Home Information Cases Sangeeta Mehra v Radiatben Rajnikant Shah & Ors (2003)

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Sangeeta Mehra v Radiatben Rajnikant Shah & Ors (2003)

Summary

Six sisters were not partners in a family business and only the surviving brothers or their representatives were entitled to the winding up of the partnership and realisation of the business assets.

Facts

Action by the claimant ('S') concerning the ownership of a family business and certain properties. CB Shah started a family business in Kenya in the 1940s and it was conducted in the UK from the late 1960s. The father ('CB Shah') had six sons ('the brothers') and six daughters ('the sisters') and the business was a partnership. He had given over running of the business to his eldest son, G, who died in 1990. S was G's eldest daughter. She was supported in her claims by one of the surviving brothers and the family of some of the other deceased brothers. S submitted that: (i) the partners in the business were the brothers alone; (ii) two properties ('the Big House' and 'Barking Road') had been part of the partnership assets; and (iii); she was entitled to a general dissolution account. In opposition, two of the brothers and the sisters submitted that: (a) the sisters as well as the brothers were carrying on the business on their own behalf and for the common benefit; (b) the sisters variously contributed unpaid work and/or earnings from other employment and/or specific capital sums to the family business; (c) there was a shared assumption that the sisters' contributions were made on the basis that the sisters were partners in the business; (d) the Big House was an asset owned by all of the brothers and sisters in equal shares and had from the outset been outside the partnership; (e) Barking Road belonged beneficially to one brother and his wife to the exclusion of the other members of the family; (f) certain property ('the Dilloway properties') had not been acquired until after the death of G, and S was not entitled to a share in it on the basis that s.42 Partnership Act 1890 did not give a deceased's personal representatives a statutory right to capital profits; and (g) the claim for an account was time-barred under the Limitation Act 1980 as it was more than six years since dissolution of the partnership.

Held

(1) S and all those she represented were entitled to the winding up of the partnership and realisation of the business assets. (2) The sisters were not partners in the business and the facts did not support the inference of a shared assumption that they were. The sisters were not entitled to beneficial shares in the assets of the business under a constructive trust. (3) Both Barking Road and the Big House belonged to the partnership. (4) One of the brothers remained a partner entitled to a share of the assets on realisation notwithstanding that he ceased to work for the business in 1989. (5) G's estate was entitled to share in the Dilloway properties as they had been purchased by the continuing partners using partnership monies and there had been no settlement of accounts with G's estate and the partnership assets. (6) S's claim to a general account on the dissolution at G's death was statute-barred. However this did not affect her trust-based claim to share in the partnership properties.

Judgment accordingly.

Chancery Division
Sonia Proudman QC
Judgment date
5 August 2003
References

LTL 5/8/2003

Practice areas

partnerships-and-LLPs,Partnerships & LLPs
trusts-and-settlements,Trusts & Settlements