Partnerships

Question 1

Adam v Newbigging

Answer 1

1. You can be involved in a partnership even if your name is kept out

Question 2

Khan v Miah

Answer 2

1. You can be involved in a partnership even if you have been preparing to start trading but have not yet done so

Question 3

Christie Owen & Davies

Answer 3

1. You can be involved in a partnership even if you’ve just taken the very first step

Question 4

Worbey v Campbell

Answer 4

1. The definition in section 1 is so ‘vague and open ended’ (University of St Andrews v Heaton) that determining whether a partnership exists or not is very fact dependent

Question 5

Adam v Newbigging

Answer 5

1. One partner’s name was always left out of the correspondence
2. The court held that it was still a partnership

Question 6

Khan v Miah

Answer 6

1. The parties had been preparing to start business
2. They had only refurbished a restaurant and not opened it
3. The court held they were a partnership

Question 7

Christie Owen & Davies

Answer 7

1. One partner had bought land with the intention of turning it into a business partnership in due course

Question 8

Pine Energy Consultants Ltd v Talisman Energy (UK) Ltd

Answer 8

1. “There are certain features which are usually to be found in a partnership. None are present here. There was no firm name, no partnership premises, no partnership employees and no partnership bank account. Nor is there any averment that steps were being taken to establish any of these. There were no partnership accounts or tax returns. None of these is fatal to the contention that there was a partnership, but the lack of any of such things points strongly against the likelihood of there being one” (per Lord Glennie)

Question 9

Burnett v Barker

Answer 9

1. Concerned a mutual agency
2. There had been contributions from both
3. The partners shared losses
4. The question is whether the parties have held each other as being partners

Question 10

Hamilton v Barrow

Answer 10

1. An investment club had inadvertently formed a partnership
2. They had not intended to form a partnership
3. The way they had acted satisfied these tests

Question 11

Sharpe v Carswell

Answer 11

1. Joint property does not create a partnership on its own
2. Merely owning a boat jointly was not enough on its own to create a partnership

Question 12

Clark v Jamieson

Answer 12

1. Sharing gross receipts does not create a partnership on its own

Question 13

Alna Press v Trends of Edinburgh

Answer 13

1. Involved someone who was owed money as a debt
2. The parties agreed the money would be repaid out of the profits of a business
3. This was not a partnership as, when the loan was repaid, the profit sharing would stop

Question 14

Dollar Land (Cumbernauld) Ltd v C I N Properties Ltd

Answer 14

1. Involved a developer who rented a shopping centre from a landlord
2. The developer spent their own money to do up the centre and rent out the shops
3. Part of the payment to the landlord would be a percentage of the profit made
4. The court held this was not a partnership as they were not doing business together

Question 15

Forsyth v Hare & Co

Answer 15

1. It is a quasi corporation, possessing many, but not all the privileges which the law confers upon a duly constituted corporation

Question 16

Sadler v Whiteman

Answer 16

1. “In English law a firm as such has no existence; partners carry on business both as principals and as agents for each other within the scope of the partnership business; the firm name is a mere expression, not a legal entity, … It is not correct to say that a firm carries on business; the members of a firm carry on business in partnership under the name or style of the firm” (per Farwell J)

Question 17

Heddle’s Ex v Marwick & Hourston’s Tr

Answer 17

1. It was held that it is up to the facts of each case whether the presumption laid down in section 17 applies

Question 18

Thomson and Balfour v Boag and Son

Answer 18

1. The presumption was overturned when the partner invested a large sum of money

Question 19

Sim v Howat

Answer 19

1. When a new firm takes on the business and assets of an old firm, the new firm also takes on the liabilities and debts of the old one

Question 20

Starrett v Pia

Answer 20

1. One of the parties tried to claim that, whilst they got an agreement in writing, they orally decided to change it
2. But if your agreement is in writing, then you need to vary it in writing

Question 21

Rennie v Rennie

Answer 21

1. When you are voting on whether or not to kick out a partner under a power you expressly agreed to, you are exercising a quasi judicial function
2. The rules of natural justice apply to any such decision

Question 22

Blisset v Daniel

Answer 22

1. When voting you have to exercise that vote in good faith for the benefit of the partnership as a whole

Question 23

Ferguson v Wilson

Answer 23

1. Wilson ran a business in Aberdeen
2. He made gas and oil engines
3. He had placed an advert in a newspaper for a partner
4. Ferguson answered the advert
5. Wilson had overstated how healthy the business was
6. Ferguson was able to recover the money he had spent

Question 24

Stevenson v Cartonnagen-Industrie

Answer 24

1. Involved a manufacturing partnership between English and German companies
2. World War I brought the partnership to an end as it was illegal to do business with aliens

Question 25

Biggs v Lawrence

Answer 25

If the whole partnership was illegal in the first place, it cannot be enforced

Question 26

Carmichael v Evans

Answer 26

1. One of the partners got on a train without a ticket 2. The partnership provided you could kick a partner out for scandalous behaviour 3. The crime was ultimately one of dishonesty

Question 27

NHBC v Gavin Henderson

Answer 27

1. “Section 38, the focus of a good deal of the submissions in this case, provides the partners with the powers that they need in order to wind up the partnership. As such, section 38 performs the useful practical function of regulating the partners’ activities during the winding up period. Unfortunately, conceptual problems remain. After dissolution, the partnership as a legal person has ceased to exist. The partners, although they may possess agency-like powers under section 38, appear to be acting for a non-existent principal … It seems conceptually neater to characterise post-dissolution activities as performed purely under section 38 for the purposes of winding up the partnership. This is likely to be consistent with what the partners see themselves as doing, having dissolved the partnership they are unlikely to consider themselves as continuing to trade"

Question 28

Hosking v Marathon Asset Management Designated members

Answer 28

1. Members do not owe each other fiduciary duties (F&C Alternative Investment v Barthelemey) but they do owe the limited liability partnership some as agent