PARTNERSHIP CASES

1. TAN ENG CHOONG V FOO KAI YUEN

The mutual rights and duties of the partners may be set out in a partnership agreement or
deed and if not are as provided in part IV of the Partnership Act 1961 ……. The scheme of
the partnership Act in general and the terms of part IV thereof in particular make it clear that
the provisions of the Contracts Act 1950 have application in a partnership agreement

2. ALAGAPPA CHETTIAR V COLISEUM CAFÉ

The appellant is the owner of premises known as No 102 Batu Road and the respondent is a
firm of partners carrying on business of a cafe and hotel in Nos 98, 100 and 102 Batu Road.
The present appellant brought an action in the Sessions Court for recovery of possession of
his premises No 102 and for mesne profits. The learned President was of the opinion that the
defendant firm though registered as a business had not the power to become tenants as so
constituted and he gave judgment for the appellant. The respondent appealed to the High
Court and Hashim J allowed the appeal. From this decision the appellant appealed to the
Court of Appeal. A preliminary point was raised by counsel for the respondent that as “the
amount or value of the subject matter at the trial is less than five hundred dollars” there was
no right of appeal unless leave was obtained from the High Court or from the Court of
Appeal.

The only other point raised was that it was suggested that since a partnership firm is not a
legal entity in law, the firm cannot hold a tenancy. – rejecting the opinion of the trial court
that the partnership known as Coliseum Café, although registered as a business, had no power
to become tenants as so constituted, his Lordship went on to say that ‘a single individual can
be a tenant, and equally can eight partners be joint tenant’. ‘Coliseum Café or Hotel, as such
is not a legal persona, but a label used by a number of individuals trading in partnership under
one name.

Held:

(1) the profits claimed must be taken into account in determining whether the amount or
value of the subject matter was more or less than $500;

(2) in this case the respondent had not made out the allegation on which his preliminary
objection rested;
(3) the letting in this case created the relationship of landlord on the one hand and the
partners on the other, and though there had been a change of partners over the years,
members of each new partnership arising from each change by virtue of s 206(g) and (j) of
the Contracts (Malay States) Ordinance, 1950, had continued de jure to assume obligations
and enjoy benefits of the tenancy. This followed from the fact that when the tenancy
agreement was made no reliance was placed upon the “personnel of the Partners

3. KEITH SPICER LTD V MANSELL

M and B lost their jobs. They agreed to go into business together and for a limited company
to run a restaurant. While they were forming the company and before it had received its
certificate of incorporation from the registrar, B ordered some goods from Specier’s for the
business. They also opened a bank account in the name of the company. The company was
eventually formed but not bound by the contract which B had made because it was not in
existence at the time.
B went bankrupt before Spicer’s had been paid. So rather than prove in a bankrupt, Spicer
sued M on the basis that he was a partner of B. Held. B and M were not partners. They were
not carrying business together in partnership. They were preparing to carry on a business as a
company as soon as they could

4. WONG PENG YUEN V SENANYAKE

The defendant and G were partners of a firm of stock and share brokers. On March 26, 1959
they executed a partnership deed by which G transferred $14,000 worth of shares from the
capital of the firm to each of his two infants’ children. On April 3, 1959 the partners executed
a partnership agreement where T became a partner of the firm. On April 30, 1959 the plaintiff
paid to the defendant the sum of $20,000 in consideration that he be made one of the partners
of the firm. The firm incurred losses and a notice was given for dissolution of the firm. The
plaintiff in order to avoid

Held – T’s consent was given subsequent to April 30,1959 and further consent of the two
infant children were not necessary

5. TAN TECK HEE V CHENG TIAN PENG

Carrying business with 25 members was not a valid partnership. Cannot take legal action.
The court declared that a firm with 25 members could not take legal action in court, as it was
not a valid partnership.
 6. TAN CHING CHEANG V ESTATE & TRUST AGENCIES LTD

The original membership of more than 20 was trimmed down before beginning a legal action.
The court still did not recognize it as partnership. The fact that originally it was not valid still
remained.

7. SMITH V ANDERSON

Court held that “carrying on a business” means to do an act repeatedly, if an association

carried out a single act that is not repeated even though it obtains profit, it’s not considered as
a business.

8. MALAYANDI CHETTY V NARAYANEN CHETTY

It was held that a business of moneylending by the chettiar was a business.

9. RATNA AMMAL & ANOR V TAN CHOW SOO

The parties entered into a formal agreement to form a so-called “syndicate” to sell condensed
milk. In an action to determine whether the property rights in a trade mark vested in the
syndicate or one of its individual members, the issue arose as to whether or not the
relationship created by the agreement was a partnership or some other form of business
association.

The Federal Court held – that since the parties had not expressly negative the creation of a
partnership, the relationship between the parties was a partnership within the meaning of s.
3(1) of what is now the Partnership Act.

10. FRENCH V STYRING

A and B being joint tenants of a race horse, it was agreed between them that A should keep
and train and have the general management of the horse, conveying him to and entering him
for the different races; that the expenses of keep should be borne jointly, and the horse's
winnings be equally divided between them. Held, that even if this agreement constituted a
partnership in the management of the horse, a question on which the Court was divided in
opinion, nevertheless A could sue B for a moiety of advances made by A on account of the
keep of the horse as being in the nature of an advance of capital for B.
 11. CHOOI SIEW CHEONG V LUCKY HEIGHT DEVELOPMENT SDN BHD

The Federal Court held that, there was no partnership resulting from a joint venture
agreement between a landowner and a housing developer because each party to the
agreement intended a wholly separate business, there was no business in common with a
view of a profit. Chooi Siew Cheong v Lucky Height Development Sdn Bhd was referred to
by the Court of Appeal in Sinnathamby a/l Klondakoundan v Brijkishore a/l
Shuparshad[1997] 4 AMR 4004.

In this case, there was no joint venture or partnership agreement, only an agreement to build
a hotel on a piece of land which the parties were intended to buy for this purpose. The Court
of Appeal accepted that there were no documentary evidences to establish the existences of a
partnership

12. LYONS V KNOWLES

Payment to the manager is referred as salary. Cinema’s owner and manager that shared gross
return will not regard as partners.

13. DRY V BOSWELL

Ship owner rented his ship to B. The court held that whatever amount paid to the ship owner
will the ship rental and also salary for any work done by B.

14. MURRAY V DAVID

P had entered 3 different transaction with D. After considering the 3 transaction, the court
found that there was no agreement to share profit in respect of first and second transaction.
The sharing of profits existed however in the third transaction. Thus, the court held that the P
were partners with D in respect of third transaction only.

15. BADELEY V CONSOLIDATED BANK

C got a loan from B to enable C to build a railway transportation. C assigns rights on the
equipment and machinery and charges to B. in the agreement, C agreed to pay 10% interest
on the amount so advance and 10% on the net profit made out of the business. B later claim
the partnership profit to be divided equally as B had been receiving profit from the
partnership. B claims as partners to the partnership. The court decided that the loan given by
B to C had been secured in the form of a charge even though B received an amount of profit
from C, it did not make B partners to C.

16. WALKER V HIRSH

P was a former clerk in a firm. P agreed to lend 1500 pound to the firm, on the term that
repayment would be in the salary of 1800 pound and 1/8 out of the net profit. The court held
that, p was not a partner to the firm even though the salary was made out of the profit of the
partnership business.

17. IRC V LEBUS’S TRUSTEES

A deceased partner bequest his shares to his widow. Due to financial difficulties, the firm
couldn’t pay the widow’s entitlement. The IRC tax the revenue acquired by the widow. The
widow claim, the partnership assets to be delivered to her because the firm had failed to pay
the annuity. The court decided that the partnership asset doesn’t belong to the widow. She
was entitled on the annuity out of the partnership profit only. The payment of annuity did not
make the widow partners to the firm.

18. RE YOUNG

There is a written agreement between A and B. A lend money to B and A to receive

repayment out of the partnership profit weekly. In the agreement, A was also given the option
to become B’s partner. B however did not exercise the option, business was carried out in B’s
name despite A controlling the business. B was declared a bankrupt, thus A claim for the
partnership money to be equally divided. Court held that A not a partner, but only receiving a
part of profit.

19. PRATT V STRICK (owner of goodwill)

The vendor will remain to stay on the premises for 3 months. He would also introduce the
customers to the purchaser. They also agreed to share any profit and expenses within the 3
months period. The court held that the vendor and the purchaser not a partner even though
they had agreed to share profits.

20. OSMAN HJ MOHAMED USOP V CHAN KANG SWI

3 Malays and 3 Chinese in this partnership. 3 Malay partners are sleeping partners. 3 Chinese
partners entered loan. Chan is the guarantor of the debt. 3 partners failed to pay the loan. The
creditor sues the partners and the guarantor. The guarantor settled the debt but claim. 5 of
them agreed to pay except Osman. The court held that, 6 are liable to pay but Osman
appealed. The loan had been within the scope of authority.

21. SITAMBARAM CHETTY V HONG HIN & ORS

The case involved loan. 2 of the partners live in Singapore. The business run by another 2
persons. These 2 persons never disclosed that there were actually 2 partners and they were
only managing the firm. One of the managers borrowed money and disappeared. The creditor
against another partner. The court held that these two managers acting within the apparent
authority. The other partners also liable.

22. RE BRIGGS & CO

A father and a son were partners in a firm. The firm was in financial difficulties. They were
being pressed by the creditors and they have no money to pay back the creditors. They
assigned books debts to the creditors. The son later dealt with this without informing the
other partner, his father. Later, their firm was declared as bankrupt and the trustees sought to
set aside the agreement stating that it was executed by the individual. Court held that
agreement was binding because it was an instrument relating to the business of the firm and
there was some intention to bind the firm

23. KENDALL V HAMILTON

An undisclosed partner had only been identified after a claim of debt repayment have been
made against the other partner. The creditor however failed to recover the whole debt. The
court held that since the debt was a joint one, the suing of the apparent partners by the
creditor would prevent the creditor from commencing fresh proceeding against the other
partner.

24. HAMLYN V HOUSTON

A partner in the defendant’s firm bribes a deck in arrival firm for the purpose of obtaining
private and confidential info relating to legal matters. The rival firm had suffered losses
because of the particular info. Rival firm sued D. Court held that liable because it was made
for the purpose of business although act was done by one of the partners.

25. BLAIR V BROMLEY

Money was paid into the firm’s account to be invested. One of the partners misused the
money. All partners were held liable because it was within the firm’s business to accept
money for investment.

26. EX PARTE HEATON

A partnership consists of a father and son. The son is trustee of a will. They had been using
the trust money for the business of the firm. When firm was declared bankrupt, an action was
taken to the father. Court held that father not liable because father was not the trustee even
though money was used for the purpose of business of the firm.

27. TOWER CABINET CO LTD V INGRAM

Partnership dissolved 1984. A new notepaper carries an Ingram name without his knowledge
has been established. Judgement made on the new firm and it was executed against Ingram.
The court held that he had not knowingly suffered himself to be represented as a partner. The
company did not know Ingram as a partner before dissolution. Ingram not liable for debt
contracted after that date.

28. COURT V BERLIN

The firm consisted of Berlin, the sole active partner and 2 domain partners. The 2 domain
partners retired. After the proceedings recover of the debt completed, the solicitor sued Berlin
for the cause. The domain partner claim that they only liable for cause incurred up to the date
of retired. The court held that they were fully liable.

29. LAW V LAW

W and J were partners in woollen manufacturers business in UK. W lived in London and took
little part in running of business. J bought W share for 21000 pounds. W discovered that the
business was consider more and they were varying asset not been disclosed. The court held
that the principle in this would allow W to set aside the contract.

30. PATHIRANA V PATHIRANA

R and A are partners in a service station. The station belongs to the Caltex that appoint them
as agents. R gave 3 months’ notice to end the partnership. Whereby during that period, he
obtains a new agreement with Caltex transferring the agency into his name alone. R continues
to trade in the same premises under his name. A later applied for a share of profit from that
business by invoking the same equivalent section 1961. The court held that the agency
agreement was partnership contract and unauthorised use of it a clear breach of fiduciary
duty.

31. AAS V BENTHAM

It was held that a shipping broking business is not the same nature that ship building.

32. STEWARD V FORBER

The court held that the provision on equal share of profit not applicable since there was an
agreement among the partners to divide the profit according to the amount of capital
contribution.

33. ONG KENG HUAT V HONG KONG UNITED CORPORATIONS.

The partners were managing cinemas. The appellants were a managing partners with
administrative and control authority. The partnership agreement provided that the appellant
will manage the cinemas and insure all the tools and equipment in the cinemas. A fire broke
out and there were disputes among them as partnership was dissolved. The court held that
appellant and respondents liable because no fraudulence.

34. KILGARIF V MORRIS

The court held that partner carried on a separate business as a money lender on his own
account and who advance money to the business as a partnership business was not a lender
with a regard to the transaction.

35. RISHTON V GRISSEL

The court decides where a principal in a business is not entitled to a capital gain as long as
the employee's salary or his agent is not determined. Each partner is also entitled to
participate in the management of the partnership business. is limited or eliminated with the
consent of other partners.

36. TAM KOK CHEONG & ORS V LOW PUI HENG

The conduct of the other three partners in selling the firm to the limited company must be
considered as showing their intention to dissolve the partnership. The date that the fourth
partner knew of the sale is the date when the dissolution takes effect. The court held that it
amounts to termination of business.

37. KRISHINCHAND BAHJWANI & ANOR V SUNIL BAJJWANI & ANOR

38. JONES V NOY

A person would be considered incapable of managing his property and a-airs where he suffers
from a medical disorder such as a mental illness, arrested or incomplete disorder of the mind,
psychopathic disorder and any other disorder or disability of the mind.

39. WHITWELL V ARTHUR

The partners of a firm of pharmacists applied to the court to dissolve the partnership on the
grounds of permanent incapacity of their partner who had suffered a stroke that had led him
paralyzed, leaving him unable to perform his duties in the business. Held: Dissolution was
not allowed at the time the application was made as there was evidence that the sick partner’s
condition was improving.

40. CHARMICHAEL V EVANS

Carmichael and Evans were partners. Carmichael was convicted of travelling on a train
without a ticket with the intention to defraud and so Evans applied to have
the partnership dissolved based on this. Held: As honesty was an important element in a
business, Carmichael’s conviction for dishonesty was considered to be detrimental
to the partnership business.

41. CHEESEMAN V PRICE

A partner persistently made mistakes in book keeping and did not keep a regular record of the
money he had received from their customers. Held: Such behaviour can allow the partnership
to be dissolved.

42. JENNINGS V BADDELEY

Partners in mining venture had contributed and exhausted all the capital they were obliged to
contribute under terms of agreement. They had failed to make profit. There was evidence that
profit would probably be made in future, if more capital were to be provided but court
ordered dissolution of partnership. F. 37 (F) THE DISSOLUTION BEING JUST AND
EQUITABLE 1. Provision : The court will grant a decree of dissolution where circumstances
have arisen which, in the opinion of the court, render it just and equitable that the partnership
be dissolved

43. EBRAHIMI V WESTBOURNE GALLERIES LTD

A private company was incorporated to take over the partnership of E and N. both held 500
shares in the company and shared the profit on an equal basis. N’s son joined the company. N
and E transferred 100 shares each to N’s son. N and his son passed a resolution to remove E
as a director of the company. E petitioned for the company to be wound up. The court held
that the majority shareholders should have acted in a way which was consistent with the
understanding of the shareholder at the time the company was incorporated. The majority
shareholders did E a wrong when they removed him from the position of directors.

44. RE YENIDJE TOBACCO CO LTD

Although the partnership’s business was thriving, the relationship of the partners had come to
a standstill. They only communicated through the secretary of the firm. Held: The dissolution
of the firm was ordered on just and equitable grounds

45. Although the

partnership’s business was
thriving, the relaonship
of
46. the partners had come
to a standsll. They only
communicated through the
secretary of the rm.
47. Held: The dissoluon of
the rm was ordered on
just and equitable grounds