It's In The Partnership Accounts But Is It Partnership Property?

The recent High Court judgment in Wild v Wild [2018] EWHC 2197 (Ch) confirms that one partner cannot unilaterally cause property to become a partnership asset without the prior agreement or subsequent acceptance of the other partners.

The claimant, Gregory, claimed that a farmhouse and bungalow belonging to his late father were assets of an unwritten partnership agreement and therefore subject to the partnership's dissolution proceedings following the breakdown of the relationship between the two remaining partners; himself, and his brother Malcolm. The three defendants, Malcolm, his wife and his mother (the Deceased's widow), submitted that these buildings did not constitute partnership property and should pass in accordance with the Deceased's Will to Malcolm's mother.

Malcolm's mother had resided in the farmhouse with the Deceased throughout his lifetime, and continued to live there following his death. Malcolm and his wife occupied the bungalow. In the alternative, they argued that, even if the bungalow was deemed to be partnership property, then they still held the beneficial interest in the bungalow arising through proprietary estoppel because of the substantial amounts they had spent on renovations to the bungalow, based on representations made by the deceased during his lifetime that it would eventually pass to them.

A key difficulty in this case was the lack of formal documentation. The Judge held that a vague reference on the balance sheet of the partnership accounts to 'property' was indeed a reference to the...