Drake v Harvey & Ors (Rev 1)

Drake v Harvey & Ors (Rev 1)

The amount payable to the estate of a deceased partner under clause 19 of the partnership deed is to be determined by reference to the book value of the assets as shown in the last annual general account, not at fair value, because the deed and consistent practice require use of book values and do not permit unilateral revaluation.

Parties
Appellant: Francesca Drake; Respondent: Jack Harvey (deceased); Respondent: Mary Elizabeth May Harvey; Respondent: Clare Harvey; Respondent: Richard Jenkins
Jurisdiction
England and Wales
Judgment Date
20 July 2011
Procedural Posture
Civil Appeal / Court of Appeal Judgment
Outcome
Appeal allowed; respondent's notice dismissed.
Legal Topics
Valuation of Partnership Assets, Interpretation of Partnership Deeds, Retirement and Death of Partners, Capital and Profit Distribution
Partnership Law Contract Law Valuation of Partnership Assets Interpretation of Partnership Deeds Retirement and Death of Partners Capital and Profit Distribution

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Parties

Francesca Drake

Appellant

Jack Harvey (deceased)

Respondent

Mary Elizabeth May Harvey

Respondent

Clare Harvey

Respondent

Richard Jenkins

Respondent

Procedural Posture

Civil Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 What basis of valuation applies under clause 19 of the partnership deed for the share of a deceased partner?
  2. 2 Can a partner or their executors insist on a revaluation of partnership assets for the purposes of the accounts used to determine the outgoing partner's share?
  3. 3 Does the partnership deed or subsequent agreement require or permit fair value or book value to be used?

Ratio Decidendi

The amount payable to the estate of a deceased partner under clause 19 of the partnership deed is to be determined by reference to the book value of the assets as shown in the last annual general account, not at fair value, because the deed and consistent practice require use of book values and do not permit unilateral revaluation.

Court Disposition

Appeal allowed; respondent's notice dismissed.

Orders

  • Amount payable to Aidan Harvey's estate to be determined by reference to book value of assets in last annual general account.
  • No revaluation of farmland or other assets required for purposes of clause 19.