Dubai Aluminium Company Ltd v. Salaam

Lord Nicholls of Birkenhead Lord Slynn of Hadley Lord Hutton Lord Hobhouse of Woodborough Lord Millett

It has always been common ground that Mr Amhurst's partners were personally innocent of any dishonesty. It is also right to note at the outset that, for a reason which will appear, the case has proceeded on the assumption that Mr Amhurst was guilty of dishonesty as alleged. He has always denied this allegation. This issue has never been tried, and there has never been any finding by a court that he acted dishonestly in any respect.

Mr Salaam and Mr Al Tajir appealed to the Court of Appeal. The Court of Appeal, comprising Evans and Aldous LJJ and Turner J, allowed the appeal. The court held that the Amhurst firm was not vicariously liable for Mr Amhurst's allegedly wrongful acts. So there was no basis on which it could obtain contribution from Mr Salaam or Mr Al Tajir in respect of its payment to Dubai Aluminium. The Amhurst firm then brought this further appeal to your Lordships' House, seeking restoration of the order of Rix J.

These bare essentials will suffice as an introduction to the points of law of general importance raised by the contribution claims. The factual history of this matter, which is not without a degree of complexity, is more fully summarised by my noble and learned friend Lord Millett. The judge's findings are reported at [1999] 1 Lloyd's Rep 415 and the conclusions of the Court of Appeal at [2001] 1 QB 113.

This was denied by Mr Al Tajir and Mr Salaam. They contended that the Amhurst firm is not entitled to make any contribution claim against them. Their case is that the Amhurst firm was not vicariously responsible for Mr Amhurst's alleged misconduct, on two grounds. The first ground is that the cause of action asserted by Dubai Aluminium does not fall within the scope of section 10 of the Partnership Act. This raises a question of interpretation of the statute. Section 10 provides: