Jaswinder Singh Bahia v Inderdeep Singh Sidhu (as Personal Representative of the Estate of Tara Singh Sidhu)
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Joanna Smith |
| Judgment Date | 12 April 2022 |
| Neutral Citation | [2022] EWHC 875 (Ch) |
| Docket Number | Case No: BL-2018-001918 |
| Court | Chancery Division |
[2022] EWHC 875 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
Rolls Building
Fetter Lane
London, EC4A 1NL
Mrs Justice Joanna Smith
Case No: BL-2018-001918
Mr Robert-Jan Temmink QC and Mr Gabriel Buttimore (instructed by Teacher Stern LLP) for the Claimant and Part 20 Defendants
Mr Ian Clarke QC and Mr Barnaby Hope (instructed by Ralli LLP) for the Defendants and Part 20 Claimants
Hearing dates: 25 and 31 January, 2, 3, 4, 7, 8, 9, 10, 14, 17 and 18 February 2022
APPROVED JUDGMENT
I direct that pursuant to CPR PD 39A 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.
This is a trial arising out of a partnership dispute between the claimant, Jaswinder Singh Bahia (“ Mr Bahia”) and the representatives of his late brother-in-law, Tara Singh Sidhu (“ Mr Sidhu”). Mr Sidhu died on 20 November 2018, but the parties have been locked in dispute over the partnership income and assets since well before the date of his death.
There are two partnerships with which the court is concerned. The first, which has been referred to as “ the Partnership”, was entered into between Mr Bahia and Mr Sidhu (together referred to as “ the Partners”) in 1972 at around the time of the purchase of a property at 8 King Street, Southall, Middlesex (“ 8 King Street”). Since then, the Partnership has successfully acquired a sizeable property portfolio (including residential and retail premises). Several of these properties feature in this dispute.
On 1 October 1976, the second defendant, A Star Liquormart Limited (“ ASL”), was incorporated by the Partners as directors and equal shareholders. It traded from 8 King Street and 136 High Road, East Finchley (“ 136 High Road”), a property purchased by the Partners in the same month, but moved to the ground floor of 8 King Street in August 1991, when the Partners granted it a commercial lease. ASL continued to run an off licence (“ the Off Licence”) from 8 King Street until March 2020, when it closed down due to the Covid 19 pandemic.
The second partnership, which has been referred to as “ the Greatway Partnership” was formed in or around 1990 by the Partners with a view to trading as “ Greatways”, a convenience store, from the ground floor of a property at 44–48 King Street, Southall, Middlesex (“ 44–48 King Street”) which the Partners had acquired pursuant to a lease in February of the same year. In December 1998, the second Part 20 defendant, Mrs Balbir Bahia (“ Mrs Bahia”) and the second Part 20 claimant, Mrs Satpal Sidhu (“ Mrs Sidhu”), the respective wives of the two existing partners, were admitted as partners to the Greatway Partnership (each holding 40%, with their husbands holding the remaining 20% equally between them). I shall refer to Mr and Mrs Bahia and their family as “ the Bahias” and Mr and Mrs Sidhu and their family as “ the Sidhus” throughout the course of this judgment.
The Partners appear to have managed their property portfolio in harmony for many years. However, it appears that from about 2007/2008, they each began to harbour suspicions about the other in respect of the collection of, and accounting for, rental income from partnership properties and the unauthorised personal use of partnership monies. Difficulties inevitably arose in relation to the settling of accounts, such that since 30 November 2007 there have been no signed accounts for the Greatway Partnership. The last signed accounts for ASL date back to the year ending 30 September 2008 and the last set of signed accounts for each Partnership property were signed on 5 April 2011.
Unfortunately, the accountants used by the Partners, who were tasked with preparing partnership accounts, have not provided evidence for this trial and are apparently unwilling to attend. In their absence, and in circumstances where the accounts that have been prepared are challenged, the parties each seek to rely on miscellaneous handwritten notes appearing on scraps of paper, cheque stubs, bank statements and the like dating back, in some cases, over 30 years. Mr Bahia challenges the authenticity of various of the documents disclosed by the Sidhus, including notes made on a diary (“ the Diary”) originally completed by him but, he says, later altered by the Sidhus, in relation to the rents collected at 44–48 King Street from a greengrocer and kiosk situated (with Greatways) on the ground floor and from bedsits at 44A and 48A King Street. Needless to say, the record keeping in relation to both partnerships appears to be wholly inadequate and each family complains that, even now, it has not been given access to key partnership documents in the possession of the other family.
By 2010, if not before, the hostility between the Partners was such that the Bahias were no longer welcome at 8 King Street and had little to do with the running of the Off Licence or the management of the various residential properties on the premises. On 13 December 2012, the Greatway Partnership ceased to trade and Tesco took over the ground floor premises at 46–48 King Street, although the Bahias continued to manage the rental properties at 44A and 48A King Street.
On 27 October 2016, Mr Sidhu served a Notice of Dissolution of the Partnership under section 32 of the Partnership Act 1890 (“ the 1890 Act”) on Mr Bahia, dissolving the Partnership from 28 October 2016. On 19 November 2018, Mr and Mrs Sidhu served a Notice of Dissolution of the Greatway Partnership, also under section 32 of the 1890 Act, dissolving the Greatway Partnership from 23 November 2018.
By the time of the Dissolution Notice in respect of the Greatway Partnership, these proceedings had been commenced by Mr Bahia, and on 8 November 2019, Chief Master Marsh gave summary judgment on the issue of the existence and dissolution of both partnerships, declaring that each had been a partnership at will created by oral agreement and that each had been dissolved by the relevant Notice of Dissolution. Chief Master Marsh ordered that both partnerships should be wound up and that there would be the taking of a dissolution account and such inquiries as may be necessary. As to the scope of any necessary inquiries, the Chief Master ordered that these should be determined by the court at a hearing on written evidence.
On 9 July 2020, following a hearing at which the parties were represented by counsel, Deputy Master Linwood ordered a trial of 17 separate Inquiries arising in the dispute.
Prior to the trial, the parties agreed that Inquiry 1 should be adjourned for directions as to the production of dissolution accounts and that Inquiries 11 and 15 were no longer required. By the time of closing submissions, it was apparent that Inquiries 3 and 5 were also no longer in dispute. I was required to determine the scope of Inquiries 6, 7 and 16 in a judgment given on the third day of the trial and for reasons set out in that judgment, I determined that Inquiry 16 should be adjourned to be dealt with at the same time as Inquiry 1.
That leaves 11 outstanding Inquiries for determination by the court following this trial, some of which overlap and some of which are in respect of relatively insignificant sums of money. It is most unfortunate that the rancour between the parties has apparently precluded any sensible resolution to date. I shall set out the terms of each of the Inquiries at the beginning of each individual section of this judgment addressing the arguments and evidence on that Inquiry. Where Inquiries are no longer live I shall set out the terms of the Order I propose to make. For present purposes, however, I note that during the course of closing submissions the parties provided me with a combined Scott Schedule (“ the Scott Schedule”) identifying the issues which remain in dispute between them and identifying their claims on a line by line basis. I am extremely grateful for this assistance and I have had close regard to the Scott Schedule in the preparation of this judgment.
It is anticipated that once the outstanding Inquiries have been resolved by the court, dissolution accounts for both partnerships can be drawn up. I would strongly encourage the parties to try to agree those accounts so as to bring this dispute to an end without the expenditure of yet more legal fees and the yet further animosity between the families that is likely to be engendered by ongoing proceedings. If the accounts cannot be agreed, then the parties anticipate that a further hearing will be necessary to determine Inquiries 1 and 16.
THE LAW ON DISSOLUTION OF PARTNERSHIPS
There is nothing between the parties on the relevant law in relation to dissolution.
In summary:
i) Pursuant to section 28 of the 1890 Act, partners are “bound to render true accounts and full information of all things affecting the partnership to any other partner or his legal representative”.
ii) Section 24(9) of the 1890 Act provides that every partner may, when he thinks fit, have access to and inspect and copy any of the partnership books and records. The refusal to provide proper access for...
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