Simon Nigel Morton & Anor. v Julie Morton
[2023] EWCA Civ 700
Suzanne Elaine Procter v Philip John Procter & Ors
9 April 2024
[2024] EWCA Civ 324
Court of Appeal
A sister left her family farm partnership without agreeing on how much she'd get paid. The court said she's still entitled to her share of the farm's value, even though there was no agreement. They have to pay her what her share was worth when she left, plus interest.
Key Facts
- •Suzanne Procter resigned from a family farming partnership in 2010.
- •The partnership continued with her brothers, Philip and James.
- •There was no agreement on financial terms for Suzanne's departure.
- •Suzanne claimed a share of the partnership's assets, specifically a ¼ share in the value of a 1994 tenancy.
- •The High Court initially found in Suzanne's favor.
- •Philip and James appealed this decision.
Legal Principles
A partner's resignation from a partnership, without agreement on financial terms, entitles them to the value of their share of the partnership assets.
Partnership Law
A change in partnership members results in a dissolution of the existing firm and the creation of a new firm; often referred to as a 'technical' dissolution.
Lindley & Banks on Partnership
The interpretation of partnership agreements should focus on the parties' intentions, considering the circumstances of their agreement.
Re White decd [2001] Ch 393, Drake v Harvey [2011] EWCA Civ 838, Ham v Ham [2013] EWCA Civ 1301
Where no agreement exists regarding an outgoing partner's share, the continuing partners must account for the value of that share, assessed at the date of retirement, using actual market value, not book value.
Sobell v Boston [1975] 1 WLR 1587
Outcomes
The appeal was dismissed.
The Court of Appeal upheld the High Court's decision, finding that Suzanne was entitled to a ¼ share in the value of the 1994 tenancy at the date of her resignation, based on principles of partnership law and the lack of an agreement to the contrary.