IN THE LIVERPOOL COUNTY COURT
Appeal No: 47 of 2010
Liverpool Civil & Family Courts
35 Vernon Street
Merseyside L2 2BX
B e f o r e :
| MICHAEL PETER HARRISON
|- and -
|(1) JOHN BURRIDGE
(2) JANET BURRIDGE
(Official Court Reporters and Tape Transcribers)
1st Floor, Paddington House, New Road, Kidderminster DY10 1AL
Tel. 01562 60921
MR JONATHAN CRYSTAL appeared on behalf of the RESPONDENTS
Crown Copyright ©
JUDGE HODGE QC:
"Both FA and FIFA Regulations stipulate that a licensed agent must be a natural person (see article 3.1 of FA Regulations, for example). MPH Soccer Management Limited is not a natural person. Players and clubs would not be permitted to contract directly with MPH to provide football agency services. The regulations require that only a natural person (that is appropriately licensed or otherwise exempt) can enter into such a contract. A licensed agent is required to act in accordance with this requirement (see in particular article 14.12) whether he is employed by a company or not. It is the FA's view that the January 2007 contract fulfils these requirements."
The second is the status of companies under the FA Regulations:
"It is recognised in both the FA and FIFA regulatory regimes that agents may choose to organise their business through limited companies. This is permissible under the regulations. However, it must be the licensed individual who contracts to provide and actually provides the agency services to the client. It is also recognised practice for payment arrangements in respect of agency services to be made through the offices of a company where relevant. The FA operates a clearing house system for all payments to agents made by English clubs and more often than not payments for agency services will be made to a company such as MPH rather than to an individual. This is of course as you would expect as it will generally be the agency company that manages the invoicing and billing processes in order to collect fees on behalf of its employed licensed agents."
1. The fourth party was named as the party to the agreement, and he was thereafter described in the agreement as "the agent".
2. The address after the fourth party's name, Peter Harrison, referring to the company, was effectively a "care of" address.
3. Recital 2 described the agent as a player's agent in possession of a FIFA licence.
4. Recital 3 defined the nature of the services provided, namely to assist in and complete the negotiations with Blackburn Rovers FC for the acquisition and the registration of Lucas Neill with West Ham.
5. By virtue of clause 2.1, West Ham agreed to make the commission payments to the agent.
6. By virtue of clause 7.2(b), the agent undertook and warranted to West Ham that he would comply with the FA Rules and the Agents Regulations.
7. The agency agreement was executed by Mr Harrison and was consistent only with its execution as an individual, there being no company seal on the same.
Yes, Mr Horne?
MR HORNE: Your Honour, turning to the order that was made below behind tab 5 in the core bundle at page 26, if number 1 is "The appeal is allowed", I think the second order I invite your Honour to make is to discharge the final third party debt order. I think that's the terminology.
MR CRYSTAL: I think that the order your Honour would make - I'm trying to assist my learned friend, he has obviously succeeded (and more about that a little bit later) - but I think the order that you would make, if you go back to the Rule, I think what your Honour would do is that you would discharge the interim debt order. If you remember, part of the jurisdiction is -----
JUDGE HODGE: Yes.
MR CRYSTAL: ----- that you can either make a final third party debt order or discharge the interim order and dismiss the application. So effectively the appeal is allowed, the interim third party debt order is discharged and if the order needed to say it could clarify "and it follows that paragraph 1 of the district judge's order is reversed or set aside". Otherwise West Ham would be in limbo, subject to further submissions. Otherwise they won't pay out because the interim third party debt order would be there.
JUDGE HODGE: Well, actually what has happened to the money?
MR CRYSTAL: It's with West Ham.
JUDGE HODGE: It is still with West Ham?
MR CRYSTAL: Yes, West Ham have got it.
JUDGE HODGE: What I think I should say is paragraph 1, appeal is allowed; paragraph 2, discharge the interim third party debt order; and then 3, discharge paras 1 and 2 of the district judge's order of 19th March.
MR CRYSTAL: Yes.
JUDGE HODGE: Then we'll come on to costs in a moment.
MR CRYSTAL: And other matters.
JUDGE HODGE: Yes.
MR HORNE: I know there's been a direction, in 2 of the original order, that the sum be paid to the claimants' solicitors, but I'm conscious, in the light of your findings about the submission of Platinum 4's invoice, that effectively the sum should be paid to Platinum.
JUDGE HODGE: I think all I can do is -----
MR HORNE: Is just leave it as is.
JUDGE HODGE: ----- is just discharge paras 1 and 2 of the district judge's order and then that's a matter between Mr Harrison/Platinum 4 Sports Limited and West Ham.
MR CRYSTAL: Well, can I rise and address you on that? I'm just trying to think on West Ham's behalf because they have not, in fairness to them and in fairness to everybody else, taken part in the appeal but they are parties. No doubt - and I've got no brief for the Hammers - but if they had representatives here they would be saying, "Well, who should we pay the money to?"; because obviously it doesn't belong to them, and should the issue as to who the money should be paid to be referred back to the district judge? On one analysis of it, I suppose that the district judge ought to join Platinum and then we'll have to decide, or they'll have to then decide, who gets the money.
JUDGE HODGE: It may be that West Ham is going to be prepared to deal with the money without any further court intervention. So I think all I should do is to allow the appeal, discharge the interim third party debt order, discharge paras 1 and 2 of the district judge's order, and then give permission to the third party to apply for directions, if so advised.
MR CRYSTAL: Directions as to where the monies are to be -- well, as to where the monies ----
JUDGE HODGE: I'll just say for directions, if so advised.
MR CRYSTAL: Yes.
JUDGE HODGE: Then it's up to them whether they feel they need to do that or whether, against any instruction from both Mr Harrison and Platinum 4 Sports Limited, they may feel that they just pay it over in accordance with that joint direction.
MR CRYSTAL: Yes. Can I just tell you what I'm concerned about? I mean I don't know anything about Platinum 4, if it's gone the same way as -----
MR HORNE: [Sotto voce] It's contractual.
MR CRYSTAL: I'm sorry, do you know anything about Platinum 4?
MR HORNE: Forgive me, sorry. I don't represent Platinum 4. Sorry, I was speaking to my instructing solicitor. What I was saying to him and the view I take is actually your Honour's view: it's a contractual matter for West Ham United; and as soon as the interim third party debt order and the final order goes, as it were, then they're back to where they were when the original interim third party debt order was made and it's simply a contractual matter.
JUDGE HODGE: I think all I'll do is say permission to the third party to apply for directions, if so advised.
Then we move on to the subject of costs.
MR HORNE: Yes, firstly, I'll address your Honour in relation to the costs of the appeal. I've been successful on the appeal and I would invite your Honour to make an award of costs against the only active party in the appeal, namely the Burridges.
JUDGE HODGE: Yes.
MR HORNE: The costs of the appeal were the subject of a conditional fee arrangement, notice of which was given to Hill Dickinson, the Burridges' solicitors. Obviously the principle of costs will need to be resolved first by your Honour but there will be the question of the uplift.
JUDGE HODGE: I'm not going to deal with things like that. I'm going to send it off to a detailed assessment.
MR HORNE: Indeed.
JUDGE HODGE: But you're asking for the costs presumably of the appeal and below?
MR HORNE: And below. But I was addressing it in stages, simply on the basis that what we've said from the outset in this case when we were joined as a party hasn't changed and we've been successful.
JUDGE HODGE: Yes. Mr Crystal?
MR CRYSTAL: Your Honour, we say that Mr Harrison's conduct is egregious. I know your Honour said strung along - it's egregious. Subject to any further determination by another court, he may well end up collecting these monies, which would be the antithesis of all the business arrangements that were in place back in 2007; and he will have manipulated things so as to deprive the claimants of an unappealed judgment which they have had for three or four years.
We say the question of Mr Harrison's conduct therefore weighs very, very heavily in the balance. I entirely accept that the starting position has to be that costs follow the event, certainly on this appeal. But we say that the question of Mr Harrison's conduct ought to result in a significant discount or extinction of any liability that Mr and Mrs Burridge have.
Can I just set this in context? We've been given to two costs schedules: one is for the costs of the appeal and the other is an estimate of fourth party's costs excluding the appeal. Mr Harrison has been prepared to spend £61,000 before VAT on trying to argue this position. I'm bound to say that probably is supportive of what I've just said. His behaviour is egregious; and it has not only been designed to string along Mr and Mrs Burridge - because it's his company that owed them the money - but there's the possibility that he should now actually benefit from your Honour's ruling. We say that fairness and justice in this case requires that he should not get his costs. He should not be double compensated. We say that the appropriate order - obviously you'll set aside the costs order that was made in the court below - but that Mr Harrison should bear his own costs, as should my clients.
That's a slightly unusual order bearing in mind I won below. Most people having spent, in Mr Harrison's case, £50,000 fighting the matter before the district judge, wouldn't then go and spend a further sum. So in fact the costs exceed the debt. It's part and parcel of what we say of stringing people along, trying to avoid the payment of the debt by one of his companies. This is a terrible position for the claimants.
So we say that the order that you should make, which will result in no further costs being incurred, is that there should be no order as to costs based on Mr Harrison - it's Mr Harrison's conduct. I don't understand your Honour to be critical in the slightest of the claimants.
JUDGE HODGE: No.
MR HORNE: Your Honour, if I can address head-on the question of Mr Harrison's conduct. Can I take your Honour to page 119 in the non-core bundle. It's important to put in context the factual basis upon which the claimants have proceeded. 119 is the list of questions they wish to be asked of the officer of the company -----
JUDGE HODGE: Well, to cut you short, you're going to say that, at 209, Mr Harrison laid out his stall.
MR HORNE: His defence is put at 209 but it's the timing, that's -----
JUDGE HODGE: Before the application for the interim third party debt order is made.
MR HORNE: It's even more that that. The cheque relates to a different transfer agreement. The dishonoured cheque relates to a different deal, as it were, if I can put it in that light, your Honour. Next we have the judgment and, you know, the claimants have achieved their default judgment. Then they examine Mr Harrison in May who sets out his stall. He then applies to be joined to the application for an interim third party order on exactly that basis and that factual basis has never changed.
Whilst the result - and I think to paraphrase your Honour's view - may have the appearance of an unjust result, it has a good legal result, with respect to the Burridges, in the sense this is all about contractual entitlement. If he hadn't set his stall out I could understand or there would be certainly some basis for the court taking a dim view about his conduct. But it's not - he has spelled it out there. Even though the claimants, who have always been helped by Hill Dickinson throughout, as I understand the representation, even though they've had those answers they've ignored them and gone on with the matter. In one sense, they only have themselves to blame. So however unattractive or however technical the argument may be by Mr Harrison, it's a good argument that they've always known about.
JUDGE HODGE: Yes, thank you.
JUDGE HODGE: Having allowed the appeal on ground number 5 of the appellant's notice, I now have to address the question of costs. Mr Wilson Horne for the appellant says that costs should follow the event, that the appeal has been successful, and therefore Mr Harrison should be entitled to his costs, both of the appeal and in the court below.
For the respondent, Mr Crystal points to the highly unattractive and technical basis upon which this appeal has been advanced and allowed. He submits that fairness and justice dictate that whilst the claimants should not be entitled to their costs, and the order for costs in their favour in the lower court should be discharged, nevertheless Mr Harrison should not be entitled to recover his costs from the claimants, but should be left to bear his own costs. He therefore invites the court to make no order as to costs, either of the appeal or in the court below.
In response, Mr Horne submits that, however technical the legal argument advanced for Mr Harrison may have been, it was nevertheless a good argument in law; and it was an argument that had been flagged up and raised by Mr Harrison even before the initial application for an interim third party debt order. Reference is made to Mr Harrison's additional information, provided on 23rd May 2007, in response to an order for his examination as a director of the defendant company. At page 209 of the appeal bundle, Mr Harrison had made it clear that it was his contention that at all material times he had contracted with West Ham United FC in respect of their signing of Lucas Neill, and that the debtor company was simply utilised as a vehicle for payment in accordance with both the terms of Mr Harrison's contract with the club and also FA Regulations, which prevent any company acting as an agent and only allow individuals to do so.
I accept Mr Horne's submission. However technically unattractive Mr Harrison's position may have been, and however unfair that may be seen to be by Mr and Mrs Burridge, nevertheless Mr Harrison had made his position clear; the claimants had applied for a third party debt order in the face of that, and the court has found that they had no entitlement to such relief. There is nothing in the conduct of Mr Harrison's defence to the application, or his pursuit of this appeal, that, it would seem to me, would justify the court, in the exercise of its discretion, in disallowing him whatever costs may be allowed on a detailed assessment. Mr Crystal makes the point that Mr Harrison has incurred costs unreasonably and in a disproportionate way. That will have to be a matter to be determined by the costs judge on a detailed assessment. Certainly it would appear that Mr Harrison, according to the costs statement, has expended sums in excess of the amount of the judgment debt. That is a factor that may be taken into account on a detailed assessment, particularly on the issue of proportionality. But that is a matter for the costs judge and not for this court. It seems to me that there is no valid basis in principle for disallowing Mr Harrison his costs, both of the successful appeal and in the court below.
What I will do is to discharge, in addition to paragraphs 1 and 2, also paragraphs 3, 4 and 5 of the district judge's order. But I will order the claimants to pay the fourth party's costs of the appeal and the costs in the lower court, to be the subject of a detailed assessment if not agreed.
MR CRYSTAL: On the standard basis?
JUDGE HODGE: On the standard basis, yes. Are there any other matters?
MR CRYSTAL: Your Honour, yes, I rise. It's always difficult, as your Honour will know from practice, for counsel to get up and ask an appellate judge for permission to appeal and I understand -----
JUDGE HODGE: Well, I can't give it to you.
MR CRYSTAL: I understand that. Can I just say, speaking for the claimants (who regrettably can't be here today), they will no doubt be puzzled how it is that Mr Harrison can use a company to discharge debts for services provided to him, but yet when it's services provided by Mr -- anyway, be that as it may, we want to go to the Court of Appeal and I need permission. What we want to avoid is the monies being paid out to Mr Harrison or any of his companies in the intervening period. I've got 21 days to go to the Court of Appeal and seek permission and also a stay. I just want to ensure that the monies, as before, that the monies remain where they are.
JUDGE HODGE: What I think you're asking me to do is to grant a stay of paragraph 2 of my order -----
MR CRYSTAL: Yes.
JUDGE HODGE: ----- which is the order that will discharge the interim third party debt order, for a certain period of time.
MR CRYSTAL: To enable us to apply to the Court of Appeal. Sorry, I should have restrained myself from commenting on -----
JUDGE HODGE: You say the Court of Appeal, I'm not actually sure, I think it's probably a single judge of the High Court.
MR HORNE: [Sotto voce] I think it's the High Court.
MR CRYSTAL: I'm grateful to my learned friend.
JUDGE HODGE: Because I'm sitting as a judge of the county court exercising an appellate jurisdiction and therefore I think any appeal from me lies to a single judge of the High Court because it's not a Part 7 or Part 8 claim allocated to any track.
Mr Horne, unless you wish to say anything, what I would be minded to do is to grant a stay of that paragraph of my order that discharges the interim third party debt order for 28 days. That would give enough time for you to put in an appellant's notice, including an application for a stay of execution, and try and get it before a High Court Judge.
MR CRYSTAL: What I don't want to do is - as your Honour probably knows, things got a little bit excitable at the time when the matter came before your Honour ------
JUDGE HODGE: Yes.
MR CRYSTAL: It seems to me that the usual order is that in those circumstances as long as we apply then the stay remains in place until the determination. If we get permission to appeal and a judge considers that, with no disrespect, your Honour is wrong, it would be absolutely absurd if the monies disappeared in Mr Harrison's coffers, possibly to never re-appear again.
JUDGE HODGE: What I think I should do is just give you a stay for 28 days and then it's for you. You'll probably get your appellant's notice in well within the 21-day period allowed and that will give some extra time for a High Court judge to look at it.
MR CRYSTAL: Yes. And it would be commonly understood, if any explanation were required by a third party, that West Ham cannot pay out the monies until the 28 days have expired or -----
JUDGE HODGE: Yes.
MR CRYSTAL: Just so that there's no attempt to -----
JUDGE HODGE: Well, the interim third party debt order will remain in place for the 28 days.
MR CRYSTAL: Yes, so the effect of that is -----
MR HORNE: It's stayed, the discharge is stayed.
JUDGE HODGE: Yes.
MR HORNE: Absolutely, I've no problem with that. I had addressed this, when we applied for permission to appeal from your Honour, on the last page of my skeleton argument and I set out the test to be applied by the court, namely it's balancing the risk of injustice either way, and obviously the question of merits can't be ignored. If your Honour is with my learned friend in terms of the principle of the stay, I have no comment to make on the course your Honour proposes taking. Really all I submit in relation to the merits is there are none. This is a technical point and it's a pretty clear answer.
JUDGE HODGE: Having allowed the appeal I can see the force of that, but nevertheless it does seem to me this is an appropriate case in which a High Court judge should have an opportunity to consider whether he's prepared to give permission to appeal.
MR HORNE: Indeed.
JUDGE HODGE: If so, there should be a stay until he's had that opportunity.
MR HORNE: Yes, that deals with that matter.
There's one matter I forgot about and that was seeking an interim payment on account of costs. I had intended to address you on that when you dealt with the principle of costs. Basically, as at today's date, Mr Harrison has paid some £18,000 to his legal representatives.
JUDGE HODGE: Isn't there a further point that, under paragraph 5 of the district judge's order, Mr Harrison was ordered to pay £14,000 by way of interim payment on account.
MR HORNE: Yes.
JUDGE HODGE: Has that payment been made?
MR HORNE: That was stayed.
JUDGE HODGE: That was stayed?
MR HORNE: I think that was also stayed and I think your Honour has discharged it anyway now.
JUDGE HODGE: Well, I discharge it now, but I just wondered whether there was any sum to come back.
MR HORNE: Ah, right, no, my instructing solicitor has whispered to me that there was an agreement reached between the solicitors on that. So I would seek an interim payment. I'm going to seek the sum of £18,000 he's paid. What happened thereafter, the matter was dealt with on a CFA basis. Given the level of costs I think that's a fairly safe sum. So I would seek an interim payment of £18,000. I appreciate that again may be subject to the stay. I'm not going to re-argue that point, I can see the force and the wisdom in that.
JUDGE HODGE: Mr Crystal, what I'm minded to do is to order an interim payment on account of £18,000 stayed for 28 days. So if you get your appellant's notice in, you can also ask for -----
MR CRYSTAL: Yes, it's unsurprising that an order like that is asked for and is frequently given. I think in the circumstances of this case - and this is a somewhat unusual set of circumstances - I would suggest it would be premature at this stage to make any interim costs order in favour of the appellant.
JUDGE HODGE: It seems to me that what's sauce for the goose is sauce for the gander. You've got an interim payment on account -----
MR CRYSTAL: Well, it's gone.
JUDGE HODGE: ----- in relation to the hearing before the district judge, and therefore it seems to me there should be an interim payment on account. Further costs have been incurred since then and £18,000 seems a reasonable sum.
MR CRYSTAL: So be it.
JUDGE HODGE: But it will be stayed for 28 days so that you can include an application for a further stay of the interim payment in your appellant's notice.
MR CRYSTAL: Yes.
JUDGE HODGE: As you know, you've got 21 days for that and my view is that it should properly be directed to a single judge of the High Court.
MR CRYSTAL: Your Honour is absolutely right.
MR HORNE: Your Honour, I was just going to add a little more sauce to the situation, relating to interest payable on those costs. That's the only sum that's been -- you'll note the order that was made in paragraph 4 by District Judge Baker, in terms of interest being payable on the costs that had already been paid by the Burridges, the jurisdiction being section 74 of the County Courts Act 1984. I was also going to invite - that's the only sum he's paid, £18,100 - I was going to invite your Honour to award costs on -----
JUDGE HODGE: I don't see why there should be interest.
MR HORNE: Indeed.
JUDGE HODGE: So I'm not going to make any order for payment of interest.
MR HORNE: Indeed.
JUDGE HODGE: All right, is there anything else?
MR HORNE: No.
MR CRYSTAL: No.
JUDGE HODGE: Since there may be a need for me to prepare a transcript, I had better keep the appeal bundle. So I will keep those with the papers.
MR HORNE: Is your Honour anticipating the parties agreeing an order?
JUDGE HODGE: Yes, could you agree an order and then submit it to me for approval?
MR HORNE: Of course.
MR CRYSTAL: I know it wouldn't be ready today anyhow - I'm sure your Honour is very busy - I assume that your Honour will send out a corrected judgment, an approved judgment a.s.a.p. because we'll need that for the -----
JUDGE HODGE: What happens is that I get the transcript - and I normally ask for it as an e-mail Word attachment - and then I try and correct them as soon as I can. But it's when I'm allowed time to do so. Normally my turnaround time is about two or three days. What takes the time is getting the transcripts in.
MR CRYSTAL: Yes, because of course we need to put a transcript of the judgment in with the -----
JUDGE HODGE: Yes, yes.
MR HORNE: I can't imagine on this side there is going to be any objection if there is a two or three day delay that affects the progress of the appeal. I can't see -- well, I certainly won't be privy to any sort of unconscionable advantage taking.
JUDGE HODGE: The delay tends to come in getting the transcript in to me rather than me turning it around.
MR HORNE: In any event, your Honour, it doesn't prevent the appeal being launched because obviously counsel have a note of the judgment anyway.
JUDGE HODGE: Yes. Right, well, I'm afraid I'm going to have to keep all of this.
[Note by the court: Since any appeal from the court's decision would be a second appeal, by article 5 of the Destination of Appeals Order 2000, any appeal will lie to the Court of Appeal rather than to a single judge of the High Court.]