England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE BIRMINGHAM COUNTY COURT
(HIS HONOUR JUDGE NICHOLL)

		Royal Courts of Justice Strand London WC2A 2LL
		17 January 2002

1. LORD JUSTICE THORPE: I will ask Lord Justice Buxton to give the first judgment.
2. LORD JUSTICE BUXTON: This is an appeal from a decision of His Honour Judge Nicholl, in an action in the Birmingham County Court which was decided in February 2001. The background and the arguments before this court were unusual in nature.
3. Before the judge, the defendant (now the appellant), Mr Bayliss, did not give evidence. The only evidence that the judge heard was from the claimant, Mr De Crittenden. Not only was that the only evidence available to the judge, but he positively found that Mr De Crittenden's evidence was reliable. It was on that basis that the judge made findings in respect of the background, and also to the terms and nature, of that agreement. Mr Bayliss is not a man in his first youth, nor a person in the best of health. He was, however, interested in trading activity both in this country and, more particularly, abroad. He entered into what appears to have been an informal arrangement with Mr Crittenden whereby, amongst other things, Mr De Crittenden would play an active part in overseas activities in various countries, of an ordinary commercial nature. For instance, there was a project relating to shipping steel to Hong Kong from Turkey, whereby Mr De Crittenden travelled to Sofia and conducted various negotiations. The broad arrangement was that it was Mr De Crittenden who would be the traveller/contact man (although Mr Bayliss was not excluded from that role), and Mr Bayliss would finance Mr De Crittenden's travelling and general expenses. They would share the proceeds of the project equally.
4. However, it came to Mr De Crittenden's attention that Mr Bayliss was engaged in litigation, which for the purposes of identification only I will describe as the Lloyd's litigation, the outcome of which, if he were unsuccessful, could be extremely damaging to Mr Bayliss' financial position. Mr De Crittenden was concerned about that because Mr Bayliss' continuing financial prosperity was an important element in Mr De Crittenden's future in the joint venture. He was also, as the judge records, a person who did not have a high opinion of the legal profession and the way it conducted litigation. He thought that Mr Bayliss required further assistance.
5. It was therefore agreed between them, it would appear entirely informally, that Mr De Crittenden would give Mr Bayliss assistance in the conduct of that litigation and that the proceeds of the litigation, whatever it was that Mr Bayliss in the event recovered, would be shared between them on the same basis as their other joint ventures, on a 50/50 basis. That was agreed in or about 1993.
6. In circumstances to which I shall return, Mr Bayliss and Mr De Crittenden fell out in about September or October 1995 and Mr De Crittenden withdrew from the joint venture agreements. The effect of that withdrawal is again something that to which I will have to return. It was agreed that he would continue to assist in the Lloyd's litigation on the same basis of a 50/50 division of the proceeds. It was that agreement that was litigated before Judge Nicholl.
7. There were various factual disputes between the parties, but they were resolved by the learned judge in his judgment. No appeal is brought, or could be brought, against any part of that. The only live defence as to why Mr Bayliss should not pay Mr De Crittenden the substantial sums that, according to the terms of the agreement, the judge found to be owed, was the claim that the agreement that was sued on had been champertous or otherwise contrary to public policy. It is that question with which this appeal is concerned.
8. In a detailed and careful judgment the judge set out what he conceived to be the current state of the law with regard to champerty. He adopted the statement of Lord Mustill in the case of Giles v Thompson [1994] 1 AC 162 at page 164. Lord Mustill said that all aspects of the transactions should be taken together, and looked at as a whole, in order to answer what was the single and only question for a court facing the champerty argument, that is:

"Whether there had been wanton and officious intermeddling with the disputes of others, in which the meddler has no interest whatsoever, and where the assistance he renders to one or the other party, is without justification or excuse."

9. The judge held that the transaction that had been entered into in 1995, when Mr De Crittenden simply assisted with the litigation and no more, had been a variation of the original agreement and not a new agreement. He expressed the view that, if it had been a new agreement and if it had been entered into without there being any of the background of the previous relations between Mr De Crittenden and Mr Bayliss, it would have been champertous because Mr De Crittenden would simply have been meddling in a matter that was none of his business.
10. The judge did not, however, take that view of what had actually occurred. He mentioned that the point of departure of the variation to the agreement had been a failure on the part of Mr Bayliss to meet obligations under the original joint venture agreement, in particular causing Mr De Crittenden to travel to Beirut at a time when that country was not considered safe and then, as the judge found on Mr De Crittenden's evidence, leaving him isolated there without remunerating him for the cost of his return air ticket.
11. The judge looked at what happened thereafter in the context of the previous arrangements between the two men. He said in paragraph 64 of his judgment, having referred to the problem about the visit to Beirut and how it nearly brought the whole business association to an end:

"[Mr Bayliss] would have been left to conduct the litigation on his own. Mr De Crittenden would have been unpaid for all the work he had done in the previous two to two and a half years, when I am quite satisfied he had saved Mr Bayliss and his companies from extinction, and probably, in Mr Bayliss' case, bankruptcy as well.

65. One therefore has to consider whether he had a proper interest in continuing. Mr De Crittenden would, in those circumstances, have been unpaid. Mr Bayliss, I am quite satisfied, would have been quite incapable of continuing with the action to achieve anything like the relatively successful outcome which Mr De Crittenden achieved for him, with very little assistance from Mr Bayliss.

66. Accordingly, it seems to me that, looking at the situation in the round, which a view to ensuring public justice is done, again the answer can only be one way; that this agreement, though, had it been entered into at that stage purely on those terms, would have been champertous, was not in the circumstances."

12. In my judgement, and subject to one particular argument to which I shall return, it was entirely open to the judge to make that broad assessment of the reality of the case, and the nature of Mr De Crittenden's involvement in it, such as is called for in the light of the guidance given by Lord Mustill in Giles v Thompson.
13. The arguments that are put against that by Mr Mason in his vigorous and clear submissions to this court are:

(1) He says that Mr De Crittenden's removal from the joint ventures in 1995 meant that he had no further interest in those ventures, therefore he had no interest in an agreement that was in part designed to give him the opportunity of recovering in respect of his rights under the joint ventures. That conclusion is contradicted by what the judge actually found. First, the judge made no finding that that was the nature of the variation in 1995. Secondly, it would have been entirely inconsistent with such a finding for the judge to have gone on to hold in a careful judgment that Mr De Crittenden had an interest in recovering in respect of his past two and a half years' work. The judge found, and there is no reason to think that he was wrong in so finding, that Mr De Crittenden would properly have been remunerated for any of the joint ventures. That point therefore does not run.

(2) More forcefully, and this is the point which is the only point which has caused me difficulty in this case, it was argued that the work that Mr De Crittenden did in supporting Mr Bayliss (work that, as we have seen the judge found that Mr Bayliss could not have done for himself) was "solicitor's work". By that it was meant that it was work that commonly, in the course of litigation, is done by a solicitor or at least by a clerk under his supervision. For instance, although we do not have it in detail, Mr De Crittenden instructed, or gave a lot of assistance to, an accountancy expert who was instructed on behalf of Mr Bayliss, and served as a conduit between Mr Bayliss and the solicitors in giving instructions as to what had happened and in giving detailed information about the nature of the transactions that led to the Lloyd's litigation. Mr Mason argues that if a solicitor had undertaken such work, he could not claim to be remunerated for it on the basis that Mr De Crittenden now claims. He would be prevented from so doing by the Solicitors' Rules. We were shown the case in this court of Awwad v Geraghty [2001] QB 570 in which that was clearly held. Mr Mason says two things. First, that ought to weigh with the court in considering, in connection with the law of champerty, whether the agreement into which Mr Crittenden entered was justifiable. Secondly, as a separate argument, that raises questions of whether this agreement was contrary to public policy in the way that it would be if entered into by a solicitor. It is fair to say that the second of those arguments, although found in the original pleadings (at least in very outline form) is difficult to distill from the grounds of appeal before this court. I will, nonetheless, consider it, and not reject it on the basis of pleading or documentation.

14. The first of those two arguments, that this in some way impacts on the law of champerty, seems to me not to be correct. The question in champerty is that which Lord Mustill indicated, what was the nature of the interest, if any, of the claimant in the litigation? The structure whereby he is remunerated does not affect that question unless it demonstrates (and in this case as I have already indicated it does not) that there is no legitimate interest in the subject matter.
15. So far as the second point is concerned, however, whether there is a breach of public policy in this case, I am satisfied that that argument cannot be sustained for two reasons. First, although some of what Mr De Crittenden did could be described as "solicitors work", none of it was work that was peculiar to a solicitor, nor work that a client himself might not very well undertake with, no doubt, the advice and instructions of a solicitor in preparing his own case. That Mr Bayliss was not able to do that himself but asked Mr De Crittenden to do it, does not transform the work into the work of a solicitor.
16. Secondly, the reason why there are particular rules governing solicitors, and the reason why (as Steyn LJ said in the case of Giles in this court, a judgment upheld in the House of Lords) solicitors' obligations have crystallised into particular rules, is because solicitors are seen as having a particular position; that is, that they have control of the litigation. They are officers of the court and they are the person with whom the client deals and upon whom he is dependent. It is understandable that particular rules apply to them. The same rules cannot be translated in one fell swoop into the position of a layman who is simply giving the client assistance of the sort Mr De Crittenden advanced.
17. So far as public policy is concerned, I would emphasise that another important factor in this case is that the litigation was actually being conducted by a solicitor. The "intervention", if it can be described as such, by a layman, was therefore was always subject to the control of a solicitor. The interest that the rule of champerty exists to protect (the individual interest) is that of the opposite party: see Steyn LJ in Giles v Thompson [1993] 3 All ER 321 at page 336A. In this present case that was assured by the judgement of the solicitor who was actually conducting the action. Had the circumstances been different, and had Mr Bayliss been a litigant in person and had Mr De Crittenden taken over the action on his behalf as some sort of Mackenzie friend, much graver and more difficult questions would have arisen. In those circumstances, I would have wished to consider very carefully whether it was right, or whether there were dangers to the public interest as well as to the other side, in a Mackenzie friend being invited in the terms that Mr De Crittenden was, whatever may have been the background of that agreement. In the present case, Mr De Crittenden's assistance, although clearly extensive, does not seem to me to pass into that category. I therefore do not think that putting the matter on a quite separate basis of public interest as opposed to champerty suffices to say that this agreement should not be enforced according to its terms.
18. I should mention one final point, which was not mentioned in Mr Mason's oral submissions although it played some part in his written submissions. There was at some stage legal aid involved in this case. A question was said to arise as to whether the sort of arrangement that was made with Mr De Crittenden was proper in a case that was legally aided. No findings were made on that matter by the judge and it does not affect the champerty question. It would simply be a question of the legal aid authorities concerning themselves in the matter, a step they thought it not necessary to take.
19. For those reasons, therefore, I would dismiss this appeal.
20. LORD JUSTICE THORPE: I agree that this appeal should be dismissed for all the reasons given by my Lord.
Order: Appeal dismissed. Appellant to pay respondent's costs of the appeal. Legal Services Commission funding assessment of both parties' costs.