Some will remember the actress Sue Nicholls as either Miss Joan Greengross, Reginald Perrin’s secretary and fantasy lover, or as Nadia Popov in the excellent Rentaghost. However, all Corrie fans will know that she plays Audrey Roberts, who is currently in a battle with her grandson David Platt (Jack Shepherd) over ownership of a hair salon at No 2, Coronation Street.
Audrey subsequently suffered a heart attack, brought on in part by the stress of dealing with her feud with David over the ownership of what was formerly her hair salon. She had earlier signed over her interest in the salon to David, as she intended to elope with Lewis Archer (Nigel Havers) and to buy a hotel in Greece. She now wants the salon back.
How could Audrey have legally protected herself? This is a difficult question to answer, as obviously the salon story line has not included many legal facts to be able to determine what is going on.
It would seem that the freehold in 2, Coronation Street is held by David and Kylie Platt (Paula Lane), signed over by Audrey when she wished to show faith in David and his future (Audrey supported David’s marriage to Kylie, where many did not). If this is correct, then the first obvious point is that Audrey could have protected herself by granting David and Kylie a lease, rather than sell or transfer the freehold. The lease could have contained a number of restrictions concerning the business, such as the name of the property – that would have at least prevented Audrey having to tear down the “under new management” sign, for which she has been arrested for criminal damage. However, the main issue is, of course, the hairdressing business.
There is no information on the legal status of the salon business operating under the name “Audrey’s”. If Audrey Roberts operated as a sole trader, then she still has the business, but is simply locked out of the Coronation Street premises. The dispute then has to concentrate on how the freehold or other property interest was transferred by Audrey to David and Kylie. If this was freely signed over by Audrey, then she would appear to have little redress.
However, there is at least some suggestion that Audrey, David and Kylie were operating as a partnership. In the absence of any partnership agreement, this relationship must be analysed within the terms of the Partnership Act 1890. The Act states that a partnership exists merely when persons carry on “a business in common with a view of profit”. A partnership does not need any agreement or other formalities to exist. Ownership of relevant property is a factor in determining the existence of a partnership, but it is not the sole or conclusive factor. It can be argued that even though the freehold in the salon was signed over to David and Kylie, there was an implied licence for the partnership to continue operating out of No 2, so Audrey cannot be locked out. The 1890 Act does contain provisions concerning partnership property. It may be even be possible to argue that the freehold of No 2 is partnership property.
The purpose of the 1890 Act is to set out some default provisions for such partnerships, eg a legal presumption that all profits (and losses) are shared equally between the partners. The important point for Audrey is that under the 1890 Act, no partner can be expelled from the partnership by a majority of partners, unless those partners have an power expressly set out in an agreement to do so. Assuming that there is no partnership agreement between Audrey, David and Kylie, it would seem Audrey may have a claim under the 1890 Act. However, this would be complicated by her opening another salon in Mary Taylor’s motor home – a partner is not permitted under the Act to compete with the partnership. If a partner does set up a competing business, the partner must account for and pay over all profits made from the competing business.
It seems that Audrey’s original faith in David was misplaced. As with many family business arrangements, the lack of formal paperwork has come back to bite them. Sadly, it is another case of the saving of legal costs by not taking initial legal advice and having a proper partnership agreement (or shareholders’ agreement, if a limited company was involved) drafted proving to be a false economy.