Town boss loses £500,000 damages fight

By Jonathan BarnesIPSWICH Town manager Joe Royle has pledged to continue his fight for compensation from former club Manchester City after he was told to repay more than £400,000 in damages.

By Jonathan Barnes

IPSWICH Town manager Joe Royle has pledged to continue his fight for compensation from former club Manchester City after he was told to repay more than £400,000 in damages.

The Court of Appeal overturned yesterday the £423,000 award that Royle received from the High Court last July after his sacking as City boss in May 2001.

Royle, 55, was also ordered to pay more than £80,000 costs yesterday by the three Appeal Court judges.


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Following the case, the Ipswich Town manager said: “I don't want to become embroiled in a war of words and the final line is this is going to the House of Lords.”

Manchester City had urged the judges to recognise they had effectively been relegated from the Premiership as soon as they played their last match in the 2000-1 season.

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They asked the Appeal Court in London to rule that Royle was not entitled to be compensated on a full salary basis as though the club was still in the top flight.

Royle argued that the club were not actually sent down to the First Division until some time later, when the three relegated clubs handed over their Premiership company shares to the three promoted teams.

But Lady Justice Smith said yesterday whether the club was about to be or had just been relegated, it was inevitably going to play in the First Division in the following season and the manager, but for his dismissal, would have been on a lower rate of pay.

Royle, a former Manchester City player, sued the club when he received only a fraction of the package that he claimed he was due after being sacked.

He was paid £150,000, less tax and national insurance, based on what his salary would have been had he stayed with the club in the First Division.

Royle's compensation for breach of contract was awarded at the High Court in Liverpool when it was held that, on a strict interpretation of his contract, Manchester City were still in the Premier League at the time of his dismissal.

He was refused leave to appeal to the House of Lords against yesterday's judgment, although he can still petition the law lords for leave.

Lady Justice Smith, sitting with Lords Justices Sedley and Gage, said she was satisfied that, at the time the contract was signed, it was intended to compensate the manager in the event of premature dismissal for the loss of the earnings he would have received but for that dismissal.

In the Court of Appeal's judgment, Lord Justice Sedley said the club initially believed that a share transfer was necessary if they were to be able to pay off Royle at the lower rate and it had not been carried out when he was dismissed.

But “although this might be embarrassing for the club”, it could not affect the true meaning of the contract, the judge said.

Commenting on the judgment, Royle said: “I am pleased the behaviour of the club has been criticised.

“When I was given the money after the earlier case, City suggested it go to charity, so I assume they will adhere to their own suggestion.”

He added: “I don't have any regrets about the way this has gone because the legal system is there to be used.”

Manchester City, now back in the Premiership, said in a statement: “We are very pleased with this positive outcome.

“Joe Royle was properly compensated by the club at the time of his dismissal following our relegation from the Premier League in 2001. We wish him well for the future.”

jonathan.barnes@eadt.co.uk

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