England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
CROWN OFFICE LIST

		Royal Courts of Justice Strand London WC2 Friday 25th February 2000

Friday 25th February 2000

1. MR JUSTICE MOSES: The issue in this appeal from a decision of the Bristol VAT and Duties Tribunal is whether horse race trainers are liable for VAT on the supply of riding services performed by apprentice and conditional jockeys employed as stable lads.
2. The respondents, Mr and Mrs Hodges carry on business as racehorse trainers in Summerton. They are registered for VAT. The appeal from the decision of the tribunal concerns the question whether they owed output tax in respect of rides undertaken by apprentice and conditional jockeys employed by them in their stables between 1997 and 1998.
3. Horse racing in this country is governed by instructions and rules by the British Horse Racing Board and the Stewards of the Jockey Club. Apprentice jockeys are young men and women who wish to become flat racing jockeys. Conditional jockeys are young men and women who aspire to ride in steeple chases, hurdle races and National Hunt flat races.
4. The tribunal found that when apprentice jockeys ride for owners in flat races and when conditional jockeys ride in, for example, steeple chase races, those jockeys were supplying services independently of the Hodges. Thus, the Hodges, the trainers, were not liable to VAT on consideration for such supplies. Nor was VAT payable by the apprentice or conditional jockeys since their earnings were insufficient to take them over the threshold above which VAT becomes payable.
5. In this appeal the Commissioners appeal on the grounds that it was the trainers who supplied the services. This is a test case.
6. The Commissioners contend that the agreement or arrangements between the trainer and apprentice or conditional jockeys are contracts of employment or contracts of apprenticeship, with the result that the riding services were provided by the apprentice or conditional jockeys as employees on behalf of the trainer. In that event the trainer is liable for VAT on the whole consideration for such supply.
7. The Commissioners further contend that even if the jockeys were self-employed, the riding services were supplied by the self-employed jockeys to their trainers who made an onward supply of such services to owners of horses. In that event, the trainers would also be liable for VAT.
8. The real question, however, in my judgment, is whether the services were supplied independently by those apprentice or conditional jockeys.
9. By Article 4(1) of the Sixth Directive 77/388/ EEC,

"...taxable person shall mean any person who independently carries out in any place any economic activity specified in paragraph 2, whatever the purposes or the results of that activity."

10. By 4(4):

"The use of the word independently in paragraph 4(1) shall exclude employed and other persons from the tax in so far as they are bound to an employer by a contract of employment or by any other legal ties creating the relationship of employer and employee as regards working conditions remuneration and employer's liability."

11. Law or Fact
12. The first question I must determine is whether the issue in this case is one of law or of fact. The Commissioners contend that the apprentice or conditional jockeys are employed by the trainers. They submit that their legal relationship depends upon the proper construction of an agreement in writing between the trainer and apprentice or conditional jockey. In those circumstances, it is contended that the question is purely one of law. This is of importance since if the issue is one of law, and I disagree with the conclusion of the tribunal, then I should reverse their decision. If however the decision is one of fact or of mixed law and fact, then unless I can detect an error of law which taints the decision, I can only reverse the decision if it contradicts the true and only reasonable conclusion (see Edwards v Bairstow [1956] AC 14, at page 36).
13. In Davies v Presbyterian Church of Wales [1986] 1 WLR 323, the relationship between the pastor and the Presbyterian church was governed solely by a book of rules. Consequently, Lord Templeman concluded at page 328G:

"The question to be determined is a question of law, namely, whether upon the true construction of the book of rules a pastor of the church is employed and is under a contract of service. If the industrial tribunal erred in deciding that question, the decision must be reversed and it matters not that other industrial tribunals might have reached a similar erroneous conclusion in the absence of an authoritative decision by a higher court."

14. The usual difficulty of determining whether the question of whether someone is employed is a question of law or a question of fact cannot be determined in accordance with the apothegm of one judge, experienced in the Employment Appeal Tribunal, who has observed that an appellate court finds an issue to be a question of law when it knows the answer but a question of fact when it is uncertain how it should make up its mind.
15. Some guidance has recently been given by the House of Lords in its decision in Carmichael and another v the National Power plc [1999] 1 All ER 897. Whether parties intend that their relationship should be governed solely by reference to a written agreement in the case is a question of fact. But unless that was the intention of the parties the nature of their relationship is a question of fact. The Lord Chancellor, Lord Irvine said:
16. "In my judgment it would only be appropriate to determine the issue in these cases solely by reference to the documents in March 1989, if it appeared from their own terms and/or from what the parties said or did then, or subsequently, that they intended them to constitute an exclusive memorial of their relationship." (901f)
17. In Lord Hoffmann's speech he said, in agreeing with Lord Irvine, Lord Chancellor, of the rule as to construction of documents:
18. "It applies in cases in which the parties intend all the terms of their contract (apart from any implied by law) to be contained in a document or documents. On the other hand, it does not apply when the intention of the parties, objectively ascertained, has to be gathered partly from documents but also from oral exchanges and conduct. In the latter case, the terms of the contract are a question of fact. And of course the question of whether the parties intended a document or documents to be the exclusive record of the terms of their agreement is also a question of fact." (903f-g)
19. The tribunal relied upon a number of documents. They relied upon agreements between the jockeys and the trainers headed in the case of apprentice jockeys
20. "Apprentice Riding Agreement between apprentice jockey and trainer" and in the case of conditional jockeys
21. "Conditional Jockeys' Agreement". Both of those agreements were governed by and incorporated, so far as necessary, orders and rules of racing. The tribunal also referred to various instructions issued by the British Horse Racing Board and the Jockey Club. All those documents were construed in reaching their decision.
22. There was no finding of fact by the tribunal that the parties intended their relationship to be solely governed by documents to which the tribunal referred. But, contends Mr Hyam, on behalf of the Commissioners, the tribunal's conclusions were based solely on documents and it can thus be inferred that it was the intention of the parties that the documents should be an exclusive record of the terms of the agreement between jockeys and trainers, so far as riding in races is concerned.
23. The tribunal also heard evidence from Mr and Mrs Hodges. They said, at page 2 of their decision:

"Our findings of fact are based on the oral evidence and the documents provided to us."

24. They also went on:

"Traditionally young men and women who aspire to become jockeys start work soon after leaving school in the stables of a trainer. They start work doing general stable duties. The Appellants have 15 employees but few of those will eventually become jockeys. They have only two riding at present. As long as these young men and women are employed in the stables their wages are subject to deductions for income tax under the PAYE system and national insurance contributions, as is normal."

25. The tribunal also referred later in their decision to the way in which a jockey arranges rides with owners of their various horses. At page 8 they said:

"At the earlier stages of a jockey's career rides are arranged on his behalf by the Trainer in whose stables he is working. It needs to be borne in mind that the Trainer may own horses himself or have a share in a horse which he is training on behalf of one or more other owners. Later, a conditional jockey might have an agent. In that case the trainer would arrange rides through the agent."

26. At page 9 they refer to further oral evidence, saying:

"Where Mr Hodges is receiving one half of the riding fees he regards that as compensation for the loss of working time of the rider concerned which would otherwise have been spent in his stables. Once jockeys are fully fledged, they are no longer employed by the Trainer and would themselves pay for schooling for each horse they rode."

27. Finally, in setting out their conclusion, they referred to the fact that the owner has a choice which of his employees he encourages to ride and there is no direct obligation by the trainer to provide riding engagements for the jockey at all.
28. Looking at the decision as a whole (although I shall have more to say about Mr Hodges' own views as to the purpose for which he received half the riding fees,) I am unable to infer that in the absence of any express finding, that the parties intended their relationship to be exclusively governed by the documents. The issue therefore is one of fact and I can only overturn the decision in accordance with Edwards v Bairstow principles.
29. The jockeys in question enter into two types of agreement, the terms of which were set out in the tribunal's decision:

"It is AGREED between the parties hereto:

(1) The employer will so long as the apprentice is employed by him/her, to the best of his/her knowledge power and ability instruct the apprentice or cause him/her to be instructed in the business or calling of a jockey, and in the requirements of the Orders of the British Horseracing Board and Jockey Club Rules of Racing so far as they would be applicable to him/her.

(2) Insofar as the Orders of the British Horseracing Board and Jockey Club Rules of Racing or Instructions issued by the Stewards of the Jockey Club may from time to time relate to, regulate or touch upon the duties and obligations of trainers to apprentices and vice versa, the employer and the apprentice shall at all times ensure strict compliance therewith.

(3) The apprentice agrees that he/she will not at any time disclose to any person, firm or company any confidential information in relation to his/her employer's business.

(4) All riding fees and share of the prize money which the apprentice earns in Flat races under the Orders of the British Horseracing Board and Jockey Club Rules of Racing shall be paid by the Stakeholder to the employer and the apprentice in equal shares unless otherwise provided by the said Orders or Rules of Racing.

(5) The employer undertakes to pay at least half the apprentice's racing expenses, the exact proportion to be separately agreed between them, and, where applicable, with the apprentice's parent or guardian, Racing expenses means those reasonable expenses incurred by the apprentice when travelling for the purpose of riding in Flat races and the fees incurred by the apprentice in respect of such races for the services of a jockeys valet. It shall be the duty of the employer to keep full and proper accounts of all racing expenses.

(6) The Licensing Committee of the Jockey club shall be informed forthwith in the event this agreement is terminated for any reason prior to March 17th 1999.

(7) The employer undertakes that he/she has provided or will provide within two months..........day of......19

(insert date upon which employment commenced)

the apprentice with a written statement of Employment Particulars in compliance with the terms of The Employment Protection (Consolidation) Act 1978'

The 'Stakeholder' is Weatherbys

The agreement required for a conditional jockey is in the same terms as that for a Apprentice jockey except for paragraph (4) which reads as follows:-

'(4) (a) Whilst the jockey has the right to claim an allowance of 71b under the provisions of Rule 109(ii)(a) all riding fees which the jockey earns in Steeple Chases, Hurdle races and National Hunt Flat races under the Orders and Rules of Racing shall be paid by the Stakeholder to the employer and to the jockey in equal shares unless otherwise provided by the Orders or Rules of Racing. Where the employer is the holder of a Permit to Train the employer's share shall be paid to the Jockey Club Charitable Trust.

(b) Except as provided in part (d) of this clause, the employer undertakes to pay at least half the jockey's racing expenses, the exact proportion to be separately agreed between them, and, where applicable, with the jockey's parent or guardian. Racing expenses means those reasonable expenses incurred by the jockey with travelling for the purpose of riding in Steeple Chases, Hurdle races and National Hunt flat races and the fees incurred by the jockey in respect of such races for the services of a jockey's valet.

(c) Whilst the jockey has the right to claim an allowance of 5lb or 3lb or loses the right to claim an allowance under the provisions of Rule 109(ii)(a) all riding fees which the jockey earns in Steeple Chases, Hurdle races and National Hunt Flat races shall be paid by the Stakeholder to the jockey less Value Added Tax, which shall be paid to the employer unless otherwise provided by the Orders or Rules of Racing. Where the employer is the holder of a Permit to Train, the employer's share shall be paid to the Jockey Club Charitable Trust.

(d) When the jockey claims an allowance of 5lb or 3lb or loses the right to claim an allowance under the provisions of Rule 109(ii)(a) the employer will not be responsible for any part of the jockey's expenses or the fees in respect of the services of a jockey's valet'

It will be seen that the essential difference between the two agreements is that in the case of conditional jockeys it is only when the jockey has the right to claim an allowance of 7lb that riding fees are to be shared equally between the employer and the jockey. In paragraph 4(c) of the Conditional jockeys agreement there is a reference to VAT which is not mentioned in paragraph 4(a) or (b) of that Agreement or in paragraph 4 of the Apprentice jockeys Agreement."

30. The licences to which the tribunal refer were governed, as I have said, by the orders and rules of racing and, importantly, were issued pursuant to Rule 60. Rule 60 provides:

"60 Subject to the provisions of Rule 61 no person shall ride in any race under these Rules unless he has attained the age of sixteen years and he has obtained from the Stewards of the Jockey Club, subject to such restrictions as they consider necessary, a licence or permit as follows:-

(i) A Flat race jockey's licence, to be applied for annually on the prescribed form, which may be granted for a period of not more than fifteen months entitling the holder to ride in Flat races.

(ii) A Steeple Chase and Hurdle race jockey's licence, to be applied for each season on the prescribed from entitling the holder to ride in Steeple chases, Hurdle races and 'Open' National Hunt Flat races.

(iii) A Flat race apprentice jockey's licence entitling the holder to ride in flat races. A joint application for such licences must be made annually by the trainer and the employee on the prescribed form and may be granted for a period of not more than fifteen months. They are only granted in respect of employees who have, of their own free will, and if they are under the age of eighteen with the consent of their parents or guardians signed an Apprentice Riding Agreement (on the standard agreement form as prescribed by the Stewards of the Jockey club) with a trainer licensed to train horses for Flat races under these Rules and are over sixteen, but under twenty-five years of age.

On attaining the age of twenty-five no person may ride as an apprentice jockey.

In the event of either:-

the apprentice Riding Agreement being cancelled by consent, or the apprentice jockey leaving the trainer's establishment with or without the trainer's consent, or the trainer relinguishing his licence or having it suspended or withdrawn or revoked, or the apprentice Riding Agreement terminating for any other reason the apprentice jockey's licence shall forthwith be automatically revoked, save that

in the event of the death of the trainer, the apprentice jockey's license shall remain in force for seven clear days from the date of death and thereafter shall be automatically revoked.

During the seven days period the apprentice jockey shall be answerable to the Stewards of the Jockey Club in the same manner as he would otherwise have been answerable to the trainer.

(iv) A Steeple Chase and Hurdle Race Conditional Jockey's licence, entitling the holder to ride in Steeple chases, Hurdles races and National Hunt flat Races unless his licence is issued subject to his being restricted to riding in Steeple chases and Hurdle races. Such licence must be applied for annually jointly be the trainer and the employee on the prescribed form and will only be granted in respect of an employee who has, of his own free will, and if he is under the age of eighteen, with the consent of his parents or guardian, signed a Conditional Jockey's Agreement) on the standard agreement form as prescribed by the Stewards of the Jockey Club) with a trainer licensed or permitted to train horses for Steeple Chases, Hurdle races, and National Hunt Flat races, is over sixteen but under twenty-five years of age and who is entitled to claim an allowance under the provisions of Rule 109(ii)(a).

Should a person holding a conditional Jockey's licence lose his right to claim an allowance under the provisions for Rule 109(ii)(a), either by reaching the age of 25 years or by having ridden 55 winners, the licence and conditional Jockey's Agreement shall nevertheless continue in force for three calendar months or until the expiry date whichever is the earlier, unless the Agreement is terminated by either party by giving seven day's written notice to the other.

In the event of either:-

the Conditional Jockey's Agreement being cancelled by consent, or

the Conditional Jockey leaving the trainer's establishment with or without the trainer's consent, or the trainer relinquishing his licence or permit or having it suspended, withdrawn or revoked, or the Conditional Jockey's Agreement terminating for any other reason the conditional Jockey's licence shall forthwith be automatically revoked, save that

in the event of the death of the trainer, the Conditional Jockey's licence shall remain in force for seven clear days from the date of death and thereafter shall be automatically revoked.

During the seven days period the conditional Jockey shall be answerable to the Stewards of the Jockey Club in the same way as he would otherwise have been answerable the trainer.'"

31. The tribunal, unfortunately, does not appear to have been provided with Rule 109, but that makes distinction between experienced apprentices who have won a number of races and those who are just starting upon their careers as jockeys.
32. Rule 109 sets out riders' allowances entitling apprentice jockeys to claim £7 until they have won 20 races, £5 until they have won 50 races and thereafter £3 until they have won 95 races. There are similar rules in relation to conditional jockeys although the allowances they are able to claim are more restricted since they are able to claim such allowances after winning a fewer number of races. Thus, the extent to which fees are shared will depend upon the success of the particular apprentice or conditional jockey.
33. By Rules 70 and 71, the fee for an apprentice jockey is £63.35 plus VAT where applicable and for conditional jockeys £87.35, plus VAT where applicable. By Rule 145, under the rubric 'equipment',

"the saddle comprises the saddle itself, the girth, the surcingle and stirrup irons and the leathers or weights and the rider is responsible for the fit condition of the saddle which he uses. But in the case of an apprentice or conditional jockey the responsibility rests with the trainer."

34. So far as instructions are concerned the tribunal set out the important instruction, paragraph A3:

"The Stewards of the Jockey Club give notice that employing Trainers are responsible for the riding arrangements of their apprentice and conditional jockeys. In no circumstances should apprentice or conditional jockeys be permitted to engage themselves to ride without the previous approval of their employing Trainers. Where an apprentice or a conditional jockey has been engaged to ride two horses in the same race the employing Trainer will be rendered liable to a severe penalty. It is the responsibility of the employing Trainer to see that his apprentice or conditional jockey arrives at any Meeting where he is engaged to ride. The Stewards will not in future permit any special arrangements to be made for horses ridden by apprentice or conditional jockeys either going down to, or at the start, of any race, other than arrangements made under Section 13 of the Jockey Club Instruction G1 on Starting. They draw the attention of Trainers to their responsibilities in this matter.

The Stewards require Trainers to ensure that every apprentice or conditional jockey makes himself acquainted with every course on the first occasion that he rides there and they will not consider this requirement to have been met unless the Trainer has ensured that the rider has walked the course. The Stewards of the Jockey Club have requested Stewards of Meetings to take severe disciplinary action in any case where the evidence shows that a rider or Trainer has failed to comply with the Instructions or Rule 152(iii).

NB - Attention is drawn to the notices concerning apprentice and conditional jockeys which appear under the following headings: G1 'Starting' (Horses at the Start), F2 'Weighing Out' and H9 'Use of the Whip.'"

35. It must be recalled that there is no dispute but these apprentice or conditional jockeys were employed as stable lads. But there is no reference in their employment agreements to riding engagements at all.
36. The Approach of the Tribunal
37. In their decision the tribunal referred to a number of indications as to whether a contract is a contract of or a contract for services. They list them in reliance upon Selwyn's Law of Employment:

"'An employment tribunal should therefore take the following factors into account, and make its determination accordingly:

a the contractual provisions (BSM (1257 Ltd) v Secretary of State for Social Services) [1978] ICR 894;

b the degree of control exercised by the employer (Global Plant Ltd v Secretary of State for Health and Social Security) [1971] 3 All ER 385;

c the obligation of the employer to provide work (Nethermere (St Neots) ltd v Taverna and Gardiner [1984] IRLR 240 (CA);

d the obligation on the employee to do the work (Ahmet v Trusthouse Forte Catering Ltd) IDS Brief 250;

e the duty of personal service (Ready Mixed Concrete Ltd (South East) v Ministry of Pensions and National Insurance) [1968] 2 QB 497;

f the provision of tools, equipment, instruments, etc (Willy Scheiddegger Swiss Typewriting School (London) Ltd v Mininistry of Social Security) (1968) 5 KIR 65;

g the arrangements made for tax, national insurance, VAT, statutory sick pay (Davis v New England College of Arundel) [1977] ICR 6;

h the opportunity to work for other employers (WHPT Housing Association Ltd v Secretary of State for Social Services) [1981] ICR 737;

i other contractual provisions, including holiday pay, sick pay, notice, fees, expenses, etc (Tyne and Clyde Warehouses Ltd v Hamerton) [1978] ICR 661;

j the degree of financial risk and the responsibility for investment and management (Market Investigations Ltd v Minister of Social Security) [1969] 2 QB 173;

k whether the relationship of being self-employed is a genuine one, or whether there is an attempt to avoid modern protective legislation (Young and Woods Ltd v West) [1981] IRLR 201;

l the number of assignments, the duration of the engagement, and the risk of running bad debts (Hall v Lorimer) [1994] 1 WLR 209 (CA)'"

38. Having listed those different indications they then apply them to the facts of the instant case:

"The employing Trainer (who is not, by definition, employing the apprentice or conditional jockey to ride) is required to give his previous approval to the jockey riding. The trainer is required to see that the apprentice or conditional jockey arrives at an Meeting where he is engaged to ride and he must ensure that the jockey makes himself acquainted with the course on the first occasion that he rides there. This provision is, we believe, wholly consistent with the jockey being employed by a third party to ride his horse and his riding not itself being part of his employment by the trainer.

b The employer's consent is required to any ride but the employer, ie the Trainer, cannot control the actual ride in a race itself at all.

c There is no direct obligation by the trainer to provide riding engagements for the jockey at all. However, he has a choice which of his employees he will encourage to ride.

dEach time he rides the jockey is undertaking a single engagement to ride a particular horse for a particular owner.

e The duty to ride for a particular owner is a personal service.

f As we have already seen, the jockey is required to provide his own equipment.

g The arrangements made for tax and national insurance are consistent with the jockey being self-employed.

h Although the consent of the Trainer is required a jockey may expect to work for a number of employers, ie owners.

i The Trainer pays at least half of the apprentice jockey's racing expenses but in the case of conditional jockey the provision only applies to a jockey who has the right to claim an allowance of 7lb.

j There is clearly a degree of financial risk in every race undertaken by a jockey. While he will obtain a riding fee in any event he takes the risk of winning a prize or not winning a prize and his success or failure in races will be highly relevant to his future career.

k There is no attempt to avoid modern protective legislation.

l This test is not of great assistance in the present case.

As is stated in paragraph 2.36 no single factor, by itself, is conclusive and all other circumstances must be considered.

Having considered all the criteria here listed we find that in fact the majority namely a), b), d), e), f), g), h) and j) point to the conclusion that apprentice and conditional jockeys, when riding in races organised under the Rules of the Jockey Club in flat races or in steeplechases for individual owners, are self-employed. We mentioned earlier that nobody disputes that a fully-fledged jockey is self-employed when working as such and the question was when, during the course of his career he would logically attain that status. We see nothing more logical than the conclusion that he is self-employed in that capacity from the very beginning of his career.

It might be said that even if a jockey is self-employed it is still the Trainer who is supplying his services. We would disagree. The Trainer may recommend a particular jockey but the owner is free to accept or reject the recommendation.

According, we allow the appeal and discharge the assessments. The appellants are entitled to their reasonable costs and if they cannot be agreed within three months from the release of this Decision they have leave to apply to the Tribunal for directions."

39. It is trite that the factors to which the tribunal refer in their allowance upon Selwyn's Law of Employment will have different significance in different cases. A skilled employee may not require and may indeed resent control over the way in which he exercises his skills.
40. In Ready Mixed Concrete South East Ltd v Minister of Pensions and National Insurance [1967] 2 QB 497, where the question was whether owner/drivers were employees, MacKenna J referred to an argument advanced by the owner/drivers that, if anyone sought to instruct them how to deliver concrete or to drive their trucks, that person would tell the other to mind his own business (see page 514D). As MacKenna J pointed out, however, it is the right of the control that matters not its exercise (see page 515A).
41. The tribunal correctly identified, without specifying which were more important, many of the indications that will be relevant in cases of this kind. But it is in the analysis of the agreements in this case that it seems to me difficulties arise when one considers their decision. At (a) on page 12, they refer to Instruction A3, to which I have already referred in this judgment. It seems to me that mere reliance upon Instruction A3 in relation to control was too limited. They had referred earlier, in their judgment, at page 9, to the agreement between the jockey and the trainer by which the trainer was bound to instruct the jockey in the business or calling of a jockey. But they make no reference to that clause in the agreement which was Clause 1 in their concluding paragraphs. Nor do they refer to Clause 2, which requires the employer as well as the apprentice to ensure strict compliance with those duties and obligation with the Rules of Racing and Instructions, which regulate or touch upon the duties and obligations of trainers to apprentices and vice versa.
42. Nor do they refer, when dealing with the issue of control, with Rule 60(iii) which they set out in their decision between pages 5 to 6. In particular, tribunal made no reference to the closing words of that rule which clearly contemplates that but for the death of an trainer an apprentice jockey is "answerable" to the trainer. That provision which is equally applicable to conditional jockeys.
43. Instruction A3 points, in my judgment, powerfully to control by the trainers over apprentice or conditional jockeys. It is they who decide whether in a particular race their stable lad employee can ride or not. The tribunal commented that this provision was wholly consistent with the jockey being employed by a third party to ride his horse and his riding not being itself part of his employment by the trainer. I could understand that comment if what the tribunal meant was that other factors point to the jockey not being employed when riding races and that they have reached the conclusion that Instruction A3 is not inconsistent with the independent supply of services. But, if that is what they meant, I do not understand what the tribunal meant when they referred to item (a), as being one of the pointers to the conclusion that the apprentice and conditional jockeys were self-employed. After all, at page 9, they had appeared to refer to those factors as being indications that the apprentice or conditional jockey was not independently supplying services because he was employed and they contrast that position with a fully fledged jockey (see the bottom of page 9, line 45).
44. I do not see how it can be said that Instruction A3, to which they refer on page 12 can be said to be a factor which points to self-employment. It seems to me beyond argument that it points in the opposite direction, even if it is accepted that that factor is not dispositive of the issue. I repeat that there is no reference to rule 60(iii), or what is contemplated in that rule by the concept of an apprentice or conditional jockey being answerable to the trainer.
45. So far as the other factors are concerned, (b) clearly points the other way because the trainer cannot, and certainly does not assert a right to control the actual ride in the race itself at all. It was not suggested that (c) indicates self-employment. Little (d) and little (e) may do so. (f), however, is not accurate. Although the jockey is required to provide his own equipment, that does not paint the whole picture. Rule 145(i) provides that the responsibility for ensuring that equipment is in a fit condition for racing rests with the trainer.
46. At (g), the references to tax and national insurance whilst being asserted to be consistent with being self-employed seemed to me to be neutral. Little (h), again, seems to me, contrary to the decision of the tribunal, to be neutral. A jockey may expect to work for a number of what the tribunal call "employers", that is owners, but that would be so whether the trainer is supplying the services of the jockey or the jockey is supplying them independently.
47. (i) refers to some but not all expenses borne by the trainer. (j) is said to be a pointer towards self- employment, but it seems to me that the financial risk is at least part borne by the trainer who undertakes to pay some expenses. It is difficult, to describe the possibility of winning prizes as being a financial risk. It seems to me that all that it demonstrates is that there is an opportunity for independent financial gain which is a factor which the tribunal were entitled to take into account pointing against employment.
48. It would be wrong for this Court to adopt the mechanical approach of analysing the factors upon which the tribunal relied and to reach the conclusion that because there were not as many pointers to self-employment as the tribunal thought, the decision should be reversed. After all, the weight of those independent factors was for the tribunal, not for this Court. But it does seem to me that the tribunal was guilty of a significant error in law in regarding Instruction A3 as a pointer towards self-employment and in failing to have regard to the reference in Rule 60(iii) and Rule 60 (iv) to the fact that apprentice or conditional jockeys are answerable to the trainer. But it does not stop there.
49. It seems to me that the tribunal was clearly influenced by the fact that a fully fledged jockey is accepted to be self-employed. I do not understand why it is said that as a matter logic, if fully fledged jockeys are self- employed it must follow that apprentice or conditional jockeys are. No one suggests the relevant agreements have any relevance to a fully fledged jockey. It does follow that because a fully fledged jockey is self-employed an apprentice or conditional jockey employed as a stable lad by a trainer is necessarily also self-employed. In so far as they attached any weight to that feature, in my judgment, the tribunal erred.
50. The relationship between a jockey and the Board or the Jockey Club whether the jockey is an apprentice or not shares certain features when that jockey is riding a race. The way prizes are distributed, the way the jockey club and the British Horse Racing Board of control rides and races, the possibility of separate engagements are all shared features, but there, I think, the similarity ends.
51. The Commissioners, further, contended that whatever the correct conclusion as to whether apprentice or conditional jockeys were employed, these jockeys were apprentices and therefore under a contract of employment by virtue of section 230(2) of the Employment Rights Act 1996.
52. The correct identification of a contract of apprenticeship was said by Waller LJ in Wiltshire Police Authority and Wynn [1980] ICR 649 at 685F to K:

"Where the purpose of an apprenticeship would be to learn a craft or a trade or a profession."

53. In my judgment, it cannot be said that the first purpose of the contract was training (see Sedley J, as he then was, in Wallace v CA Roofing Services [1996] IRLR 435 at page 436 column 10):

"...the contract of apprentice remains a distinct entity known to the common law. Its first purpose is training, the execution of work for the employer is secondary..."

54. Nor do I derive any assistance from the decision in Horan v Heyhoe [1904] 1 KB 289. Until that contract the master covenanted was to teach and instruct the apprentice in the arts of a training groom and of riding for a set period and to provide him with clothing and food. The contract is different from this case. In my judgment, it cannot be said that the purposes of the agreements in the instant case can be said to be to train a particular stable boy so that he becomes a fully fledged jockey. That will depend, as I understand it, on many other factors. Rather, the purposes of those agreements were to regulate the terms upon which someone in a trainer's employment as a stable boy may ride. Such regulation, together with any other oral terms, may create a contract of employment or lead to the conclusion that there is no independent supply of riding services but it cannot, in my judgment, be regarded as a contract of apprenticeship.
55. The alternative contentions of the Commissioners were that even if self-employed, these jockeys were providing services to the trainers who supplied them on to the owners.
56. There is no finding of fact in the tribunal's decision upon which the Commissioners could rely in order to reach that conclusion. The tribunal merely remarked that the owner was free to accept or reject a trainer's recommendation. I doubt whether that fact would determine this issue. But, nevertheless, there is no finding of fact upon which the Commissioners, as I have said, can rely. If indeed these jockeys were self-employed, it does not seem to me it would be wrong or artificial to regard the services as being supplied by the jockeys themselves.
57. The real question, seems to me, whether the control exercised by the trainers was such that the personal services supplied by the apprentice or conditional jockeys, riding for different owners, should not be regarded as an independent supply by those jockeys. I am of the view that the errors of the tribunal, to which I have referred, were errors in law. However, I am unable to say that the true and only reasonable conclusion is that those jockeys were employed.
58. In my judgment, the correct course is to allow the appeal but remit the case back to the tribunal. I shall hear argument as to whether that should be a fresh tribunal or whether it should go back to the same tribunal.
59. MR JUSTICE MOSES: Miss Neenan, Mr Leech, that is the end of my judgment. I am very conscious of the fact that in respect to you, Miss Neenan, you do not know anything about this case apart from what you have heard.
60. MISS NEENAN: That is absolutely correct.
61. MR JUSTICE MOSES: Through no fault of your own. Anyway there we are, and Mr Leech probably precious little. It is difficult to decide whether it ought to go back or make submissions whether it ought to go back to a new tribunal or the same one to look at it again. The Commissioners are paying for this, and therefore it seems to me that so far as costs are concerned it will not make a difference. What is the name of your solicitors?.
62. MR LEECH: Mr Wood.
63. MR JUSTICE MOSES: Mr Wood, what I am proposing to do is to order that it go back for a fresh tribunal so it starts again. But, if you want, through your counsel, to make submissions that it ought to go back to the same tribunal, then I will give liberty to apply. It is very difficult for either of these two counsel to argue the point.
64. MR WOOD: Miss Noble is in court, counsel for Customs and Excise, perhaps if we could have a moment we could probably assist.
65. MR JUSTICE MOSES: It does not seem to me that it is going to but it may be you want -- it may also be problems of
66. Mr Lawson sitting with others, it may also be the problem of reconstituting the same people may be a problem. You may want a fresh go at it in the light of my judgment. But if you want to have a word and mention it to me in a moment do so. If you go outside and one of the counsel can mention it and then I will see. If you would like to go out and you can at a convenient moment mention it again. Costs are going to be paid by the Commissioner anyway so I need not make any order as to costs below.
67. (Short Adjournment)
68. MISS NEENAN: Counsel of Hodges had to go of to do a case listed at 12.00 pm so I am dealing with it on behalf of Customs and Excise. The position is that neither party minds either way whether or not it is a fresh tribunal.
69. MR JUSTICE MOSES: They do not mind. I will say a fresh tribunal because there are going to be difficulties with timing if we say the same.
70. MISS NEENAN: With regards the cost situation, a costs order was made by the tribunal. The Customs and Excise pay for Hodges' costs. I ask for that to be set aside and no order for costs is made in regard to the costs of the hearing before your Lordship, the costs of your----
71. MR JUSTICE MOSES: Do you want to say something about costs and first time round?
72. MR WOOD: No, my Lord, I cannot really argue with the fact the costs follow the event and they have been....
73. MR JUSTICE MOSES: First time round there will be no order as to costs, this time round the Commissioners are going to pay for your costs anyway, so you have lost a bit. Thank you both very much.