Hi, need to submit a 2000 words paper on the topic Agreement of Partnership. In this case, there is no written agreement of partnership between Dave and Susie, but David’s act to exclude Susie is akin to expulsion from the business they were engaged in. This is not permissible under the Partnership Act unless there is an express agreement between the parties for such an expulsion4. Had a written agreement existed, Susie’s rights could have been legally enforced if provision for relief had existed under the agreement.5 But in the absence of a formal written agreement between Susie and Dave, Susie’s rights against Dave will be limited.
But Susie has been receiving profits from the business, which have been posted into a joint business account in the names of both Dave and Susie. therefore the question of a fiduciary relationship between the two parties may arise. This was also the issue in the case of Hitchins v Hitchins and Another6 , where the plaintiff- one of the siblings who was receiving profits from a hotel partnership – alleged that profits being distributed to all three siblings was to be divided jointly due to the existence of a separate partnership between them, despite the fact that no written agreement existed. In the decision, Bryson J of the Supreme Court of New South Wales relied on statutory provisions7 and held that no partnership existed for the purpose of carrying on a business in common, as required under the law. But there were still grounds for relief for the plaintiff, on fiduciary grounds, due to the existence of a close relationship between the three individuals. hence the court relied on the principle of “equality is equity”, on which basis an equal distribution of profits was ordered.
Susie could rely on the precedent, in this case, to make a claim against Dave on fiduciary grounds and the .equitable principle of equality is equity as established in the case of Hitchins v Hitchins and Another. .