Peter Glenn & Anor v Adam Walker & Ors

A business deliberately conducted through companies will not ordinarily also constitute an overarching partnership. The court must identify the parties’ substantive agreement objectively and determine which entity carried on the business. Evidence that parties used the words “partner” or “partnership” is relevant but not decisive.

A joint venture gives rise to fiduciary duties only where the alleged fiduciary accepted responsibility for exercising judgment and making discretionary decisions on behalf of another, rather than merely enjoying trust and confidence. Any such fiduciary relationship ends when the underlying relationship ends, subject to continuing liability for past breaches and opportunities acquired before termination.

The claimants alleged that they and the first and second defendants had operated an overarching partnership or fiduciary joint venture concerning renewable-energy businesses and companies, and that the defendants had excluded them, diverted opportunities and breached fiduciary duties.

The claimants also advanced an unlawful means conspiracy claim and a derivative claim on behalf of Fifty Asset Management Ltd alleging breaches of statutory directors’ duties. The defendants denied any overarching partnership or fiduciary joint venture and relied on the corporate structure through which the business had been conducted. The central issues were whether fiduciary duties were owed personally, whether the defendants had acted unlawfully, and whether the derivative claim was made out.

1. Partnership. The claim was dismissed, subject to a possible declaration concerning the validity of a meeting to remove the claimants as directors of Fifty Asset Management Ltd. Partnership is a question of fact requiring a substantive agreement, express or implied, to carry on business together with a view to profit. Where business is deliberately structured through companies, a claimant seeking to establish an additional partnership must normally show business carried on over and above that of the companies.
2. The court found no overarching partnership. Fifty Investment Development Ltd had been incorporated at an early stage and used as an overarching corporate vehicle. The later businesses were conducted through the relevant companies, liabilities were assumed by those companies, profits were obtained through shareholdings, loan notes and dividends, and no partnership accounts were prepared. The use of “partner” and “partnership” was insufficient to outweigh those factors.
3. Fiduciary joint venture. Trust and confidence alone did not establish fiduciary duties. Such duties required acceptance of a role involving judgment and discretionary decisions on behalf of another. The parties were substantially equal participants, and neither defendant occupied the necessary position of control or responsibility. No personal fiduciary duties therefore arose.
4. Even if a partnership or fiduciary joint venture had existed, it ended on or shortly after 15 February 2018 when Mr Glenn indicated that the relationship should be wound up and the parties met to agree how to separate. The ending of the relationship released the parties from continuing duties of good faith, conflict avoidance and accounting, although it did not extinguish liability for past breaches or opportunities acquired in anticipation of termination.
5. The alleged unlawful means conspiracy failed because there was no breach of fiduciary duty, and the descriptions of Mr Glenn as a thief or crook were honestly believed and substantially true in the broader sense relied upon. The derivative claim also failed: the evidence indicated that FAM’s deadlock and Mr Glenn’s conduct, rather than breaches by the defendants, contributed to termination of the management agreement.