There have been 398 people who have looked at this blog directly from a link at This has little to do with the intrinsic fascination that football fans obviously have for civil procedure. It is more do do with understanding why a judgment should be embargoed. The judgment that fans were waiting for was  VB Football Assets v Blackpool Football Club & Ors [2017] EWHC 2767 (Ch) where Mr Justice Marcus Smith considered an unfair prejudice petition in relation to the management of that club. Given this level of interest it would be unfair not to write about the case.  Here I look at the judge’s assessment of the witnesses and their recollection.

“Mr. Oyston also showed a capacity for embellishing his evidence with detail which appeared nowhere in his witness statement. I am quite sceptical as to the evidential worth of such embellishment. As with Mr. Karl Oyston, I am prepared to accept that Mr. Owen Oyston was doing his best to assist the court. As a rule of thumb, however, recollection does not improve over time, but is rather degraded as a witness tries, iteratively, to work out what his recollection actually is.”


  1. As I have explained in paragraph 17 above, I have tested the evidence of the various factual witnesses against the contemporary documents, conscious that the later recollection of these witnesses is fragile and that the contemporary documents may provide a better and clearer record of events. In making this comment, I should make clear that I intend no criticism of any of the witnesses.
(1)        VB Football Assets’ witnesses
  1. VB Football Assets called the following witnesses:
  2. i) Belokon. Mr. Belokon gave a single witness statement dated 8 March 2017 (“Belokon 1”). Belokon 1 was given in Russian – Mr. Belokon’s first language – and translated into English – Mr. Belokon’s second language. Mr. Belokon gave evidence over three days, on 13, 14 and 15 June 2017 (Days 2, 3 and 4 of the trial). Mr. Belokon was an affable witness, who gave his evidence with the assistance of an interpreter. Although Mr. Belokon’s English was undoubtedly good – indeed, outstanding for conversational purposes – it rapidly became clear when he came to give evidence that Mr. Belokon’s original plan of giving evidence in English, with occasional interpreter support, lost a great deal of the nuance that Mr. Belokon was trying to convey. With my active encouragement, and certainly for the second and third days of his evidence, Mr. Belokon essentially gave his evidence in Russian, which was translated for him into English. Although this inevitably slowed the proceedings down, it was in my judgment necessary in the interests of receiving Mr. Belokon’s evidence properly.
There are two other points of detail about Mr. Belokon’s practice that I should note, for they are relevant in terms of evaluating the evidence he gave:
  1. a)First, and unsurprisingly for a Latvian businessman, many of Mr. Belokon’s employees were native Latvian speakers. Latvian was Mr. Belokon’s third language, and he tended to speak to his employees either in Russian or in English, but not in Latvian. They, in turn, would write to Mr. Belokon in either Russian or English, which would not have been their first language. There was thus some potential for points to be “lost in translation”, particularly in communications with the Oyston Side, which spoke only English.
  2. b)Secondly, Mr. Belokon transacted orally. By this, I mean that he did not tend to author documents, nor did he tend to read them. Rather, he gave his instructions orally and, when a document had to be brought to his attention, it was either summarised or broadly translated for him by one of his employees.
I consider that Mr. Belokon gave his evidence honestly. He was very clear when he could not remember something; and equally clear when – a document, for example – might have passed under his nose with only the broadest of explanations as to what was going on. Mr. Belokon was, as I accept, a busy businessman, with multiple interests, who delegated the detail and outlined what he wanted his staff to achieve. Because Mr. Belokon was clear in demarcating what he knew as opposed to what his staff knew, I consider that I can place considerable reliance on what, strategically, Mr. Belokon thought he was achieving in his dealings with the Oystons. Of course, whether his subjective intentions were in fact realised in the communications crossing the line between the Belokon Side and the Oyston Side is an altogether different matter, which goes to the heart of the issues that were before me.
  1. ii)Mr.  Mr. Malnacs gave a single witness statement dated 7 March 2017 (“Malnacs 1”). He gave evidence on 16 June 2017 (Day 5). Mr. Malnacs’ first language was Latvian, his second English. Both Mr. Belokon and he agreed that his Russian came a poor third. His witness statement and his oral evidence were both given in English, and his English was formidable. He had no need of – and did not have – a Latvian interpreter. He was an impressive witness, who gave his evidence clearly and honestly. He was in no sense in awe of his boss, although Mr. Malnacs obviously respected Mr. Belokon. I consider that Mr. Malnacs’ evidence was entirely independent of Mr. Belokon’s: Mr. Malnacs was his own man. This was particularly clear in his assessment of the Oyston Side and in his view of Mr. Belokon’s relationship with the Oyston Side. Mr. Malnacs considered Mr. Belokon too trusting of the Oyston Side, and too dismissive of Mr. Malnacs’ own reports of the state of play at Blackpool FC.[11]
iii)               Mr. Kaspars Varpins. Mr. Varpins gave a single witness statement dated 9 March 2017 (“Varpins 1”). He gave evidence on 19 June 2017 (Day 6) and 20 June 2017 (Day 7). Again, Latvian was his first language, and English his second. Varpins 1 was in English and Mr. Varpins gave his evidence in English. Mr. Varpins’ English was not of the same standard as Mr. Malnacs’, and Mr. Varpins’ answers in cross-examination tended to be short and to the point. It would be idle to speculate whether Mr. Varpins’ answers would have been materially any different had he given his evidence in Latvian. He gave his evidence honestly. I am unsure, however, to what extent his evidence actually was of assistance to the Court. That is no criticism of Mr. Varpins. Mr. Varpins came on the scene when the relationship between Mr. Belokon and the Oyston Side had fractured. Throughout Mr. Varpins’ tenure as a director, the relationship between the Belokon Side and the Oyston Side was not a fruitful one and there was a good deal of mutual antipathy and mistrust – and so, lack of co-operation – on both sides. Although Mr. Varpins was cross-examined in detail on the events that occurred during his tenure as director, my sense was that – particularly after the commencement of these proceedings, but even before then – there was little that Mr. Varpins could add to the documents before me in the chronological files. What is more, I am of the view that those documents are much the least important in terms of understanding the grounds that underlie the Petition. These grounds predate Mr. Varpins’ arrival on the scene; and it is no fault of Mr. Varpins that I have found his evidence essentially irrelevant.
(2)        The Respondents’ witnesses
  1. The first four witnesses called by the Respondents (Mr. Belton, Mr. Dempsey Mr. Cherry and Mr. Dyer[12]) were drawn from Mr. Owen Oyston’s trusted team of advisers. In cross-examination, Mr. Belton was asked:[13]
Q (Mr. Green, Q.C.)
Is the position that Owen Oyston had a team of trusted advisers and you and Mr. Cherry were a core component of that team?
A (Mr. Belton)
I consider this to be as true of Mr. Dempsey and Mr. Dyer, as it was of Mr. Belton and Mr. Cherry. Because of their involvement in decisions made by the Oystons, which were being probed by VB Football Assets during the course of the trial, there was a natural and unsurprising tendency to be defensive.
  1. Whilst I consider all four of these witnesses were doing their best to assist the court, their relationship with Mr. Owen Oyston (which generally had subsisted over many years) inclined them to lack objectivity when the business of the football club was being critically examined:
  2. i) Belton. Mr. Belton gave a single witness statement dated 18 April 2017 (“Belton 1”). He gave his evidence on 20 June 2017 (Day 7). Subject to the qualification I have made, he was an entirely straightforward witness. His recollection of events of long ago, where he had had a second-order (albeit nonetheless important) involvement was understandably hazy, but he was careful to differentiate between what he knew or remembered, and what he accepted he must have known, but had forgotten (because, e.g., a letter, whose content he had forgotten, was addressed to him).
  3. ii) Dempsey. Mr. Dempsey gave a single witness statement dated 24 February 2017 (“Dempsey 1”). He gave evidence on 20 June 2017 and 21 June 2017 (Days 7 and 8). Like Mr. Belton, he was a straightforward witness. He had an impressive command of the documents, and a singular knack of reconstructing from the documents what he thought must have happened. But he had a significant, and I am sure unconscious, bias towards the interests of the Oyston Side.
Thus, when giving his understanding of some of the draft contractual documents passing between the Oyston and the Belokon sides, Mr. Dempsey was dogmatic in suggesting a meaning that would not be the interpretation of the reasonable bystander. His construction of the provisions of a draft of the Subscription Agreement dealing with the respective roles of Mr. Karl Oyston and Mr. Belokon, whilst I am sure honestly held, was (i) not the meaning I consider a reasonable bystander would attach to it, (ii) one that favoured the Respondents’ contentions and (iii) not necessarily the view that the Oyston Side’s counterparties would have had:[15]
Q (Mr. Green, Q.C.)
So, did these clauses then have nothing to do with the right to management as per your paragraph 14 of your statement?[16]
A (Mr. Dempsey)
Effectively it – that was preserving the existing position that Karl Oyston was running the football club and Mr. Belokon would help out by trying to sort out some overseas players.
Q (Mr. Green, Q.C.)
So your reading of clauses 5 and 6 is that they made clear, did they, that Karl Oyston was in fact taking a very much more dominant role in the management of the club going forward if this agreement was signed?
A (Mr. Dempsey)
When you say taking over – he has always had a dominant role in the management. At this stage, he was managing it, and this wasn’t intended to disturb it.
Q (Mr. Green, Q.C.)
So you are suggesting that the wording of clause 6 makes it clear that Karl Oyston was going to continue managing all aspects of the UK operations and Mr. Belokon would have no right to do so?
A (Mr. Dempsey)
Q (Mr. Green, Q.C.)
Mr. Dempsey, that’s a somewhat unreal reading of paragraphs 5 and 6?
A (Mr. Dempsey)
I drafted it, so I know what it was intended to cover.
Q (Mr. Green, Q.C.)
I see.
Q (Marcus Smith J.)
But if you were an outsider, a reasonable person reading it, would you accept that that person might read it rather differently?
A (Mr. Dempsey)
We were all in the room at the time. Mr. Belokon’s representatives were there. We knew what the situation was on the ground and how the business operated, and it wasn’t intended that that would change.
Similarly, Mr. Dempsey’s evidence regarding the interrelationship between the Subscription Agreement and the two Vlada Loan Agreements was overly protective of the Oyston Side. Whilst, in cross-examination, Mr. Dempsey had to concede that the two Vlada Loan Agreements could not be self-standing transactions, he was unwilling to accept the consequence of this, namely that they were part of a wider transaction.[17]
iii)               Mr. Cherry. Mr. Cherry gave a single witness statement first made on 24 February 2017 and amended on 6 April 2017 (“Cherry 1”). He gave evidence on 21 and 22 June 2017 (Days 8 and 9 of the trial). Perfectly understandably, he had no self-standing recollection of events, and essentially confined himself to commenting on documents that must have passed before him. I make no criticism of this.
As I have noted, Mr. Cherry was the auditor of Blackpool FC (and other Oyston Group companies, including Segesta). As such, it was incumbent upon him to maintain a degree of independence from the companies he was auditing. At least so far as Blackpool FC was concerned, I consider that such independence was lacking. Mr. Cherry acted as an advisor to the Oyston side in respect of transactions materially affecting Blackpool FC. No auditor, properly having regard to his responsibilities, should have placed himself in this position. In cross-examination, Mr. Cherry accepted that he had provided general tax advice relating to Blackpool FC to the Oyston Side and without the participation of the Belokon Side:[18]
Q (Mr. Green, Q.C.)
Since 2006, your work for the Oyston companies has involved you advising Owen Oyston in private meetings to which VBFA and its directors on the board of Blackpool Football Club were not privy, hasn’t it?
A (Mr. Cherry)
From time-to-time, I would attend various meetings at Mr. Oyston’s request, yes you’re right.
Although Mr. Cherry maintained that he did not accept instructions which he felt might conflict with his role as auditor,[19] and that his firm had systems in place (including “hot” and “cold” reviews of audit files) to maintain standards, I consider that his participation in a number of the dealings described further in Section C to have been inconsistent with his position as auditor, namely:
  1. a)His advice regarding the Oyston Side’s control of Blackpool FC (Section C(26)).
  2. b)His advice given regarding the Protoplan payment (Section C(30)).
  3. c)His intervention in the drafting of the meeting notes and, indeed, his participation in the meeting itself, on 17 December 2010 (Section C(33)).
  4. d)His presence at the tax meeting on 27 July 2011 (Section C(42)).
Obviously, the fact that the auditor of Blackpool FC was effectively “in the pocket” of the Oyston side is something that I will bear in mind when considering the allegations made in the Petition. For the purposes of evaluating Mr. Cherry’s evidence, it seems to me that I can place little weight on his explanations of the transactions in which he participated, to the extent that explanation purports to be given by an auditor. These views are not entitled to the weight that would normally attach to the opinion of an auditor.
  1. iv) Dyer. Mr. Dyer gave a single witness statement dated 9 March 2017 (“Dyer 1”). He gave evidence on 22 and 23 June 2017 (Days 9 and 10 of the trial). On the whole, Mr. Dyer was a straightforward witness, but again he showed a propensity to tow the Oyston Side’s line, for instance in his assertions that there was no intention to allow the Belokon Side to acquire more than a 20% shareholding,[20] and in his suggestion that there was nothing odd in communications relating to Blackpool FC going only to the Oyston Side, and not to the Belokon Side. The following exchange relates to an email dated 15 April 2011 (considered further at paragraph 221 below), which was sent to “everyone”:[21]
Q (Mr. Campbell)
Did it not surprise you at the time, as the financial controller, that this email was copied to Mr. Cherry, the club’s auditor, Mr. Belton, who had nothing to do with the club except that he was personal adviser to Mr. Oyston, but wasn’t copied to the club’s finance director [Mr. Malnacs]?
A (Mr. Dyer)
Yes, it’s not actually to the board of Blackpool Football Club, though, is it. It’s actually to chairman’s office, Ian Cherry, Howard Belton and Karl [Oyston], and I have just been copied into it.
Q (Mr. Campbell)
That’s rather my point, Mr. Dyer. Isn’t it odd that an email which is about the interrelated transaction between [Blackpool FC], Segesta and Owen Oyston, isn’t copied to the man who the Respondents are keen to emphasise was at the time the club’s finance director?
A (Mr. Dyer)
I think the point I was trying to make was that would be a matter for the Blackpool Football Club board, so that would have been a matter for the chairman to circulate it then on to the directors or discuss it with the directors.
Q (Mr. Campbell)
You were the company secretary, Mr. Dyer, weren’t you?
A (Mr. Dyer)
I was.
  1. The fact is that the evidence of Messrs. Belton, Cherry, Dempsey and Dyer reflected their position as long-standing and loyal advisers to the Oyston Side, and I consider their evidence in that light. 
  2. During the course of their cross-examination, Mr. Owen Oyston and Mr. Karl Oyston both sought to suggest that they – Owen and Karl Oyston – were not the key decision-makers in regard to Blackpool FC, but that they merely acted in accordance with advice given to them.[22] In this way, they sought to distance themselves from the corporate actions of the Oyston Group.
  3. I do not find this plausible and I do not accept this evidence. In the ordinary course, it is not advisers who determine what happens. They provide advice for the decision-maker and, having given that advice, if instructed to take certain steps by the decision-maker, they do so. That, I consider, is how the Oyston Side operated. The documents that I have seen, and the evidence that I have heard, bear out the fact that it was Mr. Owen Oyston and Mr. Karl Oyston – and not their team – who effectively ran the show.
  4. Both Mr. Owen Oyston and Mr. Karl Oyston showed themselves as decisive people who knew their own minds:
  5. i) Karl Oyston. Mr. Karl Oyston gave a single witness statement dated 9 March 2017 (“KO 1”). He gave evidence on 23 and 26 June 2017 (Days 10 and 11 of the trial). He was an argumentative witness, who gave speeches rather than answering questions. I found him generally incapable of answering a question straightforwardly. He had a marked tendency, not to give evidence, but to advocate. This was not aided by the fact that his actual recollection of events was extremely poor. Although, therefore, I consider that he sought to tell the truth as he saw it, he was an unimpressive witness, and I cannot place very much weight on his evidence. As a person, Mr. Karl Oyston seemed to me to be a forceful character, capable of firm and probably harsh leadership. When crossed, he could react badly and be quite rude, as his documentary exchanges with Mr. Malnacs show. Fundamentally, however, it was not he, but his father, who set the strategic direction for Blackpool FC (and, indeed, for the Oyston Group as a whole), with Mr. Karl Oyston implementing the strategy determined upon by Mr. Owen Oyston. To this extent, Mr. Karl Oyston was subordinate.
  6. ii) Owen Oyston. Mr. Owen Oyston gave a single witness statement dated 9 March 2017 (“OJO 1”). He gave evidence on 28, 29 and 30 June 2017 (Days 12 to 14 of the trial). Mr. Owen Oyston is a successful businessman and a devoted fan of Blackpool FC. I accept that, over the years, he has put a great deal of his time and money into Blackpool FC, to the club’s very considerable benefit. Mr. Owen Oyston is capable of great charm, which he is perfectly capable of deploying to secure his own ends. He was an extremely courteous witness. Like Mr. Karl Oyston, his evidence to me contained substantial elements of advocacy, and many of his answers to Mr. Green Q.C.’s questions were long and basically unresponsive to the question being posed. Mr. Oyston also showed a capacity for embellishing his evidence with detail which appeared nowhere in his witness statement. I am quite sceptical as to the evidential worth of such embellishment. As with Mr. Karl Oyston, I am prepared to accept that Mr. Owen Oyston was doing his best to assist the court. As a rule of thumb, however, recollection does not improve over time, but is rather degraded as a witness tries, iteratively, to work out what his recollection actually is. I consider that Mr. Owen Oyston’s memory suffered in this way.[23]