M Young Legal Associates Ltd v Zahid (A Firm) and Others

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLORD JUSTICE NEUBERGER,LORD JUSTICE WILSON,LORD JUSTICE HUGHES,LORD JUSTICE TUCKEY
Judgment Date16 May 2006
Neutral Citation[2006] EWCA Civ 613,[2005] EWCA Civ 1675
Docket NumberA2/2005/2024
Date16 May 2006

[2005] EWCA Civ 1675

IN THE SUPREME COURT OF JUDICATURE

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM MANCHESTER DISTRICT REGISTRY

(HON HONOUR JUDGE HOWARTH)

Royal Courts of Justice

Strand

London, WC2

Before:

Lord Justice Neuberger

A2/2005/2024

M Young Legal Associates Ltd
Claimant/Respondent
and
Zahid Solicitors (A Firm)
First Defendant
and
Sameera Sharif
Second Defendant
and
Jamail Akhtar
Third Defendant
and
Zahid Bashir
Fourth Defendant
and
Robert Heywood Ogden Lees
Fifth Defendant/Appellant

MR MARK BLACKETT-ORD (instructed by Wacks Caller of Manchester) appeared on behalf of the Appellant

The Respondent was not represented and did not attend

Judgement

LORD JUSTICE NEUBERGER
1

This is a renewed application for permission to appeal, Lord Justice Gage having refused permission in writing. His Honour Judge Howarth, in a reasoned judgment, concluded that Mr Lees was in fact a partner in the firm of Zahid Solicitors, but went on to hold that if he was not a partner the claimant's case based on holding out failed.

2

Mr Blackett-Ord, who appears for Mr Lees, realistically accepts that there is a possibility of a cross-application for permission to appeal being brought by the claimant on the latter finding. Unless I thought that the latter finding was so clearly hopeless, it seems to me it is a factor I should disregard for present purposes. I certainly do not take the view it is plainly hopeless. Not having considered it in any detail, however, that should not be taken as an encouragement to either party as to any sort of view on my part as to the conclusion reached by the judge on holding out.

3

On the issue on which Mr Blackett-Ord seeks permission to appeal, his essential point is that on the evidence the judge found, and had to find, that the agreement between Mr Lees and Mr Bashir involved Mr Lees receiving a fixed salary of £1,500 a month, and having no share in any sense in the profits or assets of the practice whatever. In those circumstances he says that it simply was not open to the judge to find that there was a partnership. Subject to one special feature, that seems to me to be an eminently arguable point, and indeed a point possibly potentially of some importance.

4

I would therefore give permission to appeal unless the special feature to which I turn justifies my refusing permission.

5

The special feature is one which was understandably and justifiably emphasised by the judge, namely Regulation 206 of the Law Society Regulations which the judge quoted in paragraph 2 of his judgment. The point can be put in (at least) two ways. The first is that it does not lie in a solicitor's mouth to argue that an agreement he entered into with another solicitor infringed the Law Society's Regulations. Another way of putting it is that in relation to the facts of this case, as the judge emphasised most clearly in paragraphs 12 and 13, the parties agreed that the basis of their arrangement would be in accordance with the Law Society's Regulations; thus, in practice—although they may not have been aware of it—they agreed that Mr Lees would be a partner.

6

The first way of putting it appears to me to raise an arguable point. The second way of putting it caused me a little more concern, at least initially. First of all, I am not convinced that the evidence is so clear as to enable the judge to reach the conclusion that there was an agreement along the lines I have summarised. Secondly, even if there was, Mr Blackett-Ord, it appears to me, has an argument fit for appeal, to the effect that the mere fact that the parties agreed a relationship would be in accordance with the Law Society Regulations does not mean that it was. To put it a better way, if the parties agreed the arrangement would involve there being no share of the income, no losses, and no share of the partnership assets or of the liabilities attributable to Mr Lees, then, however much they may have agreed their arrangement would be or was in accordance with Law Society Regulations, the consequence is that their arrangement was not a partnership.

7

7. In my view, with the benefit of Mr Blackett-Ord's advocate's statement, pursuant to paragraph 4.14 A (2) PD CPR Part 52, and his brief oral submissions today, I am satisfied that this appeal would raise a point which is arguable and therefore permission to appeal should be given.

Order: Application granted, the appeal be heard by a court of three judges one of whom may be a High Court judge, with time estimate of one day (to include cross-appeal if brought) . The costs to be in the appeal.

[2006] EWCA Civ 613

IN THE SUPREME COURT OF JUDICAT

IN THE COURT OF APPEAL (CIVIL DIVISI

ON APPEAL FROM THE HIGH COURT OF JUST

CHANCERY DIVIS

MANCHESTER DISTRICT REGIS

HIS HONOUR JUDGE HOWA

Royal Courts of Justice

Strand

London, WC2

Before:

Lord Justice Tuckey

Lord Justice Wilson

Lord Justice Hughes

A2/2005/2024

[Lower Court No. 4MA90205]

M. Young Legal Associates Ltd
(Claimant/First Respondent)
and
Zahid (A Firm)
(First Defendant/Second Respondent)
and
Sameera Sharif
(Second Defendant/Third Respondent)
and
Jamail Akhtar Sharif
(Third Defendant/Fourth Respondent)
and
Zahid Bashir
(Fourth Defendant/Fifth Respondent)
and
Robert Heywood Ogden Lees
(Fifth Defendant/Appellant)

MR M BLACKETT- (instructed by Messrs Wacks Caller, Steam Packet House, 76 Cross Street, Manchester, M2 4JU) appeared for the Appellant.

MR A MC (instructed by Messrs Pearson Hinchcliffe, Albion House, 31 Queen Street, Oldham, OL1 1RD) appeared for the First Respondent.

The Second Respondent did not appear.

The Third and Fourth Respondents appeared in person by the Fourth Respondent.

The Fifth Respondent appeared in person.

LORD JUSTICE WILSON
1

Is it possible for a person to be a partner in a firm, and thus liable jointly with the other partners to creditors of the firm, if his agreement with them is not that he should be entitled to participate in its profits but that he should be paid by the firm a specified sum, irrespective of profits, for work to be done by him on its behalf? Such is the question raised by this appeal.

2

The appeal is against a declaration made by HHJ Howarth, sitting as a judge of the High Court, Chancery Division, Manchester District Registry, on 26 August 2005. The declaration was made by way of determination of a preliminary issue in an action brought by M. Young Legal Associates Ltd ("the claimant") against five defendants.

3

The claimant acts as an intermediary between commercial institutions and prospective litigants who need funding for their claims and/or insurance in the event that they incur liabilities for costs whether to their own solicitors or to the prospective defendants. The claimant alleges that in February 2003 it entered into a contract with a firm of solicitors, namely Zahid, in practice in Rochdale, under which it was to arrange funding and/or insurance for a large number of prospective clients of the firm who were proposing to sue their landlords for the disrepair of their homes and under which, in prescribed circumstances, the firm agreed to make payments to the claimant. The allegation in the action is that sums became payable by the firm thereunder and have not been paid.

4

There are five defendants to the action:

(a) the firm Zahid itself; but in February 2004 it was dissolved and so it takes no part in the action;

(b) Mrs Sharif; she was a partner in the firm from 1 November 2002 until its dissolution;

(c) her husband, Mr Sharif; in that he was at no time other than a legal executive in the firm, there is an issue, as yet unresolved, as to whether the claimant has any cause of action against him;

(d) Mr Bashir; he was a partner in the firm from the date when it began to practise, namely 4 March 2002, until 1 September 2003; and

(e) Mr Lees; it is in relation to his status in the firm that the preliminary issue arose.

5

It is the contention of the claimant that Mr Lees was a partner in the firm from the date when it began to practise, namely 4 March 2002, until 31 October 2003 and that accordingly, pursuant to section 9 of the Partnership Act 1890 ("the Act of 1890") , he is liable to it, jointly with the other partners, under the contract entered into between the claimant and the firm in February 2003. Mr Lees however included in his defence a denial that he had ever been a partner in the firm so the court directed the trial of the preliminary issue thus raised. It is agreed that, if he ever was a partner, Mr Lees was indeed a partner between 4 March 2002 and 31 October 2003.

6

In the event the judge declared that Mr Lees was a partner in the firm. Against that declaration Mr Lees appeals; in opposition to the appeal stands the claimant. At yesterday's hearing Mr Bashir, who appeared in person before the judge, again appeared in person: in relation to the preliminary issue he made and makes no submission one way or the other. The stance of Mr and Mrs Sharif is confusing. Before the judge they were represented by counsel and actively supported the claimant's argument that Mr Lees had been a partner. Indeed, by a skeleton argument drafted by counsel and filed in this court, it seemed clear that they were supporting the claimant's opposition to this appeal. But, days prior to this hearing, they ceased to be legally represented. At yesterday's hearing Mr Sharif appeared in person, presumably with authority to speak also on behalf of Mrs Sharif; and in a few words he told us that in his view Mr Lees had not "really" been a...

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18 cases
  • Jeremy Hosking v Marathon Asset Management LLP
    • United Kingdom
    • Chancery Division
    • 5 October 2016
    ...to what remedies might be expected to be available as regards partnership and agency. 41 For his part, Mr Kitchener took me to M Young Legal Associates Ltd v Zahid [2006] EWCA Civ 613, [2006] 1 WLR 2562, where it was held that a person could be a partner even where the agreement was "not t......
  • Martin Richard Walsh and Others (Claimants/Appellants) v Needleman Treon (A Firm)and Others (Defendant/Respondent to Appeal (Fourth Defendant only)
    • United Kingdom
    • Chancery Division
    • 25 July 2014
    ...the 1890 Act). Finally he referred to the relevant law, and in particular the passages in the ruling of the Court of Appeal in M. Young Legal Associates v Zahid [2006] 1 WLR 2562, which confirm that a salaried partner may still be a partner in the full sense within the meaning of the Partne......
  • Tiffin v Lester Aldridge LLP
    • United Kingdom
    • Court of Appeal (Civil Division)
    • 11 July 2012
    ...no share of the firm's profits and had no share in its capital. 17 I refer next to the decision of this court in M. Young Legal Associates Ltd v. Zahid (a firm) and others [2006] EWCA Civ 613; [2006] 1 WLR 2562, which also underlined that critical to the question of whether a partnership ......
  • Primlake Ltd ((in Liquidation)) v Matthews Associates and Others
    • United Kingdom
    • Chancery Division
    • 26 May 2006
    ...and to constitute each the agent of the other for all acts done in the course of the business: see Lees v M Young Legal Associates Ltd [2006] EWCA Civ 613; and 1890 Act, section 5. Joint property does not of itself create a partnership: section 2(1). The sharing of profits is prima facie e......
  • Request a trial to view additional results
2 books & journal articles
  • Case Note
    • Singapore
    • Singapore Academy of Law Journal Nbr. 2011, December 2011
    • 1 December 2011
    ...to be done by him on behalf of a firm does not preclude his thereby becoming a partner of it”: M Young Legal Associates Ltd v Zahid [2006] 1 WLR 2562, [2006] EWCA Civ 613 at [32]. Thus, in appropriate cases, someone described as a “salaried partner” may in law be an actual partner; however,......
  • Agency and Partnership Law
    • Singapore
    • Singapore Academy of Law Annual Review Nbr. 2013, December 2013
    • 1 December 2013
    ...proposition, that partnership can exist without profit-sharing, was recently approved in England: see M Young Legal Associates v Zahid[2006] 1 WLR 2562 and Rowlands v Hodson[2009] EWCA Civ 1025; and Yee JC also concurred with that view: at [16].) A finding of partnership is usually more rel......

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