Key Facts
- •Complete Care Services (Rossendale) Limited (CCS) was expelled from a domiciliary crisis care partnership with Ryan and Fallon Godwin (trading as Home Care Services, HCS).
- •The expulsion was based on CCS's inadequate CQC rating and perceived risk to a contract with Lancashire County Council.
- •CCS challenged the expulsion, arguing that HCS relied on grounds unknown at the time of the expulsion notice and acted in bad faith.
- •The partnership agreement allowed expulsion for material breaches, 'special measures' by the CQC, conduct with serious adverse effects, or conduct allowing a client body to terminate a contract.
Legal Principles
Contractual provisions allowing expulsion of a partner should be restrictively construed.
Adaptive Spectrum and Signal Alignment Inc v British Telecommunications plc [2023] EWCA Civ 451
Partners owe fiduciary duties, including good faith.
Case law on partnership law (implied)
An employer can rely on grounds for dismissal that existed at the time of dismissal but were only discovered subsequently.
Boston Deep Sea Fishing and Ice Company v Ansell (1889) 39 Ch D 339
A power to expel a partner must not be exercised with any ulterior motive, but in the best interests of the partnership as a whole.
Judgement's own reasoning
Outcomes
CCS's claim was dismissed.
The court found that CCS had materially breached the partnership agreement through its inadequate CQC rating and failure to sufficiently improve. While the immediate risk of contract termination by the Council was deemed unfounded, the court held that the fundamental breach of contract and loss of trust justified the expulsion. The court also found that the principle from *Boston Deep Sea Fishing* allowing reliance on later-discovered facts applied, and that the expulsion was not made in bad faith.