MR M NEMETH v D'ARCY WHITE & CO & OTHERS [2003] UKEAT 0928_02_2006

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2003] UKEAT 0928_02_2006Case No Appeal No. UKEAT/0928/02Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MR M NEMETHAPPELLANTD'ARCY WHITE & CO & OTHERSRESPONDENT
Before
His Honour Judge D M LevyDate 20 June 2003
[1]APPEARANCES For the Appellant MR S JELF (of Counsel) For the Respondents No appearance or representation by or on behalf of the Respondents HIS HONOUR JUDGE D M LEVY QC This is an appeal by Mr M Nemeth ("the Appellant") from a decision ("the Decision") of an Employment Tribunal held at Stratford on 25 and 26 April 2002, by which he was adjudged liable to pay a sum of money to each of four applicants. No appearance has been entered nor representations received from the Respondents to the Appeal. We anticipate the words "in Chambers" in the second line of the Decision shows the date when the members met in Chambers to consider their decision, the hearing having taken place the previous day. Seven of the applicants appeared in person before the Tribunal and gave evidence. The Tribunal considered documentary evidence of the other three applicants. The first Respondent was a firm of Solicitors ("the Firm") and the remaining three Respondents were Solicitors. Neither the Firm nor the Appellant appeared or were represented before the Tribunal. Counsel represented the other Respondents. From the Decision, promulgated on 15 June 2002, it appears that proceedings for redundancy payments had been commenced by ten Applicants against the four Respondents.[2]The unanimous Decision of the Tribunal was that all the various Applicants were entitled to a redundancy payment. Four of the Applicants, (Mrs Jutsum, Mrs Philips, Mrs Kelsey and Mrs Cooper) were entitled to awards against the Firm and the Appellant in named sums. They appear to have been employees of the Upminster office of a group of solicitors which include D'Arcy White & Stubbs. As the Firm is named as D'Arcy White & Co, this appears to have been another firm.[3]However that may be, the Appellant, now represented by Mr Jelf of Counsel submits that the Tribunal has made errors in its judgment, all stemming from the fact that the Appellant signed a document which appears at page 159 of the bundle, which was addressed to him. It reads:
"This is to confirm your admission as a partner in the Brandon group of firms from 1 st June 2000. You shall be entitled to a weekly drawing of pounds 750/- against your 10% share of profits of the group. The accounts of the firm shall be prepared annually and the share of your profit will be credited to your capital account."
[4]Mr Jelf has submitted that the Decision is replete with errors. First he submits that the Tribunal failed to apply the correct test and wrongly drew the inference regarding the Appellant as a partner in the Brandon Group; he took us to various extracts from the current Lindsay & Banks, on Partnership, and to the decision in Stekel -v- Ellice [1973] 1 WLR 191, to which the Employment Tribunal referred in paragraph 47 of the Reserved Decision.[5]He submitted that before reaching the conclusion that it did, the Tribunal should have considered whether the Appellant:(i) participated in management;(ii) the degree of risk;(iii) the sharing of losses;(iv) the capital contribution and(v) his relation with other partners. They failed to consider the first and fourth of these factors, and as to the fifth of which, they failed to appreciate the significance of the Appellant not knowing the other partners, as opposed to whether he personally knew or met them. They seem to have relied entirely on findings from the bundle of documents presented to them.[6]Mr Jelf points out that an agreement relied on in the Decision was made with a Mr Shah and the Appellant does not refer to Mr Shah as acting on behalf of the Brandon Group. He submitted that there could not be a partnership without the agreement of all partners; at best there could be a sub-partnership between Mr Shah and the Appellant, but that was not stated in the agreement or what was found in the Decision. He submitted that a salaried partnership was consistent with no participation with management and no share of losses and no capital connections. There was evidence that all employees believed Mr Shah to be their employer, and in the absence of any reliance by them, by a reference to a passage at paragraphs 5 - 52 in Lindsay & Banks, he submitted that the Appellant should not have been held liable to any of the Applicants.[7]He also referred us to other problems with inferences drawn in the Decision as to the Brandon Group from the uncertainty of the evidence before it. He drew attention to the findings of an Employment Tribunal held later in the year, which reached a decision contrary to that of the Decision, namely that a Tribunal sitting at Ashford, where similar problems were faced, such as that apparent on the face of the Decision.[8]Having heard and considered his submissions, we are satisfied that the conclusion in the Decision was wrong in law because the Tribunal failed to apply the correct test in determining whether the Appellant was a partner of an organisation employing some of the Applicants.[9]We have considered whether it would be appropriate to remit this matter to the Tribunal which made the decision or to another Tribunal to consider this matter. We are told there is only one Respondent opposing the appeal namely Ms Philips. She alone is taking steps to enforce the judgment of the Tribunal and the sum which she was awarded was £585. In the circumstances, it seems to us it would be disproportionate for us to send this back for a further hearing and it would be appropriate for us to substitute, as we are entitled to do, our decision for that of the Tribunal, it having made findings which we consider to be wrong in law.[10]In the circumstances, for the Decision of the Tribunal we will substitute a finding that the Applicants named by the Tribunal were not entitled to an award against the Appellant.[11]In paragraph 60 of the Reserved Decision, the Tribunal decided:-:
"Broadly speaking, the ["the Firm"] may be said to be the employer of the Applicants, but without any meaningful legal significance being attached to that finding, since it has no independent legal existence. No enforceable award can be made on the basis of it."
It is odd that in the light of that finding, awards were made to applicants against the First Respondent, but, as there is no appeal against that Order, it is inappropriate for us to say more.