Harrison v Burridge & Anor

A final third party debt order requires an attachable debt owed by the third party to the judgment debtor. The court must identify the contractual creditor by construing the relevant agreement, having regard to any applicable regulatory framework. A payment direction or arrangement involving a company does not, without more, make that company the contracting party, or transfer the debt to it. Where the judgment debtor is not the creditor, the necessary creditor–debtor relationship is absent. A discretionary decision founded on the contrary construction is made on a wrong principle and should be set aside.

The appellant, Michael Peter Harrison, was joined as a fourth party to proceedings in which the respondents sought to enforce a judgment debt owed by MPH Soccer Management Limited. The respondents obtained an interim and subsequently a final third party debt order against West Ham United Football Club plc in respect of commission payable under an agency agreement concerning a football transfer.

The district judge held that MPH was a party to the agency agreement and that West Ham owed the relevant debt to MPH. Permission to appeal was granted on the issue whether the agreement was instead made with Mr Harrison personally, and whether the money could therefore be paid to a company nominated by him. The central issue was whether West Ham owed an attachable debt to the judgment debtor.

1. Appeal allowed. The interim third party debt order was discharged, and paragraphs 1 to 5 of the district judge’s order were discharged.
2. Under CPR 72.2, a final third party debt order requires a debt due or accruing due from the third party to the judgment debtor. The relationship of creditor and debtor must therefore exist between those parties at the relevant date.
3. The representation agreement was construed as an agreement between West Ham United Football Club plc and Mr Harrison personally. The applicable Football Agents Regulations supported that construction because only a natural person could act as a licensed agent. MPH was not a party to the agreement.
4. The Declaration of Payment to a Licensed Agent merely provided for payment through the Football Association into MPH’s bank account. It did not vary, novate or assign Mr Harrison’s contractual status, nor did it make MPH a creditor. Mr Harrison could nominate another payee, including Platinum 4 Sports Limited.
5. The district judge therefore erred in finding that MPH was a contracting party and that West Ham owed it the commission. His discretion to make the final order had consequently been exercised on a wrong principle.
6. The respondents were ordered to pay Mr Harrison’s costs of the appeal and below, subject to detailed assessment on the standard basis. An interim payment of £18,000 on account of costs was ordered, stayed for 28 days. The discharge of the interim order was also stayed for 28 days, and West Ham was given permission to apply for directions if required.

The appeal was from an order of District Judge Baker in the Liverpool County Court dated 19 March 2010 and perfected on 31 March 2010. Permission was granted on ground 5 only.