UK case on duration of a partnership, partnership property and unjust enrichment of one partner at the expense of another

Smith and Patrick v Crawshaw [2019] EWHC 2507 (Ch)

This case involved a property development partnership which was carried on between the  testatrix and the defendant. It was dissolved by the death of the testatrix, and the executors of her estate brought a number of claims against the defendant. The following elements of the judgment are of particular interest to partnership lawyers.

First, the court held that there was only one partnership. There was no evidence of any dissolution of the original partnership after the first development project had been completed, and a number of other projects were carried out subsequently under the provisions of the original agreement. The fact that a new agreement was reached subsequently was not inconsistent with a continued partnership.

Second, the property acquired in the defendant’s sole name was a partnership asset because the purchase money came from partnership funds and s21 of the Partnership Act provided that unless the contrary intention appeared, property bought with partnership money was deemed to be bought on its account.

Third, the court rejected the defendant’s claim for restitution for unjust enrichment for his work for the partnership, because s24(6) of the Partnership Act provided that in the absence of any contrary agreement no partner was entitled to remuneration for acting in the partnership business, and in any event the enrichment here was not unjust because the defendant’s services were specified in the agreement and had been remunerated by the profit share set out in that agreement.

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