HLB Kidsons (Formerly Kidsons Impey) v Lloyd's Underwriters Subscribing Policy No. 621/PK1D00101 & Ors

HLB Kidsons (Formerly Kidsons Impey) v Lloyd's Underwriters Subscribing Policy No. 621/PK1D00101 & Ors

Section 38 of the Partnership Act 1890 does not apply to a technical dissolution resulting from the merger, as the partnership was intended to continue subject only to express provisions for retirement or dissolution. There was no express or implied authority under the partnership deeds for Mr Greatorex to commence proceedings on behalf of retired partners. Therefore, Kidsons could not bind KFP to the action without their express consent.

Parties
Claimant: HLB Kidsons (formerly Kidsons Impey); Defendant: Lloyd’s Underwriters Subscribing Policy No. 621/PK1D00101; Defendant: The Underwriter Insurance Company Limited; Defendant: Royal and Sun Alliance Insurance PLC; Defendant: International Insurance Company of Hannover Limited; Defendant: Great Lakes Reinsurance (UK) PLC; Defendant: CMS Cameron McKenna; Defendant: Miller Insurance Services Limited (formerly Millers Professional Risks Limited); Interested Party: Kidsons Former Partners (KFP)
Jurisdiction
England and Wales
Judgment Date
14 October 2008
Procedural Posture
Commercial/partnership Law / Judgment on Preliminary Issues
Outcome
Claim by Kidsons on authority to sue on behalf of retired partners dismissed; KFP succeed on preliminary issues.
Legal Topics
Dissolution of Partnership, Authority of Partners, Section 38 Partnership Act 1890, Professional Indemnity Insurance, Express Authority Under Partnership Deed
Partnership Law Insurance Law Dissolution of Partnership Authority of Partners Section 38 Partnership Act 1890 Professional Indemnity Insurance Express Authority Under Partnership Deed

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Parties

HLB Kidsons (formerly Kidsons Impey)

Claimant

Lloyd’s Underwriters Subscribing Policy No. 621/PK1D00101

Defendant

The Underwriter Insurance Company Limited

Defendant

Royal and Sun Alliance Insurance PLC

Defendant

International Insurance Company of Hannover Limited

Defendant

Great Lakes Reinsurance (UK) PLC

Defendant

CMS Cameron McKenna

Defendant

Miller Insurance Services Limited (formerly Millers Professional Risks Limited)

Defendant

Kidsons Former Partners (KFP)

Interested Party

Procedural Posture

Commercial/partnership Law / Judgment on Preliminary Issues

Legal Issues

  1. 1 Whether the merger of Kidsons and Baker Tilly on 1 April 2002 dissolved the Kidsons partnership within the meaning of s.38 of the Partnership Act 1890
  2. 2 If so, whether commencement of the coverage action was necessary to wind up the affairs of the Kidsons partnership within s.38
  3. 3 Whether Mr Greatorex had authority under s.38 to commence the action on behalf of retired partners

Ratio Decidendi

Section 38 of the Partnership Act 1890 does not apply to a technical dissolution resulting from the merger, as the partnership was intended to continue subject only to express provisions for retirement or dissolution. There was no express or implied authority under the partnership deeds for Mr Greatorex to commence proceedings on behalf of retired partners. Therefore, Kidsons could not bind KFP to the action without their express consent.

Court Disposition

Claim by Kidsons on authority to sue on behalf of retired partners dismissed; KFP succeed on preliminary issues.

Orders

  • Kidsons cannot sue on behalf of KFP without their express authority; KFP to be joined as defendants if necessary under CPR 19.3.