loannis Toumazou v. Antonakis Charalambous (1987) JSC 447

[*447] 1986 March 8

(MICHAELIDES, D.J.)

IN THE DISTRICT COURT OF NICOSIA

loannis Toumazou,

Plaintiff,

Antonakis Charalambous,

Defendant.

(Action No. 7244/ 84).

Civil Procedure - Action - Parties - Partnership - Debt owing to - Dissolution of partnership - Action for said debt brought by one of the ex partners in his own name - Relevant contract had been made between the other ex partner and the defendant - Fact of partnership not mentioned in statement of claim, which was based on an allegation that the contract had been made between plaintiff and defendant - Leave to amend statement of claim, so as to conform with the evidence, given ex proprio motu.

L. Themistocleous, for the Plaintiff.

Ch. Solomonides, for the Defendant.

JUDGMENT

The following judgment was delivered by:-

MICHAELIDES. D.J.:- The plaintiff claims with this action an amount of £109- for services rendered to the defendant.

The plaintiff is a car mechanic and owns a garage in Nicosia. On 3rd May, 1983, the defendant, who owns a Mercedes under registration No. EK560 drove his car to the garage for the purpose of having its engine changed and geared. At this point I must say that the garage was owned at the time by two partners, i.e. the plaintiff and another person named Alecos. The business was run under the name "Alecos and Yiannis". I must say also that the defendant knew neither of them. The negotiations [*448] were carried out by the plaintiff's partner Alecos and the defendant.

It 1s the allegation of the defendant that he did have his car repaired at the plaintiff's garage but when the repairs were completed he paid the plaintiff's partner Alecos Socratous.

It is a cardinal rule of the Law of evidence that he who alleges something must prove it. What I have before me in the present case are the two conflicting versions of the plaintiff and the defendant. In addition, the plaintiff produce as an exhibit a card with the names of the two partners on the one side and the heading "spare parts card" on the other. Details are given on this card of the works carried out and the amount with which the defendant was debited or credited each time an entry was made. As shown on the card in question, an amount of £109. - is still due by the defendant to the garage of Alecos and Yiannis.

The plaintiff did not deny that the partnership dissolved and that the agreement was made between the defendant and his ex-partner. He added, though, that he himself repeatedly worked on the defendant's car and defendant had seen him doing so.

The odd thing in the present case is that neither the plaintiff nor the defendant considered it necessary to call as a witness Alecos Socratous, the ex-partner, a fact which would have tremendously facilitated things and helped the Court in making its findings.

The questions which now pose for an answer are the following:

(a) Was a valid agreement entered into between the plaintiff and the defendant? In other words is there any privity of contract between the plaintiff and the defendant?

(b) Was the amount due at the time of the dissolution of the partnership in question?

(d) If not, is the plaintiff entitled to bring this action alone against the defendant?

Findings:

I have watched both the plaintiff and the defendant with great care and I have weighed the evidence adduced by both of them. I have no doubt in my mind that the defendant made the agreement with the plaintiff's partner Alecos Socratous and that his car was repaired at the garage, as agreed, not only by Alecos but by the plaintiff as well and that the defendant knew about it.

I have also no doubt in my mind that on the 1.8.83 the account of the defendant showed a debit balance of £109.-. I find also and I do not believe the defendant in this respect, that he has not paid the said amount. In my opinion, he is simply taking advantage of the dissolution of the partnership for claiming that he has paid the amount to Alecos, who, as one can easily guess, may have shown no interest to come to the Court and help any one of the parties. The plaintiff, anyhow, had asked the defendant to produce the receipt with which to prove that he has paid Alecos, but no such receipt was produced. As regards the amounts agreed and paid the evidence of the plaintiff is corroborated with the evidence of the defendant himself. He mentioned that he paid three separate amounts i.e. £800.-, £150.-, and £100.-. All the above amounts are shown on the card Exhibit I. As regards the engine, he has given conflicting versions. He mentioned in cross-examination that it was brought to Kakopetria where the car was and installed on the car by Alecos. Sometime later he changed mind and said that the engine was brought there by his brother in law.

With all the above facts in mind I have come to the positive conclusion that the £1,050. - were actually paid by the defendant but this amount by no means settled the garage charges which are shown in detail on Exhibit I. A balance of £109.- still due. Despite by findings of fact mentioned above some further points need consideration, in view of the [*450] fact that the contract was not entered into between the plaintiff and the defendant, as alleged but between plaintiff's partner and the defendant.

Partnership:

A partnership is the relation which subsists between persons carrying on a business in common with a view of profit. (Partnership and Business Names Law. Cap. 116. s.5(1)).

The defendant in his testimony disputed the claim, among other things, because he never agreed anything with the plaintiff whom he considered to be a garage assistant but not a partner.

Whatever the merits or demerits of such an allegation the undisputed thing remains that the name of the shop whereto he originally drove his Mercedes for repairs was "Garage Alecos & Yiannis" a name which also appears on the card Exhibit I, had he settled the account to Alecos, as he alleges, then that payment would have extinguished the claim see Powell v. Brodhuzst (1901) 2 Ch. 160.

It is also clear that a partner may sue in the name of himself and co-partners without their consent. See Court v. Berlin (1897) 2 Q.B. 396, Johnson v. Stephens & Carter Ltd. (1923) 2 K.B. 857, Noble Lawndes and Partners (a firm) v. Hadfields Ltd. (1939) Ch. 569. See also Halsbury's Laws of England, 3rd Ed. Vol. 28 para. 977. The difficulty in this case, to which both counsel appearing in the action have failed to direct their attention to, is the statement of claim and its contents.

Despite the fact that the plaintiff agreed at the trial that the agreement was entered into between the defendant and the plaintiff's partner Alecos yet the statement of claim states that it was with the plaintiff that the defendant agreed for repairs to his car.

To sum up the situation I find that the plaintiff has proved that the defendant owes the amount of £109.- to the firm "Alecos and Yiannis" but not to himself. The action ought to have been brought by the plaintiff [*451] in accordance with the provisions of Order 7, rule 1 of the Civil Procedure Rules which is as follows:

"Any two or more persons claiming or being liable as co-partners and carrying on business in Cyprus may sue or be sued in the name of the respective firms (if any) of which such persons were co- partners at the time of the accruing of the cause of action; and any party to an action may in such case apply by summons to a Judge for a statement of the names and addresses of the persons who were, at the time of the accruing of the cause of action, co- partners in any such firm, to be furnished in such manner, and verified on oath or otherwise as the Judge may direct".

The rule in question is further analysed in Vol. 1 of the Annual Practice 1960 p. 1153 where the following are mentioned:

"As a general rule a suit by or against an ordinary partnership would have been defective for want of parties, unless all the partners were before the Court (Lindley 11th ed. p. 363-366) but now the firm may be sued without first ascertaining who all the partners are. (Pollock Part 14th ed. p. 125)".

The phrase "at the time of the accruing of the cause of action" is interpreted as follows at p. 1153 of the same book.

"These words enable the co-partners in a firm before action to sue or be sued as a firm provided the co-partnership existed at the time the cause of action accrued"

In the present case the cause of action accrued before the dissolution of the partnership and the plaintiff knew about it. He knew pretty well that it was in the partnership garage whereto the car was driven and not to his own garage. He himself never agreed anything with the defendant. The agreement was made between Alecos, on behalf of the partnership and the defendant. The plaintiff never adduced sufficient evidence to show that the contract was entered into between himself and [*452] the defendant, as alleged in the Statement of Claim. The action, therefore, should have been instituted by the plaintiff in the name of the firm, in accordance with the rule, or, at least, to state that he was suing as a partner.

There is ample authority for the proposition that the partners act as agents of the partnership. Section 8 of the Partnership Law, Cap. 116 provides the following:

"Every partner is an agent of the firm and his other partners for the purpose of the business of the partnership; and the acts of every partner who does any act for carrying on in the usual way business of the kind carried on by the firm of which he is a member bind the firm and his partners, unless the partner so acting has in fact no authority to act for the firm in the particular matter, and the person with whom he is dealing either knows that he has no authority or does not know or believe him to be a partner".

It should be noticed also that the liability of partners for debts and other contractual obligations is joint (see s. 12 of Cap. 116).

The liability however for torts committed on behalf of the firm is joint and several. (See sections 15, 14 and 13 of the same Law, Cap. 116).

In the Annual Practice 1960, Vol. I, p. 305 the following are mentioned, under the heading "Parties" Agents:

"A contract made by an agent, acting within the scope of his authority for a discharged principal, is in law the contract of the principal and the principal and not the agent is the proper person to sue or be sued upon such contract".

To this rule there are certain exceptions, which, without attempting precise accuracy of statement, may be indicated as follows: [*453]

(a) Contracts by deed in agent' s own name;

(b) Agent party to a bill of exchange is promissory note;

(d) Where the agent contracts personally, so that the contract is made with him, although it may be made for the benefit of the principal;

(e) Contracts relating to matters in which the agent has a special interest or property, e.g. auctioneers factors etc. selling their principal's goods on which they have a lieu, and being accordingly interested in receiving the price.

The facts of the present case clearly show that none of the above exceptions is applicable. The action ought to have been brought in the name of the partnership. But is this fatal?

Order 9.r. 2 provides as follows;

"Where an action has been commenced in the name of a wrong person as plaintiff, or where it is doubtful whether it has been commenced in the name of the right plaintiff, the Court or a Judge may, if satisfied that it has been through a bona fide mistake, and that it is necessary for the determination of the real matter in dispute so to do, order that any other person consenting thereto be substituted or added as plaintiff upon such terms as may be just".

Also Order 9. r. 10 provides as follows:

"No cause or matter shall be defeated by reason of the misjoinder or non- joinder of parties, and the Court may in every cause or matter deal with the matter in controversy so far as regards the rights and interest of the parties actually before it. The Court or a Judge may, at any stage of the proceedings, either upon or without [*454] the application of either party, and on such terms as may appear to the Court or Judge to be just, order that the names of any parties improperly joined, whether as plaintiffs or as defendants, be struck out and that the names of any parties, whether plaintiffs or defendants, who ought to have been joined, or whose presence before the Court may be necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the cause or matter, be added. No person shall be added as a plaintiff suing without a next friend, or as the next friend of a plaintiff under any disability, without his own consent in writing thereto. Every party whose name is so added as defendant shall be served with a writ of summons or notice in manner provided by rule 11 of this Order or in such manner as may be prescribed by any special order, and the proceedings as against such party shall be deemed to have begun only on the service of such writ or notice".

In Lowndes v. Hadfields (1939) 1 Ch. 569 the plaintiffs sued under the mistaken belief that a partnership existed. In an action in contract one of them was allowed to be substituted. The reverse, however, is not possible. No order of any Court can revive a dissolved partnership and in view of this it would seem to be desirable in all cases where the partnership has been dissolved for proceedings to be commenced in the name of individual partners. See D. Forber Smith & Johnston v.Kave (1975) S.C.T. 33 (Sh. Ct.).

This facility, however, cannot be afforded to the plaintiff in the present action in view of the fact that nowhere in the Statement of Claim the plaintiff makes reference to a partnership.

For all the above reasons leave would be given to the plaintiff to amend the statement of claim so as to conform with the evidence adduced provided an application is made to that effect within 15 days. All costs of the action up to the time of the filing of the application shall be borne [*455] by the plaintiff. If no application is made within the said period the action will stand dismissed for want of prosecution with costs against the plaintiff.

Leave to amend statement of claim granted.