Russell Jones v Dawn Hagger
[2024] EWHC 2502 (KB)
Ulrich Rued v Lloyd Dormer & Anor
5 December 2023
[2023] EWHC 3118 (Ch)
High Court
Two partners fought over money from their land development business. A judge reviewed their agreement and the work done, using expert reports to decide how much each partner should get. The judge found one partner wasn't entitled to all the expenses they claimed but did get some of the money for work completed, with adjustments for implausible claims and private expenses. The judge also dealt with the value of one of the developments that became the partner's home.
Key Facts
- •Partnership between Ulrich Rued (Claimant) and Lloyd Dormer (First Defendant) for land development, commencing December 1997.
- •Rued provided funding; Dormer managed development and performed work.
- •Disputes arose regarding expenses, profits, and the accounting of Plot 9.
- •A court order of September 9, 2021, outlined the scope of the accounting.
- •Single joint expert reports were provided by forensic accountant Jonathan Dodge and valuer Andrew Forbes.
- •The case involved determining Dormer's entitlement to wages, overtime, commission, and the costs borne by the business for Plot 9.
- •Dormer claimed he worked continuously from 2008-2016 and performed additional work after 2016.
Legal Principles
Partners owe a duty of good faith to each other.
Lindley & Banks on Partnership, 20th Ed, 16-01; Partnership Act 1890, section 28; Helmore v Smith (1886) 35 Ch D 436
Breach of duty of good faith requires dishonesty or improper motive, not mere negligence.
Medforth v Blake [2000] Ch 86
Partners must not benefit themselves at the expense of their co-partners.
Lindley & Banks, 16-17
Good faith does not require complete subordination of self-interest, but due regard to the legitimate interests of both parties.
Gold Group Properties Ltd v BDW Trading Ltd [2010] EWHC 1632
Outcomes
Dormer was entitled to his agreed wages, but not all claimed overtime.
While Dormer worked in the business, the evidence didn't fully support the extent of his overtime claims, particularly during the 2008-2011 economic downturn.
Dormer's claim for work while abroad was partially disallowed.
The court found it implausible that Dormer worked the amount of time claimed while on holiday in different jurisdictions.
Certain costs were deemed private expenditure and not deductible business expenses.
Adjustments made by Mr. Dodge were accepted by the court unless challenged by the defendants.
Dormer's claim for commission on materials was largely allowed.
Mr. Dodge's review of documentation supported the claim.
Dormer's post-2016 work on Plot 9 was partially allowed; the valuation of Plot 9 was adjusted.
The court accepted work carried out until October 12, 2018, but reduced the claim for subsequent snagging work.
The retention amount was reduced.
Insufficient evidence supported the initial high retention amount.
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