Gill v Sandhu [2005] EWHC 43 (Ch) (26 January 2005)

Gill v Sandhu [2005] EWHC 43 (Ch) (26 January 2005)

The outgoing partner's entitlement under section 42 is to a share of profits attributable to the use of partnership assets, reflecting his proprietary share at the date of dissolution, not the net value after liabilities. The Master correctly awarded Mr Sandhu a half share of profits, subject to a fair return for Mr Gill's management services.

Citation
[2005] EWHC 43 (Ch)
Parties
Appellant/defendant: Hardip Singh Gill; Respondent/claimant: Kulbir Singh Sandhu
Jurisdiction
England and Wales
Judgment Date
26 January 2005
Procedural Posture
Appeal / Judgment
Outcome
appeal dismissed
Legal Topics
Construction of Section 42 Partnership Act 1890, Entitlement of Outgoing Partner to Profits, Winding Up of Partnership, Distribution of Partnership Assets
Partnership Law Equity Construction of Section 42 Partnership Act 1890 Entitlement of Outgoing Partner to Profits Winding Up of Partnership Distribution of Partnership Assets

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Parties

Hardip Singh Gill

Appellant/defendant

Kulbir Singh Sandhu

Respondent/claimant

Procedural Posture

Appeal / Judgment

Legal Issues

  1. 1 Meaning of 'share of the partnership assets' under section 42 Partnership Act 1890
  2. 2 Entitlement of outgoing partner to profits made by continuing partner after dissolution
  3. 3 Basis for division of profits attributable to partnership assets

Ratio Decidendi

The outgoing partner's entitlement under section 42 is to a share of profits attributable to the use of partnership assets, reflecting his proprietary share at the date of dissolution, not the net value after liabilities. The Master correctly awarded Mr Sandhu a half share of profits, subject to a fair return for Mr Gill's management services.

Court Disposition

appeal dismissed

Orders

  • Mr Sandhu entitled to half share of profits made by Mr Gill after dissolution, subject to £22,000 per annum management charge to Mr Gill
  • Interim payment of £25,000 upheld