BARNES v YOUNGS [1898] 1 Ch 414 PRINCIPLE y S.27 expulsion of partners duty.

FACTS P and D were partners, carried on business together as iron and brass founders. D served a notice to P to determine the partnership on the ground that P had breach the clause 31 of the article of partnership by being guilty of notorious immorality, which immorality is detrimental to the partnership business (P living with a woman who was not his wife). Then, P commenced an action against D by claiming the notice was not effective and injunction to restrain the defendant from publishing a notice of dissolution and to restrain the D from excluding P from the partnership premises. Clause 31 of article of partnership provided that if an of the partners should during the continuance of the partnership be guilty of immorality or other scandalous conduct detrimental to the partnership business, ten the other partners might, by notice given to him, determine the partnership and publish a notice of dissolution of the partnership. In addition, it provides that if such case happened, it shall be referred to arbitration. ISSUE Whether the notice of expulsion served by D is valid PLAINTIFF S CONTENTION The notice of expulsion is bad because no particular was given and it is for the court to decide and no for arbitrator. A power to expel cannot be acted upon until the accused partner has had an opportunity of explaining his conduct. DEFENDANT S CONTENTION The dispute arose was within the jurisdiction of arbitration in accordance article of partnership, not the court. JUDGMENT by Romer J y The court has discretionary power to hear the case and the court is more fit to decide the case than an arbitrator. y A power to expel must be exercised with the utmost good faith. The person who exercises the power to expel should peremptorily exclude a co-partner, give a preliminary warning to him and advertise that co-partner s exclusion, give him an opportunity of knowing what the cause of complaint before they serve the notice, so that he may have an opportunity of explaining he cause of action. y The court decided that the notice of expulsion never yet been formulated or accurately stated by the D. Aisyah alui the expulsion is done in good faith and in accordance with fiduciary