Dr. Samrath Singh Cheema v 1. Dr. Stephen Jones and Others
| Jurisdiction | England & Wales |
| Judge | Lady Justice Asplin,Lord Justice Newey,Lord Justice Longmore |
| Judgment Date | 02 November 2017 |
| Neutral Citation | [2017] EWCA Civ 1706 |
| Docket Number | Case No: A2/2017/1442 |
| Court | Court of Appeal (Civil Division) |
| Date | 02 November 2017 |
[2017] EWCA Civ 1706
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM The High Court of Justice
Queen's Bench Division Commercial Court
David Pittaway QC
HQ16X03267
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Longmore
Lord Justice Newey
and
Lady Justice Asplin
Case No: A2/2017/1442
Daniel Tatton-Brown QC (instructed by Hill Dickinson LLP) for the Appellant
Steven Woolf (instructed by Taylor Wood Solicitors) for the Respondents
Hearing date: 25th October 2017
Judgment Approved
This is an appeal against the order of David Pittaway QC, sitting as a Deputy High Court Judge dated 19 th May 2017. The learned Judge granted declarations that: a partnership at will between the Appellant, Dr Samrath Cheema, Dr Stephen Jones, Dr Reshma Rasheed, Dr Mita Roy and Dr Meenakshi Rawal was entered into as from 1 July 2016 (the "New Partnership") and had superseded the partnership between Dr Cheema and Dr Jones which was the subject of an agreement dated 8 April 2016, (respectively referred to as the "Old Partnership" and the "April Agreement"); and that the New Partnership was dissolved by the service of a notice on 14 October 2016 (the "Notice"). He also dismissed Dr Cheema's claim against Dr Jones in which Dr Cheema had claimed interim and final injunctive relief to restrain Dr Jones from breaching the April Agreement and/or the Partnership Act 1890 and ordered that the affairs of the New Partnership be wound up and that all necessary accounts and enquiries be taken and made.
Permission to appeal was granted by Lewison LJ on 20 June 2017 in relation to a single ground, namely whether the Judge was wrong to conclude that the New Partnership was a partnership at will rather than finding that the new partners (Drs Rasheed, Roy and Rawal) had acceded to the partnership on the existing terms and conditions of the April Agreement which was for joint lives and required unanimity of decision making or alternatively, that he was wrong to conclude that none of the prospective new partners had been provided with a copy of the April Agreement and accordingly, should have found that at least those who were aware of the April Agreement were bound by its terms.
By their Respondents' Notice, the Respondents ask the court to uphold the Deputy Judge's decision on the same grounds and on an additional ground that, if the learned Judge was wrong to conclude that the New Partnership was a partnership at will which was dissolved by the Notice, he ought to have exercised his discretion under section 35(f) Partnership Act 1890 and dissolved the New Partnership in any event. Accordingly, even if the Judge was wrong about the partnership at will, the outcome of the proceedings would have been the same because the New Partnership would have been dissolved. This court is asked to exercise that discretion.
Factual background
In early 2016, Dr Jones invited Dr Cheema to become a partner in the medical practice run from two surgeries in East Tilbury and Corringham, Essex. He accepted the invitation and signed the April Agreement. Shortly afterwards Dr Jones discussed with Dr Cheema the prospect of enlarging the partnership and taking on more patients. Before the end of April 2016, Dr Jones had canvassed the names of Dr Rasheed, Dr Roy and Dr Rawal. On 21 April 2016, a formal meeting about the proposed expansion took place attended by all of the doctors with the exception of Dr Rawal. At or about that stage, Dr Cheema asked Dr Jones to ensure that any new agreement contained provisions for a probationary period for the three new doctors.
On 22 April 2016, Mrs Halcox, the Practice Manager, emailed Dr Roy making a formal partnership offer. Further, at or around that time, Dr Jones instructed Blake Morgan to prepare a new draft partnership agreement and Mrs Halcox was in correspondence with the practice accountants over the structure of the new partners' drawings. The practice minutes of 27 May 2016 recorded that the new partnership would commence on 1 July 2016. Dr Rasheed, Dr Roy and Dr Rawal started work with effect from 1 July 2016 and attended weekly practice meetings with Dr Jones and Dr Cheema. However, the discussions on the terms of the partnership were successively deferred throughout July and early August 2016.
The dispute between Dr Jones and Dr Cheema appears to have come to a head because of a discussion he (Dr Cheema) had with Dr Rasheed after a meeting on 9 August 2016, in which Dr Rasheed says that Dr Cheema suggested that Dr Jones should retire. On 12 August 2016, Dr Jones telephoned Dr Cheema mid-morning at the practice, whilst he was seeing a patient and berated him in unflattering terms. After the telephone call Dr Cheema suffered an anxiety attack and went home. He remained off work but was fit to return to work on 22 August 2016.
On 17 August 2016 Ms Halcox instructed Blake Morgan not to carry out any further work on the new draft partnership agreement. When Dr Cheema attempted to return to work on 22 August 2016, he found that no clinics had been scheduled for him, on the instructions of Dr Jones. The following day he attended a meeting with Dr Jones and Dr Rasheed at which they questioned his fitness to practise, and queried the medical certificate that he had produced. Dr Cheema returned to work on 2 September 2016 and once again was prevented from seeing patients and refused access to the computerized medical records.
Dr Cheema issued proceedings against Dr Jones on 20 September 2016 claiming a mandatory injunction to enable him to return to practice. He relied upon the April Agreement. He maintained that no new partnership agreement with Dr Rasheed, Dr Roy and Dr Rawal had been concluded and that they were not partners. Whipple J granted an interim injunction following a contested hearing on 29 September 2016. The terms were that Dr Jones was restrained from preventing Dr Cheema from practising as a general practitioner at the practice, or from acting in any way that prevented him from exercising his rights under the April Agreement.
On 29th September 2016, the Respondent's solicitors, Taylor Wood, wrote to Dr Cheema's solicitors, Hill Dickinson LLP, inviting Dr Cheema to agree to an immediate dissolution of the partnership pursuant to clause 17.6.7 of the April Agreement but Dr Cheema did not agree. However, thereafter, Taylor Wood served the Notice purportedly dissolving the partnership at will with immediate effect, which they asserted had been formed between all five doctors on 1 July 2016.
In his defence, Dr Jones alleged that the Old Partnership, pursuant to the April Agreement, had been dissolved on 1 July 2016 and that the New Partnership, being a partnership at will, had come into being to which all five doctors were parties. It was further asserted in a Part 20 claim brought by Drs Jones, Rasheed, Roy and Rawal that the partnership at will had been dissolved by service of the Notice. Thereafter, the applications before the court on 30 December 2016 were dealt with by way of undertakings as to the running of the practice until the determination of the substantive issues of the status of the parties at an expedited trial.
The Judge's decision
The Judge considered there was clear evidence that as from 1 July 2016 the doctors acted as and treated each other as partners, and intended to create a contractual relationship between themselves. At [37] he held that on 1 July 2016, the five doctors entered into an oral partnership agreement with the future intention of entering into a written partnership agreement and went on to conclude at [39]:
"In the absence of a written partnership agreement, I consider that the five doctors became partners at will, which in my view, superseded the agreement entered into by Dr Jones and Dr Cheema on 8 th April 2016. I accept Mr Woolf's submission that there cannot have been two partnerships running in tandem to provide medical services under the GMS contact. It follows that I do not accept Mr Tatton-Brown's submission that Dr Rasheed, Dr Roy and Dr Rawal joined Dr Jones and Dr Cheema as partners under the agreement they had entered into on 8 th April 2016, or, indeed, that there was some form of collateral agreement, falling short of the existence of a partnership that came into being on 1 st July 2016, pending a formal partnership agreement. In my view, it does not conform to the reality of the situation that arose when Dr Rasheed, Dr Roy and Dr Rawal joined the practice on 1 st July 2016. Although they were provided with a draft agreement, they were not provided with a copy of the agreement between Dr Jones and Dr Cheema and nor did they consider themselves bound by it."
He found that the Notice was capable of, and did dissolve the New Partnership (which was a partnership at will) between the five doctors. Thus, the Judge held at [40] that Dr Cheema's application for a permanent injunction failed and the Part 20 proceedings succeeded. Further, the Judge noted at [41] that had it been necessary to decide whether it was just and equitable to dissolve the partnership under s35(f) of the Partnership Act 1890, he would have done so. He stated:
"… I cannot see that it is practical for these five doctors to continue working together in circumstances where their mutual relationship of trust and confidence has broken down. Dr Cheema's desire to continue in practice with the other doctors on a long-term basis is, in my view, unrealistic and not in the interests of any of the doctors, or indeed, the staff or patients. I have heard evidence that the operation of the practice has been at an effective standstill over the past few months. Notwithstanding Dr Cheema's meetings with Dr...
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