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Key Rules: RSC O.81 (in CPR, schedule 1); CPR Part 69, PDs 24 and 40
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| 22.1 |
In claims for or arising out of the dissolution of a partnership often the only matters in dispute between the partners are matters of accounting. In such cases there will be no trial. The court will, if appropriate, make a summary order under paragraph 6 of PD 24 for the taking of an account. This will be taken before the Master.
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| 22.2 |
Only if there is a dispute as to the existence of a partnership (whether it is claimed that there never was a partnership or that the partnership is still continuing and has not been dissolved) or if there is a material dispute as to the terms of the partnership (e.g. as to the profit sharing ratios) will there be a trial, at which the judge will decide those issues. In such cases there will be a two stage procedure with the judge deciding these issues at the trial and ordering the winding up of the partnership which will involve the taking of the partnership accounts by the Master (see PD 40 Accounts, Inquiries etc.).
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| 22.3 |
In some cases and in order to reduce costs, it may be appropriate for the parties to invite the Master to determine factual issues as a preliminary to the account, eg issues as to terms of the partnership or assets comprised in it. At any case management conference it will be particularly important to identify issues to be determined before an effective account or inquiry can be made. The court will not simply order accounts and inquiries without identifying the issues.
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| 22.4 |
The expense of taking an account in court is usually wholly disproportionate to the amount at stake. Parties are strongly encouraged to refer disputes on accounts to a jointly instructed accountant for determination or mediation.
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| 22.5 |
The functions of a receiver in a partnership action are limited. It is not his or her duty to wind up the partnership, like the liquidator of a company. His or her primary function is to get in the debts and preserve the assets pending winding up by the court and he or she has no power of sale without the permission of the court.
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| 22.6 |
The procedure for the appointment of receivers by the court is comprehensively governed by Part 69 and its PD. A new Guide for receivers in the Chancery Division is available. Copies of the Guide can be obtained from an associate or from the Court Manager, Chancery Chambers. The Guide is also reproduced at Appendix 10. Particular attention should be paid to remuneration and the fact that it must be authorised on the basis specified in an order of the court.
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