The Gazette 1961 - 64

After some correspondence and discussion a deed was executed in English on April 9th, 1960, between M. Tayssou, as the guarantor of the expenses of the proceedings, and the applicant. M. Tayssou agreed not to withdraw the guarantee, and in consideration of this the applicant undertook to hold 2 5 per cent, of sums recovered up to £300,000 and 50 per cent, of sums recovered in excess of £300,000 on trust for Tayssou, and not to enter into any negotiations with the liquidator of the company without the consent of Tayssou. By July 13th, 1960, the Court of Appeal discharged the order and remitted the application to the Companies Court for further adjudication of the applicants' claim. Later the applicant changed his solicitors and without M. Tayssou's consent came to a compromise with the liquidator. The solicitor, who estimated that the costs of the appeal would exceed £4,000, obtained a charging order of £6,000 on the £70,000 compromise sum for his costs, charges and expenses. It was plain that the agreement of October I4th, 195 9, and the deed of April 9th, 1960, were objection able on the ground of champerty. Champerty was the maintenance of an action under an agreement whereby the maintainor was to have a share in the subject-matter and was illegal on the ground of public policy ; it was an indictable offence. Where a party retained a solicitor to conduct litigation who was ignorant of the champertous agreement, the contract of retainer was unobjectionable. If the solicitor was aware of the terms of such an agreement the contract of retainer, being an agreement to abet the doing of a series of illegal acts, must be void and unenforceable. In the present case the solicitor was aware of the terms of the agreement and the deed, and the terms had been such as to involve him as an active participant in carrying them out. His Lordship thought that unless he was constrained to decide otherwise by authority he would come, without hesitation, to the conclusion that the solicitor had been retained for abetting a, series of acts which were illegal by reason of champerty and that the contract of retainer was on that ground void and unenforceable. His Lordship, having examined authorities, held that the solicitor was entitled only to his out-of- pocket expenses. The solicitor was granted leave to appeal. (In re. Trepca Mines Ltd. — The Times, loth February, 1962.) Local Government—institution of proceedings by solicitors —ratification by subsequent resolution In January, 1961, a local authority served notice on the defendant to abate a statutory nuisance on

Per Hanna, J.:—It is absolutely clear law that on the receipt of the assessor's request for particulars of income, every taxpayer is bound by Statute to make a clear and correct return. It should be known to everyone that, under the Statute, the taxpayer who neglects or refuses to make such a return is subject to a heavy penalty. The defendant appealed to the Supreme Court on the ground that the penalty was not applicable until the appeals which had been lodged had been heard and determined by the Revenue Commissioners. In March, 1931, the Supreme Court (Kennedy, C.J., Fitzgibbon and Murnaghan, J.J.) allowed the appeal, on the ground that Hanna, J. had fixed the penalty based upon the guess-work of the assessing authority without any material supplied by the defaulting tax-payer, and that it was inequitable for the plaintiffs to have brought an action for penalties before the assessment had been finally determined by the Commissioners. (Attorney-General v. X, 38 Tax Cases (1961), 666.) Mr. Justice Pennycuick gave a reserved judgment for the applicant, Radomir Pachtich, son of a former Prime Minister of Yugoslavia, Nicola Pachtich, in this interlocutory application for review of taxation of the costs of a solicitor, and held that if a solicitor was aware of the existence and the terms of a champertous agreement in connection with litigation his contract of retainer in respect of that litigation was unenforceable. His Lordship said that on February 26th, 1959, the applicant sought to prove for a sum of £2,616,486 in the winding up of Trepca Mines Ltd. This claim having been rejected by the liquidator, an application was brought to the Court to have the liquidator's order reversed. That application was dismissed on July 12th, 1959. The applicant then persuaded a M. Tayssou to interest himself in a possible appeal from this order, and they entered into an agreement in October I4th, 1959. It was in French and purported to have been entered into in Paris, but it was in fact signed in London. Under this agree ment M. Tayssou was to pay the solicitor named in the agfeement (the respondent) for the Conduct of the appeal. This contract was plainly objectionable on the grounds of champerty and was accepted by counsel for the solicitor to be so. It was admitted by the solicitor that he was at all material times aware of the terms of the agreement of October I4th, 1959. Aiding champerty—Solicitor only entitled to out-of-pocket expenses.