England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE
BIRMINGHAM DISTRICT REGISTRY
(HIS HONOUR JUDGE BOGGIS)

		Royal Courts of Justice Strand London WC2 Wednesday, 21st February 2001

Wednesday, 21st February 2001

1. LORD JUSTICE CHADWICK: This is an application for permission to appeal against an order made on 16th November 2000 by His Honour Judge Boggis QC sitting at Birmingham as a judge of the High Court in the Chancery Division. The order was made in partnership proceedings brought by Mr Mahmood Miah and Mr Abdul Matin against Mr Farooq Miah.
2. The judge was satisfied that the three parties had entered into a partnership for the purpose of trading from premises at 523/526 Bristol Road, Selly Oak, Birmingham -- the trade being the letting of flats and the carrying on of a restaurant business at those premises in the name of Balti International -- and that the partnership was dissolved on 8th September 1998 by the issue and service of the writ in the action. The judge ordered that the affairs of the partnership be wound up and, for that purpose, that the partnership property, which included the premises at 523/526 Bristol Road, be sold. The sale was to be at an auction unless the parties agreed otherwise. Each party was to be at liberty to bid at that auction.
3. In reaching his conclusions the judge rejected the contention advanced by the defendant, Mr Farooq Miah, that there had been an agreement, at or towards the end of 1997, that he would buy out the two claimants. The judge referred to that contention in a passage at page 4E of his judgment:

"Towards the end of 1997 the three parties met to discuss the ending of their business relationship. Farooq Miah says that it was agreed orally that the partnership would end and he would have a chance to buy out the others. Mahmood Miah and Abdul Matin say that they were willing to dissolve the partnership, that they would have to be paid out and no figures were agreed.

By a letter dated 11th February 1998, Farooq Miah's solicitors, Elliott & Co, wrote to a solicitor acting for Mahmood Miah and Abdul Matin. The letter said:

'We understand that you are instructed for Mahmood Miah and Abdul Matin, former business partners of our client, Farooq Miah, and in relation to the dissolution of that partnership and transfer of business premises at 523-525 Bristol Road into the sole name of our client. Will you please confirm that you have instructions to this intent, whereupon we will submit a draft deed of dissolution of the partnership for your approval.'

The draft deed of dissolution followed in early June 1998, to be made between the three parties. It recited that they had been in partnership for some years past, and that they had agreed to dissolve the partnership on the terms set out. There was a separate agreement, also prepared in draft, which was made between Farooq Miah, as the debtor, and Mahmood Miah and Abdul Matin, as the creditors, which provided that Farooq Miah acknowledge that he was indebted to the creditors for £45,000, which was to be paid by instalments over the following year. On 5th June 1998, the solicitors for Abdul Matin and Mahmood Miah wrote that the deal as structured was totally unacceptable to their clients."

4. The judge dealt with the issue at page 10C:

"The next issue is whether there was a dissolution towards the end of 1997, and that the correspondence concerning dissolution between the solicitors in 1998 was merely to confirm what had already been orally agreed. It is right to emphasise here that Farooq Miah places great weight on a letter sent by his solicitors, Elliott & Co, to solicitors appointed by Mahmood Miah and Abdul Matin dated 11th February 1998 to which I have already made reference, in which Mahmood Miah and Abdul Matin are referred to as 'former business partners of our client, Farooq Miah'. That, says Farooq Miah, is clear acknowledgment that there had been a dissolution at the end of the previous year, and that what was being done was simply to record in writing what had been agreed.

It is the case that sometimes a deal is struck between parties orally and solicitors are then instructed simply to put that deal into a formal document, but that they are not instructed to negotiate it or regard it in some way as a subject to contract or uncompleted deal. That is not the case here. The case here, in my judgment, and I find, is that there were discussions at the end of 1997 about dissolution, the exact sum for dissolution was not agreed, although the claimants, Mahmood Miah and Abdul Matin, said that they were prepared to consider dissolution if they were paid out properly, but that no final agreement was then made. All of the correspondence thereafter is completely consistent with negotiations between the two sides. Clearly the proposal made by Farooq Miah through his solicitors, through the draft documentation, of a payment of £45,000 over a period of months was not accepted, and I do not accept that, at the end of 1997 or the beginning of 1998, there was a dissolution. There was not."

5. It is not wholly clear whether Mr Farooq Miah seeks leave to appeal against the whole of the judge's order or only that part of it which ordered a sale of the property. The grounds of appeal in section 7 of the appellant's notice are in these terms:

"(i) Being a Partnership dispute the Court was required to determine the date of dissolution of the Partnership and,

(ii) from the taking of appropriate accounting enquiries, including the preparation for Dissolution Accounts. The claimants had acknowledged on the endorsement to the writ that dissolution was effected on date of service of the writ, if not earlier.

(iii) The Judge did not have an Accountant's Report of any enquiries made at the trial to determine the case;

(iv) Defendant, being sole trader of the business for some time, claimed partnership dissolved and claimed that although he had purchased mainly the claimant's interest in the property, some monies still to be paid and requested accounting enquiries for a fair trial to determine money to be paid;

(v) Claimants did not seek sale of business in writ;

(vi) Defendant was a litigant in person throughout the trial and did not have an opportunity to put forward a skeleton argument beforehand."

6. As to points (i) and (ii) of those grounds, the judge found that the partnership was dissolved at the date of the issue of the writ. He rejected, on the facts, the contention that the partnership had been dissolved earlier.
7. As to point (iii), the order made by the judge directed the taking of accounts and enquiries in the winding up of the partnership. That is the point at which accountancy evidence will be relevant. An accountant's report would have been of no relevance in relation to the matters which the judge had to decide.
8. As to point (iv), the contention that the partnership had been dissolved in 1997 on terms that the applicant, Mr Farooq Miah, would buy out the claimants, is one which the judge rejected on the facts in the passages to which I have referred.
9. As to point (v), the contention that the claimants did not seek a sale of the business in the writ is plainly wrong. The relief claimed in the writ included, at paragraph 3, an order that the affairs of the partnership be wound up. It is an incident of winding up the affairs of the partnership that the partnership property is sold, the debts paid and the surplus, if any, distributed amongst the partners.
10. As to point (vi) the applicant chose to represent himself at the trial. That was his right. He was entitled to put in and rely upon a skeleton argument if he had wished to do so. He was entitled to ask for time to do that if he needed time. It does not appear that he did either of those things. It is now too late to complain that he had no opportunity to do so.
11. The applicant has put in a skeleton argument in support of this application. At paragraph 2 of his skeleton argument he says this:

"If the appellant's version was not accepted by the trial judge, no consideration was given to the letter from the respondent's solicitors in February 1998 wherein the respondents acknowledged to be former partners."

12. He makes the same assertion in paragraph 4 that the respondent's solicitors, in February 1998, requested a dissolution deed. The only letter of February 1998 in the bundles that have been produced to me is a letter of 11th February 1998 (to which the judge referred). That is a letter from the applicant's solicitors, Elliott and Co, to the solicitors acting for the claimants/respondents. There is no letter from the claimant's solicitors to the appeal which indicates that they ever accepted that they were former partners in February 1998. The judge does not refer to any such letter and it is plain from the passages that I have read that, if there had been such a letter in front of him, he would have made reference to it.
13. Mr Farooq Miah has been given the opportunity to produce the letter from the solicitors from Mr Mahmood Miah and Mr Abdul Matin referred to in paragraphs 2 and 4 of his skeleton argument. No such letter has been produced. I am not persuaded that there is such a letter. If there had been, it should have been put before the judge.
14. Paragraphs 5 and 6 of the skeleton argument rehearse the complaint that the judge did not have the benefit of an accountant's report. For the reason that I have already indicated, the judge did not need an accountant's report for the purposes of the issues which he had to decide.
15. Paragraphs 7, 8 and 9 of the skeleton argument contain complaints as to the judge's findings in relation to the capital contribution made by the parties to the partnership. After hearing evidence the judge came to the conclusion that the capital was originally provided as to £28,164 from Mr Mahmood Miah and £16,840 from Mr Farooq Miah. The judge found as a fact that the £28,164 was contributed equally by Mr Mahmood Miah and Mr Abdul Matin. He made that finding on the evidence before him and after hearing each of the three partners. As to their credibility, he observed that Mr Farooq Miah had lied, and lied extensively, to him over the background of this matter. He plainly gave no credit to the evidence of the applicant.
16. The task of an appeal court is to review the judge's decision. It must respect the advantage which the judge has had of hearing and seeing the witnesses give their evidence. The judge said in the present case he could not believe the evidence of Mr Farooq Miah; but, further, as he also observed, the matter largely solved itself on the documents.
17. There has been nothing put before me which suggests that there is any real prospect that Mr Farooq Miah would persuade the Court of Appeal to take a different view on the facts from the view which the judge took. This, therefore, is an application for permission to bring an appeal which has no real chance of success. The application must be refused.

(UPON RESUMING AT 2.00 PM)

18. LORD JUSTICE CHADWICK: In the course of the judgment which I gave this morning I referred to paragraphs 2 and 4 of the applicant's skeleton argument in which he had complained that the trial judge gave no consideration to a letter from the claimant's solicitors in February 1998 in which (it was said) the claimants Mr Mahmood Miah and Mr Abdul Matin had acknowledged that they were former partners that is to say, that the partnership was already dissolved and had requested the dissolution deed.
19. I observed, in my judgment, that the only letter which had then been put before me was a letter of 11th February 1998 from the applicant's solicitors to the solicitors for the claimants in which the applicant's solicitors had referred to the claimants as former business partners of Mr Farooq Miah. That is a letter to which the judge refers in his judgment. He sets out that letter at the bottom of page 4 and at the top of page 5 in the transcript of his judgment.
20. Mr Farooq Miah was not then able to produce to me any letter in February of 1998 from the claimant's solicitors to his solicitors. A copy of a letter of the 19th February 1998 has now been produced; and I have sat again this afternoon in order to consider it. The pagination on the copy suggests that the letter was in that trial bundle and so was before the judge. The letter is written by Messrs Lee & Saeed, the solicitors then acting for the claimants, Mahmood Miah and Abdul Matin. It is in these terms:

"We thank you for your letter of the 11th February 1998 and confirm that we are indeed instructed in this matter.

We note your comments and await to hear from you with a draft of dissolution of partnership."

21. That letter does not contain any acknowledgment that the partnership has already been dissolved. It is a perfectly neutral letter, in correspondence between solicitors, indicating that the writer is instructed and that he is awaiting a draft deed. Plainly that is how the judge must have regarded it when he said at the top of page 11 in the transcript of his judgment that all the correspondence in and after February 1998 was completely consistent with negotiations.
22. What happened thereafter is that, on 20th April, 1998, the applicant's solicitors wrote to Messrs Lee & Saeed to say that they were now in possession of the title deeds to the property, that they were in the process of preparing a transfer of the property into the name of their client, and that they would then (when that transfer had been approved and executed) proceed to prepare what they describe in the letter as a "deed of resolution" of the partnership. That letter was acknowledged on the claimaints' solicitors on 23rd May 1998 in these terms:

"We refer to your letter of 20th April and look forward to hearing from you with the draft deeds."

23. The deeds, in draft, were sent on 1st June 1998 by the applicant's solicitors to Messrs Lee & Saeed. The draft deeds were (i) a draft deed of dissolution; (ii) a draft transfer, and (iii) a draft agreement.
24. The deed of dissolution, as prepared by two applicant's solicitors in draft, contained a recital that the parties had agreed to dissolve their partnership on the terms thereinafter set out with effect from close of business on "the dissolution date". There is no date included in the space provided for "the dissolution date"; that tends to support the view that no date for dissolution had then been agreed. Plainly, at least, the applicant's solicitors did not know of any date that had been agreed for the dissolution. The draft deed of dissolution was accompanied by a draft agreement under which the applicant was to acknowledge that he was indebted to the claimants in the sum of £45,000 and that that amount was to be paid by instalments over a period from December 1998 to June 1999.
25. In response to that, the claimant's solicitors wrote on the 5th June that the deal as structured was totally unacceptable "as our clients require the whole of the monies payable to them on the transfer of the property"; they went on to say there also appeared to be discrepancies between the figures mentioned in the documentation and those agreed by their clients.
26. The response to that, on 10th June 1998, from the applicant's solicitors was this:

"We understand from our subsequent telephone conversation that the documents filed to date do not explain and reflect the agreement reached between our respective clients. If you would kindly indicate what terms are said to have been agreed we will consider amending the documentation accordingly."

27. That correspondence taken as a whole does not support a contention that there was ever a concluded agreement for the dissolution of this partnership on terms at any stage prior to the service of the writ in September 1998. In particular it does not support the contention that there was a concluded agreement as at the end of 1997.
28. The applicant's case, as pleaded, was not that there had been a concluded agreement at the end of 1997. His pleaded case was that the partnership had never really commenced. It is said, in paragraph 14 of the pleaded defence, that the partnership ceased by agreement in or around January 1995.
29. The partnership deed itself is dated 8th September 1994. What appears to have happened in this case is that the partnership was established by a deed in 1994 and, although the partners may from time to time have had discussions as to the terms upon which the partnership should be brought to an end, it never was brought to an end. The judge found as a fact that there never had been any concluded agreement to that effect.
30. In those circumstances the partnership was, indeed, dissolved by the service of the writ; and the order which the judge made for a sale followed from his finding that that was the position. There is, to my mind having looked further at the correspondence which the applicant has now put before me no real prospect that the Court of Appeal would reach the conclusion that the judge was wrong to hold that there had been no concluded agreement to dissolve the partnership prior to the issue of the writ; and, in particular, no concluded agreement that Mr Farooq Miah would buy out his former partners on terms which were acceptable to them.
31. It may well have been that, had Mr Farooq Miah sought to obtain their consent to a dissolution at an earlier stage, he would have been able to secure their agreement to terms which were acceptable. But because matters were allowed to drift on, they never did agree to terms in any final form. Eventually the time came, as Mr Farooq Miah has explained to me, at which his former partners decided that the value of their interest in that partnership property was higher than he was prepared to pay.
32. In those circumstances the position remains that the property will have to be sold by auction; but, of course, Mr Farooq Miah will have the opportunity to bid at that auction and will have the benefit of the taking of a partnership account thereafter. He will therefore be able to obtain the partnership business at a current price, determined by the market as tested at an auction. What he is not able to do is to obtain the partnership property at some lesser price on the basis of some agreement made in 1997 with his former partners. That is because he failed to satisfy the judge, on the facts, that there was and is neutral agreement before the issue of that limit.
33. For those reasons I confirm the order that I made earlier today. This application must be dismissed.
(Application dismissed) (Order does not form part of approved Judgment)