Solicitors within a practice sued each other, and one wished to plead the fact of a finding of professional misconduct.
Held: The defendant’s appeal succeeded. It was not an abuse for the appellant to continue to assert his innocence, and the findings were not admissible as a whole. Prospective partners were under a duty to disclose matters within their knowledge of relevance to the proposed partnership. The issue of the need to disclose a past finding of dishonesty was inextricably tied to the past finding. ‘there can be no doubt that the principle of caveat emptor does not apply to the making of a partnership agreement, and that in negotiating such an agreement a party owes a duty to the other negotiating parties to disclose all material facts of which he has knowledge and of which the other negotiating parties may not be aware.’
However, absent fraud, breach of the duty of disclosure will, at least as a general rule, give rise merely to a right of rescission and not damages.
When considering an allegation of abuse of process, a court should be slower in preventing a party from continuing to deny serious charges of which another court has previously found him guilty than in preventing such a party from initiating proceedings for the purpose of relitigating the question whether he is guilty of those charges. If the claimants had wanted to rely on the earlier proceedings hey should have pleaded the particular parts upon which they wished to rely, rather than seeking to import the entire proceedings. The abuse of process allegation was not made out as against the defendant persisting in his denial of the findings.
Judges:
Lord Justice Ward, Lord Justice Jonathan Parker and Lord Justice More-Blick
Citations:
[2008] 1 WLR 484, [2006] EWCA Civ 1749, Times 17-Jan-2007, [2007] 3 All ER 802
Links:
Jurisdiction:
England and Wales
Citing:
Cited – Hollington v F Hewthorne and Co Limited CA 1943
The defendant had been involved in a road accident in which the plaintiff’s son had died, and had been convicted of careless driving. The plaintiff as the personal representative of his son sued for damages for negligence, seeking to rely on the . .
Appeal from – Conlon and Another v Simms ChD 9-Mar-2006
Partners in a solicitors practice fell out after one was struck off by the Law Society. The remaining partners claimed damages alleging that they had been drawn into the partnership after misrepresentations by the defendant about it, and sought to . .
Cited – Maddeford v Austwick 1826
When co-partners are negotiating between each other in relation to partnership assets, each partner must put the others in possession of all material facts with reference to the partnership assets, and not to conceal what he alone knows. . .
Cited – Bell v Lever Brothers Ltd HL 15-Dec-1931
Contract – Mutual Mistake Test
Bell was director and chairman of Niger, a subsidiary of Lever Brothers Ltd who dismissed him, offering and paying pounds 30,000 compensation. Lever then discovered that Mr Bell had made secret profits at the expense of Niger for which he could have . .
Cited – Helmore v Smith 1886
The relationship between partners is of a fiduciary nature.
Bacon V-C said: ‘If fiduciary relation means anything I cannot conceive a stronger case of fiduciary relation than that which exists between partners. Their mutual confidence is the . .
Cited – Fawcett v Whitehouse 21-Dec-1829
The defendant, intending to enter into a partnership with the plaintiffs, negotiated for the grant by a landlord of a lease to the partnership. The landlord paid the defendant andpound;12,000 for persuading the partnership to accept the lease.
Cited – Andrewes v Garstin 1861
The plaintiff sued for breach of an agreement to enter into a partnership with the defendant, who pleaded that previously the plaintiff had carried on trade in partnership with another person, and that the defendant made the agreement on the faith . .
Cited – Law v Law 1905
A person with a right to rescind a contract may be held to have affirmed the contract even if there are some material facts which he did not know at the time of the affirmation. However: ‘ . . there is a duty resting upon the purchaser who knows, . .
Cited – The Secretary of State for Trade and Industry v Bairstow CA 11-Mar-2003
The Secretary of State attempted, in the course of director’s disqualification proceedings, to rely upon findings made against Mr Bairstow in an earlier wrongful dismissal action to which he had been a party but the Secretary of State not. The . .
Cited – Pan Atlantic Insurance Co Ltd and Another v Pine Top Insurance Co Ltd HL 27-Jul-1994
The plaintiff had written long term (tail) insurance. The defendant came to re-insure it. On a dispute there were shown greater losses than had been disclosed, and that this had been known to the Plaintiff.
Held: ‘material circumstance’ which . .
Cited – Hill v Clifford CA 12-Jun-1907
(Majority) An earlier decision of the GMC striking the defendant off the register of dentists was prima facie evidence of the truth of the charges against him. . .
Cited – Trimble v Goldberg PC 1906
The parties entered into a partnership to acquire ‘stands of land’ for conversion into a township and subsequent re-sale. The land was acquired, along with shares in a company owning other stands in the same locality. One of the partners then bought . .
Cited – Phosphate Sewage Co Ltd v Molleson 1879
For an action making a collateral attack on a previous decision not to be an abuse of process the evidence had to be ‘fresh’ i.e. unavailable at the time of the first hearing, and the ‘new evidence must be such as entirely changes the aspect of the . .
Cited – Ashmore v British Coal Corporation CA 1990
The plaintiff was one of many female employees who complained to the industrial tribunal that she was paid less by the defendant than her male counterparts. Sample cases were selected for trial and the others stayed pending a decision. It was an . .
Cited by:
See Also – Simms v Conlon and Another ChD 31-Oct-2007
. .
Cited – OMV Petrom Sa v Glencore International Ag ComC 7-Feb-2014
The claimant sought to have struck out as abuse of process parts of the defence, saying that the factual issues raised had already been resolved in arbitration proceedings, but as against a different oarty. The defendant replied that the arbitration . .
Lists of cited by and citing cases may be incomplete.
Legal Professions, Company
Updated: 23 March 2022; Ref: scu.247491