Dunfermline Athletic

Board Statement on behalf of Dunfermline Athletic Football Club

Thursday, 4th Dec 2014

Pitreavie Playing Fields

Dunfermline Athletic Football Club Ltd (“DAFC”) has received confirmation from Fife Council that its lease from Fife Council of the land and buildings at Pitreavie Playing Fields (“Pitreavie”) has been terminated.

Background

The lease was originally entered into in 2002 between Fife Council and Vida Sports Ltd and was for a period of 60 years. The tenant’s interest in the lease was subsequently acquired by DAFC.

With effect from 22 September 2006, DAFC sublet virtually the whole of the premises at Pitreavie to The Pars Trust (a company which was, at that time, linked with DAFC) under a lease which more or less mirrored the terms of DAFC’s headlease from Fife Council. The sublease ran until 21 September 2011 and was thereafter renewed by tacit relocation.

On 15 October 2013, Pars United CIC (“PU”) acquired 94.6% of DAFC. During the negotiations for that acquisition, PU had initially stipulated that its offer was conditional on DAFC’s having terminated that lease, as PU was concerned that the lease of the premises would be an unwelcome diversion from the primary aim of DAFC, being the running of a football club, and considered that the Fife Council was better placed to ensure that the facilities at Pitreavie could properly be enjoyed by the local community.

Unfortunately, despite Fife Council’s willingness to take back vacant possession of Pitreavie, it proved impossible for DAFC to renounce the lease to Fife Council as the lease was subject to a security which had been granted by DAFC in favour of the Charlestown Holdings Limited Small Self-administered Pension Scheme (“the SSAS”).

Faced with the alternative of DAFC’s being liquidated, PU concluded the acquisition of DAFC even though the lease was still in place. Since then, DAFC has been trying to bring its tenancy of Pitreavie to an end.

On 7 January 2014, DAFC gave formal notice to The Pars Trust that the sublease in favour of The Pars Trust would terminate on 21 September 2014.

Subsequently, DAFC gave notice to The Pars Trust that the sublease was to be terminated earlier as a result of non-payment of rent.

Notwithstanding these notices, The Pars Trust did not vacate the premises and continued to occupy Pitreavie.

Recent Events

The combined effect of the arrangements described above created an untenable position for DAFC.

DAFC was faced with having to go to court to remove the former subtenant. On removing the former subtenant, DAFC would become the tenant of Pitreavie and responsible for maintaining the whole area. The existence of the security in favour of the SSAS effectively prevented DAFC from transferring the lease to a third party or renouncing the lease to Fife Council.
Furthermore, DAFC was unable to influence whether, and if so when, the SSAS might exercise its right to take possession of the lease.

In an attempt to break this impasse, DAFC entered into discussions with representatives of The Pars Trust and the SSAS with a view to bringing about the situation whereby the SSAS would take possession of the lease and DAFC would enter into a commercial arrangement which would mean that DAFC could continue to use Pitreavie for training its various teams. Unfortunately, those discussions made slow progress and there was a considerable gulf between the parties on the commercial terms which should apply to DAFC’s right to train at Pitreavie.

Those discussions also involved the question of sums due from The Pars Trust to DAFC. Although it was agreed that The Pars Trust does, indeed, owe money to DAFC, the precise quantum of that debt is not yet agreed. The calculation of the debt due is made complicated by the fact that there are various services provided by one party to the other whose costs have to be ascertained.

When it became clear that a commercial deal involving DAFC, The Pars Trust and the SSAS was very unlikely, DAFC intimated to Fife Council that it could no longer pay the rent due under the lease on that basis. This was prompted by DAFC’s reluctance to continue as tenant against such an uncertain background and the fact that DAFC had not received any rent from The Pars Trust, its subtenant and now the occupier of the premises.

As a result of DAFC’s failure to pay the rent, Fife Council exercised its right to terminate the lease. DAFC understands that the SSAS was informed of that termination process by Fife Council and that the SSAS then made payment of the outstanding rent due from DAFC to Fife Council.

As a result of that, the SSAS effectively entered into possession of the headlease and the lease between Fife Council and DAFC came to an end. DAFC now has no legal rights over, obligations in respect of, or interest in, the premises at Pitreavie.

The Board of DAFC are delighted at this outcome. Contingency plans had been made for there to be alternative arrangements for suitable training facilities and those plans will immediately be implemented. The Board would like to put on record its thanks to those, including our solicitors DLA Piper, who have assisted the club in bringing this complex matter to a favourable conclusion.

The Pars Supporters’ Trust (PST) would like to clarify, for the avoidance of doubt, that it is in no way connected with the organisation of a similar name – The Pars Trust.
The PST would like to take this opportunity to express its support for the Board of DAFC in this regard and thank those involved in resolving this matter.



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