Titanium Capital Investment Limited & Anor v Jonathan Hughes & Ors

A partnership business connexion for section 29 of the Partnership Act 1890 is a business relationship properly regarded as an asset of the partnership. The partnership must have a right to exploit it, at least as against a partner or former partner. Mere dealings with a customer or supplier do not suffice.

After dissolution, former partners may generally compete for new business. They remain unable to appropriate partnership assets, goodwill with realisable value, confidential information, or unfinished business. A supplier relationship will ordinarily require exclusivity or special treatment capable of realisation on winding up before post-dissolution dealings engage section 29.

The claimants and the first defendant had formed an at-will partnership to sell Covid-19 lateral-flow tests. It traded as Hughes Healthcare and sourced tests from Acon. The partnership was dissolved in June 2021, after which Mr Hughes and companies associated with him sold tests, including under substantial contracts with the Danish Government.

Richards J held that Acon was a business connexion of the partnership for section 29 of the Partnership Act 1890, that Mr Hughes might have to account for post-dissolution profits, and that section 42 was engaged. He dismissed counterclaims for unlawful means conspiracy and knowing receipt: [2025] EWHC 682 (Ch).

The appellants challenged those findings. The central issue was whether, and to what extent, a former partner’s dealings with a former supplier after dissolution involved use of a partnership business connexion.

1. Appeal allowed in part. Snowden and Falk LJJ, constituting the majority on section 29, held that the judge had adopted an over-literal construction of Partnership Act 1890 section 29. A business connexion is a relationship that can properly be treated as an asset belonging to the partnership and which the partnership may exploit to the exclusion of a partner or former partner. A supplier itself does not become the partnership’s asset merely because it has traded with the partnership.

2. The relationship with Acon required reconsideration. The judge had not determined whether the partnership possessed any special, exclusive or otherwise realisable feature of that relationship, or whether Mr Hughes’s later trade resulted instead from his personal relationship with Acon. In the absence of unfinished business or a partnership asset capable of realisation on winding up, former partners were generally free after dissolution to compete for new business.

3. The court nevertheless agreed with Newey LJ that the partnership business was not confined to Hughes Healthcare-branded tests, and that Mr Manduca’s serious fiduciary breaches did not automatically release Mr Hughes from statutory obligations or bar relief. Any clean-hands objection required an immediate and necessary relationship with the relief sought.

4. Section 42 did not apply where each former partner pursued a different fragment of the former business. A person could not simultaneously be a continuing and an outgoing partner for that purpose. The finding of liability under section 42 was therefore set aside.

5. The judge should have determined Mr Hughes’s pleaded unlawful-means-conspiracy counterclaim on its merits despite inadequate closing submissions. That claim was remitted for Trial 2. The knowing-receipt counterclaim against Titanium succeeded: it beneficially received traceable fruits of Mr Manduca’s breach, and its sole director’s knowledge made retention unconscionable.

Newey LJ would have upheld the judge’s conclusion that Acon was a business connexion, but Snowden and Falk LJJ allowed the appeal on that issue and required reconsideration.

• Court of Appeal (Civil Division): Allowed the appeal in part. It set aside the section 42 finding, allowed the appeal concerning the section 29 business-connexion analysis, allowed the knowing-receipt claim against Titanium, and remitted Mr Hughes’s unlawful-means-conspiracy claim for Trial 2.
• High Court, Business and Property Courts: Richards J decided the first split trial and made the rulings appealed from: [2025] EWHC 682 (Ch) .