Royle loses Manchester City pay-off after court reverse

The Ipswich manager Joe Royle was ordered yesterday to repay the £423,000 compensation he was awarded after he was sacked as Manchester City manager in 2001.

The 55-year-old sued City when he received only a fraction of the package he claimed he was due after losing his job.

Royle was paid only £150,000, less tax and national insurance, based on what his salary would have been had he continued with the club after relegation from the top flight. His compensation was awarded at the High Court in Liverpool last July when it was held that, on a strict interpretation of his contract, City were still in the Premiership at the time of his dismissal.

City have successfully appealed, with the Court of Appeal in London overturning the award and ordering Royle to pay costs of more than £80,000.

The club had urged the appeal judges to reflect the reality of the circumstances at the time of Royle's departure in May 2001, involving City's relegation from the Premiership as soon as the team's last match was played.

City officials asked the judges to rule that Royle was not entitled to be compensated on a full salary basis as though the club were still in the Premiership.

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 that, whether the club were about to be or had just been relegated, City had inevitably lost their top-flight status and the manager, but for his dismissal, would have been on a lower rate of pay.

Royle was refused leave to appeal to the House of Lords against today's judgment, although he can still petition the Law Lords for leave.

City said in a statement: "We are very pleased with this outcome. Mr 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."

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.

"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. I don't have any regrets."