The hoover, the runaways and a judicial nod is as good as a wink on the Rangers Tax Case

Good Morning,

In the mid 1960’s a fifteen year old girl ran away from home. When she took flight from her abode, she was accompanied by an 18 year old boy who was alleged to have been a bit of a naughty scamp. In fact, it was said by some that he was a member– albeit a junior member — of the infamous Kray gang in London, and as such he just might not be the most desirable companion for a fifteen year old member of the opposite sex.

However, the two were in love and the purpose of their flight would soon become obvious to all — as they sped their way north towards Gretna Green.

The girl would turn 16 within a day or two of their departure, and on her sixteenth birthday the banns of marriage would be posted in Gretna and they could be married within 3 weeks.

There was, however, a complication.

That complication was that the girl concerned had officially been declared a ward of court in England and as such was viewed as a child who was in the “custody” of the court.

A hasty application was made to the court with the result that the court pronounced an injunction which had the effect of legally preventing her from getting married….. In England.

Of course, Gretna is not in England. Further the absolute age of consent to be married in Scotland is 16…. whereas in England it was 18.

Legally the girl could get married in Scotland and as the jurisdiction of the English court stopped at the border it appeared that she was home and dry.

Notwithstanding these facts, the English Court attempted to gain an Interdict at the Court of Session in Edinburgh, arguing that the girl was subject to the order of the court in her homeland, that the court had determined that the marriage should not proceed without their consent — which was being withheld — and asked the Court of Session to recognise that a child who was a ward of Court in terms of the law of England could not agree or consent to marriage in Scotland whilst under the guardianship of the court in London.

Suddenly — and unwittingly — our runaway couple had become a constitutional crisis.

Would a Scottish Court grant such an order and so absolutely change one of the fundamental laws of Scotland — or would they rule that the marriage could proceed — which would be seen as the highest court in Scotland telling the highest court in England to get stuffed?  Something that would almost definitely have repercussions, with the likely outcome being that Parliament would be asked to pass a law saying that the law of Scotland should be subservient to the law of England in the event of conflict.

What to do?

Well, the lawyers presented their cases and their arguments, and after hearing the debate, Their Lordships in Edinburgh adjourned to consider their verdict.

They took some time to consider that verdict and reach a decision. In fact they took so long that the banns notice period passed, and in the absence of a decision, the couple sped off to Gretna and got married as planned!!!

Game, set and a very happy match to the runaways!!!

As for the judgement about granting the wishes of an English court when it flies in the face of the law of Scotland?

Well— more than 40 plus years later— we are still waiting for the judgement to be released!!!!

No judgement — no selling the legal jerseys — no constitutional crisis as a result of the decision.

That is the thing about judges — they can be clever bastards!!! And very practical bastards to boot!

Speed forward a number of decades and imagine the scene where you find your humble correspondent waiting to address a Sheriff in one of Scotland’s busier courts.

I am there for a collection of civil cases which all relate — strangely enough — to a number of trusts which are constituted in the States of Jersey for “tax purposes”. The solicitor for the trusts — a lovely young woman — has raised  court actions on behalf of the trustees of the trusts to seek repayment of some large sums of money from a group of Scottish Businessmen who have allegedly borrowed money from these trusts.

In turn, the businessmen say that they themselves funded the trusts and only borrowed their own money — and as such they were not obliged to repay their own money — notwithstanding the fact that the Jersey Trusts were actually the lenders and they were the borrowers.

Yours truly was further stirring the pot by saying to the court that Jersey Trusts were “foreign bodies” and as such could not raise court actions at all in Scotland unless they first of all deposited sums of money with the court to cover the costs that my clients had and would incur as a result of this unnecessary and unwarranted legal folly. The law says that this is what a foreign body should do when there is no evidence that they can meet eventual expenses — and there was no evidence that these trusts had any money at all. That is the thing with Jersey Trusts — they are designed to conceal the truth at times!

So — there we are with all of this calling before an experienced Sheriff on a Monday — with the same Sheriff being due to retire on the Friday. The Sheriff concerned had had these cases kicking about his court for two years or so and to be honest he was sick of the sight of me and my far better looking opponent.

This particular Sheriff was known as the “fixer” because his hobby was fixing things — so if you had a dodgy toaster, a knackered hoover, a broken kettle or whatever you could hand it in to him and he would be as happy as a pig in shit sitting with screwdrivers, pliers, elements, fuses and whatever, doing his repairs in his chambers.

On this morning of mornings, my colleague and I were called to the Sheriffs Chambers unexpectedly as his Lordship wanted to address both of us away from the eyes and ears of the public court.

When we got to his chambers we found him resplendent in his gown, but with the judicial wig sitting on his desk — along with a cup of tea and some jaffa cakes — something he clearly had a taste for.

He bade us good morning and asked us both to take a seat, and without being addressed by either of us on the merits of the case ( as I say he was familiar with the history and arguments from both sides on various matters ) he proceeded to pronounce an impromptu and unasked for decision.

” Mr Brogan Rogan — I have reached the conclusion that your clients are nothing more than scurrilous crooks who are trying furiously to avoid paying money back to these trusts for reasons which are best left unexplored — and God help them they have seen fit to engage the services of your tortuous legal mind to assist them in this goal”

I was about to interject when he held up his hand:

” Miss X. I have no idea who your clients are at all — and neither do you! You are here representing what appears, on the face of it, to be a series of validly created trusts based in Jersey — an island known to shelter tax dodgers, villains and assorted ne’er do wells or their legal vehicles — and their money. I have no idea whether or not the principals behind those trusts are really the very same scurrilous villains that Mr Brogan Rogan represents, as suggested by him, or whether or not they are some other scurrilous villains who, for some reason or other, chose to lend tens of thousands of pounds to a set of Scottish rogues for reasons that cannot be determined — and who now want that money back. Frankly I do not much care who they are at this juncture!”

Before my colleague could interject he carried on.

” What I do know is this. I have no doubt that you two will be here in another two years time still arguing over ever increasingly technical matters, taking up a huge amount of court time and causing the presiding judge to research all sorts of extremely dull and obscure cases and statutes — all of which are designed to do no more than ensure that this case gets bogged down in legal minutiae for an eternity.”

” What I also know is that I am retiring from the bench on Friday — you are both most welcome to come for a glass or two on Friday afternoon by the way — and this time next week — while you two are boring some other poor soul to death with other equally tortuous legal nonsense — I will be at home, in my shed, fixing lawnmowers, or doing the crossword or something else worthwhile.”

” The week after I will be in Italy, under a Tuscan sun, enjoying a rustic Chianti.”

” Now — I have a question for both of you. Are either of you going to tell me this morning that this case has miraculously settled or that terms of settlement have in fact been agreed or are likely to be agreed in the immediate future?”.

” No, My Lord” we said together

“Well” said his Lordship ” In that case I have reached a decision. I am going to continue this case for a period of 6 weeks without further ado to the court of Sheriff X, as he is the kind of man who is capable of listening to the kind of mind-numbingly boring shit that you two can come up with ad infinitum in these cases — and I do say that with the greatest of respect and admiration for your ingenuity at researching and appearing expert in so many absolutely obscure areas of the law. In short, in a week when I am retiring, I see absolutely no logical reason why I should be subjected to, or be concerned with, any more of this — forgive me– complete and utter bullshit!”

” Do you concur?”

And with that he brought his involvement with these cases to a close!

Yip — judges can be clever– and practical bastards!

I have never understood anyone who wants to be a judge. Imagine getting up each day knowing that in the day ahead you have to decide if Mr A goes to jail, or Mrs B gets custody of her children, or Mrs C should have a child freed for adoption? Or whether someone should be made bankrupt or face someone who has reappeared after you have given them a chance on a previous occasion. Or any number of other things to weigh up and judge — only to then go home and pretend that you are a normal and non-judgemental person.

By the way Judge and mental are two good words to put together at times!

Worse still — imagine having to deal with argumentative lawyers — day in and day out — all of whom refer to one another as ” My friend” or even ” My learned friend” when it is plain that they mean precisely the opposite?

Bloody hell and God Forbid!!

While the money is good, parts of the job are hellish. I have no idea why anyone would want to be a judge — although I have a fair degree of admiration for some who carry out the job. Others of course are just toadying wannabes — but hey you get that in all walks of life.

Anyway — Judges WHO would want to be one? And WHY would you want to be one? I have never understood lawyers  who want to be a judge. Who would want to referee when you can still play Fitba?

I just don’t get it.

Further, anyone who applies to be a judge should automatically be barred from being a judge. Wanting to be a judge shows a shocking lack of– well— judgement!!

However,  all of that is a long way round of saying that judges can be clever at times, and that sometimes you have to study what they actually do and say very closely before you can determine what they actually mean — and what they actually want you to see… and know.

The decision of the FTT in the Rangers Tax Case is worthy of very close scrutiny.

I have seen a few Tax Tribunal decisions in my time, but this one is unusual in a number of regards. Partly for what is says — Partly for what it doesn’t say and partly for how it says what it has to say.

For a start, it is very unusual to have a verdict that is two to one in these cases.

It is even more unusual to have one where the two opinions — assenting and dissenting– are at such odds and are so diametrically opposed to one another in substance and law.

It is also unusual to have the majority verdict substantially shorter and less detailed than the minority point of view.

There is something else that is unusual but I will come back to that later.

I can see the logic in both sides of the argument as opined on, and having read the decision several times now, I conclude that had I been sitting in judgement (had I been daft enough to sit in judgement) I would have had no choice but to come down on the side of the majority.

Yes I would have said that MIH and Rangers were not liable for tax on the basis of the arguments presented.

Let me explain why — and then let me explain why I think the judgement is written the way it is and what I take from the undercurrent of the decision as it relates to the big wide world.

That’s the first thing — remember that a court is a rarefied and artificial place. It is not a place for open conversation or consideration of whatever comes to mind, and it must only consider the issue before it on the basis of the presentations made by those arguing the toss. Further  — in normal circumstances– the judge or judges — cannot argue one side of a case or another– for and on behalf of one side or another.

Instead, they must make findings in law based upon and married to their findings in fact. Where there are two opposing versions of events — the judge or judges must determine which version has been best established by credible and reliable evidence — and then they must apply the law and the tests laid down by the law.

This may be very different to what the ordinary person may expect. For example, when considering whether to convict someone in a criminal case where there are two versions of events — the judge need not necessarily search for the truth. No — he or she– will try to determine if the appropriate facts necessary for conviction have been established beyond all reasonable doubt.

The judge might believe that the crime did indeed take place as described, but find it impossible to say that the facts necessary to establish such a crime has been proven beyond a reasonable doubt in terms of the applicable law. In such a case, while the judge might think a crime has been committed — he or she must acquit!

And if you read the FTT decision of the other day– In a sort of way that is precisely what I think the majority decision says.

Further, I think the three judges — not just the two judges — were left in a position whereby they could not allow the HMRC assessments to stand because of the arguments put forward by…….. HMRC.

Here is the nub of the majority decision:

“In reply, and significantly in our view, Mr Thomson (for HMRC) accepted that both the trusts and loan arrangements were not “shams” (although certain detailed criticisms were made) but, rather, urged us to view these structures in a broader context”

and again

“Mr Thomson stressed that he did not view the loans as “shams”. It was not
necessary for the Tribunal to scrutinise the loan documents. His argument was that the whole arrangement was liable to tax as it was a mechanism for paying earnings.In that sense the loans, while not shams, were not genuine in any normal sense”

and later

“In short it would seem that even in cases of “aggressive” tax avoidance, such as the present case, the application of the Ramsay doctrine ( as argued by HMRC ) to strike at tax saving arrangements may be fettered in a context where there is already a highly prescriptive statutory code and, also, enforceable legal structures (are) in place which are of fundamental practical effect, and not merely incidental or artificial for tax avoidance purposes only.”

The trusts and the loans are the legal structures that are being referred to

Then

“On any view, taking the range of circumstances contemplated in Garforth and those of AAM, the acceptance of loans in the circumstances of the present appeal could not amount to payment in our view.”

and

“The form of the loan document is sufficient in our view to create a liability to repay. The extent of Mr Thomson’s criticism at its highest was that the loans to the employee, who was also protector of “his” sub-trust, were arguably voidable as ultravires (contrast his remarks on 9 November 2011 at p4-6 – noted in para 166 hereof –and on 16 January 2012 at pages 5 and 139). He did NOT argue that they were a“sham” or crucially that they were irrecoverable.

In our view in the present Appeal we have to regard the trust structure and
loans as “… genuine legal events with real legal effects”.

N.B.– note the use of the words “Have to”– not “can” or “could”– “Have to”!

The reason they “Have to” is because HMRC asked them to by stating that they were satisfied that these loans and trusts were not “shams” but were genuine legal events and structures with real legal effects.

And again:

“Having regard to the LEGAL EFFECT of the trust and loan structure, ( which HMRC say are not a sham ) the employees’ entitlement or, rather, expectation is to no more than a loan.

And as the Assessments were all made on the payments being a salary — then the assessments can’t stand and so game set and match to the Gers!!!!

Note — the entire decision is not based on the oral evidence although these two judges do note and indeed comment on that oral evidence.

Here is just some of what they note in their part of the decision:

“Mr Red insisted in his evidence that the Trust was not a means of “tax avoidance”. He accepted that it had the attraction of providing a larger sum for  the EMPLOYEE and his family”

Note: that various witnesses for MIH readily accepted that this was a tax avoidance scheme and described the process as such.

However, David Murray ( Mr Black ) stated categorically that he did not see it as  a tax avoidance scheme at all.

“The selected player would be offered a contract incorporating standard SFA
terms and in favoured cases also a “side-letter” in respect of possible Trust benefits.”

“In respect of his own sub-trust Mr Black explained that he determined his own
bonus. It depended broadly on company profitability and the performance of MIH,and the need to retain funds for the company’s own purposes.”

Note the part about company profitability. Rangers PLC did not make profits generally– they made huge losses instead.

The Judges go on:

“He ( Black/Murray) had not decided yet whether or not to seek to extend his first loan from the sub-trust, due to be repaid in about a year’s time.!

Mrs Crimson ( The Jersey Trustee )  was satisfied, she indicated, by the
current employment circumstances of the borrowers vouched in very general terms by the Group– that the borrowers could repay their loans

She maintained that it was reasonable to advance a loan of an amount up to the applicant’s payroll wage.

They note that Mr Indigo stated “The Board had accepted Mr Red’s responses to HMRC as adequate and appropriate. He was aware that Mr Red had been advised by Messrs Baxendale Walker, and no further legal opinion was sought on the matter. Mr Indigo understood that Mr Red had been fully cooperative with HMRC.

Mr Indigo believed that the Trust had been used to pay
“appearance money and bonuses.”

While the payment record of contributions to Mr Indigo’s trust seemed regular, he claimed in his evidence that there had been a significant repeated delay in payment. Had there been failure to make a payment Mr Indigo indicated that he would not have continued working for the Club.

Mr Indigo insisted that, according to his understanding, the scheme could be used for remuneration of players, the payment of bonuses and appearances.

In a brief re-examination Mr Indigo confirmed that Rangers accounts (as a plc) were audited by Grant Thornton and had been approved as having no contingent liabilities. The working of the Remuneration Trust had been disclosed to the auditors.

Note the bit about no contingent liabilities– I.E. They were not obliged to fund trusts per the accounts — and this may become crucial later.

Mr Magenta became aware of the trusts in 2002 and states that at that stage he was not involved in negotiations with football players and his understanding of the Trust’s purpose was that of making tax efficient payments to them.

Note he does not say payments to trusts or loans to players!

Going on:

“From 2004, Mr Magenta had become involved in negotiating players’
contracts and explaining the Trust’s functions to them. Mr Black would negotiate a broad agreement in principle but which was not legally binding. Mr Magenta’s task was negotiating a “deal” in finalised form, usually incorporating a salary (liable to PAYE and NIC) and an additional trust provision, benefiting the player’s family and affording loan facilities to the player concerned. Only payments from the footballer’s Club qua employer needed to be registered, he insisted.”

Note this seems to be a misinterpretation of the football rule as he believes that you only needed to register payments from the football club in terms of the football rules — whereas those same rules actually prohibit payments by third parties such as trusts —  and crucially they also prohibit payments via a third party again such as trusts —- note that these  propositions are entirely different.

Mr Thomson argued, Rangers could have sought a ruling from the SFA or SPL about disclosure of side-letters but, clearly, they had chosen not to do so. There was a conscious decision to conceal their existence, and that extended even to the Club’s auditors. The nature and arrangements under the Remuneration Trust had not been disclosed in full to the auditors. In the “key issues document” for 2004 they indicate that they have not reviewed the Trust’s operation and receipts in detail.

The point I am making here is that there are notes of the evidence in the majority decision, but there are far more notes  — and more important notes at that — on the applicable law and on how that law must be applied to the position as adopted by the parties.

The two judges do not even need to consider the oral evidence of the witnesses if it is accepted that the trusts and the loans are not a sham — and in many respects — they simply skim over what the witnesses said and make little comment — because it is not necessary.

And with that the majority decision ends at page 59.

Now if I may summarise what has just been said above:

Judges Mure and Rae have written a decision from the perspective that they MUST reach that decision when looking at these matters from the rarefied and constricted view of within the world of the court and the framework of the court and the joint legal pleadings and propositions put to them.

Dr Poon then produces almost twice as many pages to present a judgement which says in reality “here is life in the real world” and here are the legal arguments which say life in the real world must prevail.

Her very first paragraph makes the position that all three judges find themselves in plain, and she hits the nub of the problem square on :

“The Tribunal have been unable to reach a unanimous decision. The essential
differences between the majority and minority can be summarised in two respects.

With regard to Findings-in-Fact, I cannot subscribe to the conclusion reached by the majority that ‘WE ARE UNABLE TO MAKE FURTHER FINDINGS IN FACT in support of there being an orchestrated scheme extending to the payment of wages or salary absolutely and unreservedly to the employees involved’ (paragraph 232).

In respect of Findings in-Law, our essential difference lies in how the Ramsay principle is to apply. The kernel of my colleagues’ decision, contained in paragraph 223, is that they ‘HAVE TO regard the trust structure and loans as “… genuine legal events with real legal effects’’ [quoting from Mayes].’

I disagree that the legal form of a transaction with its corollary legal effect is conclusive as a dictum in applying the Ramsay principle, and make extra Findings-in-Law regarding Ramsay and its application to the present case.”

In other words Dr Poon says she can and should look beyond the fact that HMRC themselves said not to treat the loans and the trust as a sham – she should not be bound and constrained by their admission or acceptance of the trusts and loans as having legal effect.

She makes it plain where her colleagues say that they are UNABLE to make further findings in fact to support the HMRC case — note that unable is different to unwilling based on the evidence — and that they feel that they “HAVE TO” regard the trusts and loans as real and having Legal effect as a matter of law — whether they actually want to or not!!!!

According to Dr Poon — the other two feel they are bound to reach a decision — but she feels she is not so bound and so she then lets rip into the witnesses and cites obfuscation, delay, the willingness to cover up and hide documents, the absence of documents, the retention of documents, the avoidance of the truth, misleading the tribunal, and effectively lying and covering up the truth on the part of the MIH camp.

She makes it plain that she sees the whole thing as a sham in the real world and states clearly that there was no chance on God’s earth that any of this was anything other than an attempt to avoid and evade tax. Other than the existence of a written trust document, there really was no trust at all, there really were no proper loans — these were just payments — straightforward tax free bungs supposedly hiding behind phoney trusts and phoney loans.

Now, I said at the start there was something else odd about this judgement.

It is this.

Normally where you get a dissenting judgement or even two dissenting judgements, the majority or assenting judges write on the dissenting judgements and explain why they cannot adopt that line, why they don’t accept this point or that, and perhaps, more crucially, they point out what parts of the evidence they cannot accept or have a different view on from their dissenting colleagues. They may also agree or disagree on the credibility of witnesses as described by the dissenting judge. In short, they very professionally and very politely criticise the dissenting judgement

But not in this case.

There is nothing from the majority which states in detail that they disagree with the propositions and conclusions reached by Dr Poon with regard to that evidence or her interpretation of certain events. They have explained why they feel compelled to reach the legal decision that they did — but they then give her free reign on anything beyond that with ne’er a word in dissent.

And that is very weird indeed.

It is as if the three judges between them have written two decisions — one which they feel bound in law to follow — the majority decision — and a minority decision which sets out a salient and coherent decision that could have been reached had THEY BEEN ALLOWED to consider whether or not  the trusts and loans were a sham!!!

For just about 100 pages, this tribunal goes through the evidence, the law and the sequence of events which point to what equates to what might be viewed as an attempted fraud. They set out a case, give examples, point out legal nonsenses — such as Dick Advocaat getting interest on his wages because they were paid late – oh sorry not his wages — his loan!!! — and so on.

Who has ever heard of a borrower getting interest from the lender?

And how about the insurance policy collected by Rangers for an injured player?

The Insurance paid out on the basis that his wages AND his loan constituted his salary!! Not sure I would like to be the Director who signed off on that claim.

The point is that there is one judgement — with two distinct parts! And the second part leaves the reader in no doubt that the MIH evidence and actions did not impress in the slightest.

Oh and let’s think of who else gets to see this decision and what they can do with it.

Well — remember that the two judges who found in favour of MIH noted that MIH/Rangers were in effect “Funding” and “advancing” monies to the trusts to make real legal loans?

And remember Mr Black ( David Murray ) saying he was conscious, when deciding how much his own bonus was to be, that he had to look at the profitability of the company ( MIH) because it may have needs etc?

Well — If Rangers made payments to these trusts which were not salary ( their argument ) then what were these payments? Presumably they were not gifts?

Presumably, the money was meant to come back at some stage if all these loans were not a sham? yes? no?

Oh and how do the creditors feel about the Directors “advancing funds for loans” when the company made consistent losses — BIG losses?

Maybe if they were not funding loans then they might have shown a profit? — after all these payments were not salaries– were they?

BDO can look at Directors duties and decide whether or not the Directors were negligent in making gratuitous alienations etc with company funds. They are not bound by any HMRC concession that these were not sham trusts or sham loans — and in any event the Tribunal findings are on a very narrow point of law and are not binding.

No — BDO are not fettered at all — but hey they might be persuaded to take matters further if there is any legal justification for saying “hey- all this stuff was dodgy!”.– and lo and behold there is 100 or so pages of opinion that says just that.

Whether they choose to act on it is another matter altogether but that judgement and those conclusions are out there for all to see — and that is not an accident.

As I say– Judges are clever bastards!

Also — stop and think on this:

As the FTT judgement stands, there appears to be a judgement that says there were legal trusts and loans set up in Jersey– yet there is a part of that judgement that shows that the trusts were not administered properly with no checks and balances — and further that the trusts were in fact a sham, set up for potentially fraudulent or nefarious purposes – namely to hide the fact that these were taxable payments being made to players and others.

Further, there is torrential criticism of Crimson, who is meant to have administered these trusts on a professional basis and in line with the duties expected of a professional trustee and in accordance with the standards expected by the equivalent of the FSA in Jersey. According to Dr Poon — and there is absolutely no support for Mrs Crimson to be found in the majority opinion — those trusts were administered with no records at all and that all the evidence points to the fact that Mrs Crimson was no more than an MIH puppet acting outwith the standards of a professional trustee.

What is worse, is that Mrs Crimson’s company was not the initial trustee, and Dr Poon makes it quite clear that those original trustees had stopped simply pandering to the MIH wishes in making trust loans because they already realised that these trusts were a de facto sham and were not real trusts according to law.

The trusts had apparently come under scrutiny in Jersey– some time after the tax investigation began— and it began to get a touch “hot” insofar as the MIH trusts were concerned. When the original trustees began to actually apply the proper tests, checks and balances— when they began to delay making the loans and payments to the players and others — they were removed.

They were not removed by the “protectors” of the individual sub trusts — it appears that they were removed at the request of MIH — showing that it was they who had control all the time according to Dr Poon.

No matter what way you look at it — this is not a good judgement for Mrs Crimson. If she gets a knock at the door by the authorities in Jersey asking some questions, looking for co-operation on matters, then she is not going to be in a good place to say “beat it- everything in here is fine and dandy so far as compliance goes!”.

Further, Dr Poon makes great play on the fact that Mr Red made absolutely no attempt to assist with or co-operate with a legitimate tax enquiry. On the contrary, there is more than a suggestion that he attempted to deceive the revenue inspectors — for example by saying that there were no side letters in existence. All files volunteered by Mr Red contained no side letters. Files recovered by the Police under warrant and without notice — DID contain side letters.

Of key importance perhaps is the evidence noted by the majority judges, who note that as far as certain other witnesses for MIH were concerned, Mr Red was dealing with the enquiries from HMRC satisfactorily and in a manner that was appropriate and proper. Even they note that Mr Red was defensive in giving evidence and that certain parts of his testimony gave them cause for concern — nowhere do they say that Dr Poon’s interpretation of events is either unreasonable or something that they could not follow.

This is not a good judgement for Mr Red and those he worked for outwith the finding that the majority could not find that the payments were wages.

Mr Red has been labelled with a course of conduct of non co-operation, of deception, of concealment, of withholding evidence and so on. Not a good position for a tax advisor/consultant or future witness in any forum at all!!

Nor do the majority judges address the question as to whether or not Mr Red could have dealt with the revenue in this manner and along these lines without the knowledge of others — such as Mr Black. Nowhere is it suggested that Mr Red was off on a frolic of his own in dealing with HMRC re this enquiry. Instead — and you would almost miss the nuance — it is simply stated that he was the chief officer dealing with the tax enquiry for and on behalf of MIH/Rangers PLC.

There is a clear course of conduct outlined in this judgement. A course of conduct which is very much based on the evidence of the witnesses who were called to this Tribunal by MIH and no one else. Their evidence certainly did not impress Dr Poon did it?

Further ask yourself why did MIH call these particular witnesses? Presumably they had hundreds of witnesses who could have given evidence? Then again — maybe they have hundreds of witnesses that they did not want to give evidence?

For example: Alex Rae was live on Radio Clyde when he stated that yes he had an EBT, yes they were described to him as legal and yes that there were loans (to him) which as far as he understood he was never ever going to have to pay back! What would Mr Rae have brought to the ” This is all a sham” argument. Would he have hindered it or helped it?

What about Alistair Johnston: he at one point said on Radio Scotland that after initial enquiries from HMRC, it appeared that any tax enquiry had in fact gone quiet and that Rangers had never heard from the revenue again – so as far as he was concerned there was no issue with EBT’s etc.

That does not sit well with the numerous requests for information by HMRC outlined by Dr Poon and the delaying tactics and refusal to co-operate that she lays at the door of Mr Red. It would appear that either Mr Johnston was not aware that there were very real lines of communication between HMRC and MIH and that Mr Red had been busy trying to cover up the truth etc or that Mr Johnston was lying?.

Could it be that Mr Johnston was not being told the truth? Could it be that he was not in the loop and in fact was being deceived by someone in the MIH camp?

Well — do you recall Mark Daly putting the “proof of funding” letter from Craig Whyte’s Lawyers to Alistair Johnston on Camera? This was the letter that suggested that Whyte had in fact raised the funds to buy Rangers — although the letter said no such thing — it merely hinted that this might be the case. On camera, AJ says quite clearly that he had never seen that letter before AND that he would never have accepted it as proof of funding.

Clearly — there is another instance of someone in the MIH camp keeping AJ out of the loop as to what was going on– and effectively not giving him access to the truth– and he was Chairman of Rangers!

Are there any other examples of such behaviour in the public domain?

How about Dave King? He made a public statement saying that he had been deceived by Mr Black – sorry David Murray– and that he was going to sue him.

Whatever did he mean? On what point was he deceived? Not that I suspect for a moment Dave King would have been keen on giving any kind of evidence before a tax tribunal!

The Point here is that evidence was given by only those that MIH chose to call — and in certain cases Dr Poon goes through that evidence like a dose of salts. She tears it to shreds and cites several examples as to why it is all a sham — from the percentages of agents fees, through insurances claims based on actual wages and trust payments, to the calculation of bonuses and so on — bit by bit– brick by brick — she dismantles the legal pretence of any notion of there being separate trusts and loans to players.

These payments were wages — pure and simple. Wages disguised as something else but wages at the end of the day. She makes it plain that her colleagues feel obliged to find that they were not wages for tax purposes and why – but she feels that this was an operation and a set of devices designed to disguise the wages as something else and so rob the taxman of legitimately payable tax — and she sets that argument out in considerable detail — twice as much detail in terms of pages than the assenting judges.

But hey forget about the tax  — the non payment of tax is the least of your concerns if you have been caught up and been party to certain types of activity and certain types of scheme.

Further, think on this. Dr Poon is an accountant — go back to the start and look at the letters after her name. She is the CA – the one on the panel who has the experience of looking at a business and a set of books and deciphering from those books what actually happened in this business and in the real world.

The other two are the legally qualified punters — the tax solicitor and the advocate.

Does Dr Poon’s mammoth opinion read like the opinion of an accountant? Or does it read more like the opinion of counsel?

For those who are not familiar with the way that such people actually write — go and dig out any set of accounts for any company and you will see as often as not how an accountant writes.

There is a marked difference between the two styles. To certain eyes there are clear differences between the style of writing of different lawyers or counsel let alone the difference between an accountant and a legally trained advocate or solicitor. Some Counsel of my acquaintance pride themselves in the fact that they will never use certain words for example — and if they see one of those words in an opinion or pleadings they will say automatically that they did not write all of this and so on.

So is Dr Poon’s Judgement all her own hand — or is the ghost of someone else in there?

I will leave it for others to …………. judge!

No– judges are clever bastards at times.

This decision is telling the reader– whoever the reader might be — that This Tribunal found in favour of MIH and Rangers PLC because it had to when looking at the evidence and the law as it must be applied in that particular court based on the particular argument that was put before them.

However, it is also telling you something else — namely that in another forum, and looked at from another perspective and on a different basis, when the evidence can be looked at on a wider basis and not just through the filter of a tax assessment raised on the best judgement of a tax inspector who claims that certain monies were wages —- then there is an altogether different conclusion to be drawn, as to who did what and …. why?

What anyone makes of that, and does with that opinion is of course not known.

HMRC have  a couple of months to decide whether to appeal.

Yesterday, I spoke at length with a former Revenue and Customs officer who jumped the dyke years ago to go and work in private practice. He is very experienced in all sorts of tax cases and tribunals and is seen as an expert in his field by all — including said judges! He agreed that a 2-1 decision was most odd — especially one delivered in this format, expressing these views, in this fashion. He felt that with such a majority decision the revenue must appeal — especially with the dissenting judgement being on these terms.

He also pointed out the difference in approach of the Revenue arm and the Customs arm of HMRC saying that the Revenue arm tend to be much more softly softly and said that had this been a VAT case then there was no way that HMRC would have said anything other than that the trusts and loans were fraudulent shams. ” The Vat guys would be much more in your face about the whole thing!”.

That is an interesting observation.

I have no idea what  HMRC will do next nor what BDO will do as Liquidators — although they do have to prepare a report on the conduct of the Directors of Rangers PLC going back a number of years.

That will make for interesting reading.

BDO have all sorts of lines they can follow in terms of the Insolvency Act and so on. Who knows what they will do — but can they really just ignore Dr Poon and her pen?

I doubt many of the witnesses — Black, Scarlett, Red, Crimson, Indigo, Magenta or anyone else will want to come before Lord Nimmo Smith and go over their evidence again — and they certainly will not want to stare across the room at the friendly face of Big Rod McKenzie of Harper McLeod as he takes them through the process of signing players, agreeing their package, writing up their contracts and side letters and then signing them up to Jersey Trusts and applying for loans on dates when there were no funds to borrow or even trusts to borrow from in the first place.

That might be a very uncomfortable experience indeed — and all under oath as well.

Many of these people will only have wanted the best for Rangers Football Club but somehow, somewhere they were persuaded by someone to go down a road which no one else in Scottish Football appears to have been willing to follow — for whatever reason.

Now of course — if you are a player– who reads Dr Poon’s version of events — or even the majority decision– you might be alarmed at the fact that these loans have been described in the FTT as ” Real and Enforceable” and “Capable of being repaid”– especially if you were told that they would never have to be repaid.

And if you are the President of the SFA — you might be concerned at the fact that you were privy to and indeed benefited from what Dr Poon describes as no more than a Corporeal sham– and perhaps someone should ask whether such a person can really appear to be fit for office as president of the SFA under those circumstances? If he went along with a pretence as described by Dr Poon — should he be in charge of financial investigations and decisions etc in relation to Scottish Football?

Then again– to be absolutely fair– perhaps Mr Ogilvie was in the dark about the activities of Mr Red– you will only know when someone asks him right enough. Maybe he feels that he too was misled– again someone should ask him.

What is clear is that Rangers could only field many of the title winning teams of the last decade if those players did not pay tax on a large part of their package — and they could not afford their managers– two of whom were poached from the SFA — if they paid the tax on their package. Note that some of the witnesses said that had they not been paid that money they would not have worked for the club! What is to be made of that?

Further, Rangers may well have not gone bust– if the Directors had set aside a reasonable sum of money as  a tax reserve from say 2004 onwards when they became aware of the tax enquiry in the first place. Indeed it will be interesting to note eventually how many of the tax cases that they have accepted as being due for tax actually arose after the tax investigation started when they should have been on notice that they might be running up a problem?

The Directors could have administered their tax avoidance scheme — and many accepted in evidence that it was a tax avoidance scheme– better; they could have kept a reserve which would have covered the majority of the tax claimed without penalty and interest accruing and then paid the rest up — but that did not happen. Had MIH laid bare the legal advice re tax treatments and disclosed all the documentation relating to loans and trusts quickly and timeously, then the tax enquiry would have come and gone with a certain sum being identified quickly as potentially due. That could have been agreed, fought, compromised and negotiated on openly– just the way that other tax enquiries operate every other day of the week. Instead, according to Dr Poon, MIH did not co-operate and indeed told the revenue that all of this was fantasy and nonsense. They deliberately withheld documents, misled the officers and did everything in their power to muddy the waters and cause delay while David Murray tried to sell the club in vain. Of course no one was going to buy the club under such circumstances and Murray was not going to gamble by agreeing to underwrite or guarantee any eventual bill — despite his protestations that there was no danger of a tax bill of any kind at all. The 35 cases will eventually reveal how much that bill is actually going to be. In short, David Murray could have saved Rangers — but he chose not to. Simples!

Only the people involved will know why they acted as they did– but that behaviour, described in detail by Dr Poon, put the curse of death on Rangers PLC as a business.

An MSP now wants a full independent judicial or parliamentary enquiry into the whole HMRC investigation so that all of the salient facts and conduct can be brought out in the open for all to see.

I doubt anyone from MIH will be voting for him again

Anyway, all of this is far too reminiscent of a past life for me and while I still enjoy a right good tortuous legal debate, like the retiring Sheriff referred to up above I am away to do something far more worthwhile with my time than spending hours going over the rigours of tax legislation and House of Lords Cases.

I will leave all that to the clever bastards.

Anyone know how to fix a wonky shower, a non firing boiler and a laptop screen?

Right enough– I know just the man when I think about it.