Nicholas George Naish (Plaintiff) v Thorp Wright & Puxon (A Firm)and Another
| Jurisdiction | England & Wales |
| Judgment Date | 21 May 1998 |
| Judgment citation (vLex) | [1998] EWHC J0521-3 |
| Docket Number | 1993-N-No.907 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 21 May 1998 |
[1998] EWHC J0521-3
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
His Honour Judge Robert Taylor
1993-N-No.907
MR. J. CHRISTOPHER (instructed by Messrs. Pinsent Curtis, Leeds) appeared on behalf of the Plaintiff.
MR. U. STAUNTON (instructed by Messrs. Crutes, Cleveland) appeared on behalf of the First Defendant.
MR. P. ELIAS, Q.C. and MISS G. IRVING (instructed by Messrs. Deas Mallen Souter, Newcastle-upon-Tyne) appeared on behalf of the Second Defendant.
(As approved by the Judge)
JUDGE TAYLOR: Before I begin my judgment I should just like to say a few words. It will inevitably be a lengthy judgment and I do not want to keep the parties themselves in unnecessary suspense. I am therefore going to state in summary at the outset what my decision is going to be.
I have very great sympathy for the plaintiff and for his wife over the very unpleasant and distressing experience they underwent over the dissolution of the plaintiff's partnership. If I may say so without seeming to be patronising, both the plaintiff and his wife came across to me as a very decent and honourable couple who did not merit the experience that they underwent and I accept that as a result the plaintiff may well have suffered significant financial loss. The plaintiff is clearly a well liked and well respected member of the veterinary profession.
However, I am afraid that from his point of view, despite the very able advocacy of his counsel, I do not think that the plaintiff has established that either of the defendants was to blame for what happened, either in the advice that they gave or in the tactics that they employed; and, furthermore, in any event I think that on balance clause 26 of the partnership agreement was probably enforceable. Accordingly, on the preliminary issues which I have to decide I am afraid that the plaintiff has failed to discharge the onus on him of establishing those issues.
I now turn to my judgment proper. This is an action for damages for professional negligence. It is brought by the plaintiff, a veterinary surgeon, against the first defendant, a firm of solicitors, and the second defendant, a barrister, for alleged negligence and, in the case of the first defendant, breach of contract in the advice given by them to the plaintiff in connection with the dissolution of his partnership with another veterinary surgeon in 1988 and 1989. The proceedings were begun by writ issued on 6th May 1993. By order of Master Trench dated 24th January 1997, as varied on appeal by Mr. Justice Mantell on 10th February 1997, this action comes before me for trial of certain preliminary issues, namely, those raised by paras.1 to 9 of the reamended statement of claim.
Effectively these issues concern whether or not the defendants or either of them were negligent and, in addition, in the case of the first defendant whether they were in breach of their implied contractual obligation to use reasonable care and skill in the conduct of the plaintiff's affairs. I am not concerned at all with questions of causation or damages, which await determination, if appropriate, at a later date.
During the course of the hearing I have heard oral evidence from the plaintiff himself, the plaintiff's wife, Mrs. Penny Naish, Mr. William King Sanderson, a litigation manager with the first defendant who at all material times had the conduct of the plaintiff's affairs on behalf of his employers, and finally the second defendant. All these witnesses had previously made written statements which stood as their evidence in chief in each case. I have also had to consider various documents contained in, first, the bundle of pleadings; second, a bundle of essential documents known as the core bundle; third, four volumes of correspondence; and, fourth, a number of maps.
The material facts
The plaintiff is now 58. He qualified as a veterinary surgeon in 1963. Between July 1963 and March 1970 he was employed as assistant in two mixed veterinary practices, first at Falkirk in Stirlingshire, and second at Boroughbridge, near York. Then in March 1970 he became assistant in a practice in Leyburn, North Yorkshire. At that time the sole principal in the practice was a man whom I shall refer to solely by his initials as JW. This is because JW's character and behaviour have been referred to in very unflattering terms by most of the witnesses who gave evidence before me, and while I have no reason to doubt what they told me I bear in mind that JW is not a party to this action and has not been present to hear what was said about him or to seek to refute it.
The practice in question was a well established practice and the sole practice in Leyburn itself, which is a market town in Wensleydale. It was a mixed practice but predominantly agricultural, concerned with large farm animals and horses. The plaintiff's estimate, which I have no reason to doubt, was that in 1973 approximately 80 to 85 per cent of the work was agricultural, the remainder being small domestic pets. The relevance of 1973 is that on 1st January 1973 the plaintiff entered into a partnership with JW the subsequent dissolution of which is at the centre of this case. At this stage JW, who was some 11 years older than the plaintiff, had been in practice in the area for some considerable time. JW had previously been in partnership with a man called Porteous. Mr. Porteous had retired before the plaintiff joined the practice, in about 1968.
The partnership agreement
The agreement in its final form is to be found in the core bundle at pp.1�10. It is necessary to consider certain parts of the agreement in some detail. The deed begins by stating the consideration paid by the plaintiff for his share of the partnership, which is expressed to be a sum comprising one third of the average turnover of the past three years plus cash drawn, the instruments, medicines and drugs to be valued by the partners and one third of the book debts plus a Cortina car at valuation. Clause 28 of the agreement provides for the purchase of an additional share in the partnership by the plaintiff. Clause 1(b) of the agreement deals with termination and it provides:
"The partnership may be determined by one partner giving to the other six months previous notice in writing of his desire to terminate the same."
Clause 24 of the agreement deals with the consequences of termination. It provides as follows:
"If the partnership shall be determined by a notice given under Clause 1(b) the partner receiving such notice shall purchase the share of the other partner under the terms set out in the last preceding Clause hereof in relation to the purchase by a surviving partner of the share of the deceased partner."
And clause 23 and also clause 30 deal with the calculation of the sum which is payable by way of goodwill to the outgoing partner. Clause 23 deals with the matter in terms of the purchase price on death and it says:
"(a) The Purchase price shall be -
"(i) Such amount as shall represent the deceased partners share in the partnership property otherwise than goodwill to be ascertained by valuation to a sum equal to one year's purchase (as defined by clause 30 hereof) of the deceased partners share at the time of his death such sum to be by way of purchase money for the share of the deceased partner in the goodwill of the partnership �"
Clause 30 provides:
"Wherever a year's purchase or multiple or dividend of a year's purchase is mentioned in this deed it shall be based and calculated during the first three years of the partnership on a sum � as representing the average annual gross receipts and after the expiration of the third year on the average of the annual gross receipts of the practice for the three years immediately preceding the event which caused the right of receiving a year's purchase or multiple or dividend thereof to arise."
The final clause to which I must refer is clause 26, which is the clause at the heart of this case, a restraint of trade clause; or, as it has sometimes been described in the course of this hearing, either a binding-out or a barring-out clause. Clause 26 reads as follows:
"In the event of the determination of the partnership under Clauses 1(b) or 22 hereof the outgoing partner shall not for a period of eight years after the determination of the partnership without the previous consent in writing of the other partner practice or be concerned or engaged as a principal assistant or employee in any department of the Veterinary Profession (except as an employee in a whole time appointment under the terms of which private practice is forbidden) within a distance of Fourteen miles from the partnership premises."
Prior to the agreement reaching this final form there were at least two earlier versions of the provisions in clause 26. This is apparent from what I am satisfied was an earlier draft of the agreement which is to be found in the core bundle at pp.101�108. The relevant clause in the earlier draft was then numbered 27 and, as can be seen from p.106 of the core bundle, the duration of the restraint was originally 10 years which was then altered to eight years and the area of the restraint was originally a 20 miles radius from the partnership premises, subsequently altered to 15 miles. According to the plaintiff it was JW who took the initiative over this clause and the alterations to it. It was JW who produced the earlier draft indicating that it was based on the partnership agreement which he had had with Mr. Porteous. It was again JW who unilaterally...
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