Hurst v Bennett and Others ; Re a Debtor (No 303 of 1997)
| Jurisdiction | England & Wales |
| Judgment Date | 16 February 2001 |
| Date | 16 February 2001 |
| Court | Court of Appeal (Civil Division) |
COURT OF APPEAL
Before Lord Justice Peter Gibson, Lady Justice Arden and Sir Christopher Staughton.
Partnership - former partner's claim for money allegedly due - could not for lack of mutuality set off claims of trustees
A former partner in a firm could not for lack of mutuality set off claims for money allegedly due to him on the taking of accounts on the dissolution of that partnership against the claim of certain ex-partners to be indemnified against expenses they had incurred as the firm's trustees of the legal title to the lease of the former partnership's office.
The Court of Appeal so stated, inter alia, when dismissing an appeal by Robert Alfred Hurst against an order of Mr Justice Ferris in the Chancery Division (The Times October 3, 2000).
Mr Hurst had brought proceedings to set aside a statutory demand served on him by Margaret Heather Bennett, Michael David Simmons, Derek Bluston and Raymond Alexander Bryk, former partners of his in the firm of solicitors known as Malkin Janners until its dissolution in October 1991, in respect of Pounds 9,767.42 owed by Mr Hurst to the respondents to indemnify them against expenses incurred as trustees, for the benefit of all the partners of that firm, of a lease of office premises.
On November 10, 1997 Mr Deputy Registrar Middleton had dismissed the application and the judge dismissed his appeal.
Mr Hurst in person; Mr Stuart Adair for the respondents.
LADY JUSTICE ARDEN said that rule 6.5(4) of the Insolvency Rules (SI 1986 No 1925) provided that the court might grant the application if "the debtor appears to have a counterclaim, set off or cross-demand which equals or exceeds the amount of the debt specified in the statutory demand".
Mr Adair submitted that the debt on which the statutory demand was based was due to the trustees in their capacity as such and the cross-claim raised was against them as partners, and therefore, the claims lacked mutuality.
More precisely, the amount in the statutory demand was due to the respondents personally whereas that due to Mr Hurst, if due, was due to him from all the other partners jointly: see section 9 of the Partnership Act 1890 and generally Hurst v BrykWLR ((2000) 2 WLR 740).
The terms "counterclaim" and "cross-demand" were not defined in the rules. Rule 6.5(4) dealt with whether there was good reason to set aside a statutory demand. There was little...
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