Pickard & Anor (t/a Jacksons) v Orpwood

Permission to appeal should be granted only where the proposed ground has sufficient prospects of success. An issue may meet that threshold where the first-instance reasoning is materially unclear and the issue significantly affects the result. In construing a partnership goodwill formula, reference to the net profits of “the partnership” may concern the partnership governed by the relevant deed, rather than a distinct partnership operated under a separate deed. Disclosure of underlying accounting information is not ordinarily appellate relief. Interest and costs remain matters for the trial judge’s discretion, absent a free-standing ground of appeal.

This was an application by Phillip Orpwood for permission to appeal from a judgment of His Honour Judge Kennedy QC in the Brighton County Court concerning the valuation of his interest on leaving a partnership of estate agents and surveyors. The applicant had been a partner in the Hove business from 1987 until 31 July 1992. A separate Worthing partnership operated a similar business, later supported financially by the Hove partnership.

The county court resolved several accounting and goodwill issues, including whether losses of the Worthing partnership should be included in calculating the Hove partnership’s goodwill. The central questions were whether any proposed ground had sufficient prospects of success and whether execution should be stayed pending appeal.

Permission was granted in part. Permission to appeal was granted in relation to paragraphs 7 and 10 of the county court order, concerning the inclusion of Worthing losses and the resulting goodwill award. Permission was refused on the remaining challenges. Execution was stayed pending the appeal, and further evidence was admitted in the form of a letter dated 30 July 2002 and a statement dated 22 July 2002.

1. The court would not grant, on appeal, disclosure of the information from which disputed accounting figures were derived. However, because the trial judge had recognised a right to check the figures and the applicant had not pursued the issue after judgment, an application to the trial judge for an order requiring information remained open.
2. The applicant had no real prospect of challenging the treatment of the audit requirement. The accounts had been prepared and certified by accountants and, apart from the final year, signed by the applicant and the other partners. The audit requirement was therefore treated as waived.
3. The judge was entitled to construe the goodwill provision so that the applicant’s share reflected the period for which he had actually been a partner. The deed did not contemplate a later partner joining, and that construction accorded with the provision’s commercial purpose.
4. The proposed appeal concerning the Worthing losses was sufficiently arguable. The deed referred to the net profits of “the partnership”, which was the Hove partnership governed by that deed. The Worthing business was conducted by a separate partnership under a separate deed, with separate accounts. The trial judge’s reasons for including its losses were unclear, and the inclusion materially reduced the goodwill award. The Court of Appeal did not finally determine the merits.
5. There was no free-standing basis for appealing the interest and costs orders. Those matters were particularly for the trial judge’s discretion, although costs would require reconsideration if the permitted appeal succeeded.

1. Court of Appeal (Civil Division). In [2002] EWCA Civ 1392, Lord Justice Tuckey granted permission to appeal only on paragraphs 7 and 10 of the county court order, refused permission on the remaining grounds, and granted a stay of execution.
2. Brighton County Court. His Honour Judge Kennedy QC determined the partnership accounting and goodwill issues and made the order challenged by the applicant.