Registration of Business Names Act 1916–Contracts by firms or persons who fail to furnish information unenforceable–Court’s discretion to grant relief to persons in default–Appeal by firm of consultant surveyors and property agents–Failure to register particulars of a partner–Tangled history of litigation–Relief granted by Court of Appeal
This was an
appeal by Lawrence Vanger & Co, a firm carrying on business as consultant
surveyors and property agents from a decision by Chapman J, setting aside a
previous order by Croom-Johnson J, who had granted the firm relief from the
disabilities resulting from section 8(1) of the Registration of Business Names
Act 1916 in consequence of the fact that the registration of the firm showed a
sole proprietor, Mr Vanger, whereas a Mr Stirling was a partner in the firm.
Simon
Goldblatt QC and John Laws (instructed by Lewis Cutner & Co) appeared on
behalf of the appellants; J H Hames QC and J K S Denniston (instructed by
Gamlens, agents for Sarthall & Co, of Birmingham) represented the
respondents.
Giving
judgment BUCKLEY LJ said: In this case we are concerned with the exercise by
the court of its discretionary power under the Registration of Business Names
Act 1916, section 8, to grant or refuse relief against the disability imposed
by that section upon a firm or person by whom there has been default in
furnishing a statement of particulars or of any change in particulars required
by the Act.
The appellant
firm, Lawrence Vanger & Co, carry on business as consultant surveyors and
property agents. Under a written agreement dated January 1 1970, and a
supplemental agreement dated April 30 1971, the firm was retained as property
consultants by a company now known as Shepley-court Ltd, which was one of a
group of companies of which the respondent company, Company Developments
(Property Division) Ltd, was also one. For simplicity, I shall refer to the
respondent company as "Property Division." Under these agreements the firm was concerned
in much business with members of the group, but all the property transactions
were apparently carried out by Property Division, not by Shepleycourt Ltd or
any other member of the group. In these circumstances the parties seem to have
proceeded upon the basis that, whether by novation or otherwise, any claims by
the firm to remuneration or commission under the agreements lie against
Property Division. The firm claims to be entitled to substantial sums in
respect of such remuneration and commission. Disputes, however, arose between
the firm and Property Division or the group as to the transactions in respect
of which remuneration or commission was due and as to the method of
calculation. These are described in greater detail than I need now embark upon
in a judgment of Goff J (as he then was) of January 30 1975 in an action
entitled Shepleycourt Ltd and Others v Lawrence Vanger & Co Ltd
(a firm): 1974 S No 8774.
By a letter
dated December 4 1974 (a Wednesday) addressed to the Secretary, Company
Developments (Property) Ltd, the firm’s solicitor, a certain Mr Cutner, made a
peremptory demand for payment of £138,060.42, claimed to be due by the
addressee company to the firm. This letter demanded payment of that sum within
three days by bankers’ draft under a threat of the presentation of a winding-up
petition in default of such payment. In the judgment already referred to, Goff
J characterised this demand as an extravagant and almost impossible one. Not
only so, for, unless the firm in good faith believed that there was no dispute
about the amount claimed being due, the threatened petition would be an
improper use of the court’s process, for a petition for the compulsory
winding-up of a company should not be presented upon the basis of a debt which
is disputed in good faith, whether as to the whole amount or a substantial part
of it. On Monday, December 9 1974 the firm presented a petition based upon the
alleged liability in the sum of £138,060.42 for a compulsory winding-up of Company
Developments (Property) Ltd, alleging that that company was insolvent. The
group of companies did contain a company of that name, but it had not been a
party to the agreements with the firm, nor was it liable to the firm in respect
of remuneration or commission due under those agreements. It seems that the
petition was presented for the winding-up of Company Developments (Property)
Ltd under a mistake resulting from the fact that at some earlier date
Shepleycourt Ltd and Company Developments (Property) Ltd had exchanged names.
Nothing, however, now turns upon this confusion, for it is now common ground
that the company in the group liable for any remuneration and commission due to
the firm under the agreements is Property Division.
In consequence
of the presentation of this petition Shepley-court Ltd, Company Developments
(Property) Ltd and Property Division on December 10 1974, commenced the action
mentioned earlier by writ in the Chancery Division in which on that day they
obtained an ex parte injunction restraining the firm from proceeding
with that petition. In due course a motion inter partes for
interlocutory relief came before Goff J, who reached the conclusion that the
alleged debt of £138,000 odd was disputed in good faith to the extent of £110,000
odd but undisputed to the extent of the balance of the claim. The learned judge
decided that, having regard to all the facts and circumstances, including
undisputed evidence of solvency which was before him and the intention to
pressurise the company into paying the whole £138,000 odd at once without
further argument evinced by the letter of December 4 1974, he ought to grant an
interlocutory injunction until judgment or further order restraining the firm
from presenting any petition for the winding-up of any of the three plaintiff
companies and from advertising any such petition. The learned judge pointed out
that it was
they wish to present a petition based on an undisputed part of their claim or
on further evidence of insolvency. The firm appealed from the decision of Goff
J, but that appeal was dismissed in this court on April 15 1975. Meantime, the
firm had launched a motion in the Chancery action to discharge or vary the injunction
granted by Goff J to the extent necessary to enable them to present a petition
founded upon that part of their claim which Goff J had regarded as undisputed.
That motion came before Plowman V-C on May 7 1975, when he came to the
conclusion that that part of the claim also was disputed in the relevant sense
on account of cross-claims by Property Division against the firm. He
accordingly dismissed the motion. In an affidavit of a Mr Fletcher, a director
of the three plaintiff companies, sworn on April 10 1975 and filed in support
of that motion, it was alleged that the firm was in default under the
registration requirements of the Registration of Business Names Act 1916 by
reason of the fact that the registration of the firm showed only one person, Mr
Vanger, as the proprietor of the firm, whereas it was alleged that in fact a Mr
Stirling was also a partner in the firm. Mr Fletcher said in his affidavit that
Mr Vanger had always indicated to him that he, Mr Vanger, had total control of
the firm and that Mr Stirling was in the nature of a salaried partner with a
small percentage of the profits on a commission basis. He said, however, that
Mr Stirling had been held out as a principal on the firm’s writing paper for
some years and had twice sworn in the action that he was a partner. In an
affidavit in reply sworn on April 28 1975 Mr Vanger said that it was quite
right that by an oversight of the firm’s accountants Mr Stirling’s name was not
on the entries at the Registry of Business Names, but that he had been a
partner for over five years.
On May 1 1975
the firm applied by ex parte originating summons in the Queen’s Bench
Division for an order that, pursuant to section 8(1)(a) of the Act, the firm
should be relieved of all disabilities imposed upon them by that section. No
notice of this application was given to any of the plaintiff companies in the
pending action or to their solicitors. The summons was supported only by an
affidavit of Mr Cutner, which has been mislaid and of which no copy is
available. It seems probable, however, from other evidence in the case that all
that Mr Cutner said in that affidavit was that the grounds of the application
were fully set out in a letter dated May 1 1975 from Mr Cutner to the Registrar
of Business Names. That letter is available. In it Mr Cutner raised what may be
an interesting point of law, whether Mr Stirling was a partner in the firm
within the meaning of the Registration of Business Names Act 1916, being, as is
alleged, entitled only to a salary and a commission on certain profits. Mr
Cutner indicated in the letter that, if the Registrar considered that Mr
Stirling was a partner for the purposes of the Act, the necessary registration
would be made. The summons came before Croom-Johnson J in chambers on May 1 1975,
who there and then made an order in the terms asked for in the summons. We are
told that the learned judge was told about the existence of the Chancery action
and of the position in it and that he was shown Mr Vanger’s affidavit to which
I have referred earlier. In consequence of Croom-Johnson J’s order, the point
about non-registration ceased to be effective on the motion which was then
pending before Plowman V-C.
On May 4 1975
Mr Cutner, who does not seem then to have received more than a formal acknowledgement
of his letter to the Registrar dated May 1 1975, sent to the Registrar the
forms appropriate to lead to registration of Mr Stirling as a partner in the
firm. In the letter with which these forms were enclosed, which was of
inordinate length, Mr Cutner wrote:
It would, at
least in the writer’s opinion, be wrong were we not to state in this letter to
your goodself that Mr Vanger in an affidavit sworn for the purposes of the said
Chancery motion stated that the omission to register Mr Stirling as a "partner"
arose through what he was led to believe by his firm’s accountants to be an
oversight on their part. This statement, made on oath, was and indeed is still
true subject always to the accuracy of the said accountants in their view that
the registration of a change in the persons carrying on the practice of
consulting surveyors and valuers under the style or firm name of Messrs
Lawrence Vanger & Co was required pursuant to the provisions of the 1916
Act.
In due course
the registration was effected.
On May 27 1975
Property Division issued a summons in the Queen’s Bench Division entitled
"1975 L No 1708A In the Matter of the Registration of Business Names Act
1916 and in the Matter of an Application for relief by Lawrence Vanger &
Co." Down to that point the title
to the summons and the reference number used were the same as the title and
reference number of the firm’s summons of May 1 1975. Unfortunately, the
draftsman of the summons of May 27 1975, added "Between Lawrence Vanger
& Co plaintiffs and Company Developments (Property Division) Ltd
defendants." There were no
proceedings on foot in which Lawrence Vanger & Co were plaintiffs and
Property Division were defendants. The summons called upon the firm, described
as "the plaintiffs herein," to attend before the judge in chambers on
June 3 1975 on the hearing of an application on the part of Property Division
for an order that the order of Croom-Johnson J of May 1 1975 be set set aside.
The summons was addressed to "Lawrence Vanger & Co, the above named plaintiffs,
of 67 Chester Square, London SW1."
A copy of the summons and of the affidavit sworn in support of it was
sent by post to Mr Cutner under cover of a letter asking him to accept service
and acknowledge receipt. On May 30 1975 Mr Cutner declined to accept service of
the summons in a letter in which he wrote:
In that we
know of no proceedings having been instituted by our clients as plaintiffs
against the third named plaintiffs in the Chancery proceedings as defendants in
the matter to which your letter makes reference, we find difficulty in knowing
what to do notwithstanding it being our invariable practice to accommodate
professional colleagues where, possibly through a slip on their part, they have
erroneously listed parties in proceedings where in fact no such proceedings
were issued by one party against another as was the case when Mr Justice
Croom-Johnson made his Order on May 1 last.
I regret to
say that I regard that paragraph as disingenuous. The name of Mr Cutner’s firm
was on the record as solicitors for Lawrence Vanger & Co upon their ex
parte originating summons of May 1 1975. Notwithstanding the reference in
the title to the summons of May 27 1975 to plaintiffs and defendants, the
identity of the order sought to be set aside was perfectly clear from the terms
of the summons and it was, in my view, equally clear that the summons was
intended to be an application in the proceedings originated by the originating
summons of May 1 1975. It should have been perfectly clear to Mr Cutner that the
reference to plaintiffs and defendants in the later summons was merely an
irregularity. Indeed, I suspect that this was clear to him and that he was
endeavouring to take advantage of a purely technical point. The summons was
then served by post upon the firm at their principal place of business, but
according to Mr Cutner was not received by them until June 2 1975, one day
before the return date of the summons. The firm was not represented either by
counsel or solicitor upon the hearing of that summons. On June 2 1975 Mr Cutner
had written a very long letter to the judge’s clerk containing what he
mistakenly described as "short comments upon this matter," which
contained this paragraph:
Unfortunately,
as already mentioned, and assuring yourself as also the learned judge that no
discourtesy is being intended, all members of this firm who are qualified
solicitors are otherwise engaged during the course of tomorrow, and we would
not for one moment consider sending an articled clerk to attend before the
learned judge in chambers to put forward the views as above expressed.
I do not
intend to refer to any other part of that letter, and I do not know what
attention, if any, Chapman J before whom the summons came on June 3 1975 was
able to give, or thought fit to give, to it and the numerous enclosures which
accompanied it. We were told that the learned judge had Croom-Johnson J’s order
before him, but that his attention was not drawn in any way to the discrepancy
between the title to that order and the title to the summons then before him.
We were further told that the learned judge did refer to the explanation given
by Mr Cutner in his letter to the judge’s clerk for the fact that the firm was
not represented before Chapman J. The learned judge was presumably satisfied
that the summons had been duly served in accordance with Order 65, rule 5(2) of
the Rules of the Supreme Court. On June 3 1975 the learned judge, in the
absence of the firm, set aside the order of Croom-Johnson J and ordered the
firm to pay Property Division’s costs of the application. This is the order now
appealed against. Although the order of Chapman J is the only order under
appeal, that order cannot have been right unless the order of Croom-Johnson J
were wrong. The correctness of both orders may therefore be in question on this
appeal.
Mr Goldblatt,
for the firm, has contended that the order of Chapman J was wrong in any event
on the ground that it asked for the wrong relief. He submitted that no one can
make an application in proceedings to which he is not a party without asking to
be joined as a party, which Property Division did not do in the present case.
He relied on Jacques v Harrison (1883) 12 QBD 136, Minet v
Johnson (1890) 6 TLR 417 and Windsor v Chalcraft [1939] 1
KB 279. These were cases in which a person not a party to an action sought
leave to come in and defend the action, notwithstanding that judgment in
default had been obtained against the defendant, on the ground that the
judgment affected the applicant. Clearly such an applicant could not achieve
his object without either being joined as a defendant or being given leave to
defend in the name of the original defendant.
In the present
case, Property Division seems to me to be in a different position. There is
not, in relation to the order sought to be set aside, and cannot be, any lis
between Property Division and the firm. Property Division is, it is true,
affected by the order of Croom-Johnson J because, if that order stands, the
firm can sue Property Division for sums claimed to be due under the agreements.
They are therefore, I think, entitled to seek to get that order set aside under
Order 32, rule 6; but there would be no advantage in altering the character of
the matter initiated by the ex parte originating summons so as to make
that proceeding an inter partes one, for the only relief sought by
Property Division in that matter is to have the order set aside. This they
could achieve by a summons in chambers in the matter in which the order has
been made served upon the firm. The court would deal with it after hearing both
parties, if the respondent to the summons attended on the hearing, and the
court’s order would bind both parties as regards both relief and costs. For
these purposes, however, it seems to me not to be necessary to alter the
constitution of the original matter. Accordingly, I do not accept this
contention.
An application
to set aside an ex parte order under Order 32, rule 6, whether made by
summons in chambers or in the Chancery Division more probably by motion, should
be supported by affidavit evidence establishing, first, that the applicant has
a sufficient interest in the matter to justify his being heard, and, secondly,
the facts on which he relies to justify setting the order aside. There seems to
me to be no doubt that Property Division had a sufficient interest in the
present case. If the firm was in default as regards registration under the Act
at the dates of the two relevant agreements, it was not in a position to
prosecute any claim against Property Division in respect of remuneration or
commission under the agreements unless and until it obtained relief under
section 8 of the Act. The date when Mr Stirling became a partner (if he is one
for the purposes of the Act) has not been established, but according to Mr
Vanger’s affidavit it was more than five years before April 28 1975, which
would ante-date at least the supplemental agreement. The argument has proceeded
before us on the basis that, subject to the point of law, there probably was
default at the relevant dates.
As is natural
in a case dealt with in chambers, we have no note of Chapman J’s reasons for
acceding to the application. It was, I think, most unfortunate that the firm
was not represented before him, even if only by an articled clerk, to ask for
an adjournment, which it seems most probable that the learned judge would have
granted, if asked. Instead, Mr Cutner adopted the irregular course of making
written representations to the court, while at the same time maintaining that
the summons was irregular and had not been regularly served. In the
circumstances, we have to rely on the recollection of counsel who appeared for
Property Division for the way in which the application was presented to the
learned judge. It was submitted to Chapman J that the firm had put forward two
conflicting explanations for the failure to register Mr Stirling as a partner:
(a) that this was due to the inadvertence of the firm’s accountants, and (b)
that Mr Stirling was not in law a partner within the meaning of the Act. It was
further submitted that all the facts had not been placed before Croom-Johnson
J. It seems that it was not suggested to Chapman J that one course open to him
would have been to set aside the order of Croom-Johnson J only so far as claims
under the two agreements were concerned.
It will be
convenient, before considering these matters, to refer to section 8(1) of the
Registration of Business Names Act, 1916, which is in the following terms:
(1) Where any firm or person by this Act required
to furnish a statement of particulars or of any change in particulars shall
have made default in so doing, then the rights of that defaulter under or
arising out of any contract made or entered into by or on behalf of such
defaulter in relation to the business in respect to the carrying on of which
particulars were required to be furnished at any time while he is in default
shall not be enforceable by action or other legal proceedings either in the
business name or otherwise: Provided always as follows: (a) The defaulter may
apply to the court for relief against the disability imposed by this section,
and the court, on being satisfied that the default was accidental, or due to
inadvertence, or some other sufficient cause, or that on other grounds it is
just and equitable to grant relief, may grant such reliefs either generally, or
as respects any particular contracts, on condition of the costs of the
application being paid by the defaulter, unless the court otherwise orders, and
on such other conditions (if any) as the court may impose, but such relief
shall not be granted except on such service and such publication of notice of
the application as the court may order, nor shall relief be given in respect of
any contract if any party to the contract proves to the satisfaction of the
court that, if this Act had been complied with, he would not have entered into
the contract; (b) Nothing herein contained shall prejudice the rights of any
other parties as against the defaulter in respect of such contract as
aforesaid; (c) If any action or proceeding shall be commenced by any other
party against the defaulter to enforce the rights of such party in respect of
such contract, nothing herein contained shall preclude the defaulter from
enforcing in that action or proceeding, by way of counterclaim set off or
otherwise, such rights as he may have against that party in respect of such
contract.
I do not think
I need read subsection (2). Section 3 of the Act prescribes the particulars to
be registered; and the effect of section 6 is that, where the existing
registration is that of an individual and he is joined by a partner in the
business, the consequent change in the particulars required to be registered
must be notified to the Registrar within 14 days after the change.
It will be
observed that the power to grant relief is framed in very wide terms. Where, as
in the present case, the application for relief is made ex parte, the
applicant is under an
which are relevant to the exercise of the court’s discretion, that is to say,
bearing in any way upon the question whether his default was accidental or due
to inadvertence or some other sufficient cause, or whether on other grounds it
is just and equitable to grant relief. It will also be observed that the disability
under the section affects the defaulter only. It is only his rights under
contracts entered into during default that are rendered unenforceable: the
rights of other parties remain intact: (section 8(1)(b)). And if another party
to any such contract sues the defaulter upon it, the defaulter is not debarred
from enforcing his right against the plaintiff under that contract by way of
counterclaim, set-off or otherwise: (section 8(1)(c)). Moreover, it has been
said (though not decided) that the disability under the section attaches to the
defaulter personally and does not affect an assignee: Hawkins v Duché [1921] 3 KB 226, per McCardie J; Daniel
v Rogers [1918] 2 KB 228, per Pickford LJ at p 232 and per Scrutton LJ
at p 234. It seems to me that the policy of the section is to impose an
automatic sanction, where default has been made in carrying out the
requirements as to registration, which is personal to the defaulter and from
which he may be readily relieved upon rectifying the default, provided that he
has not in the meantime entered into contracts with other parties who have been
or are likely to have been misled or otherwise prejudiced by the default. The
only express bar to relief is that, if any party would not have entered into a
contract with the defaulter but for the default, no relief can be granted in
respect of that contract.
When an
application for relief first comes before the court, the court should consider
whether the applicant should be required to serve it upon anyone else or, as in
re Smith [1920] WN 115 and Weller v Denton [1921] 3 KB
103, and see re Oxley (1932) 77 SJ 11, to advertise it (section
8(1)(a)). Whether either of these courses should be required must depend upon
the circumstances. If the applicant is likely to have any considerable number
of claims against others to which the disability would attach, it seems to me
that it would normally be proper to require advertisement. If the applicant is
actually litigating any such claim as a plaintiff, it seems to me that it would
be proper to direct service of the application or of notice of it upon the
defendant in the action, so as to allow him to come in and be heard upon the
application for relief: (see in this connection re Thompson’s Application
(1920) 150 LT 5). The power to require either of these courses to be followed
is discretionary, but since, if the application is made ex parte, there is no
one except the applicant to question the propriety of the court’s exercise of
the discretion, it is a power to be exercised with particular care.
In the present
case, the firm had not issued a writ against Property Division in respect of
the £138,000 odd or any part of it. It had, however, issued a winding-up
petition founded upon that claim. Property Division had not commenced any proceeding
against the firm to enforce any right under the agreements, but they had sued
the firm in the Chancery action to balk any petition by the firm for the
winding-up of the company. None of these proceedings was of a kind directly
described in section 8(1), but it was clear and was known to Croom-Johnson J
that the firm was asserting a claim to be a creditor of Property Division under
the agreements, and that on the motion before the Vice-Chancellor Property
Division was taking the point about the firm being in default under the
section. With deference to Croom-Johnson J, I think it would have been better
if he had either transferred the ex parte originating summons into the
Chancery Division with an indication that it would be appropriately heard by
the Vice-Chancellor in conjunction with the motion pending before him, or had
directed that the firm should serve notice of the summons on Property Division
and had adjourned the summons so that Property Division could be heard on it.
In his exercise of his discretion, he took neither of these courses, nor did he
direct any advertisement. There is no appeal before us from this exercise of
discretion, which can only be relevant if it can be said to have afforded a
ground for Chapman J to set Croom-Johnson J’s order aside at the instance of
Property Division. In my judgment, this is not so in this case. There will be
nothing to prevent anyone else under a contractual obligation to the firm from
asserting that as against him the order of Croom-Johnson J should be set aside.
I now come to
the points relied on by Property Division before Chapman J and in this court.
The ultimate question for decision is whether on the facts as now known
Croom-Johnson J’s order should or should not be set aside. It is evident that
at the time of the hearing by Chapman J Property Division believed that the
application to Croom-Johnson J had been a furtive and unconscionable manoeuvre
to obtain relief from disability in their absence. It now turns out, and
Property Division accepts, that the application to Croom-Johnson J was made ex
parte in the Queen’s Bench Division on leading counsel’s advice. The
application could equally well have been made in the Chancery Division and
could have been served in the first instance on Property Division. It would, I
think, have been better if this course had been adopted, but no opprobrium
should in the circumstances attach to the firm for proceeding in accordance
with counsel’s advice. The belief, however, that there had been something
furtive about the procedure may well have coloured the proceedings before
Chapman J.
Property
Division then believed that Croom-Johnson J had not been shown Mr Vanger’s
affidavit of April 28 1975. Had this been the case (which it was not), Chapman
J might have been forgiven for thinking that there had been some inconsistency
between the argument contained in Mr Cutner’s letter of May 1 1975, in which he
contended that Mr Stirling was not in law a registrable partner, and Mr
Vanger’s statement in his affidavit that the non-registration of Mr Stirling as
a partner was due merely to an oversight on the part of the firm’s accountants.
A careful reading of the letter, in my opinion, discloses that Mr Cutner
nowhere alleges in it that the reason why the registration had not been made
was advice given to the firm that no registration was necessary. Had such been
the case, the failure to register would not have been accidental or due to
inadvertence and the letter, which was apparently put forward by Mr Cutner as
stating the grounds for the application for relief, would have had the effect
of eliminating the first two grounds for relief offered by section 8(1)(a). The
letter contains a justificatory argument to the effect that in the writer’s
view registration of Mr Stirling as a partner was unnecessary: it says nothing
about the historical reason why the firm had not made any such registration. We
now know, and Mr Hames very properly accepts, that Croom-Johnson J was aware of
Mr Vanger’s affidavit in which he deposed to the fact that the reason for
non-registration was inadvertence on the part of the firm’s accountants. Mr
Cutner’s letter of May 1 1975, which puts forward an ingenious justification,
and perhaps a valid one (the point has not been argued), for the firm’s failure
to effect the registration, is not, in my view, inconsistent with Mr Vanger’s
sworn testimony. This point is made in the passage I have cited from Mr
Cutner’s letter of May 4 1975.
Property
Division also complains that Croom-Johnson J’s attention was not called to the
fact that two earlier registrations had been made under the Act in respect of
the firm, dated respectively January 1 1969 and February 1 1972. Both were in
Mr Vanger’s sole name. The latter showed, and was presumably occasioned by, a
change of address of the principal place of business. The earlier particulars
showed the date of commencement of business as January 1 1969 and the latter as
January 1 1971. The 1972 registration may have been inaccurate, but this does
not appear to me to bear in any way on the question we have to consider.
Property
Division further complains that no disclosure was
persons other than Property Division. This is true, but the judge did not see
fit to ask for any evidence about this, and it can have no bearing on whether
Property Division was adversely affected by this default in registration.
Although there is no evidence establishing the negative, there is none
positively suggesting that anybody else has been adversely affected. I think
there is nothing in this point.
What I regard
as of great importance is that Mr Hames concedes that Property Division knew at
all material times that Mr Stirling was a partner in the firm and regarded him
as such. In view of this, I can find no ground in the evidence for supposing
that Property Division has been adversely affected in any way at all by the
firm’s default in registering Mr Stirling as a partner, assuming that, contrary
to Mr Cutner’s point of law, there has been such a default. In Weller v Denton
(supra) it was held to be just and equitable to grant relief where
the defendant to a claim by the defaulters had known at the relevant time who
were the proprietors of the plaintiff’s business and had not been misled by a
default in registration. So also in the present case Property Division were not
misled by the state of the register. Even if the failure to register Mr
Stirling as a partner was not due to inadvertence, as on the evidence I think
it was, it seems to me that vis-à -vis Property Division the granting of
relief would not be unjust or inequitable and the refusal of relief would be
harsh to the firm, who have not been shown to have been actuated by any
sinister or improper motive or to have acted recklessly. Indeed, I think it
would be unjust if Property Division escaped liability for any sum for which
they would otherwise be liable under the agreements by reason only of the
statutory disability cast upon the firm by section 8(1).
Accordingly,
in the light of the knowledge available to this court, I am of opinion that
this is a proper case for granting relief under the section. I would allow this
appeal, substituting for Chapman J’s order setting aside Croom-Johnson’s order
an order dismissing Property Division’s summons of May 27 1975.
I have the
authority of Lane LJ, who cannot be here this morning, for saying that he
agrees with the judgment which I have delivered.
STEPHENSON LJ
also agreed.
No order was
made as to the costs of the appeal. The order made by Chapman J (for the
present appellants to pay the costs of the application below) to remain
undisturbed.