Partnership

Adminstratrix of deceased partner seeking share in partnership assets - asset carried on partnership books at historic cost - share to be calculated at historic valueIn re White (Dennis) deceased: White v Minnis and another: CA (Peter Gibson, Chadwick and Mance LJJ): 5 May 2000

The widow of a partner in a family partnership of two brothers, who had died in 1993, claimed his share in the capital of the partnership which included a freehold property which had been carried in the partnership books at its historic (1930s) cost.

Park J [1999] 1 WLR 2079 ordered that the share fell to be calculated by the 1993 market value of that property.

The executors of the estate of the remaining brother, who died in 1994, appealed, contending that the correct approach was to use the historic cost of the property.Sonia Proudman QC and Alistair Craig (instructed by Coldham Shield & Mace, Chingford) for the widow.

George Laurence QC and Gordon Bennett (instructed by Sprecher Grier Halberstam) for the executors.Held, allowing the appeal, that where following the retirement or death of a partner the assets of the partnership fell to be distributed according to the terms of the partnership agreement, the court had to ascertain what the parties had intended by the words actually used bearing in mind the circumstances in which they had made the agreement; that there was no presumption (at least in the context of family partnerships) that the deceased partner's share of those assets was to be calculated by reference to their true current market value and not to their historic cost; that since the deceased had not been entitled under the agreement to refuse to approve and sign a general account prepared on the basis that the property was included at historic cost value his estate was bound by the account prepared on that basis; and that, accordingly, the share fell to be calculated by the historic 1930s cost of the property.