Drake v Harvey & Ors

Drake v Harvey & Ors

The partnership deed is silent as to the basis of valuation for outgoing partners. There is no binding agreement or usage requiring historic values to be used for the purposes of paying out outgoing partners or their estates. Therefore, the accounts for the relevant period must be drawn to reflect a fair value of the partnership assets, including current market value of the land, and not merely historic book values.

Parties
Claimant: Francesca Drake; 1st Defendant: Jack Harvey; 2nd Defendant: Mary Elizabeth May Harvey; 3rd Defendant: Clare Harvey; 4th Defendant: Richard Jenkins
Jurisdiction
England and Wales
Judgment Date
16 June 2010
Procedural Posture
Civil Partnership Dispute / Judgment on Preliminary Issues
Outcome
Preliminary issues determined in favour of the defendants (Aidan's estate and the parents) on the basis that fair value (current market value) must be used.
Legal Topics
Partnership Dissolution, Valuation of Partnership Assets, Capital Accounts, Retirement and Death of Partners, Interpretation of Partnership Deeds
Partnership Law Equity Trusts and Estates Partnership Dissolution Valuation of Partnership Assets Capital Accounts Retirement and Death of Partners Interpretation of Partnership Deeds

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Parties

Francesca Drake

Claimant

Jack Harvey

1st Defendant

Mary Elizabeth May Harvey

2nd Defendant

Clare Harvey

3rd Defendant

Richard Jenkins

4th Defendant

Procedural Posture

Civil Partnership Dispute / Judgment on Preliminary Issues

Legal Issues

  1. 1 Whether outgoing partners or their estates are entitled to a share based on historic or current (fair) value of partnership assets under the partnership deed
  2. 2 Whether the partnership deed or practice binds outgoing partners to historic values
  3. 3 How unsigned or disputed accounts should be treated for the purposes of calculating outgoing partners' entitlements

Ratio Decidendi

The partnership deed is silent as to the basis of valuation for outgoing partners. There is no binding agreement or usage requiring historic values to be used for the purposes of paying out outgoing partners or their estates. Therefore, the accounts for the relevant period must be drawn to reflect a fair value of the partnership assets, including current market value of the land, and not merely historic book values.

Court Disposition

Preliminary issues determined in favour of the defendants (Aidan's estate and the parents) on the basis that fair value (current market value) must be used.

Orders

  • The amount payable to outgoing partners or their estates is to be calculated on the basis of accounts reflecting fair value of partnership assets, including current market value of the land.