Dissolution by the court

• A partner can apply to the court to dissolve the firm in the event of the following cases – Mental Disorder– Permanent incapacity– Conduct prejudicial to business– Persistent breaches of the partnership agreement – The partnership being carried at loss– The dissolution being just and equitable

Mental Disorder

• Section 37(a) when a partner is found lunatic or is shown , to the satisfaction of court to be permanently unsound mind, in either of which cases the application may be as well on behalf of that partner, by his committee, or next friend, or person having title to intervene as by any other partner

Permanent incapacity

• Section 37(b) When a partner, other than the partner suing, becomes in any other way permanently incapable of performing his part of the partnership contract.

• The court will look a wider circumstances than the mental disorder.

Conduct prejudicial to the firm

• Section 37 (c) When a partner, other than the partner suing, has been guilty of such conduct as, in the opinion of the court, regard being had to the nature of the business, is calculated to affect prejudicially the carrying on of the business;

• Prejudicial conduct is a conduct that related directly or indirectly to the firm

• If the conduct is just simply a bad behavior but does not related directly to the firm , the court cannot accept the application to dissolve the firm (see Snow V Milford [1869])

• Dishonesty is generally can be considered as prejudicial conduct (See Essel V Hayward[1860])

Persistent breaches of the partnership agreement

• Section 37(d) When a partner, other than the partner suing, willfully or persistently commits a breach of the partnership agreement or otherwise so conducts himself in matters relating to the partnership business that it is not reasonably practicable for the other partner or partners to carry on the business in partnership with him.

• The courts must satisfied that the breach of the agreement can destroy the firm.

• i.e. partners persistently refuse to keep proper accounts (Cheeseman V Price[1865])

Carrying the business at loss

• Section 37 (e) When the business of the partnership can only be carried on at a loss

• Carried on at loss means that it is impossible for the business to make profit and continue the business will create a further loss.

• See Jennings v Baddeley [1856]

Just and Equitable Grounds

• Section 37 (f) whenever in any case circumstances have arisen which, in the opinion of the court, render it just and equitable that the partnership be dissolved.

• The ground of the dissolution is the widest of this six cases. So it lets the courts to consider the widest possible terms what justice and equitable require

• See Re Yenidje Tobacco Co, Ltd