You are on page 1of 7

Company 2

Property in a partnership biz
 Belong to the firm
I.e. by partners as partners
 Belong to the partner as individual.
- By an agreement the property is allowed to be used for partnership business.
Partnership Property
 Any property belonging to the partnership and all the partners are entitled to it
and can deal with it in the performance of the partnership business.
Section 22 (1) – Eistence o! PP
 Originally brought into the partnership stock, i.e. brought as the capital.
 Acquired by purchase or otherwise on the firms account.
 Acquired by purchase or otherwise for the purpose and in the course of
partnership business.
Section 22 (1) – Nat"re o! a partner#s interest in the property
 !hould be held for partnership purposes and in accordance with the
partnership agreement.
Miles v Clark
$act# % and & ' partners ' photographers. Both contributed to the stock in
trade. (he leasehold premises, furniture and studio equipment belonged to
the &. (hey intended to enter into an agreement to treat the above as %% but
)pon dissolution, what is %%*
Miles v Clarke
+eld# ,o terms ought to be implied e-pect those essential to the business
efficacy. (herefore only the consumable item of stock in trade was to be
regarded as %%.
N.B. Menon v Abdullah Kutty
$act# . and / were partners running a restaurant in .elantan. . was the
tenant living in 0ohore and / managed the restaurant. 1ater there was
Issue# 2ho was the tenant . or %artnership*
+eld# . had not assigned the tenancy to the partnership. (he tenancy was a
personal asset. ,ot %%.
Company 2
Tan Kiaw & Gian Singh v Nahar
+eld# (he tenancy was granted to the partners and not to the partnership.
(hus tenancy was not %%.
In tenancy though the premise is used to carry on the partnership business it
is not necessarily be considered as %%.
Malaya Caf Bar & !estaurant
+eld# (he tenancy belonged to the partnership.
(he facts of the case showed that the partner through out the period had
regarded the premise to be inseparable from his business and he had
accordingly treated his tenancy as partnership asset after he formed the
"onnukon v #ebaratna$
$act# App formed a partnership to develop a land. (he partnership failed to
obtain bank loan to buy the land. 1ater the 4espondent 5partner6 bought the
land with his own money. (he App sought a declaration that the land was
held in trust for the partnership.
+eld# (he 4espondent paid the land and it was clearly his separate property.
(he fact that the ob7ect of partnership was land development did not
necessarily mean that the firm must own the land. $urthermore there was no
agreement between the partners that the land was to be purchased 8 treated
as %%.
Tay Guan %o
$act# %rop. Bought in a partners name. (reated it as his own 8 transferred
to App. 4espondent 5partner6 claimed that App hold it in trust for the benefit
of all partners.
+eld# ,ot %%. the deceased partner had treated the property as his own from
the very beginning.
Sec 22 (2) – S"bse$"ent %an& bo"'ht "sin' Partnership (oney
2here partners are co-owners of a land, which is not %%, but share the profits from
the land as partners 8 later bought other land using the shared profits and used in the
same manner.
(he presumption is that the subsequent land is not %%.
 By analogy this also applies to improvement on land done out of profit.
 "ase# &avis v &avis
$act# A father left freehold business premises to his son. (he sons
carried on business 8 borrowed money by mortgaging the premises
and used it to e-pand the workshop.
+eld# (here was a partnership in the business, but not the premises.
,orth 0# 5applying !ec99 5966
(he improvement remained outside the partnership, there was no
evidence that the parties had such an intention.
Company 2
 +owever if the land heavily involved with the partnership business it is
regarded as %%.
 "ases# 'aterer v 'aterer
$act# A man carried on nursery business on a land. &evised all his
property to his three sons. After his death, the sons continued the
business and bought some more land for the purpose of the business
and paid it out of the fathers estate. 1ater one of the sons died.
Issue# 2hether the land %%.
+eld# All the land 5left by the will 8 later purchased6-%%
0ames 10# (he property was so intimately mingled with the business
that it became an integral part of the partnership business activity.
#a(kson v #a(kson
$act# A man devised to his two sons 7ointly his trading business and
land used by him for the purpose of carrying the business. (he sons
took the business and carried it in partnership.
+eld# (he lands form part of %%.
A trading business was left to them and the land was necessary for that
Section 2)
 2here the prop was bought with the firms money then the property is
deemed to be %%, although in the name of a partner.
 "ases# "onnukon v #ebaratna$
#ones v #ones
$act# (he partnership bought a shop out of partnership profit to be used
for the business.
+eld# !ince the property 5shop6 had been acquired out of partnership
profits and used for partnership business, it was %%.
'ray v 'ray
$act# (he partnership was carried on in the name 2illiam 2ray 5one
of the partners6. 1ater the partners bought few properties paid out of
the partnership assets. (he property was conveyed to 22.
Issue# (he identity of 22, firm or individual.
+eld# %%. it was conveyed to the partnership.
Section 2*(1) proce&"re a'ainst partnership property
 A writ of e-ecution against %% will only be applicable when the 7udgement has
been made against the firm.
 "ase# "eake v Carter
$act# %8B-partners bought some property, which include machinery. %.
" obtained 7udgment against B in respect of a debt paid the purchase
Company 2
price of the machinery. (he !heriff sei;ed the machinery to satisfy the
7udgment. % claimed it was his.
+eld# <ven if % failed to prove that the machinery was his, e-ecution
could not be issued against the machinery e-cept on a 7udgment
against the firm.

Sec 2*(2)+ persona% &ebt o! a partner
A private creditor may apply for court order#
36 (o charge that partners in the %%
96 Appoint a receiver for that partners share of profits
:6 (o direct all account and inquiries
Option for other partners
 !ec 9=5:6
 !ec :=596
Company 2
 4etirement from partnership at will
 /ethods of dissolution
Retire(ent !ro( partnership at /i%%+ Sec 20
!ec 9?536 ' ,o fi-ed term for the duration of partnership
- A partner may determine by notice
!ec 9?596 ' ,otice should be in writing@ signed
Partnership at /i%% or not – a (atter o! constr"ction
Abbot v Abbot
%artnership clause provides AIf any partner shallBdo or suffer any act which could be
a ground for dissolution of the partnership by court, he shall be considered to have
A partner gave notice of dissolution claiming that it was partnership at would.
+eld# (he partnership was not a partnership at will but one to continue unless
dissolves by court or some other event.
Other cases# Moss v )l*hi(k
Sukinder+it Singh Muker
Sec 21
!ec 9C536 ' continued after the fi-ed term without any new terms, old terms apply and
it is now partnership at will.
!ec 9C596 ' there is continuance of partnership if partners continue business without
any settlement or liquidation of the partnership affairs.
2etho&s o! ,isso%"tion
Deneral rule#
&issolution can be in any manner and for any reason as stated in the partnership
,isso%"tion by A'ree(ent
Clifford v Ti$$s
$act# AIf the partnerBguilty of professional misconduct the other partyBgive notice
to dissolveB 4espondent gave notice to dissolve on the ground of professional
+eld# notice valid in accordance with the deed.
#.M.M. ,ewis v '.) Balasingha$
+eld# ,otice of dissolution would be ineffective since there was in e-istence an
agreement, which had provided the means of terminating the partnership.
Company 2
,isso%"tion – Sec )3
 A partnership entered for a fi-ed period or for a single adventure it would be
dissolved by the e-piration of that period or adventure.
 If undefined time ' by notice.
Notice to ,isso%4e
 "ommunicated to all partners
 ,otice once given cannot be withdrawn, unless there is consent from all
 ,otice may be prospective.
- "ase# M(,eod v &owling
 ,otice should be well informed to others.
- "ases# - Tan Boon Cheo
- !e Cho* .ew Sing
,isso%"tion – Sec )*(1)
 &eath will dissolve a partnership, unless otherwise provided by the
- "ase# ,ee Choo .a$ %oldings Sdn Bhd
+eld# ,o evidence either oral or on writing that the partnership should
be continued thus death of a partner dissolve the partnership.
 2hen a partner was declared bankrupt, the partnership will be dissolved
,isso%"tion – Sec )*(2)
 If a partners share in the partnership property has been charged by a court
order for his separate debts, the other partners have the option to dissolve the
,isso%"tion – Sec )5
 A partnership would be dissolved upon the happening of an event that makes
it unlawful to carry on the business.
- "ase# %udgell .eates & Co v 'atson
+eld# %artnership was automatically dissolved as the practising
certificate of a solicitor lapsed.
,isso%"tion by the co"rt – Sec )6
a. Insanity
#ones v Noy
Company 2
A(he insanity of a partner is a ground for the dissolution of a partnership
because it is immediate incapacity but it may not be a ground for dissolution
for a partner who may recover from his malady.
b. %ermanently incapable
'hitwell v Arthur
$act# A partner had a paralytic attack. Other partners sought for the dissolution
of the partnership.
+eld# /edical evidence showed that the &s health was improving '
dissolution not granted.
c. %re7udicial "onduct
- /eans a partner had committed serious misconduct that pre7udicially affects
the firms business.
- "ases# - Car$i(hael v )van
$act# %artnership clause Fmay dissolveBguilty of any flagrant
+eld# (here was a breach, application for dissolution rendered.
- Clifford v Ti$$s
d. 2ilful and persistent breach
"over two situations#
I. Intentionally breach the terms of partnership agreement or statutory
II. )nintentional conduct which make the carrying on of the business
e. Business was at a loss
#ennings v Baddeley
A2here certain loss is the only result of going on, ant partner is entitled to
have the concern dissolved
%andyside v Ca$*bell
+eld# &issolution not granted, loss due to temporary circumstances.
f. 0ust and equitable
- Dive court a wide discretion
- "ases# - !e .enidge Toba((o ltd
- )brahi$i v 'estbourne galleries ,td
,isso%"tion by or&er o! arbitrator
A partnership may be dissolved by an order of an arbitrator if there is such provision
if there is such provision in the partnership agreement.