Pravin Patel v Barlows Solicitors (A Firm)
| Jurisdiction | England & Wales |
| Judge | Mithani |
| Judgment Date | 16 October 2020 |
| Neutral Citation | [2020] EWHC 2753 (Ch) |
| Docket Number | CASE NO: D30BM70 |
| Court | Chancery Division |
| Date | 16 October 2020 |
[2020] EWHC 2753 (Ch)
HIS HONOUR JUDGE Mithani QC, SITTING AS A JUDGE OF THE HIGH COURT, at the Birmingham Civil Justice Centre, Priory Courts, 33 Bull Street Birmingham, B4 6DS
CASE NO: D30BM70
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN BIRMINGHAM
BUSINESS LIST (CH.D)
Mr Sam Laughton (instructed by Frisby & Small LLP) for the Claimants
Mr John Vickery (instructed by Irwin Mitchell LLP) for the Second Defendants
The Third Defendant did not appear and was not represented
Approved Judgment
In this judgment, the following words and expressions shall have the following meanings assigned to them:
“the Claimants' Advance” shall mean the sums totalling £210,515 (or any part or parts thereof) paid by the First Claimant and/or the Second Claimant directly or indirectly to Barlows for the purchase of the First and Second Properties;
“the Bankrupt” or “Mr Chorera” shall mean Mr Drupad Chorera who was made bankrupt by an order of District Judge Whitehurst in the Leicester County Court (now the County Court at Leicester) on 20 March 2012;
“Barlows” shall mean Messrs Barlows, solicitors, who acted on behalf of the Bankrupt in the proposed purchase of the First and Second Properties and were the First Defendants to the Claim but against whom the Claim has since either been discontinued or dismissed;
“Mr Gooch” shall mean Colin Gooch, a partner or former partner in Barlows;
“the Claim” shall mean the claim made by the Claimants against the Defendants made in this action;
“the First Claimant” shall mean Mr Pravin Patel;
“the Second Claimant” shall mean the First Claimant's wife, Mrs Nalini Patel;
“the Claimants” shall mean the First and Second Claimants;
“the Previous Trustee” shall mean Mr Steven Williams who was appointed as the trustee in bankruptcy of the estate of the Bankrupt on 28 June 2012 but who was replaced as such trustee on the appointment of the Second Defendants as joint trustees of the estate of the Bankrupt on 4 July 2016;
“the Second Defendants” shall mean Mr Paul Stanley (“Mr Stanley”) and Mr Paul Barber (“Mr Barber”), the joint trustees of the estate of the Bankrupt, both partners at Begbies Traynor (Central) LLP, who were appointed trustees in bankruptcy of the estate of the Bankrupt on 4 July 2016 under a block transfer order to replace the Previous Trustee;
“the Third Defendant” shall mean Mr Nirmal Tanna;
“the Negligence Claim” shall mean a claim brought by the Second Defendants for negligence, in their capacity as joint trustees of the estate of the Bankrupt, against Barlows in the High Court of Justice, Chancery Division, Manchester District Registry under claim number C30MA407 pursuant to which they received the Settlement Amount;
“the Settlement Amount” shall mean the sum of £275,000 or any part thereof standing to the credit of a deposit account in the name of the Second Defendants' solicitors, recovered by the Second Defendants against Barlows under a “Tomlin” order made in the Negligence Claim and shall, where appropriate, include any interest accrued on that sum since it was paid into that deposit account;
“the Expenses Application” shall mean the application dated 24 August 2020 made by the Second Defendants under which the Second Defendants seek to recover their costs, expenses, disbursements, and remuneration for collecting and realising the Negligence Claim and preserving and distributing the Settlement Amount;
“the Trust Costs”, shall mean the costs, expenses, disbursements and remuneration of the Second Defendants incurred and (where appropriate) proposed to be incurred for collecting and realising the Negligence Claim and preserving and distributing the Settlement Amount;
“the First Property” shall mean the property at 106 High Street, Colliers Wood, London;
“the Second Property” shall mean the property at 108 High Street, Colliers Wood, London;
“the Third Property” shall mean the property at 43 High Street, Colliers Wood, London;
“the First and Second Properties” shall mean the First Property and the Second Property;
“the Properties” shall mean the First Property, the Second Property and the Third Property;
“the Joint Venture” shall mean the enterprise which the First Claimant claims he, the Bankrupt and the Third Defendant entered into in partnership for the purchase of the Properties;
“Wingfield” shall mean Wingfield Financial Heritage Ltd, a company registered in the BVI, which had purported to sell the Properties to the Bankrupt;
“MPV” shall mean Montello Private Finance Ltd, which had agreed to provide the balance of the purchase price by way of bridging finance to the Bankrupt for the purchase of the First and Second Properties;
“the Joint Venturers” shall mean the First Claimant, the Bankrupt and the Third Defendant;
“Mr Thakrar” shall mean Mr Hasukumar Thakrar;
“the Written Agreement” shall mean the written agreement dated 29 March 2010, drawn in the names of the Joint Venturers and Mr Thakrar but signed by the Joint Venturers only; and
“PA 1890” shall mean the Partnership Act 1890.
In addition, in this judgment, unless otherwise stated or the context otherwise requires, any reference, where appropriate to:
(a) “the First Claimant” shall also include the Second Claimant;
(b) “The Claimants” shall include either the First Claimant or the Second Claimants;
(c) “the Trust Costs” shall include the whole or any part the costs, expenses, disbursements and remuneration of the Second Defendants incurred and (where appropriate) proposed to be incurred for collecting and realising the Negligence Claim and preserving and distributing the Settlement Amount;
(d) a paragraph number on its own is to a paragraph number in this judgment.
THE CLAIM
In the Claim, as it is now formulated in the Re-Amended Particulars of Claim dated 28 March 2019, the First Claimant seeks the payment to him of the whole or a substantial part of the Settlement Amount held by the Second Defendants' solicitors, Irwin Mitchell LLP, on behalf of the Second Defendants. The Settlement Amount represents the fruits of the Negligence Claim brought by the Second Defendants in negligence against Barlows who were the first defendants to the Claim, but against whom the Claim has since either been discontinued or dismissed. I have not seen the order or agreement under which the Claim against them was dismissed but understand that it was on the basis that each side (i.e. the Claimants and Barlows) would pay their own costs.
Although the Second Claimant continues to be a claimant in the Claim, she no longer seeks any substantive relief in it. That is because she assigned the benefit of any interest which he had in the Claim to her husband, the First Claimant. I have not seen a copy of the assignment and, so far as I am aware, neither have the Second Defendants. However, they do not challenge either the fact, or validity, of the assignment. The Second Claimant has provided a witness statement in support of her husband's entitlement to the Settlement Amount and been cross-examined on the contents of that statement.
The Claim is made by the First Claimant against the Second Defendants in their capacity as the joint trustees in bankruptcy of the Bankrupt. The Bankrupt was made bankrupt by an order of District Judge Whitehurst in the Leicester County Court on 20 March 2012. The Second Defendants, both partners at Begbies Traynor (Central) LLP, were appointed trustees in bankruptcy of the estate of the Bankrupt on 4 July 2016 under a block transfer order to replace the Previous Trustee, who had retired from that firm.
The Third Defendant was joined as a party to the claim on the application of the First Claimant. That was because the principal basis upon which the First Claimant claims to be entitled to an interest in the Settlement Amount is that the Joint Venture was a partnership business (in which the partners were the Joint Venturers) and the Claimants' Advance (which he claims is represented by, or included in, the Settlement Amount) was paid by him as capital for the purposes of that business. The sums totalling the amount of the Claimants' Advance were paid towards the purchase of the First and Second Properties, both investment properties. Although the Joint Venturers had agreed that those properties were to be transferred to, and held in the sole name of, the Bankrupt, the First Claimant claims that the Bankrupt acquired the properties on behalf of the Joint Venture and, therefore, held them on behalf of all three Joint Venturers as partners in the Joint Venture. If the First Claimant is successful in establishing the existence of such a partnership, he seeks a declaration that the partnership is now dissolved. He also invites the court to direct the taking of any necessary accounts and inquiries consequent upon such dissolution. He can only do so if all the alleged partners are before the court by being parties to the Claim.
The Third Defendant accepts the substance of the Claim. He has neither filed an Acknowledgment of Service nor filed or served a defence to the Claim.
THE BACKGROUND CIRCUMSTANCES
This case has had a chequered history. The lengthy chronology (not agreed by the Second Defendants) prepared on behalf of the First Claimant sets out some of the relevant events which occurred.
The bundles prepared for the purpose of the trial are voluminous. However, a considerable amount of further documentation, which may be relevant to the Claim, appear not to have been disclosed in the Claim. I deal with some of that documentation below. I fear, therefore, that I may not have seen all the documents which were relevant to the Claim.
Although the facts, matters and evidence which give rise...
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