Key Facts
- •Alexander Hamilton invested £566,053.54 in the 'Currency Club', allegedly a Ponzi scheme.
- •The Currency Club involved multiple 'Club Leaders', including Mark and Claire Barrow and Martin Welsh.
- •Hamilton claimed fraudulent misrepresentation by Welsh, leading to his investment loss.
- •The Barrows appealed May J's ruling finding them jointly and severally liable.
- •The appeal focused on whether a partnership existed and Mrs. Barrow's involvement.
- •Limited documentary evidence existed regarding the Currency Club's structure and finances.
- •Funds were routed through various accounts, including those controlled by the Barrows and John Bowles.
- •The judge found a partnership existed between the Club Leaders, including Mrs. Barrow, and that Welsh's actions bound the Barrows.
- •The Barrows argued that the Currency Club was comprised of separate independent businesses, negating a partnership.
Legal Principles
Definition of partnership: 'the relation which subsists between persons carrying on a business in common with a view of profit'
Partnership Act 1890, s.1(1)
Substance over form; labels are not determinative in establishing a partnership.
Stekel v Ellice [1931] 1 WLR 191, 199; Weiner v Harris [1910] 1 KB 285, 290
Profit sharing is a strong indicator of partnership but not a prerequisite.
M Young Legal Associates v Zahid [2006] EWCA Civ 613
In determining partnership, consider mutual agency, profit/loss sharing, common capital, and delectus personae.
Dollar Land (Cumbernauld) Ltd v CIN Properties Ltd 1996 SLT 186; Worbey v Campbell [2016] CSOH 148
Appellate courts are reluctant to overturn trial judge's factual findings unless plainly wrong.
Volpi v Volpi [2022] EWCA Civ 464; Fage UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5; Walter Lilly & Co. Ltd v Clin [2021] EWCA Civ 136
A partnership requires carrying on business 'in common', with mutual rights and obligations.
Lindley & Banks on Partnership, 21st ed. at 2-16; Worbey v Campbell [2017] CSIH 49
Outcomes
Appeal dismissed.
The Court of Appeal found no error in the trial judge's application of legal principles or her factual findings. The evidence supported the conclusion that a partnership existed between the Club Leaders, including Mrs. Barrow, and that Welsh's actions were within the ordinary course of partnership business.