Jaswinder Singh Bahia vs Inderdeep Singh Sidhu & A Star Liquor Mart Ltd

This case involved a dispute over the dissolution and asset distribution of a business partnership between Jaswinder Singh Bahia and the estate of the late Tara Singh Sidhu, represented by Inderdeep Singh Sidhu.

TLDR:

• Dispute over the dissolution of a business partnership and the distribution of its assets.
• The High Court ordered the transfer of properties to one partner without auction, which was appealed.
• The Court of Appeal found the High Court erred in law and allowed the appeal, ordering the properties to be auctioned.

The case concerned a business partnership formed in 1972 between Jaswinder Singh Bahia and the late Tara Singh Sidhu, which acquired a sizeable investment property portfolio. The partnership was dissolved in 2016, leading to disputes over the distribution of assets.

In the High Court, Deputy High Court Judge Nicholas Thompsell directed the outright transfer of four properties to Mr. Bahia, valuing them based on surveyors' and expert valuers' assessments. The Sidhu estate, represented by Inderdeep Singh Sidhu, appealed this decision.

The Court of Appeal, consisting of Lord Justice Arnold, Lady Justice Andrews, and Lord Justice Nugee, heard the appeal. The central issue was whether the High Court's order was in accordance with established legal principles.

Lady Justice Andrews delivered the judgment, stating that the High Court Judge erred in law by not adhering to the normal practice of selling partnership assets in the open market. The Court of Appeal emphasized that the usual method of realizing partnership assets is through auction, ensuring a fair market value.

The Court of Appeal concluded that the High Court's order was not justified by exceptional circumstances and that the properties should be auctioned. The appeal was allowed, and the properties were ordered to be sold at auction, with Mr. Bahia permitted to bid on credit up to the amount of the judgment debt owed by the Sidhu estate to the partnership.

The decision underscores the importance of adhering to established legal principles in partnership dissolution cases and ensures that the realized value of partnership assets benefits all former partners fairly.

Legal representatives: Peter Knox KC and John Carl Townsend (instructed by Anthony Gold Solicitors) for the Appellants, Robert-Jan Temmink KC and Gabriel Buttimore (instructed by Hill Dickinson LLP) for the Respondents.

Judicial Panel: Lord Justice Arnold, Lady Justice Andrews, Lord Justice Nugee

Case Citation Reference: [2024] EWCA Civ 605