Tag Archives: Glasgow Sheriff Court

Remember One Stop v Tixway UK Ltd – Mr Whyte Has Appealed against the Judgement!

We have seen the release by Duff & Phelps of their comprehensive report regarding Rangers. I suspect that the detail therein is far more than many expected, even if it raises a great deal of questions about the previous involvement of MCR with Rangers/Mr Whyte/Liberty Capital etc.

It also details, in stark terms, the effects on businesses, many being small traders, of Rangers’ financial mismanagement. Whilst the big creditors, like Ticketus and HMRC get the most publicity, there are many smaller creditors to whom the unpaid sums, and the prospect of a “pennies in the pound” CVA will cause problems.

For example, the Copland Road newsagent owed over £500 won’t, one hopes, go bust for that, but that is a decent chunk of income lost.

Many of these creditors will have been dealing with Rangers in good faith, and taking the general information from the media, would have had few concerns. And anyway, they might have thought, it is Rangers we are dealing with here!

All of which brings us back to Mr Whyte and Tixway UK Ltd.

I have written about this case before here and here.

£89,127.18 is the sum owed to One Stop. That, for any business, is a lot of money, especially as this has been due since 2008. It is the sort of debt which can affect the stability of a business, and the jobs of those employed there.

You may recall that Mr Whyte’s evidence was shredded by Mr Clark QC for One Stop, and Sheriff Ross found against the company owned by the “wholly unreliable” witness, Mr Whyte. Continue reading


Filed under Civil Law, Craig Whyte's Companies, One Stop Roofing Supplies Ltd v Tixway UK Ltd

The Tixway Judgment – It Is Even Worse for Craig Whyte Than First Reported!


I blogged yesterday about the result of the One Stop v Tixway UK case and the defeat for Mr Whyte’s company, together with the scathing comments by Sheriff Ross rejecting Mr Whyte’s evidence as “wholly unreliable”.


It is hard to believe but actually the press coverage yesterday and today has actually been a lot more favourable to Mr Whyte than it could have been. I have rarely if ever read a judgment which is so damning as to the testimony of a witness. One gets the feeling that after confirming his name to the Sheriff, Craig Whyte struggled to say anything else which Sheriff Ross went on to accept as reliable.


This is one occasion where an accumulation of legal contacts has proved invaluable as I am lucky enough to have received a copy of the judgment. I will see if I can get a link to it when back at my own PC.


As Sheriff Ross took 38 pages to deal with the matter, I propose only to refer to “edited highlights”, and indeed, as far as possible, only to those relevant to Mr Whyte. It must be said though that, having seen what defence was advanced on his behalf and what his spokesman said differently at the raising of the action, his behaviour in denying the claim is entirely deplorable, and could have had very serious effects for a business which had the misfortune to become financially involved with him.


Mr Martin and Mr Jenkins, who run One Stop, are to be congratulated for their tenacity and for sticking to their guns to the bitter end. Many would have been frightened away as Mr Whyte became an ever more notable figure in Scotland. There might even have been thoughts that his role meant that he would not risk his credibility by denying a debt which in fact he knew to be due.


Mr Martin showed the resolve in pursuing this case which he has been instilling in Albion Rovers, of which he is manager. Perhaps this case will coincide with a good run for the Wee Rovers!



Summary of the Facts as Found by Sheriff Ross


The Sheriff found various issues as fact from which the following matters are extracted.


Mr Whyte was the sole director of Tixway UK Ltd. His father, Thomas Whyte, “also assists in the defender’s business affairs”.


Snowcast Ltd was a company run by Mr Chris Keatings and Mr James Snowball. Snowcast had obtained a good contract from Connaught (contractors to Glasgow Housing Association) to carry out roofing works on GHA properties. However, they needed credit to get the supplies. They had an £8,000 per month credit line from One Stop, backed by credit risk insurance. This was not enough to supply the contract properly. Snowcast were also late in paying One Stop.


In early 2008 Mr Keatings and Craig Whyte discussed how to resolve the position. As a result there was a meeting at One Stop’s premises on 29 April 2008 involving Messrs Jenkins, Keatings, Whyte and Snowball.


At this meeting Mr Whyte agreed that Tixway UK would become the customer, thus allowing One Stop to relay on Tixway’s credit rating. At this meeting, Mr Whyte signed One Stop’s terms and conditions, authorised a credit application in Tixway UK’s name and instructed One Stop to send its invoices to Castle Grant, Mr Whyte’s residence.


A credit limit of £75,000 was agreed, backed by insurance, in respect of Tixway UK. Deliveries recommenced to Snowcast at various sites in Glasgow. The invoices were sent to Castle Grant.


This continued until May 2009. Mr Whyte’s staff received all the invoices and Mr Whyte was aware that they were still being sent to Castle Grant.


Snowcast UK Ltd which had taken over the assets and business of Snowcast Ltd made payments to One Stop without seeing invoices. Mr Whyte had unrestricted access to the bank account of Snowcast UK Ltd and was able to move funds into and out of the account.


Mr Whyte made various payments to Snowcast UK as “loans” and took out various sums from the Snowcast UK bank account.


As a result of problems with the main contractor, Snowcast were still late in settling bills. Mr Jenkins was re-assured by Craig Whyte and his father that they would be paid. Finally in January 2009 Craig Whyte agreed to repay the debt at £5,000 per month. In March 2010 Tom Whyte told One Stop to send the invoices now to Tixway UK’s registered office in Glasgow. This duly occurred.


By June 2010 payments stopped. Mr Whyte was asked to sort things out., Nothing more was paid.



The Decision


The Sheriff found that Mr Whyte had agreed that Tixway would pay the Snowcast bills, and accordingly ordered that company to pay £86,127.36 plus interest at 8 per cent from the raising of the action till payment is made. A later hearing will decide who will pay the costs of the case.



The Evidence – Robert Jenkins


Robert Jenkins gave evidence for the Pursuer. Mr Whyte was introduced to him by Mr Keatings in April 2008 as “a successful entrepreneur”…“who would provide backing for Snowcast.”


Mr Whyte signed terms and conditions and approved the credit insurance application.


Mr Jenkins was asked if in fact what Mr Whyte had done was to sign as a customer for goods to be delivered for the renovations on Castle Grant, and the credit agreement reflected this.


Mr Jenkins denied this. He stated that the materials were mainly mass produced concrete roof tiles, costing around £6,000-£7,000 for 1,000 tiles. As Mr Jenkins said, £75,000 credit would buy a very large amount of concrete. These tiles were suitable for council houses but not for a listed castle.


From April 2008 to May 2009 hundreds of invoices were sent to Castle Grant, and paid for by Snowcast. By then unpaid bills were racking up, and Mr Jenkins was told by Mr Keatings that this was due to problems with Connaught. Mr Jenkins took this up with Craig Whyte and his father Tom Whyte, and was told there was “nothing to be concerned about”.


In 2010 Craig Whyte agreed to repayments at £5,000 per month, but after one payment in April, no more were forthcoming.


Mr Jenkins met both Messrs Whyte in their London office and was reassured that they were good for the money. Craig Whyte never denied the money was due.


There were between 600 and 800 invoices sent to Tixway, whether at Castle Grant or Bath Street, although addressed, as per Mr Whyte’s instructions, to Snowcast.


These were VAT invoices but Mr Jenkins did not know who reclaimed the VAT.


One Stop did not claim their insurance as this had lapsed. Mr Jenkins had expected that Mr Whyte would stick by his agreement and by the time it was clear he was not going to do so, it was too late to claim.


Mr Jenkins stated that on 29th April 2008 he did not know that Mr Whyte owned a castle, nor was the caste ever mentioned as regards supplies.


Mr Jenkins was asked whether deliveries had actually taken place, but this line of questioning was stopped by the Sheriff who said “It is not part of the defence that these deliveries were not made, or that the sum sued for is not genuinely accrued for supplies sold.”



The Evidence – James Snowball


Mr Snowball gave evidence for One Stop. He saw that the Connaught/GHA connection was a potentially lucrative one, but by early 2008 Snowcast could not cope with the cash flow demands.


Mr Keatings introduced Mr Snowball to Craig and Tom Whyte. The Whyte’s then met with Connaught, assuring them that “finance would not be an issue, if all the work was issued to Snowcast”. Mr Snowball thought the income from the contracts would increase from £300,000 per annum to over £2 million.


Craig Whyte “said that he was interested in putting something back into the community.”


Mr Whyte told Mr Snowball when the new company, Snowcast UK Ltd was being formed, that he did not want to invest in Snowcast Ltd “where something could come and bite him”.


Instead he wanted a “clean, new company”.


He also insisted that the company needed to have a gross tax certificate, where payments were received gross rather than having 20% advance tax deducted, for cash flow reasons.


Craig Whyte said that the business could be done under the Tixway name, and that it would become Snowcast’s parent company as a result.


Once an invoice was sent to Castle Grant, it would be paid by Snowcast. Snowcast’s accountant was said to have been unhappy at the arrangement, but he was told by Craig Whyte to do what he was told.



The Evidence – Paul Martin


Mr Martin was happy to deal with Tixway UK as he had seen their accounts and they had a healthy positive asset balance.


No claim was made on the insurance because there was clear communication between the parties, and Mr Martin was confident of the matter being resolved. At that time he saw no reason to doubt this.


None of the invoices were ever queried. At meetings with Craig Whyte and with Tom Whyte, the debt had never been denied.



The Evidence – Chris Keatings


Mr Keatings was the first witness for the defender.


He stated the importance of the gross payment method for Snowcast to help cash flow. Rather than have 20% tax deducted at source, payments were made gross to be accounted for in an end of year tax bill. However monthly tax returns were required. Three late returns would remove gross payment status.


Mr Keatings stated that Tixway UK did not invest in Snowcast, despite Mr Snowball thinking it had taken a 51% share.


Mr Keatings said that he could not become a director of Snowcast UK Ltd as having been a director of Snowcast which had lost its gross payment status, it would not be given to a company where he was a director. His wife therefore was appointed.


He said that Tixway “dripped in” money to meet bills, but Snowcast UK was always in difficulties due to the Connaught payment problems.


Mr Keatings told the court that he would do anything to keep the business going and his wages coming in, and that he did whatever Mr Whyte asked him to do.


Mr Keatings stated he had known Mr Whyte since 1998.He had come back on the scene in 2008. Mr Whyte saw potential for a big business here in the form of Snowcast.


He told the court that he had organised deliveries of materials to Castle Grant but these were not from One Stop.


Mr Keatings knew nothing of the arrangements within Tixway. As he put it Craig Whyte was of the nature that ”If you don’t need to know, you don’t get to hear.”


Craig Whyte had complete access to the Snowcast UK bank account to do as he thought fit. He took money out and put money in as he pleased. He thought that Tixway owned Snowcast UK but he was not sure. In any event, Craig Whyte “called the shots”.


He stated that Craig Whyte had put in £150,000 and taken out £171,500. He described the operation of Snowcast near the end as “a bit kamikaze”.



The Evidence – Craig Whyte – Examination In Chief


His starting point was to say the he did not recall signing the terms and conditions referred to but he accepted it was his signature.


He told the court this was to do with refurbishing Castle Grant.

He recalled that he had been asked to help Snowcast with cash flow. He mentioned a £200,000 facility. He denied being a shareholder via Tixway UK.


He told the court that he had known Mr Keatings for 20 years.


He did not accept that he would have entered the arrangement alleged by One Stop. He claimed that he would not have done so as it would have made no economic sense. He had no recollection of discussing credit limits.


He told the court that after the first batch of invoices (remember there were between 600 and 800) arrived at Castle Grant, he insisted they be redirected to Mr Keatings. He had no recollection of ever seeing any more. However, as he only stayed at Castle Grant 3 or 4 nights a month they could have arrived when he was not there.


He stated that Tixway UK did not reclaim VAT on the invoices.


When asked about the invoices being sent to Bath Street, he told the court that this must have been an error.


As regards the Snowcast bank account, he initially denied having any involvement with that before accepting that he got his interest and capital back that way.


As far as the meeting at One Stop’s offices went, he maintained this was not in connection with Snowcast. He described the alleged invoicing arrangement as “complete nonsense”.


He accepted this had been a business opportunity for Tixway UK, but denied that company had become the customer – if it had, then it might as well have done the work itself!



The Evidence – Craig Whyte – Cross-Examination


Counsel for the Pursuer sought to strike directly at Mr Whyte’s veracity. He was asked if Mr Jenkins had pressed him for payment. Mr Whyte denied this.


He was then shown emails and text messages which clearly demonstrated Mr Jenkins doing that very thing.


An email exchange was produced wherein Mr Whyte stated that he was “always happy to help.” He made no denial in these exchanges of the debt, though he maintained in court that it was possible that he had.


In October 2010, when Mr Jenkins suggested reinstating the £5,000 per month arrangement, Mr Whyte did not deny this, but instead suggested sitting down to discuss the matter.


When asked again about Mr Jenkins seeking payment, which he had earlier denied, Mr Whyte’s response was that there was no debt due.


He was asked if his wife had been a director of Tixway UK and replied “I believe so”.


He could not recall any actual orders of materials for Castle Grant. However he repeated that it was “complete nonsense” that he had accepted liability for Snowcast.


He denied having access to the Snowcast account, before finally stating “It is a possibility I had direct access to the Snowcast account.”


He accepted that there was no loan agreement in place with Snowcast and that he had been able to authorise payments by Snowcast.


He could not recall how much had been put into Snowcast, but he thought it was more than had been got out. He “made no apology” for asking for repayment.


He could not explain why 600-800 invoices were sent to Castle Grant. He stated that he “responded” to them.


As far as VAT was concerned, he said he could not comment on it, but that Tixway UK had never reclaimed the VAT.


He told the court that he attended the Connaught meeting not to ask for all the work to go to Snowcast but as part of his due diligence.


Any agreement he signed was for works to Castle Grant. He again denied being chased for payment by Mr Jenkins, and stated that “one of my staff” might have had access to the Snowcast bank account. He agreed that he was calling Messrs Jenkins, Keatings and Snowball liars (even though Mr Keatings had been called as a defence witness).


He accepted that he sometimes required access to bank accounts in smaller companies to do with his investments. This allowed monitoring of cash flow and the taking of payments when due.



Sheriff Ross’ Criticism of Mr Whyte’s Evidence


Reading the decision it becomes apparent that, very quickly, the Sheriff began to be exasperated by Mr Whyte. No criticism of Sheriff Ross is intended by that statement, and I am sure no sign was given to the parties to suggest what his view was.


However, the decision shows how the Sheriff’s mind was moving.


At paragraph 86 the Sheriff states, as regards Mr Whyte’s response to an email asking about the debt, “This, in my view, is a striking contemporary failure to deny the debt or at least to query the arrangement which, according to his evidence, he had never agreed.”


At paragraph 87, Sheriff Ross states in respect of Mr Whyte’s response that no debt was due to the question about Mr Jenkins pursuing it, that this reply “didn’t answer the point.”


At paragraph 88, as regards the answer “I believe so” concerning his wife’s role as director the Sheriff had this to say:-


In my view it was hard to see why such a basic query should elicit such an indirect, equivocal answer. It was becoming apparent to me, by this point, that Mr Whyte was being careful to be as non-committal as possible in his answers… It had the effect of detracting from his evidence.”


At paragraph 106 the Sheriff summarises the issue re the crucial meeting of 29th April. As Tixway’s lawyer put it, either One Stop was right, or it was engaged in a deliberate fraud upon its insurers. The Sheriff rejected Mr Whyte’s evidence on this as unreliable.


Mr Whyte’s evidence was that all that was ever on offer to Snowcast was a loan. However, at paragraph 112, the Sheriff describes that position as, “at least, somewhat improbable”. That is as complimentary about his evidence as Sheriff Ross gets. When “somewhat improbable” is the high spot, I think it makes clear how badly the witness has been received.


At paragraph 117 the Sheriff further considers the meeting on 29th April and the different accounts thereof. I think it is worth setting out that paragraph in full:-


“Mr Whyte’s evidence as to the meeting was clear only on one point, namely that the defender was never to be the customer. On every other issue his evidence was vague and somewhat ambiguous. It was difficult to know, at time, if his answers that he “had no recollection” of various points meant that events definitely did not occur or that they might have occurred but he simply could not remember. His demeanour was guarded throughout and his answers as short as he could manage. It is possible that he may genuinely have a poor recollection of the meeting but that is double-edged – it means it is more difficult to accept his evidence when he seeks to be clear that there was “absolutely not” such an agreement.”


At paragraph 118 he dismisses Mr Whyte’s evidence that the Snowcast credit limit was not discussed at a meeting whose sole purpose was to extend Snowcast’s credit limit.


At paragraph 120, discussing the 600-800 invoices sent to Castle Grant, with Mr Whyte’s evidence being that, after the first batch, this was dealt with, the Sheriff comments:-


Logically, either Mr Whyte’s staff are wholly incompetent, or disregarded his instructions, or Mr Whyte’s evidence is unreliable.”


I think the Sheriff has put that most charitably!


At paragraph 122 he describes Mr Whyte’s evidence as “inherently improbable”.


At paragraph 124 Mr Whyte’s evidence about not recalling discussion about the credit limit is described as “improbable”.


At paragraph 125 he addresses the invoices being sent, following upon the meeting, to Castle Grant. He states there is no plausible explanation for this other than an express instruction from Mr Whyte himself. Mr Whyte’s comment that he had “no idea” why they were sent there is described as “contradicted by all other evidence” and “inherently implausible”.


At paragraph 125 the Sheriff rejects Mr Whyte’s evidence about what he did with the invoices as equally implausible. “The only possible explanations are that Mr Whyte gave no such instructions (to send the invoices to Snowcast) or that his staff did not receive it and continued to process the invoices anyway or that his staff are incompetent. The last two options appear unlikely.”


At paragraph 127 the Sheriff deals with Mr Whyte’s argument that his dealings with One Stop were to do with repairs to the Castle. The Sheriff points out that Mr Whyte agreed that “the concrete red house tile would be wholly unsuitable for a listed building like Castle Grant.” Mr Whyte’s evidence did not state that One Stop ever delivered anything to the Castle anyway!


At paragraph 128 the Sheriff rejects Mr Whyte’s evidence about his relationship with Snowcast. Here the Sheriff prefers the testimony of Mr Keatings (who, don’t forget) was a defence witness which disagrees with that of Mr Whyte. The relationship with Snowcast was not at arm’s length and the Sheriff accepts that Mr Whyte had direct access to and use of the Snowcast bank account.


At paragraph 129 the Sheriff rejects Mr Whyte’s evidence that a guarantee would have been the way ahead, but that he would not have offered one anyway. He states that that explanation “tends to mislead.”


The alternate scenario offered by Mr Whyte is dismissed as inherently unlikely ever to work and the Sheriff wonders what Mr Whyte’s point was in mentioning it at all!


At paragraph 130 he dismisses Mr Whyte’s scenario that he signed a credit agreement for supplies to Castle Grant, but that One Stop took advantage of this to get credit insurance without telling him. The Sheriff states that Mr Whyte could not believe that scenario! In respect of the unlikely scenario, the Sheriff states that Mr Whyte is not naïve enough to believe I.


At paragraph 131 the Sheriff dismisses Mr Whyte’s evidence regarding being asked for payment as, at best, inaccurate.


At paragraph 132 the Sheriff deals with Mr Whyte’s denial of any £5,000 per month deal by referring to bank statement showing such a payment in April 2010, with no credible alternative explanation offered.


At paragraph 133 the Sheriff dismisses any argument that the whole thing was a misunderstanding, but points out that not even Mr Whyte tried to argue it was.


Paragraph 135 is another which I wish to quote in full:-


I would mention one other point, namely the VAT question. The invoices were VAT invoices and one would expect an attempt to reclaim the VAT. Whoever tried to reclaim the VAT may, in my view, throw some light on who the customer truly was. There was however no evidence and this point cannot be take further. Mr Whyte denied reclaiming VAT but there was no evidence that Snowcast did either. It remains an unknown factor.”


At paragraph 136 is the only silver lining – the Sheriff disregarded the evidence snout Mr Whyte’s disqualification, as irrelevant.


Legal Point


Sheriff Ross dismissed as ill-conceived the argument that any confusion between Snowcast and Snowcast UK was relevant to the case. Despite the similarity of name, all the parties knew what they were dealing with.


It might only have been outside parties confused by the duplication of names, and that would have been entirely coincidental. (NB The last point is mine, and not one stated by Sheriff Ross.)




The Sheriff then ends by giving the quotes which were on the front pages of Saturday’s papers. All in all a sorry outcome for Mr Whyte.


Filed under Civil Law, Courts, Craig Whyte's Companies, One Stop Roofing Supplies Ltd v Tixway UK Ltd

Craig Whyte – “Wholly Unreliable” – Tixway UK Loses One Stop Case

The BBC has reported the outcome of the One Stop Roofing v Tixway UK Ltd case.

Mr Whyte has been unsuccessful and his company Tixway UK Ltd has been ordered to pay One Stop Roofing the full sums claimed. A later hearing will assess who pays the costs of the case, but these will probably be awarded in their entirety against Tixway UK Ltd.

In a case where credibility of witnesses was to be the deciding factor, it appears that Sheriff Ross has been left in no doubt as to the position.

“I accept the evidence led by the pursuer (One Stop Roofing) as credible and reliable, and supported by the available documentation.

“I reject the evidence of Mr Whyte as wholly unreliable.

“It is not possible to ascertain whether he is not telling the truth or is simply unable to recollect the true position, and has convinced himself that this arrangement is something that he would not have entered into.

“Either way, his evidence is contradicted by virtually every other piece of evidence.”

The Sheriff went on to say that Mr Whyte’s firm Tixway had “offered its own credit rating to allow cover for the supply of large volumes of materials to Snowcast”.

He said this was “subject to a high degree of control by the defender over Snowcast and an understanding between the defender (Tixway) and Snowcast that Snowcast would make payment for those materials”.

Sheriff Ross concluded: “As a matter of legal liability, however, the defender remains the principal obligant.

“There is no dispute as to the sum outstanding, nor that it was properly incurred, and I accept the total brought out by the pursuer’s figures.”

The problem of course for Tixway UK is that Snowcast is in liquidation.

The Sheriff’s judgment could not really be more damning and must be of concern both to Rangers supporters and to the wider Scottish football community.

The SFA investigation into whether or not Mr Whyte is a “fit and proper person” to be involved in running a football club is continuing.

The only silver lining for him is that, if you squint hard enough at the decision, he will not, despite what the BBC suggested, be investigated for any alleged perjury.

However, that is on the basis that either (a) he was telling lies or (b) he had convinced himself that a version of events found not to be true was in fact true.

Sich a finding is probably even more damaging for his overall credibility than one which condemned him as an out and out liar.

As far as judgments go, this is akin to condemning Mr Whyte as a fantasist or Walter Mitty character.

Many wondered why a hugely successful businessman, with such a high profile, would risk his reputation in court like this over the comparatively small matter of £90,000.

If he had convinced himself that his alternate reality was true then that might explain it, but bearing in mind the comments from his spokesman whan the action was raised, namely that all the bills had been paid, this suggests that Mr Whyte’s alternative reality changed as the case continued.

His company can still appeal. However, Tixway UK would need to show that Sheriff Ross made a decision no reasonable Sheriff would have as regards credibility. Sheriff Ross is an excellent judge, and I have no doubt that his decision will be legally watertight.

There is not going to be a successful appeal in this case.

Will Mr Whyte come out all guns blazing looking to rally his dwindling band of supporters round him?

Or will this decision rip from him the final shreds of credibility he might have retained.



Filed under BBC, Civil Law, Courts, Craig Whyte's Companies, Football, One Stop Roofing Supplies Ltd v Tixway UK Ltd, Rangers

Part 2a of the Craig Whyte + Rangers Catch Up – The Tixway Case and Why Hide His “Phoenix From the Flames” Story?


Yesterday I posted my roundup of the Rangers Football Club PLC and Rangers FC Group Ltd court actions. Helpfully there were rather more interesting developments in the Bain v Rangers case than I had expected. I will do an “add on” post to take account of what happened. However, it seems to me that there is not an imminent settlement on the way in that case. Paulie Walnuts (which I suspect might not be his real name), a commenter on the Rangers Tax Case Blog, has analysed yesterday’s events already. I intend shamelessly to purloin his thoughts, add a bit on, and put it up later on.


Now, as the Swedish DJ used to say on Radioactive, “On wit de music” (Joke inserted for fans of 1980’s Radio 4 comedy programmes – if there are any others out there!)


Mr Whyte is involved in various cases, or has threatened to take such action. I wanted to have a quick run through where matters stand, at present. As before, I am happy to be corrected should I be wrong in any of the analysis or deductions, or should my source materials turn out to be incorrect.


One Stop Roofing Supplies v Tixway UK Ltd

I will deal with this first as it is due to continue in Glasgow Sheriff Court tomorrow (19th January) before Sheriff Ross.

This is the debt action brought by a building supplies company against a company owned by Mr Whyte and in which he is now the sole director.

When the company was formed, Mr Whyte was still serving his ban from being a company director. Therefore the company’s original director was Mrs Whyte (more of whom below). On the expiry of the disqualification, Mr Whyte took up the director’s role, and Mrs Whyte resigned.

Suspicious people have wondered if, in fact, Mr Whyte was acting as a “shadow director” at this time, as his wife seems to have far less business experience than her husband does. However, there has been no evidence of such activity made public, and therefore we must assume that no such evidence exists. In that case allegations of acting in respect of this company as a “shadow director” would be unfair and unfounded, and for the avoidance of doubt, I make no such allegation.

This action, at first sight, seemed to be a straightforward payment action. The Pursuer, a company run by Albion Rovers manager Paul Martin, sued for just under £100,000. Building supplies had been provided, some of which were used to renovate the roof of Mr Whyte’s property, Castle Grant, and not paid for.

However as the court action progressed, it became clear there was more to it. One Stop alleged that they had supplied materials to Snowcast, a company involved in the work on Mr Whyte’s castle.

That company is now in liquidation.

One Stop claims that Tixway owned 51% of Snowcast, and that Mr Whyte had agreed to pay for these materials. Mr Whyte denies this.

One Stop say that hundreds of invoices were sent to Tixway, but it is Mr Whyte’s position that these were all wrongly sent, and should have gone to Snowcast.

When giving evidence when the case last called, Mr Whyte was examined by One Stop’s QC.

From the report in the Daily Record law reports:-

“In a terse exchange with Alistair Clark QC, acting for One Stop Roofing, [Whyte] denied ever saying that the bills were due to be settled by Tixway.

Mr Clark put it to Whyte that he had received text messages and emails from Jenkins about the outstanding debt and a plan to pay it off at £5000 a month.

But Whyte said he had never accepted it was a Tixway debt and that since he was owed money by Snowcast as well, it was in both their interests to discuss Snowcast debts.

Whyte is sole director of Tixway but until April 1, 2008, the only director was his wife Kim.

Mr Clark asked if this was because Whyte had been banned from being a director until that point.

Whyte said: That is a matter of public record. Mr Clark said: Was the ban for trading while insolvent? Whyte said: I don’t have a recollection of why I was banned without legal documents. I am not going to say in open court and get it wrong.

Whyte told Sheriff Nigel Ross the case was an attempt to embarrass him. He said of Martin and Jenkins: They thought I would settle to avoid the publicity of coming here today and that’s why were here. They have attempted to do that already. They went to the press several months ago.”

I have highlighted the part of the exchange which is most important in the wider story of Rangers and Mr Whyte’s involvement with them.

He has been slow to volunteer information he later has acknowledged ought to have been provided, such as his director disqualification. Concessions and settlements seem to have to be dragged out of him. That, in itself, is not necessarily wrong. There is no requirement for a person taking up a position in a public company to subject himself to a “This Is Your Life” analysis, unless the points raised are relevant.

Concerning Mr Whyte there are, I submit, various relevant matters, such as his history as a director, allegations regarding his actions whilst disqualified, and questions as to the source of the “Billionaire’s” funds.

Interestingly, for a man who has threatened litigation previously over “inaccurate” reporting, I am unaware of him seeking an apology or correction for the references to him as a “Billionaire” when he first came on the scene.

Here, under oath, Mr Whyte told the court that he could not recall, without seeing the papers, why he received a 7-year ban in the year 2000.

Previously however, he has been aware of it, suggesting that this arose from “technicalities”.

As I wrote previously, it must be a big “technicality” to get a 7-year ban!

The danger for Mr Whyte is, having said he cannot respond without paperwork in front of him, that he stands up in the witness box tomorrow, or is recalled to give evidence, at which time Mr Clark presents him with the paperwork, and asks him to confirm the reasons!

The records are public, in that they arose from court proceedings. One Stop would be entitled to have obtained them to put them to Mr Whyte.

In my own experience, I have seen many people be caught out by trying to be clever in answering questions in court. Things that one can say in press interviews, for example, and get away with, are not allowed in court.

When interviewed in October by Tom English, for Scotland on Sunday, there was this exchange.

“Question – Let’s look at this closely. They said you were disqualified as a company director. Is that true?

Answer – I’m not comfortable getting into the specific allegations.

Question – They had a government official – Robert Burns, head of investigations at the Insolvency Service – saying that you could, potentially, have faced a two-year jail sentence for your involvement in a company, Re-tex Plastic Technology while disqualified. Is that true?

Answer – I’m not going to comment on specific allegations other than to say on the basis of what I’ve heard the Insolvency Service said last night, I’m looking into the possibility of suing them personally.”

I suspect that Mr Whyte would not be permitted to repeat those answers in the court, or of he did, he would be politely reminded by Sheriff Ross, who is an excellent judge, that he had to respond properly.


A Digression – Rags to Riches to Rags to Riches

Mr Whyte appears to be a remarkably modest man.

HE did not come, despite my heading above, from “rags”. His father was, and remains, a businessman in the Motherwell area. As Mr Whyte disclosed previously however, he started to make money by investing whilst at school. This allowed him to build a fortune on leaving school which he used immediately to get started investing in businesses.

By the late 1990’s, he had received glowing profiles in the press, and all for a man who was not yet 30, or not yet 28, depending on which date was on the Companies House records. He had many and varied business interests.

However, he over-reached himself and he was too successful, so the story goes. His companies collapsed. (He was a director of around 15 companies over that period, none of which remains active today.)

He was disqualified by the Court from being a Company Director in the UK for 7 years.

He left the country and travelled to Monaco, where he spent the next few years, until his return to Scotland in 2006, re-building his fortune.

When he came back, still a disqualified director, he was able to buy Castle Grant, a very famous and no doubt very expensive property in Grantown on Spey.

These business interests gave him access to funds to allow him to step up, when no one else had been willing to do so, and buy Rangers Football Club from Sir David Murray.

With this came far more scrutiny than the “under the radar” businessman had ever expected.

However, surely this is an inspiring story. Like many successful business people, Mr Whyte had taken his knocks, and yet bounced back better than ever. I recall a statistic that a large percentage, for example, of American millionaires had first been through bankruptcy (there is no suggestion Mr Whyte has ever been bankrupt.)

Surely Mr Whyte would be willing to share his experiences and insights, to inspire a further generation of entrepreneurs to help fire up the British economy.

In the same interview with Tom English, he was given the chance to share these insights with the public.

“Question – There is an air of mystery about you, though. Nobody really knows much about you – where you got your money from and how much you have.

Answer – Good.

Question – So where did you make your money and how much do you have?

Answer – If I asked you how much money you have, you would be within your rights to tell me to f*** off, it’s none of my business. All that matters is that I’m delivering on what I said I would deliver on. Rangers are in a better place now than they have been in the last three or four years. That’s what’s important. As long as I deliver on what I said I would deliver on what difference does it make?

Question – What other businesses do you have, we know nothing of this?

Answer – I’ve got more than 20 other businesses in the UK and across various parts of Europe and I’m involved in all sorts of things. I’m a prolific deal-maker, but the only one you get to hear about is Rangers. I’m doing deals constantly. This morning I’m working on a decent size deal with a fairly well-known business but it will never get any attention.

Question – Why not?

Answer – Because I don’t want it to.

Question – Again, why not?

Answer – Why should I? I’m stubborn.

Question – Give us the names of a few of your companies that you’re really proud of?

Answer – No. Good effort but I’m not going to name the companies because that’ll create a level of scrutiny for them and I don’t want to have that. I just want them to get on with business. Look, I can’t complain about it because I put myself in the position. David Murray told me what it would be like. I’m fortunate to be in the position I’m in. You know my thoughts, I’m not a publicity hungry type of guy. This stuff doesn’t sit naturally with me. I’m only doing this now because of that BBC thing.”

I think it is fair to say that Mr Whyte is reluctant to share the secret of his success with the world, and even to confirm which other companies he owns or is involved in.

Interestingly, Companies House records suggest he is presently a director of around 10 companies just now. One wonders in what capacity he has “got more than 20 other businesses in the UK and across various parts of Europe.”

A telling line too, I think, is “I’m not going to name the companies because that’ll create a level of scrutiny for them and I don’t want to have that.”

It appears that he would like the same standard of lack of scrutiny applied to Rangers as well!

Most prominent and successful businessmen are happy to share their secrets: Trump, Sugar, Branson, and Harvey-Jones. And the ones who are reluctant to are generally less robust in their rejection of such questions than Mr Whyte.

Perhaps, once the Rangers adventure is over and Mr Whyte again has time on his hands, he can write a best seller telling people how to do what he has already done?


Back to the Case

Unless the case settles by tomorrow, which is possible, it will move towards a conclusion. It is unlikely that a decision will be produced tomorrow. Sheriff Ross will consider the evidence and produce a judgment dealing with the facts and his legal findings.

Of course judgments are public documents, and often published on the invaluable Scottish Courts website.

A finding in favour of Mr Whyte would be a great victory for him, vindicating him against many of his critics.

However, should the Sheriff find that he was not a credible witness, even if the case is won by Tixway on legal grounds, then this would allow the media to refer to the decision constantly.

In a different context, Jeffery Archer and Jonathan Aitken are regularly described as “convicted perjurers” which they are, even in articles to which the convictions have no bearing at all.

Mr Whyte has staked a great deal on the Sheriff finding that he is truthful. As well as being in the hands of the Tax Tribunal, he will be in the hands of Sheriff Ross.


Filed under Craig Whyte's Companies, Football, One Stop Roofing Supplies Ltd v Tixway UK Ltd, Rangers

Does Rangers‘ Craig Whyte Spend More Time With Lawyers Than With His Manager? January Update – Part 1 – Rangers’ Court Actions


A friend recently suggested to me, I think in jest, that Craig Whyte has single-handedly decided that the British legal profession needed an economic boost, and as such has decided to try to spend as much money as possible on lawyers.

Most businesses, even very public ones, operate “under the radar” to the extent that their day to day dealings are not pored over in minute detail in the press, nor do any blogs set up to focus on such issues achieve wide circulation.

However, as a result of work by Phil Mac Giolla Bhain and the Rangers Tax Case Blog, amongst others, the dealings of “one of Scotland’s two most important institutions” (©many Rangers fans) have been laid bare.

Normally, in an organisation the size of Rangers, court actions would be dealt with at different levels in the organisation, but the suggestion has been made that Mr Whyte very closely controls all of the dealings there, and is “hands on” as Chairman in a way the previous ones were not.

I thought therefore it might be useful to compile a quick (my reader will be dubious that anything I write will be quick, but here goes!) and straightforward (ditto) guide to what issues will be occupying Mr Whyte when he ventures into the plush offices of Glasgow and Edinburgh solicitors, and when he speaks to Mr Withey, his Company Secretary, and highly-regarded partner of London City firm Collyer Bristow. Mr Whyte very wisely realised that having a lawyer “in house”, for at least some of the time anyway, is a very useful and speedy way of getting legal help.

(I have written about many of these matters previously. If you want to see more, click on the relevant topic or tag on the right of the page, or use the Search box at the top.)

So – Part 1 deals with court actions.

Court Actions Involving the Rangers Football Club PLC (Rangers FC)

Martin Bain

Mr Bain’s claim against Rangers for his dismissal is scheduled for a proof hearing over a number of days in July. He claims that Mr Whyte’s actions in suspending him and, whilst under suspension telling the press that Mr Bain would not be returning to Ibrox was such a fundamental breach of the employer/employee relationship that he, Mr Bain, had had his contract terminated. Mr Bain succeeded in arresting almost £500,000 towards the claim.

Rangers announced in court that they would be pursuing a counterclaim against Mr Bain but, as yet, there has been no confirmation of the detail of that.

Mr Whyte, in previous interviews, made it clear that he did not see why he should be paying people like Messrs Bain and McIntyre (more of whom below). However it is up to the court, rather than to Mr Whyte!

As far as ongoing procedures go, it is likely that the case will pop up every now and then between now and July to deal with procedural issues. There is one such hearing fixed for today (17th January) which is listed for a 15 minute court slot. This might only be a timetabling matter, or in connection with documents or witnesses.

Some suggestions were made that it could relate to a settlement, but that is unlikely. If terms have been agreed then this can be dealt with by both sets of lawyers submitting papers to the Court, without the need, at this stage, for anyone to appear.

If, as has been suggested, the case against Mr Bain seeks to allege that he was at fault in how he carried out his duties as Chief Executive of Rangers, then, if I acted for hi, I would look to being witnesses to court who clearly rated him very highly. Amongst these would be the Chairmen under whom he worked at Ibrox – Messrs Murray, McClelland and Johnston.

Of course the tax appeal concerning Employee Benefit Trusts presently proceeding in Edinburgh (more of which in Part 3) might alter the perspective here. Should there be findings critical of Mr Bain, for example, (and I have no information to suggest that any such adverse finding will be made, nor indeed if there has been any criticism of his actions at all) the timetable for a decision by the Tribunal would allow Rangers to incorporate such negative comment into their case, as long as it was legally relevant to the case brought by Mr Bain, or the counterclaim pursued by Rangers.

Whichever way it goes, the prospect of a full hearing regarding these matters, including possible reference to anything unearthed by the Independent Board Committee of Rangers during Mr Whyte’s takeover, would be embarrassing for all concerned, but as Mr Whyte is far more in the public eye than Mr Bain now, the negative publicity will affect Rangers far more.

It is a fool’s game to speculate about the outcome of a court case without all the facts being available, but, as the song goes, “fools rush in”.

On a commercial basis, taking account of the PR aspects and the fact that, if the case goes to proof the run up to season 2012-2013 will be dominated by coverage of it, little of which will show Rangers FC in a good light, it would be better for all parties to reach a settlement. However there appears, from what Mr Whyte has said, to be some element of personal animosity here (and if there is not, then I apologise to him). In that case, and depending on the strength of the counterclaim, Rangers might decide that a stand must be taken.

The costs of a proof in the Court of Session, which, I think is down for 8 days, will run into many thousands of pounds for each side. There are a lot of very important financial decisions to be taken by both parties.

Why ought Mr Bain to settle? There is one simple reason. If Rangers enter insolvency, then he might end up, even if successful, receiving little or nothing.

Some have argued that Rangers tactic with HMRC regarding tax should be to tell the taxman that, if HMRC push for full payment, then the company would enter administration or receivership, by which method they would get little or nothing.

HMRC do not do deals on that basis. However, for any private litigant, that is a very relevant consideration.

Therefore, for all those reasons, I would expect the case to settle, for a sum far less than what Mr Bain was suing for. It would not surprise me to find that such a settlement, including payment of Mr Bain’s costs, came very close to the sums he successfully arrested in the late summer of 2011.
Capita Trustee Services Ltd

This one seems to be resolved and off the books. Rangers paid up, under threat, it appears, of a further arrestment being served on them, but not until there had been adverse media comment about another case being raised against them.

Levy & McRae

This was one of the first cases brought against the new regime at Ibrox. Levy & McRae had done sterling work over many years for Rangers, dealing with the “fire fighting” activities, such as UEFA disciplinary hearings and players being arrested for alleged misdemeanours.

However, as a result, it seemed, of the close relationship between the form and the outgoing Board at Rangers, Mr Whyte dispensed with their services when he took charge.

This freed them up to take instructions from Mr Bain, and to act for him against Rangers.This case dragged out, until settlement was finally made, with the court being told that the bill for £35,000 for saving Rangers from a ban for sectarian singing needed to be checked. Of course Mr Whyte later admitted to Scotland on Sunday that he had delayed payment because he was annoyed at Levy & McRae taking Mr Bain as a client against them.However, Levy & McRae are excellent lawyers, and as such were able to ensure that they were paid, in full, and with expenses paid by Rangers.

Donald McIntyre

Mr McIntyre was the Finance Director of Rangers. He too was suspended, but remained on the books at Ibrox far longer than Mr Bain.However, he took the same route of resigning and claiming that his contract had been broken by Rangers. As mentioned above, Mr Whyte was adamant that he did not wish to pay either of these gentlemen.

Presumably he had a change of heart as, after an arrestment was successful for some, if not all, of Mr McIntyre’s claim, a settlement was agreed.

It is thought that payment was made by way of release of some, or all, of the arrested funds to him. It would appear that Mr McIntyre’s case settled in a similar way to that I would predict for Mr Bain, although there was no suggestion of there being a counterclaim against Mr McIntyre.

CRE8 Publishing

As I wrote at the above link, this is a case Rangers is pursuing in the Court of Session.However the defender is in liquidation. A former director of CRE8 is Lee Power, who played 25 games for Dundee, Hibs and Ayr from 1996 to 1998.

According to the Drum Magazine, Rangers were owed almost £500,000 by CRE8 when it went into liquidation.

The Weather Lottery PLC

This case, where Rangers is the Pursuer, calls again at Glasgow Sheriff Court on Friday 20th January.
The defender is a company specialising in providing lottery services to football clubs. It describes itself on its website as “The leading lottery fundraiser in the UK. Helping to raise funds for Charities, Education, Sports organisations and other societies. “

It is however, according to its last accounts, a loss making company whose current liabilities to trade creditors doubled in the last accounts.Yuill and Kyle act for Rangers. This is a leading debt recovery firm and one assumes that this is a simple non-payment action brought by Rangers.

Court Actions Involving Rangers FC Group Ltd

Fyfe Ireland

This might almost be the most embarrassing of the cases. Here the parent company was sued in a Small Claim (meaning an action for £3,000 or less) for non-payment.

Fyfe Ireland, it is understood, acted for the former Wavetower Ltd in the takeover. The type of work they did in connection with a PLC acquisition would normally cost in excess of £50,000.

It seemed daft to allow further reputational damage, and to give more ammunition to critics, by disputing the final part of a bill, especially where, in a dispute about legal fees, there are methods of having the bill independently assessed by the Auditor of Court to determine what truly should be paid.

That case settled at an early stage.

Rumoured or Possible Court Actions That Have Not Been Raised

Alastair Johnston

Mr Whyte, in his Scotland on Sunday interview in October with Tom English, stated that Mr Johnston, the former Chairman, had demanded payment of expenses in connection with his work for Rangers.

Mr Whyte made it clear in the interview that he viewed this as inappropriate. He was not for paying, and seemed almost to be urging Mr Johnston to take action.

As far as has been made public, no such action has been raised. There is no information as to whether or not the expenses were paid.

As with Levy & McRae and Mr Bain, Mr Johnston seems to have become persona non grata for his involvement before, and particularly for his Committee’s opposition to the takeover.

However, I would suspect that, for all Mr Whyte’s desire for positive PR (as undoubtedly defending such an action would have brought him amongst many of the club’s supporters), the rules regarding expenses for directors conducting club business would be so clear cut that there might not even have been the fig leaf of a defence to hide behind. A defender cannot tell their lawyer “I have no defence, but just say I do, and drag the case out”. More accurately, if the client says that, the lawyer has to say “No” unless there are areas where legitimate enquiries can be undertaken to establish the position.

As I speculate above though, there remains the possibility of Messrs Whyte and Johnston facing each other across a crowded courtroom in the Bain case.

John McClelland

When this former Chairman resigned in October, there was a brief flurry of speculation that he too was going to law.

That quickly died down and it was never clear, in any event, what the cause of action might have been.

It is possible that his resignation, at the same time as that of Rangers legend John Greig, was an attempt to distance themselves from legal responsibilities of Directors (as noted in Part 4 to follow).

If they were being kept out of the loop by Mr Whyte, as they alleged, then why stay and risk criminal penalties for alleged failures they could do nothing about?

To follow –Part 2 – Craig Whyte’s Personal and non-Rangers litigation

Part 3 – The Tax Cases

Part 4 – Companies House and the PLUS Exchange

Part 5 – The Rest – SFA/SPL (and anything else I have forgotten)


Filed under Bain v Rangers, Craig Whyte's Companies, Football, McIntyre v Rangers, Rangers, Rangers v CRE8 Publishing