Rajah: Unchallenged reason was enough to make decision
Two former partners of a law firm did not vary their 50/50 partnership after it was set up so that one would be in sole control, the High Court has ruled.
Mr Justice Rajah upheld a circuit judge’s decision that the partnership agreement signed in July 2014 by claimant Anbananden Sooben and defendant David Thayaparan Mariampillai was not superseded by oral agreement two months later.
Mr Mariampillai had been less than three years qualified in 2014 and so could not set up a law firm without a more experienced supervisor, which Mr Sooben was.
A business plan stating that the two would be equal partners was used to apply for professional indemnity insurance and, once obtained, they sought Solicitors Regulation Authority (SRA) authorisation in August 2014.
This was granted in November 2014 and trading as South-West London firm David Benson Solicitors started the following month. The partnership ended in 2019, although the firm continues to operate as a limited company and Mr Mariampillai is one of three directors.
Before His Honour Judge Nigel Gerald, Mr Mariampillai said that in September 2014 they had agreed that Mr Sooben would be entitled to 100% of the profit costs for work he did or brought in, but would have no liability for expenses or outgoings and would not be involved in the firm’s management (called ‘the 100% agreement’ in the ruling).
Counsel argued that Mr Sooben should be seen as a salaried partner.
Rajah J observed: “The judge made clear that he found this decision a difficult one to make not least because he did not find either witness to be particularly credible.”
But HHJ Gerald cited seven reasons for finding there was no 100% agreement. These included that “the absence of any written record of so fundamental a change was inconceivable” and that “it was not credible that Mr Sooben would have walked away from his equity interest in return for 100% of his profit costs, even if he was expecting to bring in more business than Mr Mariampillai”.
The fifth reason – which the judge said was extremely important – was the evidence that the partnership was always going to be funded by Mr Mariampillai, and it was always understood that Mr Sobeen “could not and was not expected to lend or invest money in the partnership”.
This removed the alleged “trigger” relied on by Mr Mariampillai for the variation.
On appeal, Mr Mariampillai argued that the judge had made three factual errors, and though Rajah J agreed on two of them, they only affected two of the seven reasons and were not enough to undermine the decision.
In particular, the errors were not used to attack the fifth reason. “This is significant because this reason on its own seems to me to be fatal to Mr Mariampillai’s case on the September variation,” said Rajah J.
“The judge has identified this reason as very important. Unlike the other six reasons this one is not one which goes into the scales to weigh the balance of probabilities as to whether or not the September variation occurred.
“It is on its own a complete rejection of Mr Mariampillai’s case. The judgment could have referred to this reason alone.”
Rajah J also rejected Mr Mariampillai’s argument that the judge’s intervention in cross-examination, supplemented by his alleged hostility to counsel, rendered the trial unfair.
Based on the transcript, “I do not think the judge overstepped the mark or descended into the arena in relation to the cross-examination of Mr Sooben”.
As for the hostility and other criticisms, he said the Judicial Conduct Investigations Office (JCIO) had upheld a complaint.
“That is the appropriate course for conduct below the standards expected of a judge. I am not concerned with that. I am concerned with whether the conduct amounted to an irregularity which made the trial unjust. In my judgment it did not.”
In March 2024, the Lady Chief Justice issued HHJ Gerald with formal advice for misconduct. The case was not specified but the JCIO said a barrister had complained that the judge had behaved in a rude and aggressive manner towards him.
The complaint included an allegation that HHJ Gerald had told him to “chill out” and that he had mimicked him in the style of a character from a television sitcom.
The JCIO said: “Whilst not all the allegations were made out, a nominated judge considered that HHJ Gerald had been discourteous towards counsel by raising his voice and making remarks which showed irritation and a degree of contempt for counsel’s submissions.”
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