Haughey (Lawline Solicitors) v Synnott

• Jurisdiction: Ireland
• Judge: Miss Justice Laffoy
• Judgment Date: 12 December 2011
• Neutral Citation: [2011] IEHC 467
• Docket Number: [No. 8823P/2011]
• Court: High Court
• Date: 12 December 2011

[2011] IEHC 467

THE HIGH COURT

[No. 8823P/2011]

Haughey (Lawline Solicitors) v Synnott

BETWEEN

CAOIMHE HAUGHEY (SUING BY HERSELF AND LAWLINE SOLICITORS)

PLAINTIFF

AND

DAVID SYNNOTT

DEFENDANT

SUPREME COURT OF JUDICATURE ACT (IRL) 1877 S28(8)

RSC O.50 r6

PARTNERSHIP ACT 1890 S39

BANKS LINDLEY & BANKS ON PARTNERSHIP 19ED 2010 PARA 23.153

LAW SOCIETY OF IRELAND A GUIDE TO PROFESSIONAL CONDUCT OF SOLICITORS IN IRELAND 2ED 2002 PARA 7.6

LAW SOCIETY OF IRELAND A GUIDE TO PROFESSIONAL CONDUCT OF SOLICITORS IN IRELAND 2ED 2002 PARA 9.14

TWOMEY PARTNERSHIP LAW 2000 PARA 20.69

TOKER v AKGUL 1996 2 CLY 1733

RAY v FLOWER ELLIS 1912 56 SJ 724

PROFESSIONS

Solicitors

Dissolution of partnership - Application to appoint receiver and manager - Role of receiver - Attitude of Law Society - Value of partnership assets - Whether partnership lawfully dissolved - Whether written partnership agreement - Whether plaintiff misappropriated assets of partnership - Whether court had jurisdiction to appoint independent person in absence of agreement of parties - Toker v Akgul [1996] CLY 1733 and Ray v Flower Ellis (1912) 56 Sol Jo 724 CA considered - Supreme Court of Judicature (Ireland) Act 1877 (40 & 41 Vict), s 28(8) - Partnership Act 1890 (c 39), s 39 - Rules of the Superior Courts 1986 (SI 15/1986), O 50, r 6 - Application dismissed (2011/8823P - Laffoy J - 12/12/2011) [2011] IEHC 467

Haughey v Synnott

Facts Both the plaintiff and the defendant had for a number of years carried on the practice of solicitors through a partnership ("Lawline Solicitors"). The plaintiff and the defendant had been in dispute in relation to the Lawline partnership for some time. The plaintiff had given the defendant notice of dissolution of the partnership and sought his co-operation for an orderly wind-down of the partnership which involved valuation of the work in progress attributable to each client. The defendant contended that the notice of dissolution was of no effect and that the only manner in which the plaintiff could unilaterally bring the partnership to an end was by retiring as a partner. Litigation had ensued which resulted in the defendant being ordered to return the files of the practice of Lawline Solicitors to the plaintiff and the court ordered that neither party should interfere in the conduct of the other's practice as a solicitor. In the present proceedings the defendant sought orders pursuant to Supreme Court of Judicature (Ireland) Act, 1877 and/or Rules of the Superior Courts ordering the appointment of a receiver to sell/realise the assets of the partnership.

Held by Laffoy J in refusing the relief sought. The dispute between the parties related to their respective entitlements in relation to the assets of the partnership as of the date of dissolution. The defendant was seeking to have the assets of the dissolved partnership definitively valued by his nominee and disbursed by his nominee. Each of the parties could appoint an accountant experienced in the conduct of the business of a solicitors' practice and come to an agreement on the assessment of the assets. There would have to be some default mechanism to address the possibility that agreement could not be reached. An alternative approach would be for the parties to agree to have the valuation of the partnership assets referred to arbitration. The court had taken no view as to whether any allegation or counter-allegation made by one party against the other was well founded. There would be an order dismissing the defendant's application and the court would hear further submissions as to the manner in which the matter would proceed.

Reporter: R.F.

Miss Justice Laffoy

1 2 1.1 For just over eight years prior to August 2011, the plaintiff and the defendant carried on the practice of solicitors through a partnership known as "Lawline Solicitors". The practice mainly involved personal injuries actions for clients whose business was accepted on a "no foal no fee" basis. The Lawline practice was carried on in offices at Christchurch Hall in Dublin 8. While the relationship of the plaintiff and the defendant in the run up to, and since, the initiation of these proceedings has been extremely acrimonious and there is a very considerable degree of conflict between them on factual issues, it is common case that the plaintiff and the defendant were equal partners in the Lawline partnership. It is also common case that it was the basis of the partnership that the plaintiff would be responsible for all the case files of the firm and that the defendant would be responsible for management, staff, financials, marketing and advertising matters. In face, the defendant practised as a sole practitioner, and still does, under the title of D.J. Synnott & Co., Solicitors, from offices at St. Stephen's Green, Dublin, 2. The plaintiff and the defendant have been in dispute in relation to the Lawline partnership for some time and solicitors have been acting on behalf of each party since March 2011. Various efforts have been made to resolve the dispute between them, including a mediation process. However, all such attempts to achieve an agreed resolution were unsuccessful.

2 3 1.2 On 26^th August, 2011 the plaintiff gave the defendant notice of dissolution of the partnership to take effect from Friday, 30^th September, 2011. She sought his co-operation for an orderly wind-down of the affairs of the partnership and attached to her letter a schedule of matters which required to be jointly addressed during the orderly wind-down. These matters were: employees; the lease on the office premises; establishing work in progress; collection of outstanding debtors; discontinuance or disconnection of utilities and suchlike; storage of documentation, such as closed files; banking matters, such as closing current accounts and paying off the overdraft; preparation of final trading accounts to 30^th September, 2011; discharge of PAYE/PRSI, VAT and other creditors; disposal or transfer of equipment, fixtures and fittings; finalisation of capital accounts as at 30^th September, 2011; and future professional indemnity insurance in relation to past work. It was also suggested that there should be a dissolution agreement in writing. At that stage, the plaintiff intimated that she would be assisted by a named chartered accountant, who was experienced in advising on solicitors' practices. She asked the defendant to appoint somebody to liaise with that person. She also proposed that a joint letter, informing them of the dissolution, be sent to the practice's then current clients and she submitted a draft letter for consideration by the defendant. She stated that it would be necessary to establish the value of the work in progress attributable to each client as at 30^th September, 2011 and that such value would be accounted for in the final calculations of the individual capital accounts as at 30^th September, 2011. She made it clear that the name "Lawline" was owned by the partnership and that she was not agreeable to its continued use by either party.

3 4 1.3 The response to the notice of dissolution on behalf of the defendant was contained in a letter dated 12^th September, 2011 from the defendant's legal adviser, Dr. Michael Twomey, to the plaintiff's solicitor. The position adopted in that response, which has been maintained ever since by the defendant, was that the partnership was governed by a written partnership agreement between the parties. It was, and continues to be, contended by the defendant that the notice of dissolution was of no effect and that the only manner in which the plaintiff could unilaterally bring the partnership to an end was by retiring as a partner and that, in the events which had happened, the defendant was entitled to treat the plaintiff as an outgoing partner. At all times, the plaintiff has disputed the existence of any written partnership agreement. The conflict on that issue cannot be resolved on this application, nor was it resolvable on the previous applications to the Court.

4 5 1.4 What provoked these proceedings was action taken by the defendant on 2^nd October, 2011. Those actions, which are not really germane to the issue which is now before the Court, resulted in the plenary summons in these proceedings being issued and the plaintiff seeking an interim injunction.

5 6 1.5 The primary relief sought in the endorsement of claim on the plenary summons is a declaration that the partnership of "Lawline Solicitors" was lawfully dissolved on 30^th September, 2011. Various forms of injunctive relief were sought. For present purposes it is sufficient to record that the plaintiff sought orders that -

6 (a) the affairs of "Lawline Solicitors" be would down with all necessary consequential accounts, directions and inquiries; and

7 (b) that the defendant co-operate with the orderly wind-down of the affairs of "Lawline Solicitors" and such directions from the Court in that behalf as should be necessary.

8 7 1.6 Interim relief was granted to the plaintiff by order of the Court (Laffoy J.) made on 4^th October, 2011. Subsequently, following the hearing of the plaintiff's application for interlocutory injunctive relief, which was resisted by the defendant, the Court (Laffoy J.) made an order on 7^th October, 2011 ordering -

9 (a) that the defendant return the files of the practice of Lawline Solicitors to the plaintiff by that evening,

10 (b) that the computers and server of the practice be re-instated in working order as soon as possible,

11 (c) that the defendant should not interfere with telephone communications to the premises of the said practice at Christchurch Hall,

12 (d) that neither party should interfere in the conduct of the other's practice as a solicitor,

13 (e) that neither party should hold herself or himself out as Lawline Solicitors, and

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