Jaswant Sidhu v Dr Sangeeta Rathor

Hearing dates: 27–31 January, 4, 5 and 7 February, 2–6, 9 and 10 March and 4 April 2020

I direct that pursuant to CPR PD Para 6.1 no official shorthand note shall be taken of this judgment and that copies of this version as handed down may be treated as authentic.

Tom LeechQC (sitting as a judge of the High Court):

Table of Contents

Introduction

In this judgment I will refer to the Claimant as “ Jaswant” and her daughter, the Additional Part 20 Defendant, as “ Sareet” and where I refer to family members of the parties I do so by their given names. I do so without any disrespect to them and on the basis that this is how they were referred in submissions and in the course of the trial.

In this action Jaswant makes a claim under the Partnership Act 1890 against the Defendant, Dr Sangeeta Rathor, for a declaration that they carried on business in partnership together, an order for dissolution and for the standard accounts and inquiries. Dr Rathor denies the existence of such a partnership and asserts that Jaswant and Sareet were employees whose employment was terminated for cause. She and Natio Health Care (UK) Ltd (“ Natio”), her service company, also claim that Jaswant and Sareet took salary increases and other benefits and made payments to themselves without her or Natio's authority.

At trial Mr Hugh Jory QC and Ms Priya Tromans (who is a qualified doctor) appeared for Jaswant and Sareet. Mr Nigel Hood and Mr James Saunders appeared for Dr Rathor. I am very grateful to counsel on both sides and their instructing solicitors for their assistance. I should also pay tribute to Mr Hood for completing the trial during lockdown in challenging personal circumstances and to Mr Jory for his consideration.

The Parties

Jaswant is married to Gurdarshin and has two children, Jasvin and Sareet. She and her husband live in the family home, 9A St Stephens Road Hounslow Middlesex TW3. In about 1985 she joined the NHS as a receptionist at a surgery in Southall and in 1987 joined the Greenford Road Surgery as practice manager. In about 1990 she obtained a Diploma in Practice Management. On 1 April 1993 the practice was dissolved and Jaswant joined one of the doctors, Dr Syed Osaf Ali, as the practice manager of his new practice called the “ Northolt Family Practice” or “ NFP” at 330 to 332 Ruislip Road Northolt UB5 6BG.

Jaswant remained the practice manager and ran the Northolt Family Practice from 1993 until Dr Rathor became a partner in the practice. On 1 August 1988 Dr Ali and she signed written terms and conditions of employment which were updated with effect from 1 April 1993. It stated that Dr Ali was her employer and that she was employed as the Practice Manager at a salary of £13,673.92 per year (equivalent to £6.92 per hour).

Sareet was married to Didar between 2011 and 2015 and for some time she and her husband lived at the family home with Sareet's parents and her brother, Jasvin, and his wife and children. In 2014 she and her husband purchased a property, 10 Stanhope Heath London TW19 7PH. They carried out substantial works to the property (which are relevant to certain issues in the action) and those works were virtually complete by the end of September 2014: see the building control report dated 26 September 2014.

Sareet was employed by Dr Ali from about September 2011. On 1 February 2013 Jaswant (as the Practice Manager) and she signed written terms and conditions of employment which stated that Dr Ali was her employer and that she was employed as a secretary/administrator at a salary of £24,008.40 (equivalent to £12.15 per hour).

Dr Rathor is married to Balwant and has two children, Ranwant and Shaan, and for most of the events which the subject matter of the trial she lived at 12 Laburnum Grove Hounslow TW3 3LU with her family. On 4 October 2017 she purchased a property, 89 Station Road West Byfleet Surrey KT14 6DT with her son and it is now registered in Ranwant's name although they are jointly liable for the mortgage payments. Dr Rathor also owns a house in India called Rathor Villa in Jaipur.

Between 2005 and 2014 Dr Rathor was the sole proprietor of the Allenby Clinic (the “ Allenby Clinic” or “ AC”), first at 423 Allenby Road Southall and then from 2011 in the Grand Union Village Health Centre Taywood Road Northolt Middlesex UB5 6WL. Taywood Road is a large multi-story Health Centre which provides office space and consulting rooms for a number of different GP practices and other health care practices. From about April 2013 Dr Rathor also began working as a locum for Dr Ali at the NFP.

Natio was incorporated on 10 July 2014. Dr Rathor describes it has her “personal services company” and the wages and certain expenses of both practices were paid by it (although there was a dispute whether it was to be regarded as the employer of Jaswant and Sareet). Before the incorporation of Natio, Dr Rathor used another company called Aqua Medical Consultants Ltd (“ Aqua”). According to its filing history it was incorporated on 4 October 2010 and then dissolved on 26 August 2016. Dr Ali used Salus Health Care Ltd (“ Salus”) for a similar purpose.

The Witnesses

Jaswant and Dr Rathor each made a number of lengthy witness statements (to which it will be necessary for me to refer in some detail) and each gave evidence for a number of days. Sareet has also made a number of witness statements and gave evidence for one day. In addition Jaswant called the following witnesses in support of hers and Sareet's case:

i) Mr Sharnbir Sangha;

ii) Her husband, Gurdarshin;

iii) Her son, Jasvin;

iv) Ms Rushpal Bhandol;

v) Mr Kewal Sidhu; and

vi) Mr Nimal Fonseka, Dr Rathor's former accountant, who practised through a company Senstone Ltd (“ Senstone”).

Dr Rathor called Ms Meera Grewal to give evidence on her behalf. She did not call Mr Ebrahim Sidat of AMS Accountants Medical Ltd (“ AMS”), which replaced Senstone as Dr Rathor's accountants. Detailed submissions were made by both sides about the failure to call certain witnesses and I return to this below. There was initially a dispute over the authenticity of certain key documents, But in the event it was unnecessary to trouble the Court with expert handwriting evidence. The evidence of Dr Harish Kamboj (who made a witness statement on behalf of Sareet) was agreed.

Approach

Both parties submitted that I should assess the reliability of the witnesses against the contemporaneous documents: see the now familiar warnings of Leggatt J in Gestmin SGPS SA v Credit Suisse (UK) Ltd[2013] EWHC 3560 (Comm) at [15] to [22]. They also submitted that I should pay particular regard both to the documents and to motive: see the equally familiar guidance given by Robert Goff LJ in The Ocean Frost [1985] Lloyd's Rep 1 at 57. See also R (Bancoult No 3) v Secretary of State for Foreign and Commonwealth Affairs[2018] UKSC 3 at [100] to [103] (where Lord Kerr cited both cases).

In the present case, however, I have to resolve a number of key issues where the documentary footprint is a relatively small one. In deciding whose evidence to accept I found the guidance in Simetra Global Assets Ltd v Ikon Finance Ltd[2019] EWCA Civ 1413 at [48] and [49] particularly helpful. In that passage Males LJ cited The Ocean Frost and gave the following additional guidance:

“In this regard I would say something about the importance of contemporary documents as a means of getting at the truth, not only of what was going on, but also as to the motivation and state of mind of those concerned. That applies to documents passing between the parties, but with even greater force to a party's internal documents including e-mails and instant messaging. Those tend to be the documents where a witness's guard is down and their true thoughts are plain to see……

….It is therefore particularly important that, in a case where there are contemporary documents which appear on their face to provide cogent evidence contrary to the conclusion which the judge proposes to reach, he should explain why they are not to be taken at face value or are outweighed by other compelling considerations. It is, however, striking that the judgment in this case contains virtually no analysis of the contemporary documents many...