Buchanan v Nolan & Anor [2013] ScotCS CSIH_38 (26 April 2013)

Buchanan v Nolan & Anor [2013] ScotCS CSIH_38 (26 April 2013)

Clause Thirteenth A of the partnership agreement only allows the purchase of the whole of the first defender's share in the capital and goodwill; once the first defender invoked Clause Fifteenth and retained the business name, premises, and pre-1995 clients, the option in Clause Thirteenth A was no longer available to the pursuer. The partnership agreement did not provide a mechanism for accounting in these circumstances, so section 44 of the Partnership Act 1890 applies. The counterclaim based on the alleged exercise of the option is irrelevant.

Citation
[2013] ScotCS CSIH_38
Parties
Pursuer and Respondent: Karen Elaine Buchanan; First Defender and Reclaimer: James Gerard Nolan; Second Defender: Christine Margaret Macleod or Tomlinson
Jurisdiction
Scotland
Judgment Date
26 April 2013
Procedural Posture
Civil Partnership Dissolution / Appeal (reclaiming Motion) From Lord Ordinary's Interlocutor
Outcome
Reclaiming motion refused; interlocutor of Lord Ordinary adhered to (with date alterations); case remitted for further procedure.
Legal Topics
Partnership Dissolution, Accounting Between Partners, Interpretation of Partnership Agreements, Goodwill and Capital Division, Section 44 Partnership Act 1890
Partnership Law Contract Law Partnership Dissolution Accounting Between Partners Interpretation of Partnership Agreements Goodwill and Capital Division Section 44 Partnership Act 1890

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Parties

Karen Elaine Buchanan

Pursuer and Respondent

James Gerard Nolan

First Defender and Reclaimer

Christine Margaret Macleod or Tomlinson

Second Defender

Procedural Posture

Civil Partnership Dissolution / Appeal (reclaiming Motion) From Lord Ordinary's Interlocutor

Legal Issues

  1. 1 Whether Clauses Thirteenth A and Fifteenth of the partnership agreement allow the pursuer to exercise an option to purchase the first defender's share in the capital and goodwill after the first defender invoked Clause Fifteenth
  2. 2 Whether the principal action should proceed on the basis of section 44 of the Partnership Act 1890 or the contractual provisions
  3. 3 How work-in-progress should be accounted for on dissolution

Ratio Decidendi

Clause Thirteenth A of the partnership agreement only allows the purchase of the whole of the first defender's share in the capital and goodwill; once the first defender invoked Clause Fifteenth and retained the business name, premises, and pre-1995 clients, the option in Clause Thirteenth A was no longer available to the pursuer. The partnership agreement did not provide a mechanism for accounting in these circumstances, so section 44 of the Partnership Act 1890 applies. The counterclaim based on the alleged exercise of the option is irrelevant.

Court Disposition

Reclaiming motion refused; interlocutor of Lord Ordinary adhered to (with date alterations); case remitted for further procedure.

Orders

  • Counterclaim dismissed
  • First defender to lodge full account of intromissions with partnership assets and liabilities