Law of Business Organisations
Was there dissolution of Smiths? 2. There was clearly no dissolution. The agreement provided that the partnership may only be terminated “by mutual agreement”. Hence, Morrissey’s unilateral action (resignation) is insufficient to dissolve the partnership: Moss v Elphick. Section 26 of the Partnership Act (“PA”) is applicable only when the partnership was silent on the duration of the partnership. In this instance, the agreement was for the partnership to enure for the joint lives of the parties (unless terminated by mutual agreement). Section 32(1) (c) is also inapplicable since the parties had indicated that the partnership was to be determined by “mutual agreement”, hence subjecting it to a contrary intention. Thus there was no dissolution of the partnership
3. However, should dissolution be ordered, Morrissey would be prima facie entitled to 1/3 of the capital in accordance with s 24.1 of the PA. However the court in Popat v Shonchhatra held that:
The slightest indication of an implied agreement between the partners that their shares of capital should correspond with their contributions to it will suffice to displace the provision that they are entitled to share equally.
4. Hence, Morrissey would most likely be awarded 1/5 of the capital as the provision was displaced by the understanding that Morrissey was to have a 1/5 share of the business should dissolution be ordered.
Did Morrissey have authority to bind firm, making Smiths liable for losses caused by the power outage at Manchester Meat(“MM”) and damage to the air-conditioning?
Actual Authority 5. Actual authority may be expressed or implied.
Express Authority 6. There is no express authority. The other Smiths partners did not tell Morrissey in unambiguous words to service MM’s air-conditioners and blower units.
Implied Authority 7. It is arguable that there is implied authority. 8. Fixing of air-conditioning and blower units may be considered to be incidental
3. However, should dissolution be ordered, Morrissey would be prima facie entitled to 1/3 of the capital in accordance with s 24.1 of the PA. However the court in Popat v Shonchhatra held that:
The slightest indication of an implied agreement between the partners that their shares of capital should correspond with their contributions to it will suffice to displace the provision that they are entitled to share equally.
4. Hence, Morrissey would most likely be awarded 1/5 of the capital as the provision was displaced by the understanding that Morrissey was to have a 1/5 share of the business should dissolution be ordered.
Did Morrissey have authority to bind firm, making Smiths liable for losses caused by the power outage at Manchester Meat(“MM”) and damage to the air-conditioning?
Actual Authority 5. Actual authority may be expressed or implied.
Express Authority 6. There is no express authority. The other Smiths partners did not tell Morrissey in unambiguous words to service MM’s air-conditioners and blower units.
Implied Authority 7. It is arguable that there is implied authority. 8. Fixing of air-conditioning and blower units may be considered to be incidental