Hammonds (A Firm) v Danilunas & Ors [2009] EWHC 216 (Ch) (13 February 2009)

Hammonds (A Firm) v Danilunas & Ors [2009] EWHC 216 (Ch) (13 February 2009)

On the true construction of clause 16.2 of the UK Partnership Deed, partnership accounts are binding on all persons who were partners at any time during the accounting year covered by those accounts, including outgoing partners. The deed provides a mechanism for objections and review, and does not deprive outgoing partners of the right to object. The construction advanced by the claimant is preferred as it accords with the commercial purpose and structure of the deed.

Citation
[2009] EWHC 216 (Ch)
Parties
Claimant: Hammonds (A Firm); Defendant: M Danilunas; Defendant: John Deacon; Defendant: Mark Hilton; Defendant: Jonathan Hosie; Defendant: David Jones; Defendant: Jonathan Moore; Defendant: Mark Newcombe; Defendant: Gerard O'Neil; Defendant: Simon Palmer; Defendant: Dermot Preston; Defendant: Nigel Proctor; Defendant: Philip Rees; Defendant: Martin Thomas; Defendant: Stephen Tupper
Jurisdiction
England and Wales
Judgment Date
13 February 2009
Procedural Posture
Civil Partnership Dispute / Judgment on Preliminary Issue and Summary Judgment/strike Out Application
Outcome
Preliminary issue determined in favour of the claimant; clause 16.2 binds outgoing partners. Certain misrepresentation claims to be struck out as unsustainable. No summary judgment on the main claim as factual disputes remain.
Legal Topics
Construction of Partnership Deed, Binding Nature of Partnership Accounts, Outgoing Partner Rights, Summary Judgment, Strike Out, Misrepresentation, Restitution
Partnership Law Contract Law Construction of Partnership Deed Binding Nature of Partnership Accounts Outgoing Partner Rights Summary Judgment Strike Out Misrepresentation +1 more

Case Brief

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Parties

Hammonds (A Firm)

Claimant

M Danilunas

Defendant

John Deacon

Defendant

Mark Hilton

Defendant

Jonathan Hosie

Defendant

David Jones

Defendant

Jonathan Moore

Defendant

Mark Newcombe

Defendant

Gerard O'Neil

Defendant

Simon Palmer

Defendant

Dermot Preston

Defendant

Nigel Proctor

Defendant

Philip Rees

Defendant

Martin Thomas

Defendant

Stephen Tupper

Defendant

Procedural Posture

Civil Partnership Dispute / Judgment on Preliminary Issue and Summary Judgment/strike Out Application

Legal Issues

  1. 1 Whether outgoing partners are bound by partnership accounts prepared under clause 16.2 of the UK Partnership Deed
  2. 2 Whether the accounts are binding on all persons who were partners during the relevant accounting year, including those who have since left
  3. 3 Whether the partnership deed deprives outgoing partners of the right to object to accounts

Ratio Decidendi

On the true construction of clause 16.2 of the UK Partnership Deed, partnership accounts are binding on all persons who were partners at any time during the accounting year covered by those accounts, including outgoing partners. The deed provides a mechanism for objections and review, and does not deprive outgoing partners of the right to object. The construction advanced by the claimant is preferred as it accords with the commercial purpose and structure of the deed.

Court Disposition

Preliminary issue determined in favour of the claimant; clause 16.2 binds outgoing partners. Certain misrepresentation claims to be struck out as unsustainable. No summary judgment on the main claim as factual disputes remain.

Orders

  • Declaration that clause 16.2 of the UK Partnership Deed binds all persons who were partners during the relevant accounting year, including outgoing partners.
  • Strike out of unsustainable misrepresentation claims pleaded by certain defendants.