McHugh & Anor v Kerr & Anor [2003] EWHC 2985 (Ch) (09 December 2003)

McHugh & Anor v Kerr & Anor [2003] EWHC 2985 (Ch) (09 December 2003)

The fraudulent acts of Mr Gordon were within the ordinary course of the firm's business as the firm did conduct share transactions for clients, and such activity is legally capable of being part of an accountancy firm's business. The Respondents' negligence did not break the chain of causation; the firm is vicariously liable for Mr Gordon's fraud under section 10 of the Partnership Act 1890.

Citation
[2003] EWHC 2985 (Ch)
Parties
Appellant: Eamon McHugh; Appellant: Mary Ellen Lynch; Respondent: John Wilson Kerr; Respondent: Ellis Allen
Jurisdiction
England and Wales
Judgment Date
09 December 2003
Procedural Posture
Appeal / Judgment on Appeal Against Summary Judgment
Outcome
Appeal dismissed
Legal Topics
Vicarious Liability, Fraud, Deceit, Ordinary Course of Business, Causation, Contribution
Partnership Law Tort Law Vicarious Liability Fraud Deceit Ordinary Course of Business Causation Contribution

Case Brief

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Parties

Eamon McHugh

Appellant

Mary Ellen Lynch

Appellant

John Wilson Kerr

Respondent

Ellis Allen

Respondent

Procedural Posture

Appeal / Judgment on Appeal Against Summary Judgment

Legal Issues

  1. 1 Whether the fraudulent acts of a partner were committed in the ordinary course of the firm's business for the purposes of section 10 of the Partnership Act 1890
  2. 2 Whether the negligence of the Respondents broke the chain of causation and relieved the Appellants of liability

Ratio Decidendi

The fraudulent acts of Mr Gordon were within the ordinary course of the firm's business as the firm did conduct share transactions for clients, and such activity is legally capable of being part of an accountancy firm's business. The Respondents' negligence did not break the chain of causation; the firm is vicariously liable for Mr Gordon's fraud under section 10 of the Partnership Act 1890.

Court Disposition

Appeal dismissed

Orders

  • Appeal dismissed; summary judgment for the Respondents stands.