Burridge & Anor v MPH Soccer Management Ltd & Ors

An equitable assignment does not require formal words of assignment. It is sufficient that, on the proper construction of the communication and its context, the debtor is made to understand that the creditor has made the debt over to a third party.

A direction for payment of an agent’s remuneration to a named company may therefore be an equitable assignment rather than a revocable mandate. Construction depends on the circumstances at the time of the direction, not later payment arrangements. Where the assigned debt is future, consideration is required, but it may arise from the accounting relationship between the assignor and the corporate assignee.

The claimants had a default judgment against MPH Soccer Management Ltd and obtained an interim third party debt order over commission payable by West Ham United plc. The commission arose under a representation agreement with Peter Harrison, a licensed football agent, and the payment declaration directed payment through the Football Association to MPH’s bank account.

A District Judge made the order final. On Mr Harrison’s appeal, HHJ Hodge QC discharged it, holding that the debt was owed personally to Mr Harrison rather than MPH: [2010] EWHC 3116 (Ch). On a second appeal, the claimants were permitted to amend their notice to contend that Mr Harrison had equitably assigned the debt to MPH. The central issue was whether the declaration effected that assignment before the interim order took effect.

1. Appeal allowed. The court granted permission to amend the appellants’ notice and restored District Judge Baker’s final third party debt order. The Chancellor gave the reasons, with which Hallett LJ and Aikens LJ agreed.

2. The representation agreement made Mr Harrison, not MPH, the contractual creditor. The original ground asserting that West Ham’s debt was directly owed to MPH was therefore rightly abandoned.

3. Whether the declaration made an equitable assignment was a question of construction in the circumstances prevailing when it was made. Mr Harrison’s later invoice in the name of another company was irrelevant. Under the football-agent regulations, an agent had to act as a natural person, but could organise business through a company and receive remuneration through it. The regulations therefore did not prevent assignment to MPH.

4. The payment direction, read in context, required the fee to be transmitted through the Football Association to MPH’s identified bank account. It concerned four instalments over a substantial period and contained no indication of revocability. Applying the principle in Wm Brandt’s Sons & Co v Dunlop Rubber Co Ltd, [1905] AC 454, language of assignment was unnecessary if the debtor was made to understand that the debt had been made over. The declaration satisfied that requirement and was also consistent with the distinction drawn in Bell v The London North-Western Railway Company, (1852) 15 Beav 548.

5. The debt was future when assigned, so consideration was required. It was supplied by the relationship between Mr Harrison and MPH: MPH would account to him for receipts and permit him to draw on the resulting credit. When the second instalment became due, the assigned sum was subject to the interim third party debt order. The retained sum was consequently payable to MPH and, under the final order, to the claimants.

• Court of Appeal (Civil Division) Allowed the claimants’ second appeal, permitted amendment to advance the assignment issue, and restored the final third party debt order: [2011] EWCA Civ 835.
• Liverpool District Registry (HHJ Hodge QC) Allowed Mr Harrison’s appeal from the District Judge and discharged the third party debt order: [2010] EWHC 3116 (Ch).
• Liverpool County Court (District Judge Baker) Made the third party debt order final.