Khan and Another v Miah and Others
| Jurisdiction | England & Wales |
| Judge | LORD BINGHAM OF CORNHILL,LORD STEYN,LORD HOFFMANN,LORD CLYDE,LORD MILLETT |
| Judgment Date | 02 November 2000 |
| Judgment citation (vLex) | [2000] UKHL J1102-1 |
| Date | 02 November 2000 |
| Court | House of Lords |
and others
and One Other Action
[2000] UKHL J1102-1
Lord Bingham of Cornhill
Lord Steyn
Lord Hoffmann
Lord Clyde
Lord Millett
HOUSE OF LORDS
My Lords,
I have had the advantage of reading in draft the opinion of my noble and learned friend Lord Millett. I am in full agreement with it, and would make the order which he proposes.
My Lords,
I have had the advantage of reading in draft the speech prepared by my noble and learned friend, Lord Millett. For the reasons he gives I, too, would allow the appeal.
My Lords,
I have had the advantage of reading in draft the speech prepared by my noble and learned friend, Lord Millett. For the reasons he gives I, too, would allow the appeal.
My Lords,
I have had the advantage of reading in draft the speech prepared by my noble and learned friend, Lord Millett. For the reasons he gives I, too, would allow the appeal.
My Lords,
The question in this appeal is whether the parties ever carried on business in partnership together. On the trial of a preliminary issue in the action the judge (Judge Rich Q.C.) found that they did. By a majority (Roch and Thorpe L.JJ., Buxton L.J. dissenting) the Court of Appeal held that while the parties agreed to become partners in the business of an Indian restaurant they never actually did so. The question turns on whether they actually started to carry on the business prior to 26 January 1994.
The facts are set out in the judgment of Roch L.J. which is reported at [1998] 1 W.L.R. 477, 480-481. I need not repeat them at length. In May 1993 the first respondent was the head waiter and the second respondent was the chef at an Indian restaurant in Barton. They wanted to open a restaurant of their own in Newbury to be called "The Nawab." They were not in a position to put up any significant amount of money themselves, and accordingly they approached the appellant, who was known to have some capital, with a view to interesting him in the venture. It was agreed that they would be partners in the business, that the appellant would provide most of the initial capital, and that the first respondent would manage the restaurant, the second respondent would be the chef, and the appellant's brother Surab Khan, who was a chef at another Indian restaurant in Milton Keynes, would be the second chef. Surab Khan was not to be a partner but was to be an employee of the partnership. The third respondent, who was the proprietor of an Indian restaurant in Radlett, was brought in later in order to provide the business experience and financial standing which an intending landlord required. He was described by the parties as "a sleeping partner". The judge found that the appellant was to have a 50 per cent. share in the business with the other 50 per cent. being shared between the three respondents.
By 1 December 1993 the parties had found suitable premises (an unused gas showroom), obtained planning permission for its conversion to a restaurant, taken a lease of the premises and agreed to buy the freehold reversion, opened a partnership bank account in the names of the appellant and the third respondent, arranged to borrow up to £60,000 from the bank towards the purchase of the freehold, commissioned a design, entered into a contract with a firm of builders for the conversion and fitting out of the premises as a restaurant, and contracted for the purchase of equipment and table linen. With the exception of some small sums paid in by his brother Surab Khan, all the moneys in the partnership bank account were provided by the appellant. The account was used solely to make payments to the builders or for other works and services obtained in preparation for the opening of the restaurant.
By this time the parties had already spent some £51,000 on the venture. It is common ground that the whole of this expenditure was incurred in the course of the venture and with the agreement and authority of all four parties. The judge found that they had held themselves out as partners, jointly entered into all these activities together, agreed upon the division of their tasks, and had
"so far advanced towards the establishment of such [a] restaurant as, in my judgment, properly to be described as having entered upon the trade of running a restaurant, albeit that it was yet to open and in the event was not opened for a further two months or slightly more."
It had been hoped to open the restaurant for business on 13 December 1993, but this proved optimistic. The appellant had difficulty in raising his share of the purchase price of the freehold, and there were difficulties with the builders who at one stage temporarily stopped work. These problems, together with the appellant's discovery that the freehold had been conveyed into the third respondent's sole name, led to a breakdown in the relationship. It is common ground that, if there was a partnership between the parties, it was a partnership at will and was determined on 25 January 1984. By this date the restaurant was still not open for trade, though further progress had been made. The parties had acquired the freehold, bought and taken delivery of furniture and equipment for the restaurant, entered into a credit agreement for the purchase of carpets and a contract for the laundry of table linen, and advertised the restaurant in the local press.
The restaurant opened for business on 14 February 1994. The respondents have since carried on the business on their own account and without any settling of accounts with the appellant. Hence the present proceedings. The judge granted a declaration that there was a partnership in the business of the restaurant between the parties and that the appellant was entitled to a 50 per cent. share therein. He ordered the necessary partnership accounts and inquiries to be taken. These showed a substantial balance in favour of the appellant, who had borne some 70 per cent. of the expenditure which had been laid out in the course of the venture. The judge granted a declaration that the freehold and leasehold interests in the premises were property of the partnership and gave directions for the sale of the premises and the...
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