Walsh & Ors v Needleman Treon (A Firm) & Ors
2014
CHANCERY DIVISION
United Kingdom
CORAM
- THE HONOURABLE MR JUSTICE BARLING
Areas of Law
- Civil Procedure
- Contract Law
- Partnership Act
- Employment Law
2014
CHANCERY DIVISION
United Kingdom
CORAM
AI Generated Summary
In 2005, the Claimants entered into an agreement with the Respondent's firm for short-term bridging finance transactions. Mr. Prior, hired by the firm in 2008 as a 'salaried partner,' resigned in 2009 amid financial irregularities. The Claimants sought damages but Mr. Prior claimed he was merely an employee. The court upheld summary judgment determining Mr. Prior was an employee with no real prospect of proving partnership at trial, and that he did not incur liability by holding himself out as a partner under Section 14 of the Partnership Act 1890.
Judgment
Me Justice Barling:
Introduction
By a judgment dated 17 November 2013 Deputy Master Rhys (“the Judge”) granted the Respondent’s (“Mr Prior”) application for summary judgment against the Appellants under CPR 24.2 (a)(i). The issue before the Judge was whether the Claimants’ pleaded case that Mr Prior was a partner as opposed to an employee in the First Defendant, a firm of solicitors (“the Firm”), had a real prospect of success at trial. The Judge also determined a second issue, not currently the subject of any pleading but argued out at the hearing before him, namely whether there was a real prospect of the Claimants succeeding at trial on an alternative claim that Mr Prior held himself out, or knowingly allowed himself to be held out, as a partner in the Firm, so as to be liable to the Claimants pursuant to section 14 of the Partnership Act 1890 (“s.14”). The Judge decided both points in favour of Mr Prior, and refused permission to appeal. By an order dated 14 April 2014 Hildyard J ordered the renewed application for permission to be heard by a High Court Judge with the hearing of the appeal (subject to permission) to follow. Those are the matters before me.
Procedural background
The Second and Third Defendants (“Mr N” and “Mr T” respectively) were at the material times equity partners in the Firm. Mr Prior maintains that he was never such a partner, and that he was at all times an employee of the Firm, albeit a “salaried partner” and head of the Firm’s property department from the time of his joining in October 2008 until about August/September 2009 when he resigned as a salaried partner, continuing to work in the Firm until January 2010.
In the proceedings the Claimants seek damages and restitution (amongst other relief) against the Defendants on the basis of alleged breaches of contract, trust and duty between about 2006 and January 2011, when the Solicitors’ Regulation Authority formally intervened in the practice of the Firm following an investigation which had been commenced in autumn 2009. The claim is based on an alleged agreement in October 2005 between the Claimants on the one hand, and the Firm, Mr N and Mr T on the other, pursuant to which the Firm was to act for the Claimants in relation to short term bridging finance transactions. The proposed transactions would be evaluated and arranged by the Firm, who would hold on trust the funds provided by the Claimants for this purpose. The Claimants would be protected by legal charges