Recent UK case on partnership winding up

Loveridge and others v Loveridge [2020] EWCA Civ 1104

A caravan park business was operated through several companies and three oral partnerships at will. The partnership proceedings related to the winding up of the three partnerships.

The first instance court had appointed the respondent partner to manage the partnerships pending their winding up, and ordered that the three other partners be restrained from interfering with the business. It discounted the possibility of appointing a third party receiver or manager because it would involve unjustified expense, and there also insufficient time for it to be done.

The Court of Appeal allowed the appeals. It noted that when appointing a partner rather than a third party receiver or manager, it was necessary to take account of the fact that the majority partners, by definition, had the most to lose from any mismanagement. Further, where several partnerships were involved, it was not necessary for the court to order ‘unitary control’ by one partner of all the partnerships. There was no reason to disrupt the status quo of the management of the partnerships by removing all control from the appellants. The respondent was not the only person capable of running any individual partnership, and as it was unclear whether he was a partner at all in one of the partnerships - in which case he would have no say in its future - and at most he had a 25% interest, and as he had made no complaints about the its continued management by the partner who might in fact be its sole owner, the court ruled that she should remain in sole day to day control of this partnership pending trial of the respondent’s claim. The court awarded sole control of one of the other partnerships to the two appellants, since they lived on its principal site, and awarded the respondent sole control of the other partnership.

Recent UK case on the duties of designated LLP members

Re A&C Restoration LLP: Manolete Partners plc v Riches [2020] EWHC 1404 (Ch)

(Judgment in this case was given in May 2020 but the transcript has only recently become available)

Riches was a designated member of A&C Restoration LLP until he retired under the terms of a retirement deed. At that time a new member was appointed. The deed included a waiver of any claim by the LLP for sums owed by Riches as a result of drawings by him which exceeded profits.

The court noted that the LLP was insolvent at the time the deed was entered into. It held that designated members of an LLP, such as Riches, owed the same duties as company directors owed to limited companies (McTear v Eade [2019] EWHC 1673 (Ch)), and that these duties included a duty to take into account the interests of creditors at a time when the firm was insolvent. It concluded that it was a breach of duty, objectively viewed, to cause the LLP to agree to a waiver which released a debt, since this could not be in the interests of the creditors. Riches was therefore estopped from relying on the clause, and remained liable for the debt. He was not able to ask the court to grant relief for any breach of duty pursuant to s1157 of the Companies Act 2006 (applied to LLPs by the Limited Liability Partnerships (Application of Companies Act 2006) Regulations 2009), because that section was dependent on him having acted honestly and reasonably, and the court considered that it could not be a reasonable decision to waive one’s own liabilities in the context of insolvency.

New short article on Irish limited partnership law.

Maebhdh Clancy, Editor of the second edition of Twomey on Partnership, has published a short article on the reform of Irish limited partnerships in the Commercial Law Practitioner. The full citation is Maebhdh Clancy, 'Limited partnerships - time for long-awaited reform' (2020) 27(9) CL Pract 192-195.

Short article on recent Scottish case on partner expulsion

Professor Laura Macgregor, one of the speakers at our most recent conference, has published a short article on good faith and partner expulsion:
Laura J Macgregor, ‘Rennie v Rennie: the requirements of natural justice on expulsion from a Scottish partnership (Case Comment)’ (2020) 24(3) Edin LR 416-421.

Short articles on Canadian partnerships

Matthew Pollack and Prasad Taksal of law firm DLA Piper have published two short article on Canadian partnerships:

'Partnerships: what, how and when' -vailable at

'Partnership agreements: A primer' - available at:

New short article on UK partnership disputes

George Sim, 'Unscrambling partnership disputes' (2020) 170(7906) NLJ 19, available at:

If you are not already a subscriber to the New Law Journal you can register free of charge for two weeks.

Short article on recent UK case on partnership taxation arrangements

Andrew Howard, 'BlueCrest: new developments in UK partnership taxation' (2020) 1503 Tax Journal 16 provides a brief analysis of the judgment in BlueCrest Capital Management Cayman Ltd & others v HMRC. It is available at:

UK government response to consultation on Corporate Transparency and Register Reform Government: response to the consultation on options to enhance the role of Companies House and increase the transparency of UK corporate entities

The UK government has recently published its response to an earlier consultation on the registration of limited partnerships, LLPs and companies. The response includes proposals to require identity verification of those who register such businesses, and of some participants in them (but only general partners of limited partnerships, and designated members of LLPs), and provisions to enable the striking off of limited partnerships from the register (something which is currently impossible).

BEIS, 'Corporate Transparency and Register Reform: Government response to the consultation on options to enhance the role of Companies House and increase the transparency of UK corporate entities' (September 2020) is available at:

Ireland's Investment Limited Partnerships (Amendment) Bill 2020

Law firms Arthur Cox and Dillon Eustace have both published brief updates on this latest piece of legislation. They are available at:

Arthur Cox:

Dillon Eustace:

UK case on derivative actions in relation to LLPs

Homes for England v Nick Selman (Holdings) Limited and Bromham Road Development LLP [2020] EWHC 936 (Ch)

Homes for England, and Nick Selman (Holdings) Limited, were equal members in an LLP. Homes alleged that Holdings had breached the duties of honesty and good faith which it owed to Homes, by delaying in executing refinancing documentation in relation to a loan from a finance company to the LLP. The trial judge exercised his discretion to permit Homes to bring a derivative claim on behalf of the LLP, applying the criteria in s263 of the Companies Act 2006 (CA 2006) for the exercise of that discretion.

On appeal, the court held that s263 did not apply. Sections 260-264 CA 2006 on derivative actions had not been applied to LLPs by the Limited Liability Partnerships (Application of Companies Act 2006) Regulations 2009 which applied other provisions of CA 2006. Nor was s263 applied by the Civil Procedure Rules 1998 (CPR) Rule 19.9C. First, CPR 19.9C applied ss261, 262 and 264 but deliberately omitted s263, which was logical because the CPR dealt with procedure whereas s263 was substantive and s260, which was also substantive, had also been omitted. Furthermore, whereas the official form to be used for such proceedings in relation to a company stated that the court must take account of the s263 criteria, the form for an LLP did not. Second, the broad discretion given to the court by s261 did not enable the court to apply the s263 criteria, because s261 concerned the terms upon which a claim was to continue if it was given permission, and not the basis on which the court was to determine whether to give permission in the first place.

Since the statutory test for permission to bring a derivative claim did not apply, the court applied common law test. It held that it was not satisfied and therefore permission was not granted. In order to bring a derivative claim at common law, it was necessary to show that one of the four established exceptions to the rule in Foss v Harbottle (1843) 2 Hare 461 applied. Only the fourth exception was relevant here, and it required Holdings’ actions to have caused financial loss to the members, and that either fraud in the sense of deliberate and dishonest breach of duty had been pleaded or it was alleged that Holdings had acquired a personal benefit at the expense of the LLP. The court accepted that the increased amount payable on the refinanced loan was a loss to the LLP which would also be suffered reflectively by the members. However, there was no allegation of dishonest breach of duty, and the allegation that the delay had put Homes under pressure in relation to an ongoing negotiation regarding a dissolution of the LLP was fell short of the type of benefit required.

A short article on this case by Gregor Hogan of Serle Court is available at



Comment List

  • None
This website is supported by the Society for Legal Scholars (SLS) Small Projects and Events Fund. The SLS is the learned society for those who teach law in a university or similar institution or who are otherwise engaged in legal scholarship.