Summary

An inference of an implied agreement to form a partnership might be legitimate if the parties had not addressed in express terms what the basis of their business should be, but if they had discussed the subject expressly and had not reached agreement because one party declined the other's proposal of partnership, then such an inference would contradict the express dealings and discussions between the parties.

Facts

The appellant (G) appealed against an order declaring that he had not carried on a business in partnership with the respondent (V). V, who had formed a personal relationship with G, had started an equine business. From the outset of their relationship G was involved in various ways, including lending monies for the business. G claimed that a year later, following discussions, he and V orally agreed that they would carry on an equine business in partnership with the financial investment in the venture to be provided by him, and that each would have an equal interest in all its assets. From the date of the purported agreement, the business was conducted with substantially increased stud activity, G was actively involved in it and provided financial support, and V dealt with the bookkeeping, administration, publicity and advertising. On a website and a business card both V and G were named as proprietors. Their personal relationship eventually deteriorated and a preliminary issue as to whether there had been a partnership was decided in V's favour. The judge, finding that G had wished to be a partner in the business, but that V had never agreed, held that there had been no oral agreement as alleged and no partnership had been formed on any other terms after the date of the purported oral agreement. G instructed new counsel for the instant appeal. G submitted (1) that the judge had failed to appreciate that a partnership could be implied from conduct as an alternative to being derived from express agreement; (2) there had been a partnership by estoppel; (3) he should be provided with an opportunity to amend pleadings to raise a different case in support of partnership.

Held

(1) An inference of an implied agreement for a partnership might be legitimate if V and G had not addressed in express terms what the basis of their business co-operation should be. However if, as in the instant case, they had addressed the subject expressly, including discussing whether there should be a partnership, but had not reached any agreement because one party declined to agree to the proposal of partnership made by the other, then the suggested inference would contradict the express dealings and discussions between the parties, Blackpool and Fylde Aero Club v Blackpool BC (1990) 1 WLR 1195 and Phillips v Symes (Stay of Proceedings) (2002) 1 WLR 853 considered. The judge had examined what V and G had said and done, and had been entitled to conclude that they had not intended to agree upon a partnership. Given the domestic relationship between them and the dealings between them before the date on which, G claimed, a partnership had been agreed, there could be several different legal analyses and explanations for their dealings in relation to the equine business. (2) Partnership by estoppel was not a true alternative basis for a claim that G and V had carried on business in partnership together. In the absence of the actual but inconclusive discussions, the holding out would be strong evidence in support of an implied agreement, but given the discussions between G and V, holding out was irrelevant to the issue of partnership. There was no pleaded case of a representation by V to G, relied on by G to his detriment, that there would be a partnership between them. (3) It was not necessary or appropriate for the judge to consider any other basis on which a partnership might be proved. It would be wholly inconsistent with the basis upon which the matter had proceeded for G, having lost on the facts of the one case actually advanced, to be allowed a second chance.

Appeal dismissed