Boyle v Burke & Anor

A partnership is dissolved only through a legally recognised ground, including agreement between all partners. Agreement may be inferred objectively from the partners’ conduct, but the court cannot impute an agreement which conflicts with their actual intention. Mere cessation or transfer of the partnership business is insufficient. A partnership may continue in existence while carrying on a much reduced business, including exploiting an asset for profit. A contractual provision triggered by final dissolution therefore requires actual dissolution of the partnership itself, followed by winding up.

The claimant was a retired partner entitled to a pension under a 1987 partnership deed. He claimed that the partnership had finally dissolved when its business was transferred to Bells Solicitors Limited on 1 October 2012, thereby converting his future pension entitlement into a lump-sum loan under clause 2.43.

The defendants intended to preserve the partnership. They retained the head lease of the partnership premises and subsequently sublet it to the company. The central issue was whether the transfer amounted in law to a final dissolution.

1. Clause 2.43 required an actual final, or general, dissolution of the partnership followed by winding up. “Termination” did not mean termination of the solicitors’ practice or of a particular business.
2. Under the Partnership Act 1890, dissolution ends the partnership relationship and is followed by winding up. Mutual agreement may be express or inferred from conduct, but cannot be imputed contrary to the partners’ actual intention.
3. The transfer of the business and assets to Bells Solicitors Limited did not establish an agreement to dissolve. The defendants’ unchallenged evidence showed that they specifically intended the partnership to continue.
4. The retained head lease and its profitable subletting constituted a continuing business. Mere cessation or substantial reduction of trading did not dissolve the existing partnership.
5. There was no dissolution on 1 October 2012. Clause 2.43 was not triggered and the claim was dismissed. Costs and consequential matters were reserved.