M Young Legal Associates Ltd v Zahid (a firm) & Ors

M Young Legal Associates Ltd v Zahid (a firm) & Ors

A person can be a partner in a firm even if he is paid a fixed sum for work done and is not entitled to participate in profits, provided the business is carried on in common with a view to profit and the parties intend to enter into a partnership. The absence of profit sharing is a negative pointer but not determinative; the intention and substance of the arrangement control. In this case, the arrangement between Mr Lees and Mr Bashir was a genuine partnership to comply with regulatory requirements, and thus Mr Lees was a partner.

Parties
Claimant/first Respondent: M. Young Legal Associates Ltd; First Defendant/second Respondent: Zahid (A Firm); Second Defendant/third Respondent: Sameera Sharif; Third Defendant/fourth Respondent: Jamail Akhtar Sharif; Fourth Defendant/fifth Respondent: Zahid Bashir; Fifth Defendant/appellant: Robert Heywood Ogden Lees
Jurisdiction
England and Wales
Judgment Date
16 May 2006
Procedural Posture
Civil Appeal / Appeal From High Court (preliminary Issue Determination)
Outcome
Appeal dismissed
Legal Topics
Partnership, Salaried Partner, Liability of Partners, Partnership Act 1890
Commercial Law Partnership Salaried Partner Liability of Partners Partnership Act 1890

Case Brief

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Parties

M. Young Legal Associates Ltd

Claimant/first Respondent

Zahid (A Firm)

First Defendant/second Respondent

Sameera Sharif

Second Defendant/third Respondent

Jamail Akhtar Sharif

Third Defendant/fourth Respondent

Zahid Bashir

Fourth Defendant/fifth Respondent

Robert Heywood Ogden Lees

Fifth Defendant/appellant

Procedural Posture

Civil Appeal / Appeal From High Court (preliminary Issue Determination)

Legal Issues

  1. 1 Whether a person can be a partner in a firm without entitlement to participate in profits, but instead is paid a fixed sum for work done on behalf of the firm.

Ratio Decidendi

A person can be a partner in a firm even if he is paid a fixed sum for work done and is not entitled to participate in profits, provided the business is carried on in common with a view to profit and the parties intend to enter into a partnership. The absence of profit sharing is a negative pointer but not determinative; the intention and substance of the arrangement control. In this case, the arrangement between Mr Lees and Mr Bashir was a genuine partnership to comply with regulatory requirements, and thus Mr Lees was a partner.

Court Disposition

Appeal dismissed

Orders

  • Declaration that Mr Lees was a partner in the firm is upheld.