Archive | July, 2009

A taxing fitness case

July 24, 2009

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Source: Read the full case report here:

The Atrium Club Ltd v. The Commissioners for Her Majesty’s Revenue & Customs (HMRC) [2009] UKVAT V20933 (London Tribunal Centre), 21 January

This an appeal against a decision by HMRC that Atrium made supplies of taxable sporting services. The case is complicated however because it concerns multiple companies – a ‘parent’ health & fitness club (Atrium) set-up in 1991 and a number of non-profit making subsidiary organisations (Atrium Health Ltd -1996, AAB Sports Ltd -2000, FAB Ltd -2003) each replacing its predecessor in order to provide exempt sporting services. By Atrium effectively leasing the premises to the new company to operate, Atrium saved VAT on its membership fees as these fees were reclassified as exempt supplies rather than standard-rated (and therefore taxable) supplies.

This was possible because under Part A of Article 13 of the Sixth Directive, certain activities closely linked to sport or physical recreation could be exempt from VAT. In 1996, consultants (AIC) employed by Atrium suggested that the fitness club could be restructured to take advantage of this rule and make the club competitive with local authority fitness clubs, and this was what happened with the licensing of Atrium Health Ltd to handle all the operational functions of the health club.

When in 2000 the rules became stricter, so a new company (AAB) was set up by another set of consultants (WJB Chiltern) in order to meet the more demanding new criteria. In 2002, this new scheme attracted the attention of HMRC and after an investigation, Customs concluded that not only were the membership fees of AAB taxable, but that  Atrium should also be held liable for abusive practices designed to evade tax.

The Tribunal held at [70] however that while the WJB Chiltern scheme was ingenious, there was no direct nexus between Atrium and the customers. All the staff and club activities belonged to AAB rather than Atrium and it was AAB that dealt directly with the customers and paid staff PAYE contributions to HMRC. Given this conclusion, it was not possible to argue that Atrium actually supplied the sporting services [84].

HMRC’s alternative argument was therefore considered, namely that this arrangement was an ‘abusive practice’ designed to obtain a tax advantage [73]. The problem with this approach is that the scheme never worked and so no tax advantage ever occurred. When HMRC liquidated AAB for non payment of tax, all its assets were transferred to a newly created company (FAB Ltd) and HMRC could not then pursue Atrium for the debt [86], as such Atrium’s appeal against the HMRC decision was allowed.

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What’s in a name? well quite a lot actually by the sounds of it…

July 24, 2009


Sources: Full case report – 

Lambden v. Henley Rugby Football Club & Henley Rugby Football Club Ltd [2009] UKEAT/0505/08/DA

The case concerns the sacking of Jon Lambden, the 54 yr-old Head Coach and Director of Rugby at Henley Hawks Rugby Club on 18th February 2008. The case itself is an appeal from the decision of the 2008 Employment Tribunal in Reading that dismissed Lambden’s claim for unfair dismissal.

At issue in the case, is the nature of the claimant’s employment relationship with the club. The claimant contends that he was employed and therefore because the club summarily dismissed him without going through the full employment procedure, he is entitled to compensation. The Club on the other hand maintains that the claimant was actually self-employed and therefore it was entitled to terminate his services as it did.

Although there was a question mark over whether the Rugby club itself or the limited company set-up to manage the club that engaged in a contract with the claimant, the Appeal  Tribunal agreed with the earlier Tribunal that the Rugby Club had no contractual relationship with the claimant and that any action would be against the limited company [36].

So why was the claimant’s employment relationship so controversial?

The problem was that Henley Rugby Club had merged two previous roles (one self-employed, the other employed under PAYE) and offered the claimant the choice of which tax status he wanted to be [21]. The claimant chose self-employed and set up his own limited company (JKNA Training Ltd) [23]. In doing so, the Tribunals found that the claimant had a clear idea as to the difference in status between the two methods of taxation [26]. This decision was not so clear-cut however when the full facts of the contractual relationship were examined

  • The claimant’s hours of work were all training evenings and match days
  • The work for the club amounted to just under one half of all JKNA invoices
  • The claimant had autonomy over playing and sporting matters (the tribunal held that this was not an indication of self-employment but rather specialist expertise superior to the club [32]).
  • The claimant was under the control of the Chairman of the Club Management Committee
  • A notice period of three months on either side was agreed
  • Salary was fixed at £27,500pa regardless of how many hours were actually worked, with provision for a bonus and importantly, 4 weeks holiday pay
  • Also included was a fully insured, leased car from the Club’s fleet and a Club credit card (although the Tribunal held that provision of a car and credit card were usually indicative of employment rather than self-employment status, it gave little weight to them, preferring the substance of the arrangements instead [27]).
  • The claimant was not expected to provide a replacement or substitute if he was unable to provide his services

Although both Tribunals held that there were aspects that pointed more to employment than self-employment, no single point was decisive and in the absence of an unequivocal finding more weight had to be given to the parties self-description (ie self-employment) [57].

Ultimately though, the decisive point in the case was the fact that the Employment Appeal Tribunal could only overrule the earlier Tribunal decision if it felt that it was in some way perverse or misdirected in law [45]. On these facts, it was impossible to say that they had and the claimant’s action failed.

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Restricted access to rugby ground

July 24, 2009


Sources: full case report –; see also an interesting Irish blog report on the case:

Hannon & Others v. BQ Investments [2009] IEHC 191

The four claimants (Brendan Hannon, Martin Ryan, Declan Cusack & John Meaney) are all trustees of Thomond FC and sued the defendants over an agreement for sale of some land for a student apartment development. As part of the sale, the purchaser also agreed four special conditions (8-11) :

  1. The provision of “two suitable rugby playing pitches, levelled, top soiled and ready for seeding” on the remaining lands
  2. The relocation of the existing floodlights and electricity sub-station to one of these new pitches
  3. The club would have a right of way over the roadway and footpath for use of the pitches and clubhouse
  4. (Uncontested at trial) that the club could connect into the services installed by the purchaser.

While an earlier Circuit Court case (concerning clauses 8 & 9) was settled for an additional sum, effectively buying out the defendants obligations under the two clauses, nothing was raised about clause 10 until a year later when the claimant’s solicitors sent a letter reminding the defendants about their obligation to construct and light a right of way to the pitches.

The dispute in this case therefore relates to the meaning of the words in clause 10 and in particular when the obligation to build this roadway and footpath became due. The problem is that while the location of the right of way was agreed by both sides, no formal clubhouse actually existed (simply a temporary portakabin). The defendants therefore argued that they did not need to build a new right of way to this land as other pre-conditions had not been fulfilled. By contrast, the claimants argued that their actual use of the land was irrelevant but that any plans they did have for the land was compromised without the right of way, but even if it were not, clause 10 is a stand-alone clause.

Ultimately the court decided that the phrase ‘for use of the’ related to the purpose of the land, rather than any condition precedent  and that as a result the defendants were in breach of contract. The court however reserved any decision on awarding damages or specific performance until after further evidence had been heard about the future plans for the land.

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Racing case did not crash out of court

July 24, 2009


Sources: Full case report –

Opinion of Lady Clark of Calton in the cause of Pearce v. Ferguson & Another [2009] CSOH 39

This case is an ex tempore oral opinion given by Lady Clark of Calton in the Scottish Court of Session (Outer House) in order to advise the parties. The issue relates to a negligence action for personal injuries during a test session ahead of a motor race at Knockhill Racing Circuit.

Although the defendant tried to argue that the claimant was a voluntary participant and motor racing carried an inherent risk [4], this was rejected by the court. In particular, at [5] it was noted that ‘it is not a matter within judicial knowledge as to what risks or dangers might be common or expected or exist by participating in test sessions at Knockhill Racing Circuit. I certainly cannot conclude that it is within judicial knowledge that the pursuer had voluntarily agreed to the risks of an accident of the type averred or that such accidents were part of the common risks of the sport at that particular racing circuit. I am of the opinion that evidence would be required about this.” (I’m guessing then that Lady Clark will not be watching the Hungarian Grand Prix this weekend!)

The opinion concluded at [7] with the rejection of the defence’s plea for a summary dismissal, and the note that it will only be possible to establish whether the defendant was in breach of his duty once the full facts have been established. We now wait for the full trial….

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Please don’t gamble in the comments section of the blog…….

July 23, 2009


Source: Sunday Business Post write-up:; Full case report:

Mulvaney & Others v. Sporting Exchange Ltd (Trading as Betfair) & others [2009] IEHC 133

The two linked cases both concern bookmakers (Seamus Mulvaney and Ellen Martin) who are claiming damages for libellous comments posted by third parties on a forum hosted by Betfair Ltd. Although a number of issues arise in each of the cases, the main focus in this preliminary judgment was on the applicability of European Directive 2000/31/EC (the E-Commerce Directive) which had been transposed into Irish law by the European Communities (Directive 2000/1/EC) Regulations, 2003 (SI 69 of 2003) ahead of a full defamation trial.

This issue is important because while the E-Commerce Directive was designed to remove obstacles to cross-border online services, Article 14 of the Directive can also exempt internet intermediaries from liability for things they host, but did not create. The problem for Betfair is that Article 1(5)(d) of the Directive does not apply to gambling activities. If the court therefore held that the chatroom constituted gambling or betting, then Betfair could not rely on the Directive as a defence.

Ultimately, at [4.15] the court decided that because ‘no significant nexus’ operated between the chatroom forum and the betting sections of the website, no gambling did take place in that area and the Directive did apply.

Given that Betfair could rely on the Directive, the next questions to be answered were whether Betfair was an “intermediary service provider” and if so whether provision of a chatroom comes within the Directive? At [5.14], the Court agreed that it did and held that the use of a chatroom forum by third parties did amount to hosting an ‘information society service’ for the purposes of the Directive. Betfair can therefore rely on the E-Commerce Directive as a defence at the full defamation trial, although whether it will succeed or not will depend on the action that Betfair ultimately took when it became aware of the comments.

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Is that your horse?

July 23, 2009


Source:  full case report –

O’Brien v. Derwin & Others [2009] IEHC

This case concerns a traffic collision on the night of the 21st October 1998 on the N6 road between Athlone and Moate. The claimant’s car collided with a number of horses loose on the road before subsequently crashing into a concrete fence post. The claimant suffered brain damage in the collision, while one horse was killed and another injured.

The issue before the court was whether, on the balance of probabilities, the defendants owned and/or controlled the horses that were loose, and were negligent in allowing them to escape onto the highway causing the accident [3].

As no one had claimed either horse, it was left to the court to decide who the probable owners were. Witnesses described both animals as fine big horses and valued at between €3-10,000 [21]. Because the injured horse was also registered on the Show jumping Association of Ireland records, from here it could be traced to the defendant. Having reached this conclusion, it was then reasonable for the court to conclude that both horses were under the defendant’s control on the night of the accident [23].

Using photographs taken by the claimant’s son the day after the accident [14] and a site visit by the court [15], Mr Justice Charleton concluded that the condition of the fencing (or lack of) was inadequate and as such it was likely that a number of horses did escape from the field onto the highway that evening causing the crash. What then most likely happened is that the remaining horses were rounded up by the defendants that night and hurriedly transferred to another property [26]. The defendants were therefore held liable for the full costs of the accident.

The claimant was awarded €337,394.02 (€160,000 general damages, €177,394.02 special damages)

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Two bites of the legal cherry?

July 23, 2009


Source: Full case report: (WESTLAW), see also the original tribunal hearing report in the Yorkshire Post containing more detail about the specific allegations:

Campbell v. Leeds United Association Football (in liquidation) [2009] EW Misc 4 (EWCC)

The case (heard in Leeds County Court) concerned a claim for psychiatric damages by Yvonne Campbell, a waitress and later banqueting manager at Leeds Utd Football club. Yvonne had earlier won two claims for damages for direct discrimination on the grounds of race, sex, victimisation and harassment at two employment tribunals in 2005 and 2006. She was awarded £5,000 by the first tribunal, and a remedy hearing was directed to be convened for the second tribunal, but in the end was never held (The Schedule of Loss for this second claim included psychiatric loss and loss of earnings and amounted to at least £110,000).

The problem is that in May 2007, Leeds United went into creditor’s voluntary liquidation and no return is therefore expected for unsecured creditors like Mrs Campbell. Although Leeds Utd were insured against claims by employees for personal injuries caused by negligence / breach of statutory duty, they were not insured against employment tribunal claims. The case is therefore Mrs Campbell’s attempt to secure damages via an alternative method. Indeed, the court noted at [11] that it is common ground that the allegations made are the virtually the same as those made before the Tribunal. The only difference is that the court case is based on a breach of regulations 3(1), 3(3), 3(6)(a), 4, 5(1), 5(2), 6, 7, 10 and 13(1) of the Management of Health & Safety at Work Regulations 1999, which led to a foreseeable risk of injury attributable to stress, rather than the Statutory direct discrimination actions argued at the Tribunal.

Although Leeds Utd tried to argue that Mrs Campbell was barred by estoppel from arguing essentially the same points, the Court held that a finding of discrimination was an entirely separate issue from negligence [24]. The court also ruled that Henderson v. Henderson (a principle that a party should not be allowed to reopen old cases to introduce new evidence) did not apply to the Tribunal’s assessment of psychiatric loss as no assessment had in fact taken place [36], and it would amount to a denial of justice if Mrs Campbell’s claim was struck out [37].

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Sagen & Others v. VANOC 2010 (case report)

July 22, 2009


Sources: see an interesting blog account of the trial: or read the full case report here:

The facts of the case of Sagen & Others v. Vancouver Organizing Committee for the 2010 Olympic & Paralympic Winter Games (VANOC) has been reported in brief earlier on the blog. Here is the full case report.

The case was brought by 16 highly-ranked (current and retired) female ski jumpers who all claim that female ski jumpers are being excluded from competing at the 2010 Winter Olympic Games because of their sex, in violation of their equality rights under s.15 of the Canadian Charter of Rights and Freedoms. [1]

They argued in the Supreme Court of British Columbia that as the VANOC is a federally incorporated organisation, it had duties under the Charter to make provision for women’s events if it is also hosting male ski jumping competitions. The claimants therefore wanted VANOC to stage a female ski-jumping event, or alternatively to remove the male ski-jumping event (although the claimants suggest at [6] that the IOC would authorize VANOC to host a female event rather than cancel the male event).

By contrast, VANOC suggested that the claimants were suing the wrong defendants and that they were sympathetic to female ski jumping (and indeed remained ready to host an event), but their hands were effectively tied by the IOC [4].

Although the Court ruled that the exclusion of women’s ski jumping from the Winter Olympic was discriminatory and was for no other reason than their gender [7], her Honorable Madam Justice Fenlon then went on to state that as not every discrimination is actionable, and given the degree of IOC control, VANOC was not in breach of the Charter.

The main arguments of the case can be summarised by the following two questions:

1)       Does the Charter apply to VANOC?

Broadly speaking, the Charter only applies to government responsibilities [10]. For the claimants to succeed, they therefore had to argue that VANOC was either controlled by government, or carrying out a governmental program.

The problem for the claimants was that although the Canadian, British Columbia, Vancouver and Whistler governments were all represented on VANOC, there was no evidence of any governmental day to day governance [24] or control over VANOC finances [29], and indeed VANOC operated ‘more like a franchisee of the IOC, than a purchaser of a product’ [39]. Even the degree of control operating under s9 of the Trade Marks Act was not conclusive evidence [48].

However the claimants did succeed on the latter argument, and at [58] the Supreme Court held that staging the 2010 Winter Games was a governmental activity, even though it had created a private entity (VANOC) to deliver the actual event.


2)       Is VANOC in breach of s15 of the Charter?

Having established this, the next problem to be overcome was whether VANOC was in breach of the Charter. In doing this, the Court considered three issues:

i)                     What was the benefit at issue? – the opportunity to participate in the 2010 Winter Games at an Olympic Ski Jump Event [75]

ii)                   What is the appropriate comparator group? – Male ski jumpers [75], indeed the court held that Lindsey Van holds the facility record at Whistler [66]

iii)                  What is the discrimination? That the claimants are being treated less favourably on account of their gender [75]

Having established that this discrimination exists, it is then important to understand why and this effectively is the crux of the claimant’s case. The IOC criteria for the inclusion of new events were governed by rule 47 of the Olympic Charter (which effectively laid down certain criteria regarding participation and standards of competition). The problem is not that the rule itself is discriminatory (if anything while it applies equally to men and women, the rule sets a lower standard for participation in women’s events), but rather that its application to ski jumping is discriminatory. This is because while women’s ski jumping does not meet the criteria, neither does the men’s events [86], but they are still included under a ‘grandfather clause’ because they had previously been an Olympic event. As women’s ski jumping had not historically been included, this event was not eligible and therefore constituted discrimination.

The problem with this argument is that the claimants were not asking for a women’s ski jumping exhibition event, but rather an Olympic event [108] and this was beyond VANOC’s capacity. Indeed, the claimants agreed at [116] that VANOC does not have the authority to stage an Olympic Event without the consent of the IOC (while VANOC itself could stage a women’s ski jumping event at the venue, without IOC approval it would not be an Olympic event. Similarly, both the International Ski Federation (FIS) and many National Olympic Committees (NOCs) have stated that they will only participate in IOC sanctioned events during the Olympics).

Given this conclusion, and the IOC’s degree of control, VANOC was not therefore in breach of s15 of the Charter by implementing the IOC Programme of events.

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Hockey Player Acquitted of Assault

July 7, 2009


Victoria, BC 

Robin Gomez was acquitted of assault causing bodily harm in an incident which arose from a punch thrown during a semi-professional hockey game in 2008.  Hubbard J ruled that players impliedly consent to this type of misconduct and that retaliatory hits are part of the game. 

In several past hockey assault cases, defendant players have successfully pleaded that they were either provoked or acted in self-defence.  These acts of provocation included being struck in the head by an opponent’s stick or cross-checked from behind.  

What is particularly interesting in this case is that Hubbard J appears to regard taunting and trash talking as sufficient cause to incite or provoke an assault condoned by the courts. 

Hockey cases such as these are further complicated in proving the necessary mens rea insofar as Gomez’s role in the game is to intimidate and fight but not necessarily to injure.

Chris Ferraro’s civil suit is still pending.

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Boys will be boys…

July 5, 2009


Full Case Report: Orchard v. Lee [2009] EWCA Civ 295 (

Other Sources:;

The case itself concerns an injury to an assistant lunch break supervisor who was patrolling the playground of Corfe Hills School in Dorset on 27th January 2004 when she was struck by a thirteen year pupil playing tag with a friend. The claimant’s case was that running backwards at speed created a foreseeable risk of injury and this should have been appreciated by a boy of the claimant’s age. (Although the claimant brought proceedings naming both boys and the school as defendants, no action was ever commenced against the school).

In Poole County Court (7PH00119, 30th May 2008), her claim was rejected as merely a simple accident caused by horseplay. While there was some inconsistency around how the accident happened, the Court’s finding on the location and circumstances of the accident [40] was not later challenged by the CA.

Instead the focus in the Court of Appeal (in the leading judgment given by Lord Justice Waller) was on clarifying the applicable test of negligence. The first is that mere foreseeability of the risk of injury was not enough as children would appreciate that many games could lead to bruises and scrapes [7]. The court then confirmed that the primary question was whether the average child of that age would appreciate that their conduct was culpable [9]?

However probably the most important paragraph of the judgment was at [11], where the Court confirmed that “for a child to be held culpable, the conduct must be careless to a very high degree and where a child of 13 is partaking in a game within a play area, not breaking any rules, and is not acting to any significant degree beyond the norms of that game, he or she will not be held culpable.”

Given this ruling, the conclusion in [14] that “no part of the conduct seems to be outside the norm where a game of tag is being played, let alone a significant degree outside the norm”, and the fact that the school had only prohibited running inside the corridors, rather than in playgrounds, the court felt that the two boys were only acting as typical boisterous  13 year old boys might act and therefore “it would be a retrograde step to visit liability on a 13 year old for simply playing [an acceptable game] in the area where he was allowed to do so [the playground].” [19]

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