Alexander Isaac Hamilton v Mark Colin Barrow & Ors

A partnership exists where persons carry on a business in common with a view of profit under the Partnership Act 1890, s 1(1). The inquiry is objective and evaluative. Labels, separate sections, separate accounts, flexible commission arrangements and the absence of profit sharing are not conclusive. The court must assess the whole relationship and whether mutual rights and obligations show a common business. Inadequate paperwork does not confine the evidence to direct dealings between the putative partners. On appeal, factual and evaluative findings stand unless plainly wrong, infected by legal error or rationally insupportable.

The claimant invested substantial sums in the Currency Club and alleged that he had been induced by fraudulent misrepresentations. At trial, May J found that the Club Leaders carried on a partnership, that all three defendants were partners, and that Mr Welsh’s misrepresentations bound Mr and Mrs Barrow. Judgment was entered jointly and severally for £566,053.54 plus interest: [2023] EWHC 1743 (KB).

Mr and Mrs Barrow appealed on grounds concerning the existence of a partnership and whether Mrs Barrow was a partner. The central issues were whether the Currency Club operated as one business or as separate businesses, and whether the trial judge’s evaluative findings disclosed an appealable error.

Appeal dismissed. Falk LJ gave the leading judgment, with Birss LJ and Elisabeth Laing LJ agreeing. The application to adduce new evidence did not require determination.

1. Under the Partnership Act 1890, s 1(1), the existence of a partnership is principally an objective and evaluative application of the statutory test to the facts. The essential question was whether the Club Leaders carried on a business in common with a view of profit. Labels and descriptions were relevant but not determinative. No formalities or fixed checklist applied, and profit sharing was not an essential prerequisite. The court could properly consider mutual confidence, mutual obligations and the fiduciary nature of the relationship, as discussed in Worbey v Campbell [2017] CSIH 49 and Whywait Pty Ltd v Davison [1997] 1 Qd. R. 225.
2. The appellate court’s restraint applied to primary facts, evaluations and inferences. Under Volpi v Volpi [2022] EWCA Civ 464, Fage UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5 and Walter Lilly & Co. Ltd v Clin [2021] EWCA Civ 136, intervention required a plainly wrong or rationally insupportable conclusion, an identifiable error of law, a fundamental misunderstanding of the issue or evidence, or a finding outside the bounds of reasonable disagreement.
3. The trial judge was entitled to draw inferences from all the evidence, including conduct and evidence beyond direct dealings between the putative partners. The lack of paperwork justified caution about the defendants’ account. The shared banking arrangements, common dealings with Mr Arkian, coordinated communications, collective decision-making, mutual restrictions, commission arrangements and interdependence of success and failure supported the conclusion that the sections were administrative divisions of one business. Separate websites, accounts and flexibility over commission rates did not displace that conclusion. Arora v Moshiri [2021] EWHC 2230 (Ch) was distinguishable because it concerned parties carrying on different kinds of business independently.
4. Mrs Barrow was properly found to be a partner. The evidence included joint marketing and correspondence, use of the term we, participation in critical decisions, her important role in IIMM Ltd, and representations that she was Mr Barrow’s equal partner. Her role could not be characterised merely as administrative support.

• Court of Appeal (Civil Division): Mr and Mrs Barrow’s appeal was dismissed. Mr Welsh’s application for permission to appeal had been refused. [2024] EWCA Civ 888.
• High Court of Justice, King’s Bench Division: May J found that the Currency Club was a partnership, that all three defendants were partners, and that the defendants were jointly and severally liable for £566,053.54 plus interest. [2023] EWHC 1743 (KB).