Jaswinder Singh Bahia v Inderdeep Singh Sidhu & Anor

1. At the outset of this trial involving a partnership dispute an issue has arisen as to the scope of a number of the 17 Inquiries identified by Deputy Master Linwood in his order of 9 July 2020, following submissions from the parties.

2. I am bound to say that insofar as there was any doubt around the scope of those Inquiries I am rather surprised that this was not identified and addressed between the parties well in advance of the trial, and it is unfortunate that time has been taken up at trial in dealing with this issue.

3. To put the points on which the parties are in dispute into their context, I should say that a couple of the Inquiries identified by the Deputy Master have been compromised, and it is agreed between the parties that Inquiry 1 should be adjourned to be determined on a subsequent occasion.

4. Inquiry 1 is in the following terms: "An inquiry (1) whether (i) any of the Partnership debts and liabilities have since been paid and by whom and out of what fund and (ii) of all income and expenses in relation to all partnership properties not otherwise provided for below from 6 April 2011 to date."

5. For clarity, I should make it clear that there are two partnerships with which the court is concerned in this case; the first is referred to in the order of the Deputy Master as “the Partnership” and the second as “the Greatway Partnership”.

6. The Inquiries in respect of which there is now a dispute as to scope are Inquiries 6, 7 and 16. Although there has been some discussion around the scope of Inquiry 14, that has now been resolved and I do not need to address it any further.

7. I shall deal with each disputed Inquiry in turn. In doing so, I have regard to submissions made by the parties on the second day of trial and to the content of a Scott Schedule produced following opening submissions identifying each of the parties' positions on each Inquiry. Inquiry 6

8. Inquiry 6 is in the following terms: "An inquiry (6) into sums collected by or on behalf of the Claimant for the Partnership in respect of the following properties."

9. A number of properties are then identified and the time period for the Inquiry is said to be “from 6 April 2011 to date”.

10. It is common ground that notwithstanding the words of Inquiry 6, it should in fact cover the period between April 2011 and 5 April 2019 in respect of each of the properties identified. However, Mr Temmink QC, on behalf of the Claimant, invites me to find that in determining this Inquiry the court should look at both the rental income and the rental expenses arising in relation to the relevant properties. He says any other approach would be inconsistent. He points out that all the necessary evidence as to rental expenses is in the trial bundle before the court, running to approximately 150 pages.

11. Mr Clarke QC, on behalf of the Defendants, says that the words used by the Deputy Master in formulating this Inquiry are clear and that they do not extend to expenses. He accepts that there are invoices in the trial bundle evidencing the expenses, but he says that there is nothing in the witness statements addressing the issue of expenses and that, accordingly, it would be unfair to broaden the scope of the Inquiry beyond its clear words (i.e. “sums collected”).

12. Having considered this carefully, I am bound to say that I agree with Mr Temmink that the court should be dealing now with the question of the net amount collected in rent from the relevant properties over the identified period, which obviously requires consideration of expenses. In submissions made to the court on the first day of trial, Mr Clarke made it clear that the only evidence available to determine the Inquiries is presently before the court, and I agree with Mr Temmink that it is difficult to know what witnesses would say in their statements on the subject of expenses beyond perhaps referring to, or adding up, the invoices in the trial bundle.

13. Indeed, contrary to Mr Clarke's submissions about the evidence, I note that Mr Hardeep Bahia refers to having disclosed all expenses to Andy Sidhu in paragraph 126 of his witness statement, whilst at the same time querying the calculation made by Andy Sidhu in Schedule 1 to the Defence and Counterclaim (which itself includes a separate column for “Costs in Accounts” which has plainly been factored into the calculation as to the total amount of rent said already to have been declared). In his submissions on this issue, Mr Clarke was not able to identify any documents that will be available on a subsequent Inquiry, but which are not now available.

14. I must have regard to the overriding objective of dealing with this Inquiry expeditiously and fairly, but I must also have regard to the need to deal with it proportionately and to the need to allot resources to other cases. Balancing up these interests and having regard to (1) the fact that the Defendants themselves appear to have taken account of the expenses in Schedule 1 to the Defence and Counterclaim; (2) Mr Clarke's concession that no additional evidence will be available at the hearing of a future Inquiry; and (3) his acknowledgement during submissions that Inquiry 4 does extend to expenses (even though the wording in relation to that Inquiry is similarly lacking in clarity), it seems to me that the interests of justice weigh in favour of dealing with the matter now while the evidence is available and before the court.

15. Insofar as it is necessary for me to interpret the order of the Deputy Master, I assume that this is what he intended in formulating Inquiry 6.

16. I can see no real prejudice to either party in dealing with this now, but if either advocate wishes to lead admissible evidence specifically on the question of expenses, then I am prepared to allow it and this can be discussed with the parties in due course. Inquiry 7

17. Inquiry 7 is in the following terms: "An inquiry (7) whether the Second Defendant was a Partnership asset and, if so, whether the Deceased and/or the First Defendant have accounted to the Partnership for all the profits generated by the Second Defendant from 1 January 2009 to date."

18. After some discussion between the parties, it is common ground that this Inquiry should run only to 5 April 2019, such that any issues as to the closure of the business of ASL (as identified in the Scott Schedule on behalf of the Claimant) will need to be addressed at a future hearing.

19. However, Mr Temmink says that this court will be invited to find at this trial that commission from ATM withdrawals is missing and must be accounted for. He says that he will invite the court to draw inferences as to the missing withdrawals and that there is no further evidence available on which any future court could rule. All the evidence has come from the Defendants’ disclosure.

20. Mr Clarke says this is not an issue raised in this Inquiry, it is not pleaded and it has not been addressed by the Claimant's expert who has produced a report specifically addressing Inquiry 7. Accordingly, Mr Clarke says that this is not a matter for this court but must go off for resolution at the next hearing.

21. Looking at the comments made by the Defendants in the Scott Schedule, however, I note that although the Defendants say that this issue is not pleaded, they nevertheless accept that they have disclosed all available documents and they respond to the point about ATM withdrawals by saying that there is no missing cash, there was in any event no ATM machine between 2010 and 2015, and "all commission as per contract paid into ASL bank account 1281".

22. Both Mr Hardeep Bahia on behalf of the Claimant and Mrs Satpal Sidhu on behalf of the Defendants have provided evidence in their statements about the ATM cash machine and the receipt of commission. Furthermore, a great many emails relating to the removal of the ATM machine appear to have been included in the trial bundle.

23. Whilst the matter of ATM withdrawals has not been specifically pleaded, Inquiry 7 is concerned with whether the Deceased and/or the first Defendant have accounted to the partnership for all of the profits generated by ASL. Commission on the ATM withdrawals would be an element of any such profit, and I do not consider that it is correct to say that the issue has not been addressed in the witness evidence or indeed by the Claimant's expert.

24. In the table at 4.5 of the expert's report, he identifies the ATM commission received into the HSBC bank account between 2009 and 2019. In his conclusion at section 12.5(b), he expressly addresses the question of “recognition of commissions” saying this: "I have been unable to confirm or reconcile all the commissions received from phonecard sales and the use of the ATM to the bank and/or accounts to commission statements. The monies received have been sporadic and do not seem to have been included within the VAT summaries provided. It is possible that the company's turnover has been understated as a result."

25. In circumstances where all of the available evidence appears to be before the court, I again fail to see how it is in the interests of justice or consistent with the overriding objective for this issue to be adjourned to be dealt with on another day. Given that the issue has been raised in the evidence and appears to be covered by the terms of the Inquiry, I cannot see any prejudice to the Defendants in dealing with it at this hearing. Inquiry 16

26. Inquiry 16 reads as follows: "An inquiry (16) as to whether sums deposited into the Greatway Account between November 2005 and August 2017 belonged to the Greatway Partnership and ought to be included in its accounts and, where relevant, whether any settled accounts should be re-opened, surcharged and falsified on the basis of material error, concealment or misrepresentation."

27. It is common ground that dissolution accounts need to be prepared for the years 2013, when the Greatway Partnership ceased to trade, to 2017. However, Inquiry 16 envisages accounts between November 2005 and 2017. The Defendants accept that there is no need for accounts between 2005 and 2007 but they say that there are no existing settled Greatway Partnership accounts between 30 November 2007 and 2013 and that, accordingly, the court should direct that the drawing up of accounts between those dates be adjourned, just as Inquiry 1 is to be adjourned, for resolution at a later date.

28. The Claimant says that in circumstances where the Defendants have conceded Inquiry 11 (i.e. have accepted that there is no need for an inquiry into whether the Claimant wrongfully introduced monies belonging to the Partnership into the Greatway Partnership between 2003 and 2013 such that the income between those years is effectively now agreed) there is no longer any issue in relation to the period 2007 to 2013.

29. Mr Clarke disagrees. He says that while there is no longer an allegation of wrongful introduction into the Greatway Partnership accounts, it is still necessary to draw up agreed accounts for years when the Sidhus have not signed the existing accounts, i.e. 1 December 2007 to 2013, and that it is not possible, in his words, just to “jump in” as at 2013 and create meaningful accounts from that date going forward without having settled accounts in the years prior to that date. He says that there may be doubt around the expenditure between those dates and that ultimately the Defendants have simply not agreed the Greatway Partnership accounts drawn up between December 2007 and 2013 such that they cannot be said to be settled accounts.

30. In circumstances where the parties have been in dispute for years over the accounts and where the issues identified in Inquiry 1, together with the need to prepare Greatway Partnership accounts for the years 2013 to 2017, are to be adjourned to another day, it seems to me to be fair and just that I should also adjourn the finalisation of what may be disputed accounts in relation to the Greatway Partnership for the years December 2007 to 2013 to the same hearing.

31. In doing so, I am not encouraging the parties to engage in yet further, as yet apparently unidentified, disputes over the figures in relation to expenses. Quite the reverse. However, it does seem to me that where the Sidhus have not signed the accounts between 1 December 2007 and 2013, and given the extent of the distrust that plainly exists between the parties over record-keeping and preparation of accounts, both parties now require certainty over the content of the Greatway Partnership accounts for the years 2007 to 2013.

32. It seems to me that certainty is best achieved by providing for accounts between those dates to be drawn up and approved by the court in due course, if necessary. Accordingly, Inquiry 16 will be adjourned to be dealt with at the same time as Inquiry 1.

33. I now invite the parties, please, to prepare an order reflecting my decision and which also accurately and clearly identifies the issues to be dealt with by the court on the next occasion in the context of Inquiry 16 so that there can be no ambiguity going forward as to what issues remain outstanding between the parties.