England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM STAINES COUNTY COURT
(HIS HONOUR JUDGE MICHAEL COOK)

		Royal Courts of Justice Strand London WC2 Tuesday, 16th April 2002

Tuesday, 16th April 2002

1. LORD JUSTICE THORPE: My Lord will give the first judgment.
2. LORD JUSTICE BUXTON: Despite the fact that this appeal is entituled as being between Mr Stephen Robert Jones (who sues as a representative claimant) and two defendants, Twinsectra Limited and Barclays Bank Plc, the latter two persons play no part in this appeal.
3. The original claim was made by Mr Jones and others on behalf of some 26 residents of buildings at Tudor Court, Elton, Middlesex, to obtain the freehold of their premises under either Part I of the Landlord and Tenant Act 1987 or the Leasehold Reform Act 1967. After what appeared, from the little we know of it, to have been some fairly complex litigation, those proceedings were eventually successful, with the result that the claimant as trustee became entitled to call for the transfer of the freehold in the properties. The solicitor who acted throughout for the claimants was a Mr Kennedy, and he sought to recover his fees from the persons who had benefited in the action and to whom I will hereafter refer as "the clients".
4. This appeal from a decision of His Honour Judge Michael Cooke in the Staines County Court is in regard to Mr Kennedy's costs. The appeal does not concern either the amount of those costs or the process of their taxation, but merely whether that taxation should take place in the Staines County Court or in the Supreme Court Taxing Office. That is an issue that has been strongly contested between Mr Kennedy on the one part, and his clients on the other.
5. Mr Kennedy commenced his process of recovery by an application in the Staines County Court for a charging order upon the properties that had been recovered as a result of his efforts. That application was made under section 73 of the Solicitors Act 1974 which, because it plays a large part in this appeal, I shall set out:

"(1) Subject to subsection (2) [which does not arise in this case], any court in which a solicitor has been employed to prosecute or defend any suit, matter or proceedings may at any time -

(a) declare the solicitor entitled to a charge on any property recovered or preserved through his instrumentality for his taxed costs in relation to that suit, matter or proceeding; and

(b) make such orders for the taxation of those costs and for raising money to pay or for paying them out of the property recovered or preserved as the court thinks fit..."

6. There is a further provision, again not arising here, as to conveyances made to defeat such charge being void.
7. That application was backed by a witness statement from Mr Kennedy. On 4th May 2000 an order was made on an application without notice to District Judge Dimmick. The order reads as follows:

"It is declared that J E Kennedy & Co as the solicitors acting for the claimant in this suit are entitled to a charge upon the claimants' freehold interest in the premise 1-4B inclusive Tudor Court, 8-12 inclusive Tudor Court and 1-7 inclusive Tudor House Hanworth Park Feltham Middlesex for their taxed costs, charges and expenses properly incurred.

It is ordered that the said solicitors costs be assessed by this Court and matter be listed for 11am on Tuesday 27th June 2000, when directions shall be given in the matter and in respect of the assessment."

8. The claim for costs that Mr Kennedy made was for the balance unpaid on his then bills. As will have been seen, the order sought by Mr Kennedy and made by the district judge was that those costs should be assessed in the Staines County Court. Thereafter, however, a question arose as to where in fact costs should be taxed.
9. On 26th September 2000 those by that time representing the clients proposed that the taxation should take place in what they describe as the Royal Courts of Justice, meaning thereby the Central Taxing Office. The clients' solicitors furnished draft directions in anticipation of a hearing on 28th September, in which various directions were suggested as to the delivering of cash accounts and other books and papers to their draftsman, and provided that the matter should be remitted thereupon to the Central Office for detailed assessment by a costs officer acting in that jurisdiction.
10. Mr Kennedy objected to that proposal in a letter that he sent the next day to the clients' solicitors. First, in his view the district judge in the county court was perfectly well able to deal with the assessment of the bills; second, there would be delay caused by the remission of the matter to the Central Office. The clients' solicitor replied on that very same day in a lengthy letter dealing mainly with disputes that unfortunately seem to have existed about what documents should be produced and what should not, but then dealt with the question of "transfer to Royal Courts of Justice". He explained that although the matter had not been dealt with previously between the parties it had been considered amongst the clients themselves. He said this:

"Clearly, the costs in issue in this matter amount to over £70,000. It is clear from even my limited involvement that the matter not only relates to a significant sum of money but is also of a particular complexity."

11. He went on to say that he regretted that he could not take the same view of the respective experience of the district judges and of the taxing masters in the High Court, and ended as follows:

"I have excluded reference to the RCJ from the Directions at this stage, although I reserve the right to make an application (hopefully with your consent) at a later stage."

12. The draft directions went forward to the district judge with a view to a consent order being made, omitting that part of them that had sought to alter the earlier order of District Judge Dimmick and to transfer the matter to the High Court. A consent order was signed by both solicitors on 28th September 2000 which said nothing about assessment in the central office, and so the assessment stayed in the county court. On 1st November 2000 District Judge Freeman made an order in those terms and also an order requiring certain steps to be taken by consent between the parties, including the filing of various documents and the exchange of points of dispute. That order said that either party might apply for a detailed assessment appointment provided the application was made by 4th January 2001. No such application was made and therefore the parties were informed that the detailed assessment would take place on 26th March 2001 in the Staines County Court. Still there was no application to return to the Central Office.
13. However, on 21st February 2001 the clients did apply for the detailed assessment to be transferred to the Central Office at the Royal Courts of Justice. In that application they pointed out, as they already had done so in correspondence, the total amount sought was £70,000, and that each of the three bills in respect of which the order had been made for detailed assessment exceeded £5,000 in claimed value. They alleged that the matter was too complex by reason of the taxation problems and the background of the case to warrant a taxation in the county court, and that in any event the county court did not have jurisdiction to entertain the taxation.
14. That complaint as to jurisdiction is the central issue in this appeal. It arises from the terms of section 69(3) of the Solicitors Act 1974. That section is headed "Action to recover solicitor's costs". Subsection (1) limits the bringing of such an action to a period after one month has expired from the date upon which the bill of cost has been delivered, and says that a necessary precursor to such an action is the delivery of a signed bill as required in section 69(2). Details are given for the delivery of that bill. Then section 69(3), upon which the clients relied and rely, reads as follows:

"Where a bill of costs relates wholly or partly to contentious business done in a county court and the amount of the bill does not exceed £5,000, the powers and duties of the High Court under this section and sections 70 and 71 in relation to that bill may be exercised and performed by any county court in which any part of the business was done."

15. Sections 70 and 71 in some part laid down detailed provisions as to the procedure for taxation on the application of either the party chargeable or the solicitor or, where applicable, third parties.
16. That application was heard by Deputy District Judge Beith on 8th March 2000 and he dismissed it. On the question of jurisdiction he accepted the submissions of counsel for Mr Kennedy that the jurisdiction to tax the bill in the county court was available - I emphasise these are not the words the deputy district judge used - under a freestanding power as set out in section 73, and was not affected by the jurisdictional limit in section 69(3). He also found that in his view the case was not one of complexity. The Deputy District Judge drew attention to the fact that in September 2000, when discussion took place as to the possibility of removal into the High Court, the claimants' solicitor, albeit expressing some reservations, had in fact consented to the order then made. On the account of his reasons (which I emphasise is only a note of his judgment) it is not clear what weight the deputy district judge gave to that latter point. It is a point that emerges in more detail later in the proceedings. So the matter went forward to what at that stage had been ordered to be a final assessment hearing in the county court.
17. Eventually an appeal against the deputy district judge's order came before His Honour Judge Michael Cook, pursuant to permission granted by him. He held, first, that there had not been an agreement to confer jurisdiction on the county court. He did not give detailed reasons for that conclusion, and it will be necessary to revert to it, but the upshot of that conclusion was that, as there had been no effective agreement to the contrary, the clients were not precluded from taking the jurisdiction point in front of the deputy district judge. He also held that there had been no jurisdiction on the part of the district judge or the county court to tax this bill. That was because the judge held that although the bill fell under section 73, which in its terms appeared to give the county court and the district judge power to make such order for the taxation of costs as they saw fit, it was in Judge Cook's view also subject to the restrictions imposed, in terms of as the judge thought of jurisdiction, by section 59(3) of the Solicitors Act: that being because the amount of the bills exceeded £5,000.
18. Judge Cook also disagreed with the deputy district judge concerning complexity, but only to the extent that he said he thought that the officers of the Supreme Court Costs Office were better able to deal with the complexities of this particular taxation. He was extremely brief on that point and he gave no reasons in any detail as to why he differed from the deputy district judge. It is fair to say, it has been pointed out to us, that the question of whether the deputy district judge had made a correct assessment of the discretionary issue of whether the bill in any event was suitable for taxation in the county court had not been raised in the notice of appeal from the deputy district judge to the circuit judge. It is quite clear that the essential basis of Judge Cook's decision was the question of jurisdiction, and the interplay between sections 69(3) and 73; and that is the main, though not the only, issue in this appeal.
19. I have reached a perhaps somewhat simplistic view on that question, which is that the judge was entirely right in finding as he did that a solicitor, by seeking a charging order under section 73, does not thereby effectively exempt himself from all the limitations and safeguards on a solicitors action for costs imposed by section 69, and following, of the Act. In my view it would be extremely surprising if that were so. Sections 69, 70 and 71 are a comparatively stringent code laid down step by step to ensure that a client, who to some extent may, in the general run of things, be in a disadvantageous position against his former legal adviser, has certain protections not available in the ordinary run of litigation. That is why section 69 is side-noted "Action to recover solicitors' costs". It is concerned with steps taken to recover those costs and with that particular form of action.
20. Section 73, the history of which I shall have to go into in a minute, does provide a solicitor with a particular and beneficial means of securing or attempting to secure that which he is owed. There is no suggestion in any of this that solicitors are not entitled to be properly paid for the work that they have done. But the fact that section 73 confers that ability to seek what is effectively a freestanding charging order on property that the solicitor has been successful in securing before the client does not, in my judgement, mean that it is intended thereby entirely to exclude the provisions of sections 69 and following. There may be cases in which when questions of taxation arise under sections 73 the particular provisions, or some of them, in sections 69 to 71 cannot in practice apply. In this case, for instance, the bill had been delivered a long time in the past and no application had in fact been made for there to be a taxation on the part of the client; and in those circumstances some of his rights under section 70 may have been lost by non-exercise. But that would not be the case if, as is entirely possible under the structure of the legislation, the bill had been delivered at the same time as the charging order was applied for. And there are provisions in the code, as I believe it to be, constituted by sections 69 to 71 that will always be applicable. The first is the requirement in section 69 as to the contents of the solicitor's bill. The second, and more immediately important in this appeal, is the requirement in section 69(3) that bills over £5,000 shall be taxed in the Supreme Court Costs Office and not in the county court. Those who drafted this legislation (which I would note in passing has not been changed or withdrawn even in the present climate of seeking to place more work in the county court) no doubt thought that there were good reasons why, in respect of bills over a certain level, the expert taxing officers in the High Court (who, it may be observed, spend their whole time and work taxing bills, as opposed to the district judges who have many other burdensome tasks quite apart from taxation) would be the proper people to perform a taxation. That, in my judgement, is a provision that is directed not merely at the distribution of business between the different levels of courts, but also as part of the structure imposed by Parliament upon this particular and delicate matter of recovery of solicitors' costs.
21. I am, therefore, wholly unpersuaded that section 69(3) disappears and is of no effect once a taxation is sought under a charging order. As I have said I see no rational reason for that, and indeed some strong reasons against it. If the solicitor is seeking the benefit of the charging order it is only right that he should bear the burden, and the client should have the benefit, of such provisions as are elsewhere in the Act provided in the interest of the client.
22. In his well-judged and persistent submissions to us on behalf of the solicitor, Mr Martin Young has raised a series of objections to that view, which I must now address.
23. First, he said that he would rely on what he described as the clear and plain language of section 73(1)(b), which provides:

"Make such orders for the taxation of those costs and for raising money to pay or the paying them out of the property recoverable preserved as the court thinks fit."

24. Although Mr Young did not press the point to this extent, to rely upon the literal wording "as the court thinks fit", proves very much far too much. If the words were read literally - and I emphasise Mr Young did not say they should be - they would seem even to extend the taxation of costs that had not been properly incurred, a proposition about which, in connection with the early days of this legislation, Sir George Jessel had something to say in Emden v Carte (1881) 19 Ch D 311 at p 316.
25. It is necessary also to read the whole phrase. The order that the court can make as it thinks fit is for:

"The taxation of those costs and for raising money to pay for those costs out of property recovered or preserved."

26. The overriding language of wide discretion, and the making of orders not otherwise provided for in the legal structure, seems to me to attach much more naturally to the recovery jurisdiction envisaged at the end of that phrase rather than to the costs jurisdiction. It is the recovery jurisdiction that should be emphasised, the making of the charging orders for purpose of recovery. That is what section 73 is all about. Taxation comes in because there has to be a taxation in order that the solicitor and the other parties may know the amount that is properly charged upon the property recovered.
27. Second, Mr Young pointed out that, in contradistinction to sections 70 and 71, section 73 is not specifically mentioned by way of exception or reference in section 69(3). There are several good reasons for that. The first is that the powers under section 73 are not necessarily powers of the High Court; they are to be exercised wherever the charging order is made: that is, in the jurisdiction in which the underlying proceedings took place. I thus cannot accept that anything can be drawn from the absence of section 73 from the references in section 69(3), but the wording and formulation of section 69(3) is, in my judgement, some indication in the opposite sense. It illustrates that when the county court is exercising its taxing function it exercises powers that are in the first instance seen as those of the High Court, but which in cases below a certain limit can be exercised by the county court. It seems to me, by contrast, that the argument of the appellants to the contrary requires it to be assumed that the county court has in some way its own freestanding taxation powers, conferred by section 73 and not related to the powers of the High Court.
28. Thirdly, in an interesting part of his argument, Mr Young took us to the legislative history. He told us - and I take it from him - that the present power had first been introduced by section 28 of the Attorney Solicitors and Properties Act 1860 that in its terms was not very different from those of the now section 73, but provided that the attorney or solicitor should have a charge on the payment for the tax costs and expenses of the suit and:

"...it shall be lawful for such Court or Judge to make such Order or Orders for Taxation of and for raising and Payment of such Costs... as to such Court or Judge shall appear just and proper..."

29. Now, we are handicapped in this investigation by nobody in the court being certain, despite a not insubstantial amount of research on both sides of the Bench, as to what the taxation powers, if any, were of the county courts when they were first founded in 1846 or when the Act we just referred to was passed in 1860. All that we know is that first, in the Solicitors Act 1932 was to be found in section 69 thereof, a provision virtually identical to the present section 73 and very close to the section 28 of the 1860 Act; and that in the County Court Act 1934 limited powers, not unlike those now to be found in the new section 69(3), were given for taxation, in particular in section 184(c) of that Act of 1934: the limit then being £100.
30. Mr Young said that this legislative history at least illustrated that the charging order power and the general taxation rules in the county court had proceeded, if you like, on parallel lines, certainly with no attempt to rationalise the two. That appears to be the case. But there can, of course, be two explanations of that. One is that it was consciously realised and intended that the specific power under the Solicitors Act should not be subject to the limitations introduced in the County Courts Act; or (which, in my judgement, is a great deal more likely) it was always assumed that taxation under the 1932 Act (as it then was) would be subject, insofar as it was appropriate, to the protections and limitations on taxation introduced in respect of the remuneration of solicitors in the County Courts Act 1934. Since we do not know whether those taxation provisions were first introduced in 1934 we cannot draw any conclusions other than those that I have just set out. If, however, it was the case that section 184(c) introduced for the first time a limited power on the part of a solicitor to have his bill taxed in the county court, then it would be very surprising indeed if that provision had given an unlimited power to a county court in charging cases if previously the only thing that the county court could have done in the charging case was to remit taxation to the High Court. I do not draw any conclusions from those latter speculations, because speculation they must be, in the absence of further information in respect of the taxing powers of the county court before 1934.
31. Fourth, Mr Young took us to the decision of Roxburgh J in Harris v Yarm [1960] 1 Ch 256. With the care, if I may say so, that characterised the whole of Mr Young's submissions, he did not claim - and in my judgement rightly did not claim - that this case was in any way conclusive on the particular issue in this appeal; but he did say that it was significant and that there were observations of importance. In that case solicitors took out a summons for a charging order under what was section 72 of the then Solicitors' Act (now section 73 of our present Act). The Master was not prepared, despite granting the summons, to order that costs should be taxed (that being on an application by the client in that case, not by the solicitor), because more than 12 months had expired since the delivery of the bill and therefore the client's ability to rely upon section 73 might seem to have expired. The question, however, resolved itself into an issue as to the appropriate time at which a section 72 application might be made. The learned judge said this:

"Though there is no authority on the point, there is nothing anywhere to suggest that section 72 is in any way subordinate to section 69. There is nothing in the Annual Practice nor in any of the reported cases to suggest that. The words 'at any time' were not in the Act of 1860 and were introduced in the Solicitors Act, 1932. In my view, they must mean what they say - at any time - provided that the right to recover the costs is not barred by any statute of limitations, and that operates both for and against solicitors...

I cannot see how section 69 could be paramount to section 72, because section 72 says that the court 'may make such orders for the taxation of the said costs', and those costs are the costs of the action. To say that the court may make orders for taxation of the costs of the action at any time, provided that the statute of limitations does not intervene, is quite inconsistent with the hypothesis that it cannot make them after 12 months 'except in special circumstances.'"

32. The issue in that case in my judgement, and as Roxburgh J emphasised, was as to the time at which a charging order could be applied for; and, once it was applied for, whether the other provisions of sections 70 and 71 followed with it. The judge emphasised the words "at any time", specifically introduced into the legislation in 1932, and he decided that they overrode any other objections taken on the basis of the wording of sections 69 to 72. But in that case there was a specific provision which the judge thought could be related to the terms of sections 70 and 71. That is not our case. There is no specific provision in section 73. The solicitor has to rely on the completely general wording "as he thinks fit". Further, it would be very odd if a provision specifically written into what is now section 73 to affect the date upon which the charging order could be sought was offset or controlled by the internal mechanics of the taxing process set out in section 70 and 71. The taxing process is a concomitant and necessary part of the application to the charging order, but it is only a secondary and concomitant part of it, and not the first or central aspect of the section 73 application. The legislature, clearly having decided that the application could be made at any time, Roxburgh J did not think that either that or the other limitations upon applications for taxation in section 70 could be overwritten by the timing provisions in section 70. I do not think, and Mr Young was, in my judgement, right not to think, that the judgment of Roxburgh J in any way concludes this matter. It turned upon a comparison of the particular provisions of these two sections.
33. I should also say that Roxburgh J not only decided the case on the basis I have just indicated, but decided that the point did not in any event arise because the "special circumstances" required for a taxation after 12 months under section 70 were present. In my judgement that did not make his observations on section 73 obiter. Rather, in the structure of his judgment the two ratios stood together as alternative grounds of decision.
34. On construction, therefore, and on the matter of jurisdiction, I find that the circuit judge was right in his conclusions for the reasons that I have sought to give, albeit at much greater length than he adopted.
35. Mr Young, however, had two further points. The first was that the order of District Judge Dimmick as long ago as 14th May 2000 was an order of the court and bound the parties; second, if that was not right, there could be construed out of the consent order an effective agreement to confer jurisdiction upon the county court whatever might be the statutory limitation that otherwise applies.
36. I take those in turn. First, I cannot agree that the order of District Judge Dimmick was conclusive. This is a question of jurisdiction. A court that takes jurisdiction on a mistaken basis cannot thereafter prevent the parties from applying for the matter to be put right. This is not a case like, for instance, that of Re Gale [1966] Ch 236, where there had been an order made that was not itself open to the court, but made within the exercise of a power and jurisdiction that was open to the court. In this case we are invited to look at the taxation as a separate exercise. The finding of the judge, which I would agree with, is that District Judge Dimmick had no power to enter upon that taxation at all. In any event, I would have been extremely reluctant to have found against the clients on the basis simply of District Judge Dimmick's order, bearing in mind that - and I say this not in any way critically - it was made on an application to him without notice. But that point does not arise because his order cannot in these circumstances oust the jurisdiction.
37. Second, the consent order amounted to or constituted an agreement to confer jurisdiction upon the county court. As I have already said it is not normally open to parties to make binding agreements, whether or not through the instrumentality of a consent order, that would oust the jurisdiction of a particular court. In order to make it possible for that to happen in connection with relations between the county court and the High Court a specific provision was necessary (now section 18 of the County Courts Act 1984), which reads as follows:

"Jurisdiction by agreement in certain actions

If the parties to any action, other than an action which, if commenced in the High Court, would have been assigned to the Chancery Division or to the Family Division or have involved the exercise of the High Court's Admiralty jurisdiction, agree, by a memorandum signed by them or by their respective legal representatives, that a county court specified in the memorandum shall have jurisdiction in the action, that court shall have jurisdiction to hear and determine the action accordingly."

38. It was contended that the effect of the consent order and of the correspondence before it, and more particularly the exclusion from that order of the transfer originally sought to the Supreme Court constituted an agreement between the clients and the solicitor that the Staines County Court should have jurisdiction in "the action". I will come back in a minute to what is meant in this context by "the action".
39. First, however, was there within the confines of the consent order an appropriate agreement at all? In that connection we were taken by Mr Bacon, for the clients, to the well-known observations of Lord Denning MR in Siebe Gorman & Co Ltd v Pneupac Ltd [1982] 1 WLR 185, where Lord Denning said:

"We have had a discussion about 'consent orders.' It should be clearly understood by the profession that, when an order is expressed to be made 'by consent,' it is ambiguous. There are two meanings of the words 'by consent.' That was observed by Lord Greene MR in Chandless-Chandless v Nicholson... One meaning is this: the words 'by consent' may be evidence a real contract between the parties. In such a case the court will only interfere with such an order on the same grounds as it would with any other contract. The other meaning is this: the words 'by consent' may mean 'the parties hereto not objecting.' In such a case there is no real contract between the parties. The order can be altered or varied by the court in the same circumstances as any other order that is made by the court without the consent of the parties. In every case it is necessary to discover which meaning is used. Does the order evidence a real contract between the parties? Or does it only evidence an order made without objection?"

40. Mr Young rightly cautioned us that we should proceed with care at the appellate level before reaching any conclusion as to whether the exchanges that we have seen fell into one or the other category. I would say two things about that. First, the issue turns entirely upon written correspondence; second, although I do not rely on this, I think it very likely indeed that this very experienced circuit judge, seeing this correspondence, thought immediately that the exchanges did not found an agreement of the sort that fell into Lord Denning's first understanding, but only evidence the existence of an order of the court: which, as I have already said, if it was an order infringing the court's jurisdiction could not withstand further investigation in another application.
41. Having looked at the exchanges, and more particularly the reserve with which the clients' solicitor expressed himself before the making of the consent order and his saving of the possibility of returning to court on that issue, I find it impossible to say that there was such an agreement between the parties at the time of making the consent order, or before it, as to fall into the first category that Lord Denning set out. I do not think it realistic to say, in the context of litigation, that there was a real agreement in the sense of a contract between these parties that the county court and no other should have jurisdiction in this case. That is inconsistent with what the clients' solicitor said.
42. It might be that outside the context of solicitors dealing with litigation some agreement might be construed out of these exchanges. But the whole point of what Lord Denning says in Siebe Gorman is that before finding that there is a binding agreement one has to look very carefully at litigious exchanges, and much more so at the comings and goings before a consent order is entered into, than one would look in the ordinary business of life outside that rather artificial context.
43. In my judgement, therefore, there was in this case no agreement that satisfied the requirements of section 18, as indeed it had to do if it was going to be effective. But Mr Young resourcefully said that that was not the end of it, because although the clients' solicitor had expressed reservations before the consent order he did nothing to interfere with the process that Mr Kennedy, on the basis of consent order, then put into action for a taxation in the county court. He had lost his chance to object at the very latest by the end of the year, when the taxation process was well advanced. No application has been made then, and none was made until 21st February, for a transfer to the Central Taxing Office.
44. I cannot agree with that submission either. An agreement is either made in terms or it is not. If the agreement was not made at the time of the consent order it cannot leap into existence afterwards because some party to the original non-agreement fails to take some further step. So whatever complaint may be made, and no doubt legitimately made by Mr Kennedy, about a late change of mind or a late change of attitude on the part of his opponents, that cannot go so far as to create an agreement at the time of the consent order when otherwise such agreement did not apply.
45. There is a further difficulty that stands in the way of a section 18 argument. I have already said that there is excluded from the possible ambit of section 18 "an action which, if commenced in the High Court, would have been assigned to the Chancery Division". The first question is what "action" are we concerned with here? Although the application for the charging order was made, and legitimately made, within the original action, the reality of it was that it was not part of the original action at all, but was a step by Mr Kennedy, of an unusual but entirely legitimate nature, to secure the recovery of his costs from one party in that action. The statutory definitions of action are not entirely helpful in this connection, not least the now (as it would appear) archaic definition of "action" to be found in the County Courts Act. But I accept that the application for charging order and that which went with it was for these purpose an action. If of course it is not such, section 18 does not arise at all. I do not accept that the arrangements as to what order should be made for taxation themselves were a separate action; they were a necessary part of the application made by Mr Kennedy. But that application and whatever was said to have been agreed about taxation must stand or fall according to whether or not the application for the charging order, if commenced in the High Court - which of course it would have had to have been if the original action had been brought in the High Court - would have been assigned to the Chancery Division.
46. There appeared, before we heard Mr Young, to be a simple answer to that, which is to be found in Schedule 1(a) of the Supreme Court Act 1981, which is headed "Distribution of Business in the High Court", which reads:

"1. To the Chancery Division are assigned all causes and matters relating to-

(a) the sale, exchange or partition of land, or the raising of charges on land..."

47. That appears to be the end of the matter, but Mr Young rightly reminded us that one must always look at the operating clauses or sections under which powers are exercised in a schedule. He said that that was to be found in section 61 of the Supreme Court Act 1981, Distribution of business amongst divisions, which provides three things. First, that the distribution is to be as in schedule 1; second, under section 61(2), rules of court may provide for distribution of business in the High Court amongst the divisions (therefore rules of court apparently can alter the schedule 1 arrangement). Section 61(7) provides:

"... rules of court may provide for the distribution of the business (other than business required to be heard by a divisional court) in any Division of the High Court among the judges of that Division."

48. Mr Young said that that had been achieved in order 106 of the Rules of the Supreme Court Proceedings relating to solicitors. Rule 2, jurisdiction under Part III of the 1974 Act, is the part we are concerned with. Rule 2.2 reads:

"The jurisdiction of the High Court under Part III of the Act may be exercised by -

(a) a judge,

(b) a master or taxing master or district judge of the Family Division, or

(c) a district judge of the cost of the contentious business done in proceedings in the district registry of which he is the district judge, or for noncontentious business."

49. That, it was argued, overrode or excluded the rule in schedule 1, and that solicitors' business can go into any division. It would be expected to be taken up, in the case of a charging order, in the division in which the original proceedings had taken place.
50. There are two problem about that in this case: 1. There is, of course, no original division of the High Court in which these proceedings took place, because they took place in the county court. 2. More to the point, I am quite clear that Rule 2(2) is made under the provisions of section 61(7) - that is to say determining at what level within a particular division particular business may be entertained. It cannot override, either in its terms or in its place in the legislation or in its vires, the specific provision in relation to charging orders, be they brought by a solicitor or be they brought by anybody else, and their allocation to the Chancery Division.
51. In those circumstances section 18 was not available to these parties even if, which I do not think to be the case, they in fact had sought effectively to make an agreement under it.
52. For those reasons, therefore, I would dismiss this appeal.
53. MR JUSTICE MOSES: I agree.
54. LORD JUSTICE THORPE: I also agree.
(Appeal dismissed; Appellant do pay Respondents' costs of the appeal assessed in the sum of £4,500).