised as follows:  “… it became clear in my mind that they (Rangers) could go down to a lower division and be relegated” because of these financial troubles.  The more he read and the more he thought about this, he believed relegation could actually happen.  It became clear to him that Rangers were in very serious trouble.  They could not pay the taxman.  They were liable to very severe penalties.  He took it that if they could not pay their tax bill they would be relegated.

[30]      According to him it was common knowledge at the time that he placed his bet that Rangers were in financial troubles.

[31]      He knew that clubs could be relegated for financial reasons from what had happened to Gretna.  He explained as follows:  Gretna had been financed by a particular individual;  they got into the top division;  they were bottom of the league;  the individual who had been financing them became ill;  they were relegated by the SPL to the first division; realised they did not have the money to complete the fixtures within the SFL and were then relegated further by the SFL.  Instead of taking the penalty of the relegation they folded.

[32]      He referred to two articles in the press in support of his understanding of what happened to Gretna, namely:  6/33 and 6/41 of process.  All this information was in the public domain. 

[33]      The pursuer’s position regarding the placing of the bet was as set out in paragraphs 4 and 5 of his witness statement where he said this:

“4.       Against this background, on 5^th September 2011 around 2pm went to Coral Bookmakers, Tollcross Road, Glasgow and asked them what price are Rangers to be relegated.  In my mind, I knew it would be a large price for them to be relegated.  I was then quoted £2500 to one for Rangers to be relegated.  I thought it’s a good ‘throw away bet’ and I didn’t expect to win but there was a small possibility that I would win.  I decided to take my chances and place a bet of £100.  The young lady who was the cashier made a remark to me that there was no chance Rangers would be relegated.  I remember writing on the bet ‘Rangers to be relegated’.  I did not say how they were to be relegated, nor did anybody at Coral.  Nobody at Coral suggested to me they would only pay out if Rangers went down on sporting prowess or on points, and in fact they didn’t try to negotiate with me at all on the bet.  Coral just accepted what was written on the slip which was ‘Rangers to be relegated’.  I just placed what I thought at the time was a simple bet.  I wanted to keep it very simple.  I never thought much about what I was writing and just wrote it.  I recall saying to the cashier I quite agree with her that there would be little chance but I would rather just take the bet and see what happens.

 

5.         The cashier then called her head office/Racing Room to ask the price for ‘Rangers to be relegated’.  She confirmed that the bet was okay with her head office/Racing Room.  I heard her repeat the bet exactly as it was written “Rangers to be relegated”.  She then put the telephone down.  It was clear to me that she had received permission to lay PTL the bet and I handed my £100 over to her.  She accepted my £100 and provided me with a receipt.  She put on the slip from ‘SPL’ and the reference number and didn’t raise any issues with the bet I had written down at all.  She passed me the receipt.  Once she provided me with a slip I left the premises.”

 

[34]      The pursuer’s position was that the capacity in which he placed the bet was as a punter.  At the time of placing the bet he was retired.  He was not carrying on a business, trade or profession when he placed his bet. 

[35]      As regards the rules of the SPL and SFL he was not shown these in the betting shop and he had not seen them before placing his bet.  He said the only rules available to punters in a betting shop were the rules of the betting shop itself, (Coral Rules) and not the rules of all the sports upon which the bookmaker took bets.  The pursuer described the position of the defenders in relying, on the rules of the SPL and SFL that he had not seen, as very unfair.  He had never agreed to these rules applying to his betting contract.

[36]      The pursuer’s evidence was that in 2012, he had read in the newspapers that Rangers had indeed been relegated for the next season to the fourth tier of Scottish football.  6/27, 6/28, 6/29, 6/30, 6/31 and 6/32 were articles which showed the usage of the word relegation as to what had happened to Rangers.  In particular he had read at that time 6/27 to 6/30.

[37]      He went on to refer to 6/5 to 6/9 and 6/30 of process as showing that Rangers in 2012 were the same entity as Rangers in the season 2010/2011.

[38]      The pursuer cited two other occasions where clubs had been relegated for reasons other than sporting prowess reasons, namely: a Welsh club, and an Italian club Nocerina and referred to two articles:  6/34 and 6/35 of process which spoke of these events in those terms. 

[39]      The pursuer referred to certain Gambling Commission documentation:  6/48 and 6/49 of process.  The relevance of these documents according to him was that they showed that the defenders should have explained things to him before he placed his bet, if relegation was only to apply with respect to a points issue.  Had they done so he would have known where he stood.  In his view the dictionary definitions of relegation were the correct position on the meaning of relegation. 

[40]      In cross examination he was asked a large number of questions about his background with respect to the gambling industry and his experience regarding bookmaking, he said this:

• He attended Shawfield Racing on two nights per week.
• He worked there as a bookmaker at the weekend.
• He set odds for dog racing.  The week before the proof he was acting as a bookmaker’s clerk at the above course.
• His father was a bookmaker.
• He had acted as a clerk for a bookmaker since he was about 14.  For the best part of 60 years he had been a bookmaker’s clerk.
• Between 1987 and 1996 he was a bookmaker. 
• He accepted he knew well how the gambling industry worked. 
• He had taken bets in his betting shop with respect to football.
• The shop at which he placed the bet was five to six miles from his home and there were many betting shops nearer his home than the one in which he placed his bet. 
• He accepted that in the past he had been asked not to make bets in certain betting shops.  In certain betting shops he was not treated as an ordinary punter.  At Coral’s in Victoria Road (which was near where he lived) the amount he was allowed to bet was limited.
• In 2011 he was taking part on a regular basis in Texas Hold’em Poker tournaments.  He was playing four nights per week and was making a profit by doing so. 
• He described himself at the time of placing the bet as retired and his pension then was £200 per week.
• In 2011 he was also betting on horse racing and what he described as singles in football.  He described himself as a success when betting on football.
• He thought it was fair to describe him as an “ordinary person” in relation to betting transactions.
• He said normally he would have £100 cash in his pockets as he had at the time of placing the bet.
• He did not think £100 was an extremely large amount to bet, where according to him he did not think that he would win the bet.

[41]      The cross examination then moved away from his background.  He was asked what he understood relegation to mean and he said this: 

“If in SPL, next season in first, second or third division, start next season in a lower division, relegated.”

 

• He said this about the average guy in a betting shop:

“He is a complete mug” and described himself as “not a mug punter”.

• In respect of Gretna he accepted:  it was a consequence of them finishing last in the SPL that they went to the first division of the SFL and that thereafter they continued to have financial difficulties.
• 6/41 and 6/33 were the only articles about Gretna being relegated. 
• He accepted that the person who chose the wording of the bet was him.
• He suggested the words “Rangers to be relegated”,
• He accepted that he knew at the material time that the SPL and SFL had rules and accepted that he was very good at looking up things on the internet.
• He was asked this about articles lodged which used the word “relegation” to describe what happened to Rangers and he said this:

“I would use whatever articles were helpful to my case.”

• He was asked this about the said articles:

“There would be very many articles about what happened to Rangers Football Club would not refer to relegation?” and his answer to that question was “yes”.

 

Mr John Fox
[42]      He confirmed that he had written a report 6/50 of process and the content of it remained his opinion.  He is a bookmaker.  He has 50 years’ experience in the gambling industry.  Apart from his practical experience he is President of the Scottish Bookmakers Protection Association and Vice President of the National Association of Bookmakers.

[43]      The material opinions in his report were these:

[44]      He had had regard to the Gambling Commission’s objects, which were that bets required to be simple and clear to follow and he then opined:

• therefore “the rules must be made available to punters when they place a bet and the bet must be kept simple.  The punter is not expected to know the rules in relation to the game in question and this is why the Gambling Commission advocates to keep the bets simple.  In my view the bet placed by Mr Kinloch was clear and transparent”.
• “Traditionally, in the industry there is a higher gross margin on football bets.  Novelty bets such as in Mr Kinloch’s case on which football team will win or be relegated from a football league have a higher margin due to the fact that they are much more difficult in predicting the outcome, and you are more likely to lose.” 

 

• At paragraph 9 of his report he spoke of the media speculation regarding Rangers’ financial position as at 2011.  His understanding of the financial position of Rangers at that time was very much as set out by the pursuer in his evidence. 
• At paragraphs 11 and 12 of his report he opined that relegation could happen for a number of reasons and in particular Gretna were relegated to the first division and then the third division, the latter being due to the financial struggles of the club.  He made reference to Juventas being relegated from Serie A to Serie B of the Italian League due to their behaviour not their performance.
• He then said this at paragraph 13:

 

• “In Mr Kinloch’s case, Coral should have been alert to the possibility of Rangers entering administration, and as a result of this they would be subject to a point’s deduction.  Ultimately, affecting Rangers’ final position in SPL this would have had a bearing on any odds quoted for any teams finishing position in SPL.  In retrospect the odds of 2500/1 for ‘Rangers to be relegated’ seemed to be generous at the time given the possibility that they might be relegated due to their financial difficulties.”

 

• He went on to say this at paragraph 21 relative to the odds offered:

 

• “In my opinion, the odds offered were generous at the time considering the speculation in the press about Rangers’ finances.  I would say Coral’s racing room were not up to speed and quoted odds far in excess than should have been available.  The bet was confirmed at those odds and accepted.”

 

His conclusion was:

 

“All I can say is that from my experience of the betting industry I would have regarded the bet as a winning one.  I take into consideration that:  Rangers are the same club before and after liquidation, Coral Racing Limited ‘struck’ the bet, under the Coral rules at the time which they had drafted, and Rangers was put into a lower division (this does not always happen for liquidation purposes as I mentioned above re Juventus).  In my opinion Mr Kinloch’s bet, which was placed on simple, clear and transparent terms, was a winning one.”

 

[45]      So far as his oral evidence expanded upon the terms of his report he said the following:

[46]      Customers would not bet on a sport unless they knew the rules.

[47]      He said that from time to time bookmakers set odds wrongly. 

[48]      He at one point said:  Rangers were relegated in accordance with SPL rules.

[49]      Asked again about this in cross examination about Rangers being relegated in accordance with the SPL rules he said yes.

[50]      He accepted that the normal layman would know that there were rules which governed bets, what he described as shop rules. 

[51]      It was his position that he would expect bookmakers to keep on top of a subject matter upon which they were taking bets.  He accepted in cross examination that the natural time to settle relegation bets was at the end of the season. 

[52]      Finally he said that if a punter had wanted to place a bet on relegation and had wanted to discuss what relegation meant he would have walked away from the bet.

 

Defenders Proof
Simon Clare
[53]      He adopted his witness statement.  At the material time he was the trading director of the defenders.  He was responsible for the following areas:  Risk management;  the setting of prices and market making.

[54]      He explained how odds are calculated: 

“3        Odds are calculated by a team of experts known as “compilers”.  Coral has compilers for each sporting area.  They are specialists in their particular sporting field.  They are employed to know as much as they possibly can about their designated sport.  In the football market, Coral has a team of 7 compilers who are very well informed on all football matters.  They are football ‘anoraks’.  They will look at the history of clubs, the makeup of the squads, the teams that win, how often they win, etc., to work out the likelihood of a team winning a match, winning the league or being relegated, all according to the nature of the bet being taken on.

 

4          The compilers use their specialist knowledge to work out what they consider the appropriate odds should be.  There is also an open betting market that the compilers’ odds would be considered against.  There are odds comparison sites that customers and competitors can review.  Coral has a price compiler that would monitor the odds offered by other companies in relation to specific bets.  The general betting market therefore acts as a comparator for the compilers’ proposed odds.  The general market levels out any big disparities.”

 

[55]      He then gave evidence as to how the pursuer’s bet was priced:

“8.       Mr Kinloch placed a bet of ‘Rangers to be relegated’ at odds of 2500/1.  There is no doubt at all in my mind that, in offering these odds, Coral clearly intended that ‘relegation’ in this context meant for Rangers to exit the league based on their final league position from the number of points that they had accumulated over the course of the season.  The odds offered to Mr Kinloch of 2500/1 for Rangers to be relegated were calculated with reference to that concept of placing bottom of the league. The price of 2500/1 is exceptionally large and would not have been offered if the compilers had thought that there was any realistic chance of the event in question actually happening.

 

9          In considering the pricing of a bet on relegation, Coral would also proceed on the basis that the bet would be subject to the specific rules of the league in question.  The compilers would know the rules as to how and which teams could be relegated from the league, for example, whether only one team is relegated, or more than one, or whether there is a play-off for certain teams.  The odds would be based on the scheme of relegation for each particular league.  In Scotland, for example, only 1 team was relegated from the SPL whereas in some English leagues the bottom 3 teams can be relegated.  This would have an impact on the odds offered.

 

10        Had Coral been asked to take a bet that Rangers would exit the league by any means possible, that would not have been treated as a bet on the normal relegation market; rather, it would have had to have been considered as a ‘special’ bet.  There were well-known news stories about Rangers suffering financial problems before September 2011.  It is inconceivable that the compilers would not have known about those stories about Rangers.  Had a ‘special’ bet been asked for, that Rangers would exit the league by any means, the compilers would have gone away and assessed the chances of this event happening in any of the various ways possible.  The odds offered would have been conservative to take account of the inherent unknown and unknowable factors that could conceivably influence the outcome of the bet.  They would have been hugely lower than 2500/1.  I think, indeed, that the odds would have been something close to evens if someone had asked for a bet of this nature and Coral had actually decided to take it on at all, which is by no means certain.”

 

[56]      In cross examination he gave certain evidence relative to the size of the defenders:  At the material time they had approximately 1850 shops;  they were also involved in on‑line betting and he estimated that in an average year they took 150 million bets. 

[57]      He accepted in cross‑examination that the betting slip did not say that all bets were subject to the rules of the relevant sport.  He said in re-examination that he did not regard relegation as a difficult concept for a normal customer to understand.

 

Professor Leighton Vaughan Williams

[58]      Professor Vaughan Williams adopted his reports 7/5 of process as part of his evidence.  Professor Vaughan Williams’ experience and expertise in the area are as follows:

“I have been instructed by Brodies LLP Solicitors to give a written opinion in the case of Albert Ian Kinloch v Coral Racing Limited.  I am a Professor of Economics and Finance, and have been Director of the Betting Research Unit at the University since 1995.  I have extensive experience as an adviser and consultant on betting for a wide range of bodies including HM Revenue & Customs, the Department for Culture, Media and Sport, the National Audit Office and the Gambling Commission.  I have given oral and written expert witness evidence before the House of Commons and House of Lords, the Competition Commission and courts of law.  I have written numerous peer-reviewed academic articles in this area and a number of books including ‘The Oxford Handbook of the Economics of Gambling’ (Oxford University Press), ‘Information Efficiency in Financial and Betting Markets’ (Cambridge University Press), ‘The Economics of Gambling’ (Routledge) and ‘The Economics of Gambling and National Lotteries’ (Edward Elgar).  I am editor of the peer-reviewed ‘Journal of Gambling Business and Economics’.”

 

[59]      He based his opinion on the terms of the betting slip; the position of Rangers within the SPL in 2011 and their position in the third division of the SFL in 2012/2013, the SPL rules together with the background information that at the time the bet was placed it was in the public domain that Rangers were in financial difficulties and there was a realistic prospect of them facing administration.

[60]      In reaching his opinion he considered the case of Gretna and said as follows:

“The reference to the Gretna case in 2008 is instructive.  In that case, Gretna had ten points deducted for going into administration, leaving them last in the SPL with a net 13 points (23 points before the deduction).  The team above them in the table, Kilmarnock, were on 40 points, so Gretna were uncontestably relegated from the SPL, on any interpretation of the meaning of relegation, and were replaced by First Division champions Hamilton Academical.  By contrast Dunfermline Athletic came bottom of the SPL table in 2012, with 25 points. Rangers came second in the table, with 73 points after a ten point deduction was imposed (83 points before the deduction), Celtic won the title with 93 points and Motherwell came third with 62 points.”

 

He then opined:

“The threat of a point’s penalty for entering administration was, therefore, well established at the time that the bet was placed on 5 September, 2011.  Indeed, the same ten point penalty that was imposed on Gretna for going into administration was indeed later imposed on Rangers.  The overhanging threat of a possible point’s penalty would almost certainly have weighed on the determination of the odds on offer that Rangers would be relegated.  A penalty on the scale of that imposed on Gretna, however, would have been judged extremely unlikely to cause Rangers to finish bottom of the table.  Rangers did end the season a full 48 points clear of Dunfermline Athletic even after the deduction.  In my opinion, 2500/1 would have been a price that a reasonable person could have expected on Rangers finishing bottom.  For comparison purposes, the best odds on offer about Hamilton winning the SPL, as featured on the Oddschecker site, on Saturday, 3 December, 2016, was also 2500/1.  At the time, Hamilton had earned 14 points from 14 games (just two wins) while Celtic were leading the table with 37 points from 13 games (12 wins).  This is the sort of price, therefore, that is reasonably to be expected about a football event that has no realistic prospect of occurring.  I do not consider that this sort of price could reasonably have been expected to be on offer about a team being removed from the league for reasons unconnected to its position in the table at the end of the season.

 

A more general point about the setting of odds and the offering of a football bet by a bookmaker is that the odds-setter needs to have some frame of reference to calculate the likely true odds, such as  the form of a team.  Known uncertainties, like the previously imposed ten point penalty on Gretna, should also be built into the quoted price.  To quote a price about a team being ineligible to play in the league for legal or administrative reasons or perhaps for conduct such as match fixing is outside the scope of any football bet that has been offered to the best of my knowledge, at least by a mainstream bookmaker.  For these reasons, I consider that the construct put upon the term ‘relegation’ in the betting context is inextricably linked to the finishing position of the team in the league table and that that would be apparent to any reasonable person placing a bet on a team to be ‘relegated’.

 

[61]      He further commented:

 

“I also observe that the 2011/2012 season ended on 13 May, 2012, at which point Dunfermline Athletic, the bottom-placed team in the SPL table, were declared relegated.

 

Bets on the team to be relegated should have been settled at that time, with all bets on Dunfermline to be relegated being winning bets.  The status of Rangers for the 2012/2013 season, in the third division of the SFL, was not determined until the close season, following liquidation on 14 June, 2012 and a vote by SFL chairmen on 12 July 2012.”

 

[62]      He further stated in his report:

 

The odds were certainly excessively generous if the odds setter was considering “relegation” to be removal from the SPL for any reason whatsoever, including at some point in time beyond the end of the season.  It seems to me unreasonable to believe that the odds were offered or indeed accepted on that basis.”

 

[63]      He concluded:

 

“In the 2011/2012 season, the club that finished in last place in the League, at the end of the season on 13 May, 2012, was Dunfermline Athletic, who were relegated.  At this date, settlement of the relegation market would be in favour of those who backed Dunfermline to be relegated.  No other club was relegated at the conclusion of the season.  Rangers were deducted ten points but still finished in second place in the SPL, and so a bet on Rangers to be relegated would be settled as a losing one.  At the end of that 2011/2012 season, Rangers were not relegated in any sense or meaning of the word.

 

During the close season Rangers went into liquidation and a decision was later taken to compel the re-formed Rangers to play in the third division of the SFL.

 

If, on the other hand, the relevant SPL rules had at the time permitted the deduction of a very large number of points from a team whose owners suffered an insolvency event in the course of a season, and Rangers had suffered such a deduction, as a direct result of which they finished bottom of the SPL at the end of the 2011/2012 season, and had thus been relegated instead of Dunfermline, then “Rangers to be relegated” would in that case have qualified, in my opinion, as a winning bet.  In the event, the bet did not so qualify”.

 

[64]      He described odds of 2500/1 for a bet on the basis of the pursuer’s contention regarding the proper construction of the disputed phrase as being excessively generous.  He accepted in cross examination that bookmakers made errors from time to time in setting odds.  However, for a standard bet like this one, the bookmaker was not likely to get it far wrong. 

[65]      In cross examination he described what was contended for by the defenders regarding the meaning of relegation as follows:

“Common sense what relegation means.  It was his opinion that the position in Rule A.2.1 as regards relegation conformed to common sense.”

 

[66]      He was asked about journalists describing what happened to Rangers as relegation and said this:

“That is journalistic shorthand”.

“Just convenient shorthand”.

“Journalists-use words with abandon”.

 

Mr Roderick McKenzie
[67]      Mr McKenzie has been the principal solicitor acting for the SPL since 1988.  He had provided advice to the SPL on the legal issues surrounding the administration and later liquidation of The Rangers Football Club Plc in 2012, The Rangers Football Club Plc ceasing to be a shareholder in the SPL Limited and the club commonly called Rangers Football Club ceasing to play in the SPL.  Generally he gave evidence on the rules and structure of the SPL and the issuing arising from the various commercial events which affected Rangers. 

[68]      He began by looking at Rule A2.1 of the SPL.  He then looked at the mirror rule of the SFL 15.1.

[69]      Thereafter he advised that having regard to these rules the following occurred at the material time:

“6.       The Club that finished in last place (12^th) in the SPL at the end of the 2011/2012 Season, and which was thus relegated in accordance with Rule A2.1 of the SPL Rules and Rule 15.1 of the Rules of the SFL to the first division of the latter league, was “Dunfermline Athletic FC”.

 

7.         The membership position in the SPL which had been occupied in the 2011/2012 season by “Dunfermline Athletic FC” in the 2012/2013 Season was, in terms of Rule A2.1 of the Rules of the SPL  and Rule 15.1 of the Rules of the SFL, taken by the team that had finished in first place in the first or top division of the SFL in the 2011/2012 season of that league, namely “Ross County FC”.

 

Turning then specifically to Rangers he explained:

“8.       It was advised to The SPL Limited that acting through its administrators The Rangers Football Club Plc had sold substantially all of its business and undertaking to Sevco Scotland Limited in June 2012 and that the sale included the one share held by The Rangers Football Club Plc in The SPL Limited.  The registration of such a transfer of share required, in terms of the then articles of association of The SPL Limited the approval of not less than eight of its members.  An application was made to the SPL for the approval of the registration of the transfer of the one share in The SPL Limited previously belonging to The Rangers Football Club Plc to Sevco Scotland Limited, the new owner and operator of the business which included the Club commonly called ‘Rangers Football Club’, but that application was refused by a vote at a General Meeting of the members of The SPL Limited on 4 July 2012.

 

9.         On 3 August 2012 the one share in The SPL Limited formerly belonging to The Rangers Football Club plc was instead transferred to The Dundee Football Club Limited, whose football team (Dundee FC) thus became eligible to, and did, play in the SPL in room and place of the team commonly called ‘Rangers Football Club’ in the 2012/2013 Season.  The registration of the transfer of that share from The Rangers Football Club Plc to The Dundee Football Club Limited was approved by the members of the SPL Limited at a General Meeting on 3 August 2012.

 

10.       In respect of the 2012/2013 season, the team commonly called ‘Rangers Football Club’, now owned and operated by The Rangers Football Club Limited (formerly called Sevco Scotland Limited), applied to and was permitted to join the lowest division of the SFL as a new Associate Member of the SFL.  Sevco Scotland Limited was admitted as an Associate Member of the SFL and its football team, Rangers FC became entitled to play in the third division of the football league of the same name.  The SFL was, at that time, organised in three divisions.  I understand, (but was not present when it was decided), that the members of the unincorporated association which was the SFL, when admitting Sevco Scotland Limited as an Associate Member, determined that its team, Rangers Football Club would commence to play in its third division i.e. its lowest division from which it would be eligible to compete for promotion at the end of each successor season.” (“The five way agreement”).

 

[70]      He then looked at the position of Gretna and said that his understanding of their position was this:

“12.     At the end of the 2007/2008 Season, the football team known as Gretna Football Club was relegated from the SPL, to the SFL in accordance with the then respective rules of those leagues, because it had finished that season with the lowest number of league points in the SPL.  The consequence being that its owner was obligated to transfer its one share in The SPL Limited to the owner and operator of the club promoted from the SFL.  That promoted club, Hamilton Academical FC, was the champion club in the first division of the SFL and was the “Candidate Club” at the end of Season 2007/2008 in terms of the Rules of the SPL.”

 

[71]      Beyond his witness statement Mr McKenzie advised that from its formation the SPL had changed its rules on about 30 occasions.  However, in substance the rule regarding relegation had not changed.

[72]      He advised that the rules of the SPL were available on a website.  He believed that so far as the substance of these rules was concerned:

“Regarding certain parts of the rules the public have reasonably substantial knowledge.”

[73]      Relegation from the SPL he said was based on sporting performance.  However, he advised that the rules of the SPL also permitted removal of points on the happening of an insolvency event. 

[74]      It was his position that Rangers did not leave the SPL pursuant Rule A2.1.

[75]      He was taken to a decision by Lord Nimmo Smith regarding Rangers which arose out of a referral from the SPL as to whether SPL rules had been broken and accepted that paragraphs 3 to 7 set out accurately a history of Rangers.  He also accepted the contents of paragraphs, 34, 35, 38 and 39.

[76]      In cross examination he said this:

“Most informed football supporters are well aware of what happens at the end of a season, promotion/relegation”.

 

[77]      He accepted that there was no definition of relegation or relegated in the SPL rules.

[78]      He was asked about Dundee Football Club and what in fact happened in 2011/2012 was that two teams went down from the SPL and two teams went up?  He answered that question as follows: 

“No at end of season a club Dunfermline was relegated and a club was promoted that happened on the last day of the season and the share was exchanged in May early June.  Transaction between Rangers Plc and Dundee did not happen until 3rd August and the next season had already started”. 

 

 

Submissions on Behalf of the Pursuer
[79]      The key question of construction for the court is what the words:

            “Rangers to be relegated” mean?

[80]      The pursuer’s consistent and simple position was to this effect:  relegation means to move to a lower division of a league.  It follows that if a club is playing in a lower division of the league the following season, it has been relegated.  On the other hand the defenders contended that:  relegation is confined to going down only one league, covers only where the club has gone down on points, and is according to league rules.  This was despite none of these qualifications being stated expressly in the contact.

 

The Governing Law
[81]      The principles of construction to be applied by the court were:  as set out by the Inner House in @Sipp Pension Trustees v Insight Travel Service Ltd [2016] SLT 131 at paragraph 17,  namely, in interpreting a contract, the court has as its ultimate aim:

“The determination of what the parties meant by the language used, doing so by ascertaining what a reasonable person with all the background knowledge available to the parties would have understood the parties to have meant”.

 

[82]      What is involved in that task is as set out by Lord Neuberger of Abottsbury in Arnold v Britton [2015] AC 1619 at paragraph 15, as adopted by the court in Sipp at paragraph 17:

“That meaning has to be assessed in the light of (i) the natural and ordinary meaning of the clause, (ii) any other relevant provisions of the lease, (iii) the overall purpose of the clause and the lease, (iv) the facts and circumstances known or assumed by the parties at the time that the document was executed, and (v) commercial common sense but (vi) disregarding subjective evidence of any party’s intentions.”

 

[83]      Miss Poole stressed this in regard to factor (v) commercial common sense:  it had to be applied in the present case in the context of a contract between a business (the defenders) and a consumer (the pursuer).

[84]      Miss Poole submitted that the only difference between parties with respect to the approach to construction related to which of the above factors were relevant when looking at the circumstances of the present case and secondly the defenders were relying on certain older cases regarding construction and she submitted there had been in later cases, a return to looking at the plain and ordinary meaning of words used and a downplaying of commercial common sense (see: Arnold v Britton at paragraph 17).

[85]      She submitted that in the context of this case what was said by the court at paragraph 44 of Sipp was of some importance:

“Care, must also be taken to avoid reading anything said in Grove as being to the effect that the court can correct a bad bargain or even an unfair one;  there is no general rule that a commercial contract requires to be fair.  As Lord Hodge observed in Arnold v Britton at paragraph 77, it is not legitimate to re-write parties’ agreement because it was unwise of one party to gamble on future outcomes;  the question is not whether a reasonable tenant would have entered into the obligation.”

 

[86]      As I understand it, what underlay many of the pursuer’s submissions was this:  the defenders were seeking to have the court rewrite the contract to correct a bad bargain. 

[87]      Having looked at the general rules in respect of contract construction she turned to the role of consumer law in carrying out the exercise in the present case.

[88]      It was her position that the Unfair Terms in Consumer Contract Regulations 1999 (“the 1999 Regulations”) were directly applicable to this contract and it was her position that the bet placed by the pursuer was covered by the 1999 Regulations.  The defenders were sellers or suppliers in terms of the 1999 Regulations.  It was further her position that the pursuer was a consumer in terms of the 1999 Regulations.  She submitted that the pursuer’s bookmaking background had no relevance as to whether he was at the material time a consumer.  She submitted that when he placed the bet he was doing no more than following his hobby.  He was not doing anything, when placing the bet, which could properly be described as his following a trade or profession.  She argued that the purpose of the 1999 Regulations was to redress the balance in bargaining power between the consumer and the supplier.  She submitted there was a clear imbalance in the present case given the position of the pursuer and the evidence of Mr Clare as to the size of the defenders.

[89]      The effect of the 1999 Regulations on the construction of the bet was twofold.  First it was her position that if the court were in any doubt, as to the meaning of the disputed wording then the construction which was most favourable to the pursuer required to be adopted,  (see: Regulation 7(2)).  Thus, if the court were to conclude the SPL rules had any relevance as regards construction this would mean “relegation” could have two meanings;  first in terms of the SPL rules and secondly the natural and ordinary meaning contended for by the pursuer and therefore applying Regulation 7(2) the pursuer’s construction should be preferred.

[90]      The second way in which the 1999 Regulations impacted on the issue of construction of the bet was this:  Regulation 5 provides:

“5.‑(1) A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer.

(2) A Term shall always be regarded as not having been individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term.”

[91]      Miss Poole submitted that the defenders in their construction sought to import rules which were not available in the shop, namely:  the SPL rules into the contract of persons like the pursuer who were placing a bet.  That was she submitted clearly an unfair term.  She directed the court’s attention to schedule 2 of the 1999 Regulations at (i) where the following was said to be a term which may be regarded as unfair:

“irrevocably binding the consumer to terms with which he had no real opportunity of becoming acquainted before the conclusion of the contract”.

 

If the SPL rules were part of the contract, then the pursuer was bound by terms he had no real opportunity of becoming acquainted with before the conclusion of the contract.  This militated against the defenders contended for construction. 

[92]      Regulation 5 applied only where the term had not been individually negotiated.  She argued there had been no attempt to individually negotiate the terms of the bet.  Turning to Regulation 6 which provided: 

“(2) in so far as it is in plain intelligible language, the assessment of fairness of a term shall not relate – (a) to the definition of the main subject matter of the contract”.

 

The subject matter of the bet Miss Poole submitted was the stake of £100 and the odds of 2500/1 and not the relegation of Rangers thus Regulation 5 did not take the bet outwith the scope of the 1999 Regulations.   

[93]      Even, if I were against the pursuer regarding the argument that the 1999 Regulations were directly applicable she submitted they were of some importance in that (a) they guided the court to favour the interpretation which prevents the contract being unfair and secondly they guide the court as to what constitutes common sense when applying the principles of contractual construction.

[94]      Miss Poole then turned to consider such of the factors, as set out by Lord Neuberger which she argued were relevant to the circumstances of the instant case.  So far as the ordinary natural meaning of the words contained in the bet the pursuer’s construction was based on dictionary definitions (relegate is to move to a lower class (football) or to move to a lower division of a league (sport) or move down/demote).  To look for a definition in a dictionary is reasonable.  This construction was supported by a number of sources in the press who described Rangers as being relegated.  These articles show this construction of relegation reflected common parlance.  The defenders had produced no articles to the contrary effect.

[95]      She submitted that it was of some significance in deciding the ordinary natural meaning that the betting slip says “Coral rules apply”.  In such circumstances the defenders knew they could have put within their own rules that the SPL rules applied when bets were being placed on football.  They did not do so.  All sports have multiples rules, the ordinary person placing a bet could not be expected to know these, especially given how often these rules changed.  The evidence in this case was that the SPL rules had changed on many occasions.  Many people placed bets on sports where they knew nothing about the rules of the sport. 

[96]      She argued that it was not fair, open and transparent to read the SPL rules into the contract.  She submitted the difficulties with the defenders’ interpretation were illustrated by the number of occasions in their pleadings they had altered their contended for construction, this showed not a natural meaning. 

[97]      So far as other provisions of the contract were concerned she first referred to the Coral rules.  These rules contained no definition of relegated or relegation.  There was one rule in them which mentioned relegation but it governed ante post bets.  The pursuer’s bet was placed after the season commenced, and was therefore an in‑running bet.  She submitted that although this rule was not directly applicable to the pursuer’s bet it nevertheless was supportive of the construction contended for by him.  Rule 34 provides:

“For the settlement of Ante Post bets, final League placings count (ie divisional playoffs are excluded).  The only exception to this rule is where promotion and relegation markets are offered”.

           

[98]      She submitted that the above suggested that where relegation markets were offered by the defenders, final league placings were not decisive and/or that divisional playoffs were included.  This supported a construction that where such markets were offered, “relegated” was not confined to going down one division on the basis of points.  Moreover, the absence of any definition for in running bets therefore suggested that there was no special definition of relegation and the ordinary meaning would apply.

[99]      So far as the rules of the SPL were concerned it was her position that their terms were irrelevant to the construction exercise to be performed by the court.  In elaboration of this she submitted that rules set out in one contract cannot be read into a different contract in the same way as provisions of statutes may not be read over into other statutes, (see Somerville v Scottish Ministers 2008 SC (HL) 45) without being incorporated in some way.  She submitted that this was not surprising given that the SPL rules and the betting contract governed different things:  the former being a contract between the Football Association Clubs governing the relationship between them, and the latter governing the relationship between what she described as a punter and a bookie.  The irrelevance of the SPL rules could be tested in another way:  the defenders could not argue that the SPL rules are implied terms because they could not meet the required test, namely: not so obvious go without saying, nor were they necessary for business efficacy.

[100]    The pursuer also had an alternative position, on the basis that the court held that the SPL rules had any relevance, which was as follows:

[101]    First there were the arguments which she had advanced earlier in terms of the 1999 Regulations.

[102]    In addition she argued that the logical consequence of the defenders’ contention that the definition of relegated included “according to the rules of the league system in question” would be that the internal rules of anything they accepted bets on were incorporated into their betting contracts.  She submitted that this was not a sensible construction given the millions of words in the many internal rules of everything upon which they accepted bets would be incorporated into their betting contracts.  This was of particular significance given that internal rules may change, as they did in the instant case.  Further, it was evident that aspects of betting rules were different from rules of the sport in question.  For example extra time did not count in in terms of Coral rules, whether a bet is a winning one is decided on whether the team won within the 90 minutes, but under football rules what happens in extra time does count to decide who is the winner.  (see:  rules 31 and 32).  This also showed that the defenders’ contention was wrong.

[103]    In any event, it was her position that the SPL rules relied upon by the defenders did not define relegated or relegation in their long interpretation articles, so they did not give a definition that could be read across into the betting contract.

[104]    Finally she argued that the references in the SPL rules to relegation referred to by the defenders were in fact consistent with the construction contended for by the pursuer, because they were simply one example, going down on points, of the various reasons for relegation in practice, including financial reasons, match fixing, absences of licences etc.  Accordingly she submitted that even if regard were had to the SPL rules they supported the pursuer’s position and not the defenders.

[105]    Miss Poole stressed that what the SPL rules set out when looked at was no more than a number of mechanisms whereby a team could be relegated.  It is important not to confuse mechanisms of relegation with relegation itself. 

[106]    In considering any other relevant provisions of the contract, she next turned to the relevancy of the betting odds which were set and submitted that they were not of any relevance to the construction of the contract.

• She submitted that having regard to Mr Clare’s evidence as to the number of bets taken by the defenders and the evidence from Professor Vaughan Williams, Mr Fox and the pursuer there is room for an error being made by a bookmaker when setting odds.  Compilers will not always get odds right.  She submitted that it was giving a blank cheque to bookmakers to avoid bets simply by saying the odds are very high therefore the bet can be avoided.
• She described the argument that the odds were indicative of the proper construction of the terms of the contract as being the tail wagging the dog.  She submitted that odds change all the time.  However, the meaning of a bet does not change.  Accordingly to hold that the odds are indicative of the meaning of the bet is not a legitimate means of construction.
• She described the odds of 2500/1as not being exceptionally long odds.  She submitted that on the evidence odds go far higher (eg Professor Vaughan Williams spoke of odds of 5000/1 being offered on Leicester winning the Premier League in the 2015/16 season).  She submitted that in those circumstances one could take very little from the odds offered. 
• Mr Clare had given evidence that the difference between the odds on “relegation” meaning dropping down divisions for any reason including financial reasons and “relegation” on the basis contended for by the defenders was a difference between evens and 2500/1.  She submitted that she simply did not accept that the odds would have been as different as that. 

[107]    She went on to submit:  the defenders’ position was what she described as a “slippery slope” argument.  Again as I understood it, she was submitting that by accepting the defenders’ position regarding the significance of the odds set in respect to the construction of the contract, the court would be rewriting the contract and releasing the defenders from an imprudent bet.  Again she reminded the court that it was not the function of the court to release the defenders from an imprudent bet. 

[108]    With respect to the overall purpose of the contract she did not go beyond her note of argument which said:

“15.     This was a betting contract on the outcome of an event which could not be known in advance to either party.  The purpose of the ‘Rangers to be relegated’ clause was to set out the terms of a simple bet laid by a punter, not a business, and the circumstances in which the bet would win.  The purpose of the contract was to gamble on a future uncertainty.  Since neither party could set out the future precisely, taking the ordinary and natural meaning set out above is most consistent with the purpose of the contract.  Both parties were engaged in a game of chance.  Clubs can and do get relegated for reasons other than going down on points:  while this may not be common, it follows that the risk to Coral from this type of bet is low and they will not often have to pay out on this type of bet.  Some bets the defender has to pay out on, some it does not in which case it retains the stakes.

 

[109]    With respect to the facts and circumstances reasonably known by the parties at the time the bet was entered into she relied first on what was known about Gretna, which she described as them being relegated from the first to third division.  

[110]    Secondly she relied on the widespread public knowledge at the material time that Rangers had serious financial problems.

[111]    Thirdly she relied on the Gambling Commission regulatory principles which required rules to be transparent and clear to players.       She submitted this supported the pursuer’s construction.  For relegated to have a meaning narrower than that put forward by the pursuer the defenders would have had to make that clear and there were no such qualifying words.

[112]    She argued that the above background circumstances known to the parties supported the pursuer’s construction.

[113]    Turning to commercial common sense she submitted that the court should prefer the dictionary definitions.  The common understanding of relegation was to found therein.  It was to be moved from one division to a lower division.

[114]    She rejected the position advanced on behalf of the defenders that commercial common sense meant that you read into this contract rules which could not be implied into the contract.

[115]    She reiterated that this was not in any event a commercial contract and therefore the significance of Regulation 7(2) in considering the proper construction.  Lastly with respect to commercial common sense she said this:

“In contracts with consumers, the role of common sense is to recognise the consumer/business imbalance, and apply an approach that reflects the law’s understanding of the weaker position of a consumer.  This points to the court preferring the normal meaning used by the press and dictionaries, rather than reading in additional words cherry picked from disparate provisions in league rules that self evidently are not express in the betting slip, nor in the Coral rules, and were not agreed to by the pursuer.  The defender accepts bets on a wide variety of sports, all of which have differing and changing rules.  It cannot be the case that consumers are expected to be aware of and agree to all of these different detailed rules from different bodies.  The type of people who place bets (punters) are most often consumers and ordinary punters who would not ordinarily know about the detailed internal rules of what they bet on.  While punters can be taken to have accepted terms and conditions set out by Coral, expressly referred to on betting slips and displayed on walls of betting shops, they cannot be taken to have accepted all of these other various internal rules of sports.  This is particularly so when gambling companies do not apply all of the rules of the sport in question, as the defender self evidently does not.  Rather, it is in keeping with common sense that the defender make good on a bet placed with it in good faith after a football team was relegated.  The fact that the arrangement worked out badly for the defender is not a reason for departing from the normal meaning of relegated.”

  

[116]    In conclusion she said this, the pursuers argument on the question of construction is this:  having regard to the five factors set out in Sipp, which are of relevance in the instant case, a reasonable person with all the background knowledge available to the parties would have understood the parties to have meant that if Rangers were playing in a lower football division the next season they had been relegated.  A court should prefer this construction and find the bet to be a winning one. 

[117]    She submitted in summary that the most important factors in considering the issue of construction were these:

• The terms of the bet did not contain the various glosses of the defenders, nor did Coral’s rules.
• People are not bound by terms in other legal instruments which they have not agreed should apply.
• The ordinary and natural meaning, as can be gleaned from the dictionaries, favours the pursuer.
• Common sense in the betting industry, directs a reasonable person, to a dictionary in order to find the natural meaning of a word such as relegation. 
• All the background facts relative to Rangers and Gretna were within the public domain.

 

The Defenders’ Reply
[118]    With respect to the evidence Mr Sandison submitted that all of the witnesses should be accepted as credible and reliable with the exception of the pursuer.  He described the evidence of the pursuer in this way:

• He had actively concealed his background in the gambling industry.
• There was an attempt to show him in the context of the placing of this bet as an ordinary person (see:  article 8 of Condescendence) where this is said:  “The contract between the parties arose out of a bet that was placed by an ordinary person …”  He was clearly not.
• He had made no attempt to assist when asked questions in cross‑examination. 
• Against the above background the court should approach his evidence as self‑serving and it should be carefully tested to see whether it concurred with other evidence which the court accepted.

[119]    With respect to the approach to construction of the contract he said this:

[120]    In construing the contract between the parties, the court has as its ultimate aim the ascertainment of the meaning which the contract terms would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract. 

[121]    The meaning which a contract would convey to a reasonable man is not the same thing as the meaning of its words.  The meaning of words is a matter of dictionaries and grammars;  the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean.

[122]    The meaning of this contract ought to be assessed in the light of the following:

(1)     The natural and ordinary meaning of the clause,

(2)     the facts and circumstances known or assumed by the parties at the time that the betting contract was entered,

(3)     commercial common sense;  but

(4)     excluding from consideration the parties’ declaration of subjective intent as to the meaning of the contract.

[123]    The construction contended for by Mr Sandison was this, as set out in the defender’s pleadings: 

“’Relegation’ in the context of sporting and in particular football leagues, denotes a process whereby a team is removed from a particular league at the end of a season and placed instead in the league immediately below it in the hierarchy of leagues in the sport in question as a result of its finishing that season with insufficient league points, according to the rules of the league system in question, to entitle it to play in the higher league in the following season.”

 

[124]    Turning to the application of the above principles to the circumstances of the present case he made four points in support of his contended for construction which were as follows:

(1)     He referred to the content of Rule 24.1 of Coral’s rules.

(2)     His primary point was to this effect:  the ordinary meaning of relegation inexorably pointed to the definition within the SPL rules. 

(3)     The business of the defenders could not work unless relegation was defined within the terms of the rules of the sport.

(4)     The odds set determine what reasonable people would understand by the word relegation in the contract.  

[125]    Before turning to develop the above points Mr Sandison observed:  the starting point adopted by Miss Poole in her submissions was wrong.  What was to be construed was not the word “relegation” but “relegation from the SPL”.  This was important;  the meaning of relegation had to be construed in context.

[126]    Turning to his first point Mr Sandison reminded the court there were two sources of express terms and these were:  (1) the betting slip itself and (2) the terms incorporated by reference to Coral’s rules.  It was his position that there was something of relevance in Coral’s rules.  He drew the court’s attention to Rule 24.1 which defined the result of an individual football match by reference to the decision of official bodies.  That tended to support the suggestion that football bets were to be decided by official bodies.           This rule was in the context of individual games, however, there was a close analogy to a bet on relegation or promotion, which in substance was a bet on a series of games.  Accordingly one would refer to the official body as to what they say about who won or lost a series of games. 

[127]    With respect to the ordinary meaning of the disputed words he reminded the court that words had to be construed in their context.  The pursuer says the ordinary meaning of relegate is to move to a lower league,  Mr Sandison emphasised that relegate was a transitive verb, where something was done to someone.  It could not therefore support a position where what happened was that the club moved itself to a lower league.

[128]    What happened to Rangers was that they were not moved to a lower league.  They were because of circumstances rendered ineligible to play in the SPL.  They thereafter by means of an agreement ended up in a lower league.  Looking just to the dictionary meaning they were not relegated to a lower league. 

[129]    Having dealt with the dictionary meaning Mr Sandison turned to examine what “From SPL Rangers to be relegated” meant. 

[130]    In considering that question it had to be understood that Rangers were only in the SPL as a result of the articles of association and rules of the SPL.  The SPL is a rules based organisation.

[131]    These rules deal expressly with what relegation means (A2.1) for a club such as Rangers at that time. 

[132]    None of the other mechanisms within the rules which can result in ejection of teams from the SPL is called relegation in terms of the rules.

[133]    It was his position that to properly construe what “From SPL Rangers to be relegated” necessarily means having regard to the SPL rules.

[134]    Mr Sandison emphasised that what he was not arguing for was importation of the SPL rules into the contract.  Rather, he was saying:

• that in order to understand, what the subject matter of the express terms of the contract is, ordinary people would direct themselves to the SPL rules.More than that, ordinary people of necessity would direct themselves to the rules of the SPL.

  [135]    The arguments which had been put forward on behalf of the pursuer were based on an assertion that he was seeking to incorporate the rules of the SPL into the contract, that not being his position, the submissions were irrelevant. 

  [136]    In reply to the pursuer’s submission that the SPL rules were not up in the betting shop and that ended the matter, so far as reference thereto was concerned, he reminded the court that the pursuer’s own expert had said that people who bet on sports knew about the rules of the sports.  People who lay such sporting event bets were aware of the substance, if not the detail, of the rules of the relevant sport.  This particularly applied to something as blunt as relegation. 

  [137]    It was not necessary for the rules to be capable of being used, for the purpose for which he wished to use them, for the rules to have been known to parties.  What is relevant so far as background knowledge is concerned is not what was known but what could reasonably have been available to the parties.  As had come out in evidence the SPL rules were available on a website.  That was enough to make them a background feature.

  [138]    He then argued that it was appropriate to stand back from the contract itself and look at the commercial context.  He then argued this:  it is simply impossible to determine whether a particular sporting outcome has come to pass other than by reference to the rules of the sport in question.  It was impossible to run a betting business, where bets were offered on sporting events without reference to the rules of the relevant sport.  The rules of the sport decide the outcome of the event, it could not work in the context of sporting bets to decide the matter except by reference to the rules of the game. 

  [139]    Taking a further step back, he referred to the evidence of Professor Vaughan Williams.

  [140]    His evidence was the only evidence as to what was common sense in the context of a bet.  What he sought to take from his evidence was that the odds given and accepted were an important indicator of the proper construction.  Those elements indicated what a reasonable contracting party would have understood “From SPL Rangers to be relegated” meant in that they reflect the risk of Rangers being relegated.  The odds reflected the situation of Rangers being relegated on points and did not reflect the pursuer’s contention regarding relegation.

  [141]    Mr Sandison then dealt with a few discreet issues raised in the pursuer’s submissions:

  [142]    First so far as the use of articles saying Rangers had been relegated, he said that these only amounted to a very small number of articles and showed no more than a figurative use of language by journalists.  With respect to each article there were question marks. 

  [143]    Secondly in relation to sporting bets, he asked this question:  was the outcome to be left to journalists rather than the rules of the game, business could not be run on that basis.

  [144]    Thirdly the pursuer had made reference to changes of position by the defenders as to the proper construction.  At root the defenders had not altered their position.  From the start they had contended for a definition based upon demotion to the next lower league on the basis of sporting performance.  The defenders had changed their position only to reflect the possibility of a points deduction arising. 

  [145]    Regarding the 1999 Regulations he made these points:

  [146]    He began by looking at Regulation 3, the interpretation section where “consumer” is defined as follows:

  “means any natural person who, in contracts covered by these regulations, is acting for purposes which are outside his trade, business or profession;”

   

  [147]    Turning to Regulation 4(1) it provided:

   

  “These Regulations apply in relation to unfair terms in contracts concluded between a seller or a supplier and a consumer”.

   

  [148]    The scope of the Regulation was limited to unfair terms as defined in Article 5:

  “5, - (1) a contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties rights and obligations arising under the contract, to the detriment of the consumer.

   

  (2)  a term shall always be regarded as not having been individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term.”

   

  [149]    Article 6(2) provided:

   

  “In so far as it is in plain intelligible language, the assessment of fairness of a term shall not relate – (a) to the definition of the main subject matter of the contract … “

             

  [150]    Having set out the relevant provisions Mr Sandison submitted first that the pursuer was not a consumer within the terms of the 1999 Regulations.  He submitted that the evidence was clear, never mind the whole background, that at the time of laying his bet he was a professional gambler.  It was clear that the principal source of his income was gambling.  It was clear that on repeated occasions he was carrying out an activity, namely:  gambling with a view to profit and he was using these winnings to finance further gambling.  He submitted that £100 was a lot of money for a pensioner to stake on what he believed would be a losing bet where according to him his pension was only £200 per week.  In summary it was clear that his gambling was repeated, provided a large portion of his means and the further investment to be used as working capital, for further gambling.  In placing the bet he was therefore acting in the course of business as a professional gambler.  Thus the Regulations did not apply in this case.

  [151]    Secondly the term can only qualify if not individually negotiated, the terms here were individually negotiated.  The pursuer asked for a price for Rangers to be relegated, the person behind the counter telephoned the head office, she added SPL and he accepted this.  He was able to influence the substance of the terms, in fact he proposed the terms.  For this further reason, the 1999 Regulations did not apply.

  [152]    He further submitted that the pursuer was excluded from the scope of the 1999 Regulations by Regulation 6(2).  The term is in plain and intelligible language “From SPL Rangers to be relegated” was the subject matter of this contract.  Therefore it could not be an unfair term as it was the main subject matter of the contract.

  [153]    Lastly Regulation 7(2) is a statutory version of the contra proferentem rule, thus if all the construction tools available to the court fail to produce an answer as to the proper construction of the disputed terms, then one turns to Regulation 7(2).  What the Regulation did not do was absolve the court from carrying out the construction exercise by using all of the tools available to it.  It was his submission that if the court used all of the tools there could be no doubt about the proper construction.

   

  Discussion
  [154]    Before turning to the principal issue of the proper construction of the disputed phrase there are two preliminary matters.  First as regards the credibility and reliability of the pursuer I believe there is merit in the submission advanced by Mr Sandison.  I believe he was obstructive when answering questions put to him in cross examination.

  [155]    Beyond that he was described as an ordinary person placing a bet in Article 8 of Condescendence.  During his evidence he sought to give the impression of being an ordinary person placing a bet.  It became absolutely clear in the course of cross examination, given the evidence elicited regarding his background in the betting industry and his involvement in gambling at the material time that he was anything but an ordinary person placing a bet. 

  [156]    Against that background the approach to his evidence suggested by Mr Sandison was an appropriate one and I have adopted that approach when considering his evidence.  There being no challenge to the credibility and reliability of the other witnesses I found all of them credible and reliable.

  [157]    Secondly there is the issue of whether the 1999 Regulations impact on the issue of construction and if they do impact on it, how they impact on that issue. 

  [158]    I am persuaded that having regard to the evidence of the pursuer himself he was not a consumer as defined by Article 3 of the 1999 Regulations.  When placing the bet he was entering a contract for the purpose of his trade, business or profession as a professional gambler.  In reaching that conclusion I accepted all of the arguments put forward by Mr Sandison which clearly pointed to him, being at the material time, a professional gambler; that was his business.  His actings at that time went well beyond the placing of bets as a hobby as submitted by Miss Poole.  I did not accept the pursuer’s evidence as credible where he sought to portray himself as an ordinary person in relation to gambling and as someone who was not carrying out his business, trade or profession when he placed the bet.

  [159]    For the above reason the 1999 Regulations do not apply to the contract (see: Regulation 4(1)).

  [160]    In any event in terms of Regulation 5(1) a condition can only qualify in terms of the 1999 Regulations if it has not been individually negotiated.  It was clear from the evidence that the material terms were individually negotiated.  As contended by Mr Sandison the pursuer not only influenced the substance of the terms but proposed them.  Accordingly for this further reason the 1999 Regulations do not apply to the contract.

  [161]    Moreover, the position advanced on behalf of the pursuer regarding Regulation 6(2) appeared to me to be untenable.  It cannot be correct that the main subject matter of the contract was the stake and the odds.  The main subject matter of the contract was:  “From SPL Rangers to be relegated”.  That was the subject of the bet.  The term accordingly could not be unfair in terms of the 1999 Regulations as it was the subject matter of the contract.  Reliance was placed by the pursuer on Schedule 2(i) as to how unfairness arose in terms of the 1999 Regulations.  I do not believe that this provision has any bearing on the matters before me.  The defenders’ argument, properly understood, is not based on them seeking to bind the pursuer by reference to rules which he had not seen.  What they are using the SPL rules for is to understand the subject matter of the contract. 

  [162]    Turning lastly to Regulation 7(2), I accept Mr Sandison’s argument that this is a statutory form of the contra proferentem rule and only has any application, if having used all of the various tools regarding construction, the court is left with a reasonable doubt as to the construction of the contract.  For reasons which I detail later in this opinion I am not in any doubt as to the proper construction of the contract and for this further reason the 1999 Regulations have no relevance. 

  [163]    So far as the pursuer’s fall‑ back position regarding the 1999 Regulations, namely:  even if they were not directly applicable they nevertheless should be had regard to when construing the contract, this argument appears to me to fall to be rejected for two reasons:

  [164]    First the general purpose of the 1999 Regulations is to protect the consumer, against the far greater power of the seller or supplier in respect of the agreement of terms in a contract.  The particular circumstances of the pursuer, regarding his background in the betting industry, his knowledge of the betting industry, and the influence he had on the material terms of the contract make it inappropriate to indirectly apply the principles which can be derived from the 1999 Regulations to the construction of the contract.  Moreover, it is not a basis to arrive at a proper construction of a commercial contract to consider whether the result arrived at would be unfair to one party (see:  Sipp at paragraph 44).

   

  Approach to Contractual Construction
  [165]    The principles governing contractual construction are reasonably well understood.  They have most recently been elucidated in Sipp at paragraph 17, quoted earlier in this opinion. 

  [166]    It appears to me that there is a reasonably consistent line of authority from Investors Compensation Scheme Limited v West Bromwich Building Society [1998] 1 WLR 896 down to Sipp. 

  [167]    Each case, of course, deals with its own particular set of facts and in order to deal with that situation the court requires to identify and use the most apt tools of construction, as identified in this family of cases, to arrive at a sound construction of the document before it.

  [168]    Miss Poole seemed to be suggesting in the course of her submissions that there had been a sea change in the principles regarding construction arising from the decision in Arnold v Britton. 

  [169]    Lord Neuberger in Arnold v Britton gives certain guidance regarding consideration of commercial common sense.  He first says this at paragraph 17:

  “First the reliance placed in some cases on commercial common sense … should not be invoked to undervalue the importance of the language of the provision which is to be construed.”

   

  And he goes on at paragraph 20 to observe: 

  “Fourthly, while commercial common sense is a very important factor to take into account when interpreting a contract, a court should be very slow to reject the natural meaning of a provision as correct simply because it appears to be a very imprudent term for one of the parties to have agreed …”

   

  [170]    The foregoing guidance was expressly endorsed by the court in Sipp.

  [171]    This guidance requires to be borne in mind when considering and applying the construction tool of commercial common sense.  However, overall, I believe the difference in approach in the various decisions since Investors Compensation are, as submitted by Mr Sandison, matters of emphasis.  I am not persuaded there has been a significant change in approach to construction arising from the guidance of Lord Neuberger in Arnold v Britton.

   

  Construction of the Relevant Provision
  [172]    I think it is important at the outset to make a preliminary observation regarding what it is the court is required to construe.

  [173]    In the written note of argument for the pursuer, this is said:

  “The key question of construction in this case is what the words ‘Rangers to be Relegated’ mean“

   

  and throughout oral submissions that was the approach taken by Miss Poole. 

  [174]    I do not believe that that is the correct question.  The correct question is rather this:  what is the proper construction of “From SPL Rangers to be relegated”?  That is what is said in the betting slip. 

  [175]    With respect to the issue of construction I am persuaded it is of importance to note that what is being considered is “From SPL Rangers to be relegated”.  In order to arrive at a sound construction the court has to look at the context in which the stipulation is made.  What the court is seeking to identify is the ordinary meaning of words in context.  The court cannot approach the construction of the bet without having regard to the fact that it related to relegation from the SPL.  To approach it in any other way would be to fail to have proper regard to the context of the bet.  It appeared to me, that what underlay a number of the arguments put forward on behalf of the pursuer, with respect to construction, was to take the stipulation out of its proper context and to approach the matter of construction as though the words “from the SPL” did not appear.  What was being proposed by the pursuer appeared to be the answering of an abstract question about relegation rather than the proper question as I have earlier set out.

  [176]    Miss Poole’s contention was that the natural and ordinary meaning of the words in the contract was this:  to move to a lower division of a league.  The pursuer’s construction is based on definitions in various dictionaries of relegate: “(it) is to move to a lower class (football) or to move to a lower division of a league (sport), or move down, to demote.”

  [177]    I do not believe the dictionary definitions provide support for the view that what happened to Rangers was:  that they were relegated from the SPL.

  [178]    Relegate is a transitive verb.  A transitive verb has two characteristics:  first it is an action verb and secondly it has a direct object. 

  [179]    Applying that understanding to the phrase “From SPL Rangers to be relegated” means:  that a body performed an action which moved or demoted Rangers to a lower league.

  [180]    However, as submitted by Mr Sandison that is not what happened to Rangers.  It was either unchallenged evidence or a matter of admission, that what happened to Rangers at the material time was this:  the Rangers Football Club Plc sold inter alia the one share in the SPL to Sevco Scotland Limited.  That sale required the approval of at least 8 of the members of the SPL.  That application was refused.  It was thus no longer eligible to play in the SPL.  It thereafter applied to the SFL and was permitted to join the lowest league of the SFL (the five part agreement). The foregoing process cannot be described as being moved by anyone to a lower division, or being moved down or demoted.  The dictionary definitions are not apt to cover what happened to Rangers.  I am satisfied that what did not happen was that the SPL moved or demoted Rangers to a lower division.  Rangers ended up in a lower division by the entry into a contract which allowed them to join the SFL in the third division.

  [181]    With respect to the articles produced referring to Rangers being relegated I believe they do not provide any material assistance to the pursuer.

  [182]    First, all that was provided was a very small number of articles referring to what happened to Rangers as relegation.  The pursuer in his evidence accepted that there would be “very many” articles referring to what happened to Rangers which would not have referred to this as relegation.  As the pursuer accepted the articles which had been lodged had been chosen to support the pursuer’s case.  This, small and self-selected sample, adds no significant support to the pursuer’s position. 

  [183]    There is I believe some force in the point made by Professor Vaughan Williams that what is said by journalists is often in the form of journalistic shorthand.  It is often figurative use of language and for this further reason, these articles do not add any significant support to the pursuer’s position. 

  [184]    The next question, which logically arises, is this:  what is the relevance of the SPL rules?  Miss Poole argued that these were irrelevant as rules of one contract could not be read into another contract without being incorporated in some way.  This submission, I believe was based on a misunderstanding of the defenders’ position, Mr Sandison is not seeking to import the rules of the SPL or SFL into the contract.  His argument is this:  in order to understand the subject matter of the express terms, the ordinary person would direct himself to the rules of the relevant sport, in this case, football.  I am persuaded there is considerable force in the argument advanced by Mr Sandison.  I reject the pursuer’s position which I believe to be misconceived.

  [185]    It appears to me that there is no alternative to looking to the rules of the relevant sport to decide the outcome of an event within that sport.  To do otherwise would be to render the content of a bet on a particular sporting event wholly lacking in clarity. 

  [186]    The reasonable person knows that any sport is governed by rules.  The pursuer’s own expert accepted this.  He in addition accepted that people would not bet on sports unless they knew the rules, that is without a general knowledge of the rules of the sport they were betting on. 

  [187]    The SPL rules thus in the context of this case I believe form part of what Lord Hoffman in his first principle in relation to contractual construction in Investors Compensation Scheme Limited said was “all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract”.  The SPL rules were reasonably available to both parties;  they were available on line. 

  [188]    I am persuaded that the reasonable man is not only directed but driven to the rules of a particular sport when placing a bet in a sporting context.  That is where one finds the natural and ordinary meaning of a sporting term.  The natural and ordinary meaning of a sporting term is the definition of that term within the rules of that sport.  In order to give context to a sporting term such as relegation the reasonable person goes to the rules of the relevant sport.  Here the term of the contract is:  “From SPL Rangers to be relegated”, not to construe relegation in terms of the SPL rules would be to remove relegation from its context.   The sound construction of such a term is to be found in the rules of the sport.

  [189]    I am satisfied that Ms Poole’s submission that:  common sense in the betting industry directs a reasonable person to a dictionary to find the natural meaning of a words such as relegation, is wrong.  That submission entirely removes the bet from its sporting context and the context of a sport governed by rules, namely:  the rules of the SPL.  It cannot I believe be said that in terms of the outcome of a sporting event or series thereof a dictionary definition should be preferred to the definition contained in the rules of the relevant sport.  The outcome of such an event would be lacking in clarity, if reference were not made to the relevant rules.  The outcome cannot be left to other means.  

  [190]    A reasonable person with all the background knowledge would have understood the outcome of the bet was in terms of the rules of the sport.

  [191]    In the context of a bet on a sporting event a reasonable person would be bound to understand that odds given on the outcome of such an event would be based on an assessment of that event occurring in terms of the rules of that sport.

  [192]    The pursuer’s had an alternative position, if the court held the SPL rules were relevant to the construction issue.  That argument was as follows:

• That the rules of the SPL had changed from time to time, and therefore should not be looked at to obtain the meaning of the contested phrase.From the evidence of Mr McKenzie the rules of the SPL had changed on a large number of occasions, however, the substance of the rule regarding regulation had not.In these circumstances I can see no merit in Miss Poole’s argument.
• Miss Poole’s second point was based on the applying of the 1999 Regulation to the contract, I have already said, that I find that these do not have any application to the circumstances of this case and I accordingly reject this argument.
• The third leg of her argument related to the large number of sporting rules which it would be necessary to have regard to, given the large variety of sporting events upon which the defenders took bets.It seems to me that the large number of sporting events upon which bets are taken by betting companies such as the defenders, tends to support the defenders contention, that reference must be made to the rules of the sport.It supports it for this reason:how else given the many different sporting bets taken could the outcome of these bets be decided other than by reference to the rules of the sport.
• It was argued that there was in any event no definition of relegation in terms of the SPL rules.It is correct to say there is no definition section where relegation is defined.However, there is a single rule, Rule A2.1 where relegation is referred to and on a sound reading of that rule, when taken in the context of all of the other rules, it is clear what relegation means in terms of the SPL Rules.No other rule refers to relegation.

[193]    Lastly, it was said by Miss Poole  that the reference to the SPL rules was in fact consistent with the construction contended for by the pursuer, in that it is one example (going down on points) of the various reasons for relegation in practice (others including financial reasons, match fixing, absence of licences).

[194]    As I understand this submission it relies first on the evidence regarding Gretna.  It was explained in the evidence of Professor Vaughan Williams and Mr McKenzie, that the position regarding Gretna was:   Gretna were relegated from the SPL.  They were following their relegation to the SFL, found to be unable to guarantee they could fulfil their fixtures and it was decided in those circumstances they should play in the 3^rd Division of the SFL.  However, that did not happen due to ongoing financial difficulties.  What happened to Gretna after leaving the SPL was not relegation in terms of the SFL rules.  For the reasons I have already stated the fact that a few journalists described this as relegation is nothing to the point.  The evidence regarding Gretna in no way assists the pursuer with respect to the construction he places on relegation, so far as clubs being relegated for match fixing, this related to Italy and absence of licences related to Wales.  The only evidence before the court regarding these matters were a few articles describing these events as relegation.  I have already given my reasons for not attaching any significance to such articles so far as the issue of the proper construction of the contested phrase which is before the court.  

[195]    Miss Poole argued so far as background circumstances there were three other circumstances to which the Court should have regard.  The first point she made related to the Gambling Commission principles.  This argument was founded upon the 1999 Regulations applying to the contract I have found  they do not apply and accordingly reject this argument.   

[196]    The next factor under this head which she relied upon was the public knowledge of Gretna being “relegated” I have already stated my position regarding this.

[197]    The third factor relied on under this head is the public knowledge regarding Rangers’ financial position.  I accept that is a relevant background consideration.

[198]    I turn next to commercial common sense.  I believe there is considerable force in the argument advanced by Mr Sandison.  It is, I am persuaded, impossible to determine whether a particular sporting event has occurred other than by references to the rules of the sport.  It would be impossible for a betting business to be run and for it to offer bets on sporting events without reference to the rules of the sports.  Bets on sporting events could not be offered except by reference to the rules of the sport.  There is no alternative in a sporting context to such an approach.  For these reasons I am persuaded in this case that commercial common sense is a significant factor in arriving at a sound construction. 

[199]    In addition it was submitted by both parties that the meaning of the term had to be assessed in terms of any other relevant provision of the contract and both referred to such terms. 

[200]    I believe that the reference to the Coral rules relied upon by Mr Sandison is a factor which points to the construction contended for by the defenders, although I believe it is a very minor factor.

[201]    The pursuer also relied upon a rule within the Coral rules namely Rule 34 which provides:

“The settlement of Ante‑Post bets, final League placings count (ie divisional playoffs are excluded).  The only exception to this rule is where promotion and relegation markets are offered”.

 

[202]    I do not believe any material assistance so far as the construction issue before the Court can be taken from this.  First it is a rule which does not apply to in running bets.  The bet before the court was an in running bet.  Secondly it relates to a league system where there are divisional playoffs and there was no evidence before me that at the material time divisional playoffs were a feature of the SPL or SFL.  The rule as with Rules 30 and 31 to which I was referred (regarding extra time) seemed to be an example of where the defenders for purposes of specific bets took a defined position different from the rules for the relevant sport.  This tended to suggest that in the absence of them doing so the appropriate sports rule applied.    

[203]    The final factor, so far as other terms of the contract, to be considered is the odds set of 2500/1.  This I believe is a compelling indicator that the defenders’ contended for construction is correct.  The evidence of Professor Vaughan Williams and Mr Clare was that these odds were set on the basis that there was no reasonable prospect of the event which was the subject of the bet occurring.  The pursuer’s own expert Mr Fox said this in his report at paragraph 21:

“I would say Coral’s racing room were not up to speed and quoted odds far in excess than should have been available.” (emphasis added).

 

[204]    The background information reasonably available to both parties at the time of placing the bet was this: Rangers were in very serious financial difficulties and what had happened to Gretna in light of financial difficulties.  In those circumstances if the pursuer’s construction is correct the chances of Rangers not being in the SPL in the following season were very high.  They were very considerably higher than if the defenders contended for construction was correct.  On the basis of Rangers footballing strength at the material time, as shown by their final position in the league even after deduction of 10 points because of their financial difficulties, the chances of their being relegated in terms of the defenders’ definition of that term, were very slight indeed and might properly be described as highly unlikely.   Mr Clare said that for a bet based on the pursuer’s construction of “From SPL Rangers to be relegated” the odds that would have been given would have been about evens.  Miss Poole challenged that figure.  However, there was no evidence to the contrary.  I could see no reason why Mr Clare’s evidence should not be accepted.  Beyond that some support for his low figure was to be gained from the pursuer’s own expert’s opinion that the “quoted odds were far in excess than should have been available” and the evidence of Professor Vaughan Williams that he did:

“not consider this sort of price (2500/1) could reasonably have been expected to be on offer about a team being removed from the league for reasons unconnected to its position in the table at the end of the season.”

 

[205]    It was clear from the evidence that from time to time bookmakers make mistakes when setting odds and this has to be borne in mind when considering the significance of the odds offered and accepted.  However, taking that factor into account, I am satisfied that odds of 2500/1 to a reasonable person placing a bet as well as the reasonable bookmaker would clearly indicate that relegation meant what is contended for by the defenders, that is, the highly unlikely event.  If it meant as contended for by the pursuer, the odds would have been so significantly lower as to take the matter well out of the area where error in the setting of the odds could explain why 2500/1 was offered.  The only explanation put forward on behalf of the pursuer as to why the odds were so high, if his contended for construction was correct, was that the defenders had made an error.  As I have said an error of this magnitude seems inherently highly unlikely, particularly, when the evidence regarding Rangers’ financial difficulties had been in the public eye for so long and was clearly of a significant nature.  The defenders, according to the unchallenged evidence, had an entire team who did nothing more than look at all factors which might have relevance to a particular footballing team and the taking of a bet with respect to that team.  It seems highly unlikely that they would have made an error of this magnitude. 

[206]    Miss Poole argued that the odds were not an indicator of what a reasonable person would have believed was the subject matter of the bet, because odds could change, however, the subject matter of the bet did not change.  I am not persuaded by this argument.  The question is:  what do the odds offered and accepted at the time of the bet indicate about the subject matter of the bet.  Or put another way what does that fixed figure show about a reasonable persons understanding of the subject matter of the bet at the time of the making of the bet.  The fact that at another point different odds may be fixed in no way detracts from the odds fixed at the time of the bet being a very significant  indicator as to the subject matter of the contract as contended for by Mr Sandison.

[207]    Having regard to the above circumstances I believe that the odds set are a clear indicator that the defenders contended for construction with respect to this matter is the correct one.

[208]    The final factor relative to assessment relied upon by either party was: the overall purpose of the clause of the construct.  This was relied upon by Miss Poole.  The argument comes  to this:  because neither party could set out the future precisely, the pursuer’s contended for construction is the most consistent with the purpose of the contract.  I do not understand how that is correct.  This was a simple bet, however, the simple, natural and ordinary meaning of “From SPL Rangers to be relegated” is to be found in the SPL rules for the reasons I have given and not in the dictionary.   

[209]    It follows from the foregoing discussion that I preferred the evidence of Professor Vaughan Williams to that of Mr Fox.  I found the former’s evidence to be more considered and better researched.  The former’s evidence I found to be soundly based.  I did not believe the evidence of Mr Fox to be soundly based. 

 

Conclusion
[210]    In summary, for the foregoing reasons, I am persuaded that the sound construction is that contended for by the defenders.  Accordingly, on this construction of the pursuer’s bet it is a losing bet.

 

Second Issue
Interest

[211]    There was a secondary issue, should the pursuer’s bet be a winning bet,  relative to the date from which interest should run and the rate at which it should run.

[212]    It was agreed that the payment of interest could arise in terms of an express contractual provision, alternatively it could arise by implication.

[213]    In terms of a contractual provision, it was not disputed that there was no express term in the contract or in Coral’s rules relative to the issue of interest.

[214]    The argument for the pursuer was that the date from which interest should run was 13 September 2012 when a copy of the betting slip was sent by the pursuer’s solicitors to the defenders.

[215]    It was argued that there was support for that position in clause 2.5 of the Coral rules:

“You must retain your receipt until all bets on your slip can be fully settled, when any returns due will be paid upon the surrender of your receipt”.  

 

It was argued that by 13 September 2012 the bet on the pursuer’s slip could be fully settled and accordingly that was the date from which interest should run.

[216]    If the court found, there was no assistance in the foregoing, it was argued that this was the type of contract, where the law should imply an obligation to pay interest from the date the debt should have been settled by the defenders, which in this case was the date upon which receipt of the letter from the solicitor enclosing the betting slip, namely:  13 September 2012.

[217]    Thirdly if both the above arguments failed the pursuer relied upon the law of equity, namely, the court ought not to allow the defenders to benefit by not having to compensate the pursuer from having wrongfully withheld his winnings, having regard to their conduct in relation to the bet.  That conduct was:  (1) the defenders had misled the pursuer as to the Coral rules that applied on a number of occasions; (2) the defenders raised a number of spurious arguments on which they no longer relied to avoid paying out the bet;  (3) they omitted to reply to pre-action correspondence in the spirit of the court’s practice note and (4) they  refused to accept the betting slip on reasonable conditions set out by the pursuer in a letter dated 13 October 2016 which delayed it being able to be received by them.

[218]    Finally if the court accepted none of these arguments the pursuer claimed interest from the date of citation namely 13 July 2016.

[219]    So far as a the rate was concerned given the lack of reference in the contract or Coral’s rules the pursuer sought it at the judicial rate.

[220]    Finally if the pursuer was not a consumer, but a business the matter was governed by the Late Payment of Commercial Debts (Interest) Act 1988.

[221]    Mr Sandison in reply said this:  this is not a case of damages, rather the claim is a payment due under contract and what is being sought is to enforce a contractual debt and therefore it cannot run until the date of payment has arisen.  Accordingly the question for the court was when does the date of payment arise?  Mr Sandison also referred to Coral’s Rule 2.5.  He relied on that part of the rule which said this:

“… returns due will be paid upon the surrender of your receipt”.

[222]    Accordingly interest arose from when the pursuer surrendered his slip.  That was the date on which winnings became payable.

[223]    The best evidence rule did not require the pursuer to retain the slip.  Mr Sandison argued that if the pursuer had parted in reasonable circumstances with the slip then the best evidence rule would have allowed the production of a certified copy, in terms of the Civil Evidence (Scotland) Act 1988.

[224]    It was therefore his position that interest did not run until 24 October 2016 when the slip was surrendered.

 

Discussion
[225]    It appears to me on a sound construction of clause 2.5 of the Coral Rules, that on placing a bet the pursuer was entitled to be paid, if the bet was a winning one, on the surrender of his receipt.  It is a straightforward clause.  The natural and ordinary meaning is clear.  It is accordingly from that date that interest runs.  Had I been awarding interest I would have awarded it at the Judicial rate.

 

Decision
[226]    Accordingly for the foregoing reasons I sustain the defenders 3^rd plea in law, repel the pursuer’s pleas in law and grant decree of absolvitor.  I reserve all issues of expenses.