Partnerships Flashcards
Conlon v Simms [2007]
Fiduciary Relationship -
CofA said that a prospective partner owed a duty to disclose all the facts. In this case the partners are able to recover the damages in respect of this loss.
Morrison v Service (1879)
Creation of Partnership -
Shared Resources - The court held they were in partnership.
All facts and circumstances must be considered to determine if a partnership exists.
Mortgage Express Ltd v Dunsmore Reid & Smith 1996
Creation of Partnership -
Despite someone saying he is a partner the law shall look at all circumstances to determine if a partnership does exist.
Adam v Newbigging (1888)
Creation of Partnership -
Lord Halsbury is saying that you cannot talk your way out of a partnership. If the law deems you to be in a partnership then you are.
Stewart v Buchanan (1903)
Creation of Partnership -
“A person who is truly a partner will not escape responsibility however emphatically he may declare in the contract that he is not a partner and is not to be considered a partner. In each case the whole circumstances must be considered”. Lord Moncrieff
Can still be liable for company debt even if it states in the Memorandum of Agreement that you are not to be.
Sharpe v Carswell 1910
Part Ownership -
Owned shares in a container ship. The ship carried cargo, sharpe performed duties as master of the ship and received a salary. Sharpe died as a result of injuries in the course of employment.
His widow tried to claim money under the workers compensation act 1906 from the owners.
Court held that he was an employee despite the fact that he did have some shares in the company. Section 2(1) of the partnership act.
Mair v Wood 1948
Legal Entity -
Lord President Cooper – “fundamental to the Scots law of partnership that the firm is a legal persona distinct from the individuals who compose it”
Case to cite to state one partner cannot sue another.
Bryan v Butters Brothers & Company (1892)
Partners binding the firm -
Court said that the principal had the ability to bind the firm as he was a partner, does not matter what the agreement said but it matters what the 3p knew.
Mann v D’Arcy and others [1968]
Oral agreement entered into -
D’Arcy was the active partner. The arrangement was to go into a single partnership with Mann for this venture.
Court said yes, as they regularly did this. The partnership was bound regardless.
If he had been expressly excluded it would be apparent authority and if he did not know it would be implied.
Section 5
Fortune v Young 1918
Binding the Firm -
A partner who signs an obligatory document out with that of the course of business. This does not mean that the individual partner can escape it.
Section 5
Mercantile Credit Co. v Garrod [1962]
Binding the Firm -
Must look into the business that the company is in as this can be significant. If things are sold out with the business by X, they can be personally liable.
Section 5
Kirkintilloch Equitable Co-op Society Ltd v Livingstone and others 1972
Liability of the firm for wrongs -
Court said that everyone is liable for the firms mistakes.
Section 10
Dubai Aluminium v Salaam [2002]
Liability of the firm for wrongs -
The actions of a partner were so close to that of the business that they could be held liable.
Section 10
Clark v Jamieson 1909
Earnings v. Profit -
Mr. Clark was employed to work a small boat in Shetland. Remuneration was a share in the gross earnings of the boat. Clark drowned and his widow tried to claim compensation under the workman’s compensation act. Court held him to be a workman and not a partner.
Each man was to receive a share in the earnings not the profits.
Section 2(2) of the partnership act
Cox v Coulson [1916]
Earning v. Profit -
The sharing receipt was not in partnership. Sharing in profits and receipts is different. This means bearing the loss together. So it is clear that they are not in partnership.
Consider the difference between sharing in the profits (net profits after expenses/costs/outlays) and sharing in the sales (gross returns). Section 2(3) Partnership Act
Cox v Hickman (1860)
Debt payments do not constitute a partnership - "I greatly doubt whether the creditor, who merely obtains payment of a debt, and no more, out of the profits of the business, can be said to share the profits" - Wrightman J Section 3(a) Partnership Act
Newstead v Frost
View of Profit -
Created a partnership to exploit profits. HofL said it was created to exploit profits and that the tax avoidance was not enough. There was an overall view of profit.
Tower Cabinet Co v Ingram 1949
Partners Leaving -
Ingram left and had notified the correct people. C used the wrong paper to a new client. This was deemed to be wrongful interpretation rather than the new partnership being brought back into existence.
Could have applied Section 36 Partnership Act.
Martyn v Gray 1863
Holding out to be a Partner -
Man supplied goods and was not a partner. Held himself out to be one based on the the firms credit to obtain goods. The jury said he had held himself out to be a partner.
Scarf v Jardine 1882
Old v. New (Partners) -
Firm dissolved and 1 partner carried on. Was supplied goods from an old supplier and was then sued. They became insolvent and the HofL held that it was liable under the doctrine of personal bar. As the old partner held himself out as such; so was barred from doing otherwise.
Stekel v Ellice 1973
Salaried Partner -
“In terms of the outside world it often will matter little whether a man is a full partner or a salaried partner. Salaried partners are held out as being a partner; and the partners will be liable for his actions accordingly”. Megarry J
Heddle’s Executrix v Marwick and Hourston’s Trustee 1888
Commencement and Cessation of Liability -
Action raised for a loan prior to the partnership - it was held they would have to pay this.
“It must always be a question of circumstances whether a new firm becomes responsible for the obligation of the old”. Lord Shand
Welsh v Knarston 1972
Commencement and Cessation of Liability -
The Firm failed to raise a PPI claim on time and so it was barred. Two partners left the firm; subsequently an action for negligence was raised. The two partners argued that they were not liable. There was a continuing obligation and so they were liable.
Sim v Howat 2011
Continuing Obligation of retired partners -
Sim was found to be liable as liable passed from the old firm to the new firm.
