England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM LINCOLN COUNTY COURT
(HHJ Inglis)

		Royal Courts of Justice Strand London WC2 15th October 2001

15th October 2001
1. LORD JUSTICE RIX: This is an application for permission to appeal by Mrs Suzanne Ramage against an order of His Honour Judge Inglis made on 27th April 2001 following a trial which took place for about a week and was in essence concerned with the accounting position between partners of a partnership which was dissolved on 21st February 1992 and which had existed from about June 1991.
2. What happened was that Mr and Mrs Ramage had originally, back in June 1990, formed a four person partnership with Mr and Mrs Darbyshire, who are the claimants in these proceedings, for the manufacture and sale of clocks and other such items. In June 1991 Mr Ramage went bankrupt which resulted in the dissolution of the original partnership, but Mrs Ramage and the Darbyshires continued in a new partnership on the basis of a 50/50 split between Mrs Ramage, on the one hand, and the Darbyshires on the other. As I say, that partnership was dissolved on 21st February 1992.
3. Mrs Ramage then brought proceedings for an account on 12th June 1992, but those proceedings became bogged down and were ultimately dismissed for want of prosecution on 28th April 1997.
4. The present proceedings, in which the Darbyshires are the claimants, were commenced on 20th February 1998, just one day within the six years from the dissolution of the partnership.
5. His Honour Judge Inglis, when reviewing the history of all these matters, expressed some scepticism as to whether, if the matter had been before him at the relevant time, he might not have considered the Darbyshires' proceedings to have been an abuse of process, seeing how they had been perfectly capable of joining in the proceedings for an account which Mrs Ramage had brought in 1992. Nevertheless, directions were made for the present proceedings and in due course those directions resulted in the one week trial which I have mentioned.
6. Mrs Ramage accepts that she was a partner until the dissolution on 21st February 1992, albeit she had a small role in affairs and remained ignorant, she says, of most of the dealings of the partnership, which she left to her husband, even though he was an undischarged bankrupt at that time and therefore no longer a partner, and to Mr Darbyshire. So she submits on this application, really almost as a matter of drawing these matters to the attention of the court by way of a plea in mercy, that she should not really be responsible for the partnership accounts.
7. However unfortunate it may be for Mrs Ramage and however small the role that she may have in fact taken in the partnership while she attended to her growing family, the fact is that in her evidence she did not deny her role as a partner, and there is no sign in her witness statement, or in the pleadings, or in the judge's judgment that she did dispute her ultimate responsibility as a 50 per cent partner for a true account of the partnership dealings.
8. The judge put it in this way at page 3 of his judgment:

"Mr Ramage carried on in the business as before. He was the salesman and took the lead on what might be called external commercial relations in the business. Like many bankrupt businessmen, his wife's position by that time was as a partner largely, enabling him to continue his personal commercial activities. Mrs Ramage had worked in the business with him before the partnership and during the period of incorporation. She had skills in bookkeeping and in graphics, but she had a large and growing young family and played no significant part in the day-to-day activities of the business after the summer of 1990. She lent herself, however, to the continuation in the business of Mr Ramage and the Darbyshires themselves accepted it, however unwisely."

9. I have no doubt as a result of what I have read in the papers and heard from Mrs Ramage today that this is ultimately a true and fair statement of her position. I think that in truth she recognises that herself. It follows that the first ground of her application for permission to appeal, which is really to put before the court the tenuousness of her active dealings in and knowledge of the affairs of the partnership, cannot support permission to appeal.
10. The Darbyshires' claim in these proceedings, upon the taking of an account of this partnership, was originally in the sum of some £16,000 plus interest of more than £12,000. Those are the figures to be found in their claim form. Then that was amended to a schedule which refined their claim as being for some £13,000 overall plus some £16,000 in interest. Ultimately most of that claim failed. The judge's order ultimately was for payment by Mrs Ramage to the Darbyshires of only £2,424.87 plus interest of only £969.95. He also ordered her to contribute a sum of £2,500 towards the Darbyshires' costs. So across the broad range and detail of the issues debated before the judge Mrs Ramage, who was supported by her husband who had come over from South Africa to speak for her at trial, was successful to that extent.
11. Mrs Ramage's second main ground of appeal relates to one of the biggest items within the account which was a sum of £12,500 paid to the Darbyshires, or it may be to Mr Darbyshire personally, by a Mr La Frenais, who is a director of a company called British Precisions Limited.
12. In one sense the history behind that payment goes way back to the period of the partnership before its dissolution when the partners contracted with British Precisions to make goods for a customer called Cenix. Pretty shortly after the partnership failed, before the fruits of those associations were earned. Ultimately profits were earned through the Cenix connection. In the period after the partnership had been dissolved, when new partnerships of various kinds were contemplated or even created, payments were made by British Precision to Mr Ramage of some £19,000. Some years later, in December 1995, £12,500 was paid to Mr Darbyshire as I have mentioned.
13. The issue before the judge was how that £12,500 should be treated. Mrs Ramage said that it should be treated as part of the partnership earnings and that part of it should be allocated to her 50 per cent share. The Darbyshires, on the other hand, said that the £19,000 paid to Mr Ramage should also be treated as part of the partnership, and that half of that £19,000 should be allocated to them, so that on balance they, the Darbyshires, would come out of these matters with a credit in their favour of some £3,250.
14. The judge considered this item very carefully. The strength of the argument for saying that the £12,500 was to be dealt with as a partnership asset was that that was how Mr Darbyshire had treated it at the time of receipt. He drew up an invoice expressing it in such terms. He pressed his claim upon Mr La Frenais and British Precisions on that basis. The judge found that he was mistaken in this. The judge also found that one of the reasons why he treated that sum in that way was because he wished to claim his and his wife's half share to the £19,000 paid by British Precision to Mr Ramage.
15. The judge, as I say, looked at this matter very carefully. He held that there was in truth no basis for treating any of these monies as being part of the partnership. It all arose out of post dissolution events. It was only treated as such by the Darbyshires as part of the partnership accounts in order to give them a leg up for their claim to half of the £19,000; but that too was also outside the partnership accounts. The fact is that the £12,500 was paid to Mr Darbyshire as a personal compensation for missing out on profits which might have been earned by the partnership from the Cenix connection if that partnership had survived. On these matters, therefore, he held in effect and overall in favour of Mrs Ramage because he was willing to treat neither the £19,000 nor the £12,500 as part of the partnership. I can see no reasonable prospect for thinking that the judge's careful findings on this matter would be upset on appeal.
16. Mrs Ramage's third ground of appeal is in relation to what happened to a certain number of carton boxes which had been left behind after the dissolution of the partnership. These boxes were amongst a whole lot of other items left over from the failure of the partnership, some of which were utilised by Mr Ramage in future dealings and transactions and other parts of which were taken by the Darbyshires. The judge carefully considered all these items, these carton boxes among them, and made his careful adjustments in relation to them all. I can see no reasonable prospect on appeal for upsetting any of those findings. Therefore there can be no permission to appeal on that ground.
17. Fourthly, and finally, Mrs Ramage seeks permission to appeal in respect of the sum of £300 costs awarded to her husband. She has made no application for permission to appeal in respect of the order of the costs of £2,500 against her, although she has addressed certain submissions to me today on that subject.
18. As for the £300 costs awarded to her husband, the position is that at the beginning of these proceedings brought by the Darbyshires Mr Ramage, as well as Mrs Ramage, was made a defendant. There was no call for that as Mr Ramage was a bankrupt and for that very reason had had to fall out of the original partnership. In due course, at an earlier stage of these proceedings, Mr Ramage was therefore dismissed from these proceedings. The costs order in his favour represents the judge's assessment in his discretion of Mr Ramage's entitlement to costs as at the stage at which he left these proceedings. The judge who had after the week's trial a very good grasp of the merits of the action and the way in which it had been conducted, insisted, very sensibly in my judgment, on assessing the costs for himself rather than leaving them go off for detailed assessment.
19. He carefully considered the submissions before him that Mr Ramage had, even before he was dismissed from the action, incurred much larger expenses in coming from South Africa. The judge considered all of those matters, thought that those visits were ultimately to be explained as being for the benefit of Mrs Ramage, in just the same way as after he was dismissed from the action Mr Ramage continued to come from South Africa to England to assist his wife in this litigation, understanding, as indeed he had been warned, that he would not be able to make a claim in respect of those costs.
20. The judge carefully considered these matters, assessed Mr Ramage's costs at £300. I can see no reasonable prospect on appeal of the Court of Appeal being able to interfere with the judge's discretion on that matter, even if it open to Mrs Ramage to advance this issue on her husband's behalf, which I doubt.
21. Similarly with the order for costs of £2,500 made against Mrs Ramage: as I have said, that matter is not formally before me, but I can say in the light of Mrs Ramage's submissions on that subject to me today that even if it had been I can see nothing in the judge's careful assessment of these matters to make me think that there would have been any real prospect of the Court of Appeal being entitled to interfere in the judge's discretion on that matter either.
22. I have gone into all of these matters quite carefully and at some length in deference to Mrs Ramage's helpful and courteous submissions before me today. I have sympathy for the predicament of a wife in these circumstances, where essentially she is landed with responsibility for the sake of her husband while being very much in ignorance of the affairs which result, at the end of the day, in a liability brought home to her. However, for the reasons which I have set out earlier in this judgment, I think that Mrs Ramage herself accepts that, unfortunate as it may be, and even though her essential responsibilities were and remain elsewhere, looking after her young family, nevertheless there is nothing that I can do for her in this legal context. Certainly I am not able to give her permission to appeal.
23. For all those reasons I am afraid that I must refuse this application.
ORDER: Application dismissed.