Agassi v Robinson (Inspector of Taxes) (No. 2)

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLord Justice Dyson
Judgment Date02 December 2005
Neutral Citation[2005] EWCA Civ 1507
Date02 December 2005
Docket NumberCase No: C3/2004/0829

[2005] EWCA Civ 1507

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

(CHANCERY DIVISION)

MR JUSTICE LIGHTMAN

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Lord Justice Brooke

Vice-President of The Court of Appeal (Civil Division)

Lord Justice Dyson and

Lord Justice Carnwath

Case No: C3/2004/0829

Between:
Andre Agassi
Appellant
and
S Robinson (H M Inspector of Taxes)
and
(Bar Council and Law Society Intervening)
Respondent

Mr Patrick Way and Ms Nicola Shaw (instructed by Christopher Mills, Tenon Media) for the Appellant

Mr Bruce Carr (instructed by The Solicitor of the Inland Revenue) for the RespondentAnthony Speaight QC and Ron Chatterjee for the Bar Council

Richard Drabble QC and David Holland for the Law Society

Lord Justice Dyson

This is the judgment of the court, to which all its members have contributed.

Introduction

1

The appellant is a well known professional tennis player. Through his company, Agassi Enterprises Inc, he entered into endorsement contracts with two manufacturers of sports clothing, Nike Inc and Head Sports AG, neither of which is resident or has a tax presence in the UK. A question arose as to whether the appellant, being at all material times resident in the US, could be assessed to income tax under section 556 of the Income and Corporation Taxes Act 1988 in respect of payments connected with his activities in the UK as a sportsman. The Special Commissioners decided that he was assessable for tax and that decision was upheld by Lightman J. On 19 November 2004, however, his appeal was allowed by this court (Buxton, Sedley and Jacob LJJ). The question of costs was adjourned because an issue of principle was raised by the HM Revenue and Customs. They disputed the appellant's claim that he was entitled to the costs he had incurred in retaining the services of Messrs Tenon Media ("Tenon"). We have been assisted by the Senior Costs Judge sitting as an assessor.

2

Tenon are experts in the field of tax law. Mr Christopher Mills of Tenon is a member of the Chartered Institute of Taxation. In that capacity he is licensed to instruct counsel under the Bar's "Licensed Access" scheme (previously known as "BarDIRECT"). That is what he did in the present case for the purposes of the appeal to the High Court and then the appeal to this court. Although this appeal concerns the costs treatment of fees paid to a member of the Chartered Institute of Taxation, the issues raised have implications for fees paid to other persons who do not have the right to conduct litigation within the meaning of section 28 of the Courts and Legal Services Act 1990, and we have reconstituted the court because it was recognised that the issues were of considerable importance to the conduct of civil litigation and to the legal profession. The Bar Council and Law Society were invited to make representations to us, and we have been greatly assisted by their contributions.

3

Tenon have acted for the appellant for many years and are said to be more familiar than anyone with his tax affairs. They are experts in tax law. The tax point at issue in the current litigation was a short point of statutory interpretation. There was no evidence to be marshalled and no witnesses were to be called. The appellant considered that it was more efficient to use Tenon rather than a firm of solicitors. This was because the appeals did not require expertise in the general conduct of litigation and Tenon had already been involved in briefing counsel during 2002 and 2003 on the matter, and had briefed counsel in relation to the hearing before the Special Commissioners.

The Solicitors Act 1974 ("the 1974 Act")

4

Section 20 provides:

"(1) No unqualified person shall-

(a) act as a solicitor, or as such issue any writ or process, or commence, prosecute or defend any action, suit or other proceeding, in his own name or in the name of any other person, in any court of civil or criminal jurisdiction; or

(b) act as a solicitor in any cause or matter, civil or criminal, to be heard or determined before any justice or justices or any commissioners of Her Majesty's revenue. "

5

An "unqualified person" is a person who has not been admitted as a solicitor and does not have in force a practising certificate: sections 1 and 87.

6

Section 22 provides:

"(1) Subject to subsections (2) and (2A), any unqualified person who directly or indirectly—

(a) draws or prepares any instrument of transfer or charge for the purposes of the Land Registration Act 2002, or makes any application or lodges any document for registration under that Act at the registry, or

(b) draws or prepares any other instrument relating to real or personal estate, or any legal proceeding shall, unless he proves that the act was not done for or in the expectation of any fee, gain or reward, be guilty of an offence…"

7

Section 25 provides:

"(1) No costs in respect of anything done by any unqualified person acting as a solicitor shall be recoverable by him, or by any other person, in any action, suit or matter."

The Courts and Legal Services Act 1990 ("the 1990 Act")

8

Part II of the 1990 Act (ss 17–70) is entitled "Legal Services". Sections 17 and 18 are headed "Introductory" and describe the "statutory objective", the "general principle" and the "statutory duty". Sections 27–31C are concerned with rights of audience and rights to conduct litigation.

9

Section 17 of the 1990 Act is in these terms:

"(1) The general objective of this Part is the development of legal services in England and Wales (and in particular the development of advocacy, litigation, conveyancing and probate services) by making provision for new or better ways of providing such services and a wider choice of persons providing them, while maintaining the proper and efficient administration of justice.

(2) In this Act that objective is referred to as "the statutory objective".

(3) As a general principle the question whether a person should be granted a right of audience, or be granted a right to conduct litigation in relation to any court or proceedings, should be determined only by reference to –

a) whether he is qualified in accordance with the educational and training requirements appropriate to the court or proceedings;

b) whether he is a member of a professional or other body which –

i) has rules of conduct (however described) governing the conduct of its members;

ii) has an effective mechanism for enforcing the rules of conduct; and

iii) is likely to enforce them;

(c)….

(d) whether the rules of conduct are, in relation to the court or proceedings, appropriate in the interests of the proper and efficient administration of justice; and

(4) In this Act that principle is referred to as "the general principle."

10

Section 18 provides, in the present context, that when the Lord Chancellor is called upon to exercise any functions which are conferred by Part II of the Act with respect to the granting of rights of audience or the approval of rules of conduct, it is his duty to act in accordance with the general principle and subject to that, so far as it is possible to do so in the circumstances of the case, to act to further the statutory objective. This is what is called, in the heading to this section, "the statutory duty."

11

Section 27 contains provisions in relation to rights of audience. It provides by s 27(2) that a person is to have a right of audience before a court in relation to any proceedings only in certain clearly defined circumstances. One of these, which relates to a member of the Bar, is where he has a right of audience before that court in relation to those proceedings granted by the appropriate body, and that body's qualification regulations and rules of conduct have been approved for the purposes of this section in relation to that right (s 27(1)). Section 28 deals with the right to conduct litigation and, so far as material, provides:

"(1) The question whether a person has a right to conduct litigation, or any category of litigation, shall be determined solely in accordance with the provisions of this Part.

(2) A person shall have a right to conduct litigation in relation to any proceedings only in the following cases—

(a) where—

(i) he has a right to conduct litigation in relation to those proceedings granted by the appropriate authorised body; and

(ii) that body's qualification regulations and rules of conduct have been approved for the purposes of this section, in relation to … that right;

(b) where paragraph (a) does not apply but he has a right to conduct litigation in relation to those proceedings granted by or under any enactment;

(c) where paragraph (a) does not apply but he has a right to conduct litigation granted by that court in relation to those proceedings;

(d) where he is a party to those proceedings and would have had a right to conduct the litigation, in his capacity as such a party, if this Act had not been passed.

(2A) Every person who exercises in relation to proceedings in any court a right to conduct litigation granted by an authorised body has—

(a) a duty to the court to act with independence in the interests of justice; and

(b) a duty to comply with rules of conduct of the body relating to the right and approved for the purposes of this section;

and those duties shall override any obligation which the person may have (otherwise than under the criminal law) if it is inconsistent with them.

(3) ….

(4) Where, immediately before the commencement of this section, no restriction was placed on the persons entitled to exercise any right to conduct litigation in relation to a particular court, or in relation to particular proceedings,...

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