Cruickshank and Others v Sutherland and Others (ex parte as to Henry Charles Begg)
| Jurisdiction | England & Wales |
| Judge | Lord Dunedin,Lord Atkinson,Lord Sumner,Lord Wrenbury,Lord Carson |
| Judgment Date | 03 November 1922 |
| Judgment citation (vLex) | [1922] UKHL J1103-3 |
| Date | 03 November 1922 |
| Court | House of Lords |
[1922] UKHL J1103-3
House of Lords
Lord Dunedin.
Lord Atkinson.
Lord Sumner.
Lord Wrenbury.
Lord Carson.
After hearing Counsel, as well on Monday the 17th, as Tuesday the 18th and Thursday the 20th, days of July last, upon the Petition and Appeal of Sir William Dickson Cruickshank, Knight, C.I.E., Ronald Gordon Cruickshank and William Kearnes Eddis, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of His Majesty's Court of Appeal, of the 29th of July 1921, might be reviewed before His Majesty the King in His Court of Parliament, and that the said Order might be reversed, varied, or altered, or that the Petitioners might have such other relief in the premises as to His Majesty the King in His Court of Parliament might seem meet; as also upon the printed Case of Sir George Henry Sutherland, Knight, Charles William Tosh, Alfred Donald Pickford, and Thomas Doubleday Wood, lodged in answer to the said Appeal (which said Appeal was, in pursuance of an Order of this House of the 13th day of July last, heard ex parte as to Henry Charles Begg, he not having lodged a printed Case in answer to the Appeal, though ordered so to do); and due consideration had this day of what was offered on either side in this Cause:
It is Ordered and Adjudged, in the name of the House of Lords, by the Lords of Appeal sitting in the House of Lords during the Dissolution of Parliament, by virtue of a Writing by His Majesty the King under His Sign Manual, dated the 26th day of October 1922, pursuant to the provisions of the Appellate Jurisdiction Act, 1876, That the said Order of His Majesty's Court of Appeal, of the 29th day of July 1921, complained of in the said Appeal, be, and the same is hereby, Reversed: And it is hereby Declared, That in taking the accounts of the partnership in the pleadings mentioned as on the 30th April 1917 ( a) the assets of the firm (other than the good-will thereof) ought to be brought into account at their fair value to the firm as at that date, and that for the purpose of ascertaining the value of the share in the partnership of the Testator David Cruickshank in the pleadings mentioned the Appellants, as the executors of his will and codicil, are not bound by the value of the assets appearing in the books of the partnership and ( b) that such part of the sum of Rs. 8,74,450 13a. 10p. (being the total sum reserved against nine items) as is in excess of the sum which represents the loss (if any) reasonably to be anticipated in respect of each of the nine several items of Bad Debt Reserve Account is and forms part of the assets of the firm: And that for the purposes aforesaid all necessary and proper accounts and inquiries may be directed to be taken and made on the basis of the said declaration: And it is further Ordered, That the said Respondents do pay, or cause to be paid, to the said Appellants the Costs incurred by them in the Courts below, and also the Costs incurred by them in respect of the said Appeal to this House, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments: And it is also further Ordered, That the Cause be, and the same is hereby, remitted back to the Chancery Division of the High Court of Justice, to do therein as shall be just and consistent with this Judgment.
My Lords,
I have had the advantage of perusing the opinion which has been prepared and will presently be delivered by my noble and learned friend Lord Wrenbury. That opinion so exactly expresses the views that I had formed in the case that I feel it unnecessary to trouble your Lordships with any remarks of my own.
My Lords,
I, too, have had the advantage of perusing the Judgment prepared by my noble friend and, as I thoroughly concur, I see no reason to deliver a judgment myself.
My Lords,
I am in the same fortunate position, with the same happy result.
My Lords,
The Order under appeal contains a declaration that Mr. Cruikshank's executors are for the purpose of ascertaining his share bound by the values appearing in the books of the partnership. The principal question in the case is whether this is right.
Upon Mr. Cruikshank's death on the 27th October 1910 clause 16 of the partnership articles took effect, and the amount of his share, with share of profits calculated and made up in the usual way to the 30th April next after his decease, had to be ascertained as provided in clause 15.Clause 15 relates to the case of a retiring partner and provides that the share of a retiring partner shall be ascertained by preparation of the annual account in terms of clause 13. The result is that the amount of the share of a deceased partner must be ascertained by reference to the account under clause 13 made on the 30th April next after the death and that the account is to be such as would be proper if he were a retiring partner.
The account under clause 13 is a full and general account of the partnership dealings for the preceding year and of its property, credits and liabilities. The question between the parties is whether so far as property is concerned this is to be an account of its property at its fair value to the firm or an account in which the property must be taken at the values appearing in the books of the partnership.
The current partnership was for four years from the 1st May 1914 and was constituted by a deed of the 1st July 1914. It was a renewal of partnership relations which had subsisted between the parties before, the last preceding partnership having been for two years from May 1912. In forming the partnership of 1914 the assets of the previous firm were taken over at the values appearing in the partnership books.
The accounts of the 30th April 1915 and 30th April 1916 were prepared upon the footing of bringing in the assets at their book values. Mr. Cruikshank was a party to the former of these. As to the latter he was then in failing health and was not able to attend to business. He took no active part in the preparation of that account. But he took no exception to it, and no one contends that he was not bound by it.
The above are, I think,...
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White v Minnis and Another
...authorities to which I was referred, including, in particular, Noble v Noble; Inner House, 28th January 1966 (unreported), and Cruickshank's Trustees v Sutherland, satisfy me that, as a general principle, where in a partnership it is necessary to make up a balance sheet affecting the money ......
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Drake v Harvey and Others
...to be entered in the accounts at the same value thereafter irrespective of increases in value was “a difficult one”. He considered Cruickshank v Sutherland and found that it established that where the partnership agreement was silent a full and general account should contain a real, and not......
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