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Patel v Patel (2007)

Summary

A debt owed by a former partner to another which accrued due on the former partner's death could not become an asset of a new partnership in the absence of an express agreement between the partners of the second partnership.

Facts

The appellant (X), who had been in partnership with his brother (R) until the latter's death, appealed against a county court's decision that although a transfer of money within the partnership from him to R had been a simple or discreet debt which accrued due when R had died, it was statute-barred as having accrued more than six years earlier. After R's death and consequent dissolution of the partnership, X continued to run the business in a second partnership with the respondent (Y), who was R's widow and executrix of his estate. X argued that, by continuing the business seamlessly after her husband's death, Y implicitly or tacitly agreed to adopt or bring into the second partnership as part of its starting assets R's share of the assets and his liabilities of the first partnership.

Held

A debt owed by a former partner to another which accrued due on the former partner's death could not become an asset of a new partnership in the absence of an express agreement between the partners of the second partnership. In reality, X's claim was against Y in her capacity as personal representative of R, whose debt and obligation to account in that sum at dissolution it was. For that reason, the claim having been brought more than six years after the dissolution and death of R was barred by limitation.

Appeal dismissed

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Judgment
18 Dec 2007

Court of Appeal
May LJ, Thomas LJ, Pill LJ

References
‚ÄčLTL 7/4/2008; [2007] EWCA Civ 1520

Members
John McGhee QC