Partnership Cases Flashcards
Sharpe v Carswell
Sharpe’s widow sought to obtain compensation for her husband’ death aboard a fishing vessel. She argued that Carswell was her husband’s employer and therefore that compensation was due under the Workmen’s Compensation Act 1906 because Sharpe had held shares in the fishing boat, Sharpe was a partner and not an employee.
It was held that mere ownership of shares did not, without more, render the deceased a partner and Mrs Sharpe successfully proved her entitlement to compensation under the Act
Cox v Coulson
Coulson agreed with Mill that Mill would out on a play at Coulson’s theatre. Coulson was to have 60% and Mill 40% of the gross box office receipts. Coulson paid the expenses of running the theatre and Mill paid the expenses of putting on the play. During a performance the claimant, who was in the audience, was accidentally shot by one of the actors. The claimant sued Coulson alleging that Coulson was Mill’s partner and was jointly liable with Mill.
It was held that Coulson was not Mill’s partner because they merely shared gross box office receipts
Clark v Jamieson
That fact that one person in a fishing business, Clark, was remunerated through a share of gross earnings was not of itself sufficient to establish the existence of a partnership. Importantly, Clark did not contribute to the running capital of the business, nor would he have been liable if the business had made any losses
Mercantile Credit Co Ltd v Garrod
P and G were partners in a garage business which mainly dealt with letting garages and repairing cars. The partnership agreement expressly precluded the sale of cars. P sold a car which he had no authority to sell to the claimant. When the owner of the car reclaimed the car, the claimant sought to recover the money he had paid for it from G.
It was held that it was within the usual authority of persons in a garage business to sell cars and, as the claimant had no knowledge of the restriction on P, he could recover the cost of the car from either partner
Dubai Aluminium v Salaam
A senior partner in a firm of solicitors dishonestly assisted a client in perpetrating a fraud against Dubai Aluminium which resulted in the latter paying out $50M in terms of a fake consultancy agreement. Dubai Aluminium sued the partnership on the basis that the senior partner was acting in his capacity as a partner when he assisted his client in perpetrating the fraud by drafting certain contracts and agreements. The question was whether the senior partner was acting in the ordinary course of business of the partnership in drafting the agreements. The Court of Appeal held that the activities of the senior partner had been performed outwit the ordinary course of business of the partnership, since it was not in the business of committing fraudulent activities. It was held that the House of Lords ruled the Court of Appeal had erred in holding that the senior partner’s acts had not been done in the ordinary course of business of the partnership. For the wrongful activities of a partner to have been conduced in the ordinary course of a partnership’s business, they must also be so closely connected with acts that he or she was authorised to do that, for the purpose of the liability of the firm to third parties, it might fairly and properly be considered as done by the partner whilst acting in the ordinary course of the firm’s business. This, the courts will apply a “sufficiently close connection” test
Martyn v Gray
G went to Cornwall to discuss the possibility of investing in a tin mine belonging to X. Nothing came of the discussions, but while G was in Cornwall he was introduced by X to M as “a gentleman down from London, a man of capital”. M later gave X credit believing he was in partnership with G.
It was held that the introduction amounted to a representation that G was in partnership with X, and so G was liable for the debt incurred subsequent to the introduction. He should have made the true position clear by correcting the impression made
Hudgell, Yeates and Co v Watson
Practising solicitors are required by Lae to have a practising certificate. One of the partners in a firm of solicitors forgot to renew his certificate which meant that it was illegal for him to practice.
It was held that the failure to renew the practising certificate brought the partnership to an end, although a new partnership continued between the other two members
