2 Duty not to compete with the firm.Section 30 pro-
vides that if a partner without the consent of his co-
partners carries on any business of the same kind as his
firm so as to compete with it, he must account for and
pay over to the firm all the profits he has made from that
competing business.
Section 30 is in fact no more than an extension of the
duty to account because a partner cannot be prevented
from competing by the use of s 30. The section actually
allows him to compete but requires him to hand over all
the profits of the competing business.
A particular partnership agreement may expressly pro-
vide that there shall be no competing business. If this is
so, the other partners can get an injunction from the court
to stop the competing business from being carried on.
Dissolution
A partnership is usually dissolved without the help of
the court, though sometimes the court is brought in.
Non-judicial dissolution
Any of the following events will normally bring about a
dissolution of a partnership.
1 The ending of the period for which the partnership
was to exist.Section 32(a) states that a partnership for a
fixed term is dissolved when the term expires. A partner-
ship for the joint lives of A, B and C ends on the death
of A or B or C.
2 The achievement of the purpose for which the
partnership was formed.By reason of s 32(b) a partner-
ship for a single undertaking is dissolved at the end of
it. In WinsorvSchroeder(1979), S and W put up equal
amounts of cash to buy a house, improve it, and then
sell it at a profit which was to be divided equally. The
court decided that they were partners under s 32(b) and
that the partnership would end when the land was sold
and the profit, if any, divided.
If in partnerships of the types set out in 1 and 2 above,
the firm continues in business after the period has
expired, without any settlement of their affairs by the
partners, an agreement not to dissolve will be implied.
Unless there is a new agreement to cover the continuing
partnership, it is a partnership at will. Section 27 applies
to it so that the rights and duties of the partners are the
same as before the original partnership ended. However,
since it has now become a partnership at will, any part-
ner can give notice to end it.
3 By the giving of notice.Under s 32(c) a partnership
which is not entered into for a period of time or for a
particular purpose can be dissolved by notice given by
any partner, but not a limited partner.
The notice must be in writing if the partnership agree-
ment is in the form of a deed (s 26(2)). If not, oral notice
will do.
The notice takes effect when all the partners know of
it or from any later date which the person giving the
notice states as the date of dissolution (s 32(c)). No par-
ticular period of notice is required. Withdrawal of the
notice requires the consent of all the partners (Jones
v Lloyd(1874)), otherwise the dissolution goes ahead
and the court will, if asked by a partner, order the other
partners to wind up the firm with him. The court said
in Peyton v Mindham(1971) that it could and would
declare a dissolution notice to be of no effect if it was
given in bad faith as where A and B dissolve a partner-
ship with C by notice in order to exclude C from valu-
able future contracts.
Dissolution by notice depends on what the partner-
ship agreement says. If, as in Moss v Elphick(1910), the
partnership agreement says that dissolution is only to be
by mutual consent of the partners, s 32(c) does not apply.Part 2Business organisations
128
Bentleyv Craven(1853)Mr Bentley carried on business in partnership with the
defendants, Messrs Craven, Prest and Younge, as sugar
refiners at Southampton. Craven was the firm’s buyer
and because of this he was able to buy sugar at a great
advantage as to price. He bought supplies of sugar
cheaply and sold it to the firm at the market price. The
other partners did not realise that he was selling on his
own account and Bentley, when he found out, brought
this action, claiming for the firm a profit of some £853
made by Craven. The court decided that the firm was
entitled to it.
Comment. Those who wish to make comparisons with
other fiduciaries will note that a partner, like a trustee,
may not make a private gain out of his membership
of the firm. There is also a comparison with directors’
secret profits and benefits, which will be dealt with in
Chapter 6.