Oyston/Belokon saga: Blackpool FC owner warned to stop disobeying court orders in latest hearing
Blackpool Football Club owner Owen Oyston has been warned by the High Court to pay up his remaining Â£25m debt and stop disobeying court orders.
The threat emerges as the first anniversary approaches of a judge's ruling that the Oyston family had "illegitimately stripped" the club of millions of pounds.
Owen Oyston was ordered to pay Â£31.27m to former club director Valeri Belokon, a Latvian millionaire, after a trial last November.
At the latest hearing today at London’s High Court the same judge, Mr Justice Marcus Smith ruled in favour of Mr Belokon’s company VB Football Assets’ (VBVA) application and held that it was now time to "buttress" the court's decisions with a penal notice.
About 30 Blackpool supporters were in court to hear what happened in the latest round of the long-running saga.
Oyston was not present.
The court was told that Oyston has failed to hand over documentation of some properties and shares he owns to Belokon's solicitors so that they can be sold to realise cash to settle the debt.
Those charging orders were made on June 22 this year and he had until July 5 to comply.
The judge said Mr Oyston had said in a statement "he doesn't wish to be obstructive and there's a lot going on".
The judge continued: "He says he has been focusing on obtaining finance to discharge the entirety of the judgment debt and he is sorry if he has not given sufficient attention to other details.
"So the point is that he has been distracted by other matters going on and I have some sympathy with that. There is clearly a lot going on.
"But to my mind that underlines the importance of the application (today’s hearing), which is to fortify the orders already made with a penal notice so as to ensure compliance."
The judge added: "I am persuaded that the requests made by VBFA, while perhaps not necessarily necessary, are required to facilitate the sale.
“Therefore, because the requests have been made and because they have not been complied with it seems to me that the orders I have made in the past for sale and freezing [of assets] ought to be buttressed by a penal notice."
He said a court expected its orders to be obeyed and added that a penal notice "enables other certain consequences to be triggered if there is continued disobedience."
This penal notice is subject to two qualifications. Oyston has to explain in an affidavit why he cannot provide the documentation or material or what has become of it and he can set out why he says the material is not necessary.
No date has yet been inserted into the penal notice, but court officials said after the hearing that they usually take effect 14 days after they are made.
Oyston is required to provide the documentation, such as title deeds and share certificates - including the 1,604,694 he owns in Blackpool FC (Properties) Ltd and 500 in Closelinlk Ltd - or be in contempt of court.
Failure to comply with the order would render him liable to contempt proceedings under which he could be jailed, fined or face seizure of his assets.
Fraser Campbell, for Belokon's company, also successfully applied for the interim charging orders against Oyston to be made final.
The judge asked both sides to consider whether now was the time for a neutral third party to become involved in the sale of assets so that a best price could be achieved as the obligations on both sides were "considerable".
Lawyers said they would consider it.
Mr Campbell said: "It's now in Mr Oyston's own commercial interest to get on and pay. For whatever reason he is not doing so and a third party may be able to facilitate that process, we will consider that before the charging orders are taken any further."
Matthew Collings QC, for Oyston, added "for public interest": "Mr Oyston is not trying not to pay this judgement."
Applying for the orders, Mr Campbell submitted that Oyston was currently in breach.
He continued : "He is flaunting several orders of the court.
"There's obviously the order to pay the judgement debt. There's also various court costs orders to the tune of Â£155,000 and nowhere in the voluminous material is there a single sentence of explanation, let alone apology, as to his failure to make those payments."
He added that Oyston's estranged wife was also being not being served with certain information as required by a court order on May 23.
Mr Collings responded that Mrs Oyston was not entitled "to every piece of correspondence" but only to what affected her interests.
He added that the judge's remarks that Mrs Oyston must be kept in the loop would be passed on to solicitors.
Mr Campbell argued that Oyston, as landlord of properties, had failed to hand over keys, saying he either did not have them or they were lost, along with title deeds and further documentation, which affected VBFA taking possession.
He added that he was also now only offering up access to Belokon's solicitors Clifford Chance to his "data room".
"It appears that their access has been partial to date. He has allowed access to potential third party purchasers but not to us,” he said.
"So a penal notice is appropriate and necessary. It will focus his mind so he knows what he has to do."
He said that Oyston must deliver possession of the share certificates adding that he should have done that by July 5 or within seven days of a request. He told the judge that a few copies had been provided but no explanation had been given about what else was "out there or lost."
"We are not seeking to expand the scope of these orders, we are seeking to enforce them,” he said.
"Either he should provide the documents or identify by affidavit how he has come to lose them and what he's done in terms of trying to find them."
Mr Collings submitted that with properties registered with the Land Registry - which applied to all Oyston's properties except one - title deeds were not necessary for conveyancing.
The paperwork for that one, 160 Victoria Road, "an acquisition of some antiquity", would be sorted out, he said.
He objected to the need for a penal notice, saying there were other legal processes which could be followed.
"There's been no breach of this order whatsoever," he claimed. "What's being sort is completely unnecessary and arises from a complete misunderstanding of this whole process."
Regarding the data room, Mr Collings said: "It has a vast amount of material and Clifford Chance have been angling for all this material for a long time but they are not entitled to total and unimpeded access to Mr Oyston's affairs.
"What we are going to do is my solicitors have offered to provide hard copies of materials in the data room."
He said that copies of the share certificates were provided late but that they were pointless documents. They were available anyway from official company records.
Oyston was willing to provide blank share transfer forms which could be held in trust pending a sale, added Mr Collings.
In his closing remarks, Mr Campbell said the last 20 minutes of Mr Collings' address to the court provided "a remarkable insight into Mr Oyston's attitude to these proceedings ".
He continued : "He would rather pay leading counsel to come along and work himself up into a lather about whether we are reasonably entitled to seek a sale of a property by having the keys to that property than simply to get on and provide what the order provides for and what we are sensibly and moderately requesting.
"It's perfectly clear from everything Mr Collings has said that we will face the most obdurate opposition to any moderate sensible request advanced in correspondence until a court order is now backed up by a penal notice.
"Because what we will have on every occasion is the usual aggression and prevarication in correspondence followed by a suggestion at the end of the day that we don't really need what the court order has provided for."
Mr Campbell added: "If Mr Oyston was sincere in what he told the court since last November - that he is working night and day to raise the money to pay off this debt - then he would provide this information in a heartbeat.
"Instead he instructs Queen's Counsel to make every technical objection possible."
In giving his ruling, the judge said: "I am not interested in a debate about what is needed to effect a sale but I am interested in the material which will assist in whatever way in making a sale."
He said Oyston was entitled to argue it was not but the judge said he gave a wider meaning to the word "facilitate".
He said keys should be provided as well.
The judge also ordered Oyston to pay Â£42,000 costs on account for today's hearing.
It was revealed that Oyston was paying his own defence QC Â£20,000 to represent him at today’s 90 minute hearing.