Harrison v Burridge & Anor [2010] EWHC 3116 (Ch)

[2010] EWHC 3116 (Ch)

Case No 6LV24665

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

IN THE LIVERPOOL COUNTY COURT

Case No 47 of 2010

Liverpool Civil & Family Courts

35 Vernon Street

Liverpool

Merseyside L2 2BX

Date Wednesday, 22 nd September 2010

Before

HIS HONOUR JUDGE HODGE QC

B E T W E E N:

Between

MICHAEL PETER HARRISONAppellant

(1) JOHN BURRIDGERespondents

(2) JANET BURRIDGERespondent

Transcribed by Cater Walsh Transcription Limited

(Official Court Reporters and Tape Transcribers)

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MR WILSON HORNE appeared for APPELLANT

MR JONATHAN CRYSTAL appeared for RESPONDENTS

JUDGMENT

[1]This is my extemporary judgment in the case of John Burridge and Janet Burridge (as claimants) against MPH Soccer Management Limited (as defendant) in claim number 6LV24665, appeal number 47 of 2010.

[2]This is an appeal by the fourth party, Mr Michael Peter Harrison, from an order of District Judge Baker, sitting in the Liverpool County Court, dated 19th March 2010 and perfected on 31st March 2010. Permission to appeal, limited to ground number 5 of the grounds of appeal as set out in Mr Harrison’s appellant’s notice filed on 31st March 2010, was given by me on paper on 1st April 2010 in an order perfected on 12th April 2010. There has been no renewed application by Mr Harrison to seek permission to appeal in relation to grounds 1 to 4 and therefore the only active ground of appeal is that set out in ground 5 of Mr Harrison’s grounds of appeal.

[3]By the district judge’s order, a final third party debt order was made in the sum of £58,219.54. The third party, West Ham United Football Club plc, was ordered to pay that sum by four o'clock on Monday, 22nd March, together with any accrued interest, to the solicitors for the claimants, Hill Dickinson LLP.

[4]Mr Harrison appeals that third party debt order. The third party, West Ham United Football Club plc, has adopted a neutral position in relation to whether a third party debt order should be made against it and has not participated in this appeal. The defendant, the judgment debtor, MPH Soccer Management Limited, has, as I understand it, been struck off the register and dissolved since the commencement of these proceedings and it too has taken no part in the appeal. The effective parties to the appeal are therefore Mr Michael Peter Harrison, as appellant, represented by Mr Wilson Horne of counsel, and Mr and Mrs Burridge, as respondents, represented by Mr Jonathan Crystal of counsel.

[5]The background to this appeal is as follows. On 11th September 2006, the claimants, Mr and Mrs Burridge, issued a claim form in the Liverpool County Court seeking to recover £50,000 plus interest from the defendant, MPH Soccer Management Limited. That sum of £50,000 was said to represent an agreed fee due and owing from MPH Soccer Management Limited to Mr and Mrs Burridge for their assistance in arranging the transfer of a footballer, Mr Ali Al Habsi, to Bolton Wanderers Football Club in or about 2005. The claimants had invoiced the defendant in the sum of £50,000 on 7th July 2005. The defendant company had drawn a cheque payable to the claimants in that sum, and dated 4th May 2006, but that cheque was not met on presentation. As a result, the claimants brought this claim against MPH Soccer Management Limited which, it is common ground, was then a corporate vehicle of Mr Michael Peter Harrison. Judgment in default was obtained in the sum of £56,042.48 in those proceedings on 14th November 2006.

[6]On 18th September 2007, the claimants issued an application for a third party debt order in respect of a sum of money which was to fall due from West Ham United Football Club plc to MPH Soccer Management Limited on 1st October 2007. That sum of money represented the second tranche of a series of payments totalling £900,000 plus VAT which was to fall due pursuant to an agreement dated 19th January 2007 relating to the transfer of another footballer, Lucas Neill, from Blackburn Rovers Football Club to West Ham United Football Club on a two and a half-year player’s contract. An interim third party debt order was made in respect of the judgment debt by District Judge Fitzgerald on 1st October 2007. That interim third party debt order became the subject of a final third party debt order as a result of the judgment of District Judge Baker which is the subject of this appeal.

[7]District Judge Baker had heard the matter on 27th November 2009 and he prepared a written reserved judgment, dated 3rd December 2009, which was formally handed down on 19th March 2010. District Judge Baker was asked on that day to give permission to appeal to Mr Harrison, but he refused permission to appeal on the footing that he considered that there was no reasonable prospect of success in interfering with the generous ambit of the discretion available to the district judge.

[8]As I have indicated, an appellant’s notice was filed on 31st March 2010 raising five grounds of appeal. The matter came before me on paper on 1st April 2010. It did so so soon after the filing of the notice of appeal because there was also an application for a stay of enforcement of the final third party debt order. I refused permission to appeal on grounds 1 to 4 on the footing that the appeal on those grounds did not stand any real prospect of success, and there was no reason (still less any compelling reason) why an appeal should be heard on any of those grounds. That decision has not been challenged. But I did give permission to appeal on ground number 5.

[9]That ground was that the district judge had been wrong to find that(a) effectively MPH was the party to the agency agreement with West Ham and

(b) the relationship of creditor and debtor consequently existed between MPH and West Ham. It is said that the district judge should have held that the parties to the relevant agency agreement were West Ham and the fourth party, Mr Harrison, in compliance with articles 3.1 and 12.11 of the Football Association Football Agents Regulations. Further, it is said that District Judge Baker should have held that it was open to the fourth party to direct to whom instalments due under the agency agreement should be paid, as envisaged by article 17.7 of the FA Regulations, as the relationship of creditor and debtor is said to have existed between Mr Harrison and West Ham United Football Club.

[10]It is necessary for me to refer to the terms of the relevant agreement. As I have said, that was made on 19th January 2007. The parties are said to be West Ham United Football Club plc and Michael Peter Harrison of MPH Soccer Management Limited, Suite 9, Vance Business Park, Norwood Road, Gateshead, NE11 9NE (therein described as “the agent”). There follow four recitals. It is recited that West Ham is a professional football club playing in the FA Premier League and is desirous of signing the player Lucas Neill from Blackburn Rovers Football Club on a two and a half-year player’s contract. The agent is said to be registered with the English FA as a player’s agent and to be in possession of a licence issued in accordance with FIFA for that purpose. It is recited that West Ham wishes to appoint the agent on a non-exclusive basis to assist in and complete the negotiations with Blackburn Rovers Football Club for the acquisition and the registration of the player, and the agent had agreed so to act upon the following terms. Finally, it is recited that West Ham should not be obliged to use the services of the agent and that it might represent itself in any negotiations and/or transactions should it so desire.

[11]The operative part of the agreement provides for the appointment by West Ham of the agent to act on West Ham’s behalf in relation to the acquisition of the player’s registration and, in consideration of the payments thereinafter mentioned, the agent had agreed so to act. By clause 1.2, in pursuance of his duties under the agreement, the agent agreed to comply with the FIFA Regulations and the FA Regulations for the time being governing players’ agents.

[12]Clause 2 provided for the commission. In consideration of the services, West Ham agreed to pay to the agent a once-only commission fee payable (subject as thereinafter mentioned) by four instalments. The first instalment was to fall due within 14 days of West Ham receiving notification that the contract had been registered. A further instalment, which, although it is redacted in the form of agreement before me, I am told was £200,000 plus VAT, fell due on 1st October 2007.

[13]By clause 2.3, payment was to be made through the Football Association, subject to receipt of the agent’s written invoice therefor.

[14]By clause 2.6, if the registration of the player’s contract was subsequently transferred, or the contract was renegotiated by West Ham and the player, or the player was no longer employed by West Ham, or the agent was no longer registered as a FIFA licensed agent, or ceased to hold valid and active professional liability insurance cover in respect of the provision of the services before any of the instalments set out at clause 2.1 had been paid to the agent, then the agreement was immediately to terminate, and such outstanding instalments should not be payable.

[15]By clause 2.7, the agent undertook and warranted to West Ham that(a) he should carry out performance of the services to the best of his ability and use his best endeavours in connection therewith;

(b) he should comply with the Football Association Rules and the Agents Regulations as well as all relevant public law provisions; and

[16]The agreement was executed as a deed and was delivered by the agent in the presence of a witness. The deed was executed by Mr Harrison personally.

[17]Contemporaneously with the entry into that representation agreement a further document was completed by Mr Harrison. It is headed The Football Association Declaration of Payment to a Licensed Agent. By clause 1, West Ham United Football Club recorded that it had employed the services of a licensed player’s agent in the transfer contract negotiations involving Lucas Neill as player.

[18]By clause 2, the fee agreed by the club was £900,000 plus VAT and was to be paid in accordance with the written agreement between the club and Mr Harrison (described as “agent”). The dates for the various payments are then set out, including the payment due on 1st October 2007. The document then went on to record that the fee due to the agent was to be sent to the Football Association for onward transmission to the agent. The form continued:

“Please provide bank details for the agent and ensure all fees are forwarded in the appropriate currency. Please contact the Football Association’s finance department if assistance is required.”

The bank name was inserted as Lloyds TSB, the branch was inserted as a branch at Newcastle-upon-Tyne, the sort code was given, as was the bank account number, and then the name of the account holder was inserted as MPH Soccer Management Limited. The form concluded: “The undersigned confirm that no payment other than that specified below will be made in respect of the agreement”; and the agent confirmed that no payment should be sought or accepted from any other party to the transaction. As I have said, the document was signed by Mr Harrison as agent and dated 19th January 2007. The club, West Ham United FC, agreed to pay £900,000 plus VAT to Mr Harrison.

[19]It is not disputed that that agreement should be construed against the background of the FA Football Agents Regulations of 2006. These appear at page 245 and following of the appeal bundle. I have been referred by Mr Horne for the appellant to regulations 1.5, 3.1.1, 12.4, 12.11, 14.12, 14.28, 17.1 and 17.7. Under the terms of those regulations, only an individual and not a company may act as a licensed agent. But, by clause 17.7, a licensed agent may organise his occupation as a business as long as his employees’ work is restricted to administrative duties connected with the business activity of a licensed agent. Only the licensed agent himself is entitled to represent and promote the interests of players and/or clubs with other players and/or clubs.

[20]The Football Association’s understanding of those regulations is set out in a letter, dated 1st July 2008, from Mr David Lampert, the Head of Financial Regulation at the FA, to Miss Victoria Barry of Hill Dickinson, the claimants’ solicitors. That letter is at pages 243 to 244 of the appeal bundle. The writer makes it clear that he is not making any comments regarding the factual basis of the claim or of Mr Harrison’s or MPH Soccer Management Limited’s defence. The writer limits the letter to an explanation of the form and effect of the FA’s regulatory framework governing agents insofar as it is relevant to the queries which had been raised. The writer explains that at all relevant times the FA had domestic requirements governing the conduct of agents in the football transfer market, the relevant regulations being the 2006 Regulations.

[21]Mr Lampert addresses two matters. The first is the parties to an agency contract. He writes:

“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.”

[22]Clearly the court is not bound, on a matter of construction, by the view of any third party; but it does seem to me that Mr Lampert has accurately summarised the true meaning and effect of the applicable Football Agents Regulations.

[23]As I have indicated, District Judge Fitzgerald had made an interim third party debt order on 1st October 2007. The effect of that order was to provide that, until the hearing of the claimants’ application for a final third party debt order, West Ham United Football Club plc was not, unless the court ordered otherwise, to pay to the judgment debtor, MPH Soccer Management Limited, or to another person, any sum of money due or accruing due by the third party to the judgment debtor except for any part of that sum which exceeded the total shown below, which, with court fees and costs, amounted to £58,219.54. The interim order went on to make clear that it did not authorise West Ham to pay any money to the claimants as judgment creditors at that stage.

[24]The scheme for third party debt orders is contained in Part 72 of the Civil Procedure Rules. By CPR 72.2 (1), upon the application of a judgment creditor, the court may make an order (a “final third party debt order”) requiring a third party to pay to the judgment creditor(a) the amount of any debt due or accruing due to the judgment debtor from the third party; or

(b) so much of that debt as is sufficient to satisfy the judgment debt and the judgment creditor’s costs of the application.

[25]By CPR 72.2 (2), the court will not make an order under paragraph 1 without first making an order (known as an “interim third party debt order”) as provided by rule 72.4 (2).

[26]CPR 72.4 contains provisions relating to interim third party debt orders. By subrule (1), an application for a third party debt order will initially be dealt with by a judge without a hearing. By subrule (2), the judge may make an interim third party debt order (a) fixing a hearing to consider whether to make a final third party debt order; and(b)directing that until that hearing the third party must not make any payment which reduces the amount he owes the judgment debtor to less than the amount specified in the order. By subrule (4), an interim third party debt order becomes binding on a third party when it is served on him.

[27]CPR 72.8 provides for the further consideration of the application for a third party debt order. By subrule (6), at the hearing the court may (a)make a final third party debt order; (b)discharge the interim third party debt order and dismiss the application; (c)decide any issues in dispute between the parties, or between any of the parties and any other person who has a claim to the money specified in the interim order; or (d)direct a trial of any such issues, and if necessary give directions.

[28]It is common ground that the applicable principles are those set out in the notes to CPR Part 73 relating to charging orders, stop orders and stop notices at paragraph 73.4.5 of the 2010 edition of Civil Procedure. Mr Horne, in particular, notes and accepts the eighth of those principles, which is that the court has a discretion, which will not be interfered with on appeal unless exercised on a wrong principle.

[29]In summary, it is Mr Horne’s contention for the appellant that the district judge misconstrued the representation agreement when he held that, under its terms, there was a debt due or accruing due from West Ham United Football Club plc to the judgment debtor, the defendant, MPH Soccer Management Limited. After addressing various arguments, which are not material for the purposes of the only live ground of appeal, the district judge addressed the issue of the true meaning and effect of the representation agreement at paragraph 17 of his judgment. He made the following findings: First, that the agreement of 19th January 2007 was made between West Ham and Mr Harrison of MPH and that he was, as a natural person, to fall within the FA Rules, conducting the negotiations on behalf MPH, of which he was a director. The district judge believed that he was supported in that view by the fact that he directed payments of the commission due from West Ham into MPH’s bank account, and by the evidence of Mr Synnott.

[30]Mr Synnott was a partner in the firm of solicitors who act for West Ham United Football Club plc, Michael Simkins LLP. In connection with an earlier application for a third party debt order in respect of the first instalment of the monies payable under the representation agreement, Mr Synnott had made a witness statement, dated 16th February 2007, in which he had referred to the agreement as being between MPH and West Ham. He had also indicated that a further conditional payment in excess of the sum claimed by the claimants was to be made by West Ham to MPH on 1st October 2007 provided that the player remained employed by West Ham and remained represented by MPH. It was that statement which had led the claimants to make the application for a third party debt order in respect of the instalment of the commission that was to fall due on 1st October 2007.

[31]Returning to the district judge’s judgment, his second finding was that, in the circumstances he described, the relationship of creditor and debtor existed between MPH and West Ham. Certainly, he said, that was the case so far as West Ham was concerned.

[32]Thirdly, he said that the debt was due and accruing as at the date of the interim third party debt order on 1st October 2007.

[33]Fourthly, in so far as the exercise of his discretion was concerned, the district judge was mindful that he was dealing with an application to enforce a judgment debt for a fairly substantial sum of money where there was no doubt that the third party was, at 1st October 2007, holding a sum substantially in excess of the judgment debt, which was to be paid into the judgment debtor’s bank account. Thereafter, and either at the direction of Mr Harrison personally or as the director of MPH, there had been a number of concerted attempts to prevent those monies, the subject of the interim third party debt order, being paid to the claimants in satisfaction of the judgment debt due to them from MPH. In all the circumstances, and having dealt with the various points made on behalf of Mr Harrison, the district judge was not satisfied, on the balance of probabilities, that cause had been shown either by Mr Harrison or by MPH as to why the interim third party debt order should not be made final. Accordingly, he made the interim third party debt order against West Ham plc a final order in the sum provided for by the order of 1st October 2007.

[34]For the appellant, Mr Horne challenges that decision. He says that, in essence, the district judge made two errors of principle. First, he was wrong to construe, as he did in subparagraph 17.1 of his judgment, the representation agreement as a contract between the club and MPH. In support of that contention, Mr Horne relies upon the various matters which are set out at paragraph 15 of his written skeleton argument dated 30th March 2010. He submits that the following aspects of the agreement should have led the district judge to conclude that the fourth party, namely Mr Harrison, was indeed the contracting party: 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.

[35]Mr Horne goes on to submit that the agreement must also be construed in the light of the FA Regulations applicable to a player’s agent since these govern how the player’s agent must conduct his business. In particular, he relies on the fact that a player’s agent must be a natural person, and only that person can contract directly with a football club, albeit he is able to organise his business through a limited company.

[36]Insofar as the document headed Declaration of Payment to a Licensed Agent is concerned, Mr Horne submits that the FA effectively acts as a clearing bank for the onward transmission of agents’ fees from the football club paying the fee. The agent has the right to provide bank details for where he wants the money due to him to be paid. It is in that context that Mr Harrison nominated the company as the recipient of the payment; but, he submits, that does not alter the fact that the payment is contractually due and owing, not to the company, but to Mr Harrison, the individual agent and, Mr Horne submits, the contracting party.

[37]Mr Horne also refers to what actually happened in or about October 2007. That is set out in a witness statement from the fourth party, Mr Harrison, dated 1st November 2007. At paragraph 4, Mr Harrison relates that he delivered an invoice to the third party, West Ham, via another company of his, Platinum 4 Sports Limited, as he was allowed to do under the FA Regulations. He goes on to relate that West Ham refused to pay him the full amount of the invoice and referred to the interim third party debt order as the reason for this. He records that the third party consequently paid the net amount of the sum owed to Platinum 4 to it via the Football Association, the third party retaining an amount equivalent to the retained sum in order to comply with the interim third party debt order.

[38]At paragraph 12, Mr Harrison relates that the monies were owed to him personally. He advised the FA that he wished the second tranche of monies, including the subject monies of the interim third party debt order, to be paid to Platinum 4 Sports Limited. The third party had done this, save for the retained monies, and all monies had been paid on to him by the FA.

[39]From a letter dated 10th October 2007 from Mr Harrison’s solicitors, Mohindra Maini, to West Ham’s solicitors, Michael Simkins LLP, exhibited as PH2 and appearing at page 276 of the appeal bundle, it would appear from the second paragraph that the invoice delivered by Platinum 4 Sports Limited to West Ham was dated 17th September 2007 and related to the full amount of the second instalment of £235,000 including VAT. Although Mr Harrison has not exhibited that invoice, that evidence was not challenged before the district judge. Mr Horne makes the point that, at the time of the hearing before the district judge, West Ham United Football Club plc had been represented by solicitors and had seen Mr Harrison’s witness statement but had not sought to challenge his version of events.

[40]Mr Horne submits that because, for those reasons, the district judge had been wrong to construe the representation agreement as a contract between the club and the defendant judgment debtor, the district judge had also been wrong to treat the relationship of creditor and debtor as existing between MPH Soccer Management Limited and West Ham. Thus, Mr Horne submits, the district judge exercised his discretion on a wrong principle. Accordingly, he submits, the court should interfere with the decision of the district judge.

[41]In his response, Mr Crystal submits that the issue for the district judge, which he says he correctly addressed, was whether there was a debt due or accruing due from West Ham United Football Club plc to MPH Soccer Management Limited. It was for Mr Harrison to persuade the court that there was no debt due from West Ham to MPH Soccer Management Limited, but rather the debt was due to him. Mr Crystal emphasises that Mr Harrison has, on the evidence, consistently conducted his business activities as a licensed football agent not in his own name but through corporate vehicles. In addition to MPH Soccer Management Limited, there was also the company Platinum 4 Sports Limited. Mr Crystal drew an analogy with the position of a solicitor who practises as part of a limited liability partnership. The individual solicitor would provide the services of a solicitor, but fees would be invoiced by, and payment would be made to, the limited liability partnership of which he was a member. Mr Crystal emphasises what I accept is the unattractive nature of the submission being advanced by Mr Harrison, that this is a debt due to him rather than to his company, MPH Soccer Management Limited.

[42]Mr Crystal submits that the district judge directed himself correctly in subparagraph 17.1 of his judgment and he addressed the correct issue. He says that he correctly distinguished between the individual agent and the corporate vehicle through which that agent chose to carry on his business. Essentially, he says that the defendant, MPH Soccer Management Limited, was supplying Mr Harrison’s services to West Ham United Football Club plc. He submits that the court should not substitute the exercise of its own discretion for that of the district judge. I accept that, provided the district judge exercised his discretion on a correct view of the law, this court should not substitute the exercise of its own discretion for that of the lower court. That was one of the bases upon which I refused permission to appeal in relation to grounds 1 through to 4 of the appellant’s notice.

[43]Those essentially are the submissions. In the notes to CPR 72.2, at paragraph 72.2.1 (on page 1907) of the current (2010) edition of Civil Procedure, it is said to be essential to the making of a third party debt order that the relationship of creditor and debtor should exist between the judgment debtor and the third party respectively. If the judgment debtor could sue the third party for the amount and recover it, it is plain that there is an attachable debt. But that is said not to be an infallible test. There must therefore be money due or accruing due to MPH Soccer Management Limited from West Ham United Football Club plc as at 1st October 2007, the date of the making of the interim third party debt order.

[44]As Mr Horne rightly acknowledges, the court is not bound by expressions of opinion even from qualified solicitors, such as Mr Synnott or his partner, Mr Roger Graham Billings, who made two witness statements dated 31st October and 4th December 2007, as to the true meaning and effect of a contractual document. The construction of a contract is a matter of law, and it is a matter to be determined by the court.

[45]It seems to me clear in the present case that the representation agreement dated 19th January 2007 is indeed an agreement made between West Ham United Football Club plc and Mr Peter Harrison as an individual. It is not an agreement made with MPH Soccer Management Limited; nor does it seem to me that that position is affected by the terms of the Declaration of Payment to a Licensed Agent. The commission, including the second instalment due on 1st October 2007, is payable to the agent, namely Mr Harrison. All that the Declaration of Payment does is to provide that the payment should be effected by way of a transfer through the Football Association to a bank account maintained by MPH Soccer Management Limited. It does not seem to me that that document constitutes any variation, novation or assignment in relation to Mr Harrison’s status as a contracting party under the representation agreement of 19th January 2007. The payment is, subject to satisfaction of the relevant conditions, to become due and owing from West Ham United Football Club plc to Mr Harrison personally. Payment is to be effected through his company’s bank account. There is, in my judgment, nothing to constitute MPH Soccer Management Limited a creditor of West Ham United Football Club plc. There is nothing to prevent Mr Harrison nominating another payee to receive the monies into its own account. On the evidence, that is what Mr Harrison would appear to have done by submitting an invoice in respect of the 1st October 2007 commission payment, not in the name of MPH Soccer Management Limited, but in the name of Platinum 4 Sports Limited.

[46]It follows that, in my judgment, the district judge fell into error when he found that MPH was a party to the representation agreement with West Ham United Football Club plc. Consequently, he also fell into error when holding that the relationship of creditor and debtor existed between MPH and West Ham. I agree with the appellant that the district judge should have held that the parties to the agency agreement were West Ham and Mr Harrison. I accept also that the district judge should have held that it was open to Mr Harrison to direct to whom instalments due under the agency agreement should be paid. On the evidence, it would appear that, even before the making of the interim third party debt order, Mr Harrison had re-directed the payment of the 1st October 2007 commission instalment to be made, not to MPH, but to Platinum 4 Sports Limited.

[47]It follows that I accept Mr Horne’s submission that the district judge exercised his discretion to make a final third party debt order on a wrong principle, and that this appeal should be allowed accordingly.

[48]I should say that I reach that result with no sense of satisfaction. It does seem to me that the claimants have been strung along by Mr Harrison; and it may well be that the claimants have good reason for complaining about his conduct to the Football Association. But, as a matter of law, and with regret, it seems to me that there was no third party debt due from West Ham United Football Club plc to the judgment debtor, and therefore it was wrong in principle to make a final third party debt order in relation to the part of the commission payment which equalled the amount of the judgment debt and the costs.

[49]I therefore, with regret, allow the appeal. 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.50. 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?

51. 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.

52. 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.

53. 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.

54. 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.

55. 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. RULING ON COSTS

56. 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.

57. 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.

58. 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.

59. 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.

60. 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.

61. 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.] - - - - - -