[2025] EWHC 2180 (Ch)

It seems to me that there is a misconception which lies behind the arguments of the Defendants which are contained within Grounds 1-4.

The foundation of the Defendants’ arguments in Grounds 1-4 is the proposition that wherever there is a change in the membership of a partnership, this constitutes, as a matter of law, the dissolution of the existing partnership and its replacement by a new partnership.

This is plainly correct. The relevant law is explained in Lindley & Banks on Partnership, Twenty-First Edition, at 3-05 to 3-07, where reference is made to the following statement of principle by Eichelbaum CJ in Hadlee v Commissioner of Inland Revenue [1989] NZLR 447, at 455:

“In law the retirement of a partner or the admission of a new partner, constitutes the dissolution of the old partnership, and the formation of a new partnership. Here upon the happening of such events there were no overt signs of dissolution; the partnership’s financial structure and arrangements were such that none was required but that does not alter the underlying legal significance of any retirement or new admission.”

The legal position is further explained in Lindley, at 24-01 (I have omitted footnotes from the extracts from Lindley quoted in this judgment):

“What is meant by the “dissolution” of a partnership is often misunderstood, not only because that word is used in two distinct senses but also because it has a very different meaning when applied to a company or limited liability partnership. In the case of a partnership, it invariably refers to the moment of time when the ongoing nature of the partnership relation terminates, even though the partners may continue to be associated together in a new partnership or merely for the purposes of winding up the old firm’s affairs. Indeed, the outward appearance of a partnership immediately prior to and immediately following a dissolution will frequently be unchanged. For a company or LLP, on the other hand, dissolution marks not the commencement of the winding up but its conclusion, i.e. the moment of extinction. It should be noted that dissolution is an absolute concept: there is no such thing as a “partial” dissolution.”

The author then goes on to explain the distinction between a technical dissolution and a general dissolution, at 24-03 and 24-04:

“It does not necessarily follow from the fact that a partnership has been dissolved that its affairs will fall to be wound up in the manner prescribed by the Partnership Act 1890. It has already been seen that, as a matter of law, a change in the composition of a partnership results in a dissolution of the existing firm and the creation of a new firm; in such a case, the new firm will usually take on the assets and liabilities of the old, without any break in the continuity of the business. This is often referred to as a “technical” dissolution and is usually, but not always, the result of agreement. Such a dissolution will almost inevitably require the taking of accounts to ascertain the entitlement of the outgoing or deceased partner.

In contrast, the expression “general” dissolution is used to denote a dissolution involving a full scale winding up, which may well have been brought about at the instance of one partner against the wishes of the others. When a firm is referred to as “in dissolution”, this usually indicates that a general dissolution has taken place, but that the winding up of its affairs is still continuing. Once the winding up is complete and the accounts are finally settled as between the partners, there will be nothing left which could properly be referred to as a partnership, whether in dissolution or otherwise.”

It will be noted that, although the distinction is drawn between a technical dissolution and a general dissolution, there is still, in either case, a dissolution of the old partnership. In the case of a technical dissolution, caused by the departure of an existing partner or by the arrival of a new partner or by a combination of such circumstances, there is still the dissolution of the old partnership and the creation of a new partnership. This point is brought out in Lindley, at 24-05:

“The above distinction between a technical and a general dissolution was accepted without demur in HLB Kidsons v Lloyd’s Underwriters,11 when considering the potential application of section 38 of the Partnership Act 1890 on a change in a firm, and again in Boyle v Burke. It was also accepted by the Supreme Court of Western Australia in Rojoda Pty Ltd v Commissioner of State Revenue, albeit that Murphy JA correctly observed that:

“The reference to a ‘technical’ or ‘notional’ dissolution is somewhat of a misnomer, because it is not the dissolution itself, but, at most, the winding up of the partnership which is notional. The partnership practising after the retirement of a partner is a different partnership than prior to that partner retiring, but the assets and responsibility for liabilities of the partnership are taken over by the remaining partners.”

The Judge, quite correctly, accepted that the above legal principle applied when the Second Defendant joined the Medical Partnership. At Paragraph 19 the Judge recognised that the joining of the Second Defendant as a partner in the Medical Partnership effected a technical dissolution of the 2014 Partnership; that is to say the original partnership, established by the 2014 Partnership Agreement between the Claimant, the First Defendant and Dr Jagadish. Although the dissolution which occurred was characterised by the Judge as a technical dissolution this did not alter the fact that, as a matter of law, the effect of the Second Defendant joining the Medical Partnership was (i) the dissolution of the 2014 Partnership, and (ii) its replacement by a new partnership between the Claimant, the First Defendant, Dr Jagadish and the Second Defendant. I will refer to this new partnership as “the 2016 Partnership”.

The next question which arose, and which the Judge had to answer was what were the terms of the 2016 Partnership. The answer to this question depended upon what, if anything, the parties agreed in this respect, on the occasion of the dissolution of the 2014 Partnership and the creation of the 2016 Partnership.

The Judge made very clear findings of fact in this respect. The Judge found, as a fact, that the Defendants both agreed that the 2016 Partnership should continue on the same terms as the 2014 Partnership Agreement; see the Judge’s findings in Paragraphs 20, 22 and 24. These findings of fact are unassailable in the Appeal. The Judge saw and heard all the evidence in the case and, in particular, saw and heard the Claimant and the Defendants give their evidence at the Trial. I am in no position to interfere with those findings of fact, even if I could see any grounds to do so, which I cannot.

The Defendants have sought to argue, by Ground 3(5), that the Second Defendant could not have agreed to be bound by the terms of the 2014 Partnership Agreement in relation to the 2016 Partnership, on the basis that she did not see the terms of the 2014 Partnership Agreement and on the basis that the terms of the 2014 Partnership Agreement made no provision for the payment to the Second Defendant of a share of the profits of the 2016 Partnership.

In my view these points do not undermine the Judge’s findings of fact that the Second Defendant agreed to be bound by the terms of the 2014 Partnership Agreement. Nor do I consider that these points properly respect the relevant findings of the Judge, at Paragraph 20, which I repeat for ease of reference:

“20.

In my judgment the evidence shows that, on balance of probabilities, the defendants, at least impliedly and probably expressly, agreed and accepted that the partnership, with the addition of the second defendant, was to continue on the same terms as set out in the Original Agreement. The first defendant, in his oral evidence, told me that was his understanding, as stated above. I am satisfied that the second defendant was also aware that the partnership was to continue on the original terms. She was aware of the existence of the Original Agreement on her own evidence. Also on her own evidence, in May or June 2016 she saw the pages of that agreement that were to be amended on her joinder as a partner although she “may not have read them”. Those pages clearly refer to a deed and state that it contains the “arrangements which the parties have agreed shall govern relations between themselves”. The second defendant told me that she agreed to those documents being sent to NHS on her behalf. In the circumstances she knew there was a document setting out the terms governing the partnership and agreed to them. Further, as she told me, she agreed to whatever the first defendant agreed to. As the second defendant was aware of the Original Agreement, aware that the only changes were to the identity of the partners and consequent profit share, I infer that she was agreeing to be bound by the terms of the original agreement. If she chose not to read relevant documents or to ask for the full terms to be provided to her, that does not detract from her agreement to be bound.”

The Judge’s finding was that the Second Defendant agreed to be bound by the terms of the 2014 Partnership Agreement, and was “aware that the only changes were to the identity of the partners and consequent profit share”. It is therefore no answer to the Judge’s finding that the Second Defendant agreed to be bound by the terms of the 2014 Partnership Agreement to say that the Second Defendant’s profit share was not agreed. Even if this was correct, it did not alter the fact that the Second Defendant had otherwise agreed to be bound by the terms of the 2014 Partnership Agreement, which included the restrictions on termination in the 2014 Partnership Agreement and the priority right of the Claimant to the Annual Payment out of the profits of the 2016 Partnership.

It is however not even correct to say that the parties did not agree what the profit share of the Second Defendant would be. The Judge addressed this question in Paragraph 5, and made the following findings of fact:

“It is somewhat unclear as to what share of the profits the second defendant was to have and from whose share of the profits the payment to her was to come. Either she was to receive 10% of the profits which would come out of the first defendant’s share (per the Draft Partnership Deed of April 2026 [2016]); or she was to receive 5% of the profits reducing each of Dr Jagdish and the first defendant’s share (per the 2017 accounts and the latter’s evidence). A deed, described as an ‘Amendment of partnership agreement Adding of new partner from 1 April 2016’ was drawn up adding the second defendant as a partner (“the 2016 variation”). Clause 11 and Schedule B again provided that the claimant would receive a fixed sum of £50,000 plus superannuation per annum, Dr Jagadish would receive 50% of the profits, the first defendant 40% and the second defendant 10%.”

The fact that the Judge left this particular finding of fact in alternative terms does not alter the fact that the Judge did find as a fact that there was agreement as to the share of the profits which the Second Defendant would receive out of the 2016 Partnership.

So far as the reading of the terms of 2014 Partnership Agreement was concerned, I did not understand the Defendants to argue that the Second Defendant could not have agreed to be bound by the terms of the 2014 Partnership Agreement if she did not read them through. There was no legal requirement, or at least none identified to me, to the effect that the Second Defendant had to have read through the terms of the 2014 Partnership Agreement, either in full or in part, before she could make a legally effective agreement to be bound by those terms in relation to the 2016 Partnership.

There was some reference made in this context to the decision of the Court of Appeal in Cheema v Jones [2017] EWCA Civ 1706 (2018) 159 BMLR 204. This case was also concerned with a medical partnership. The original partnership had been between the two doctors, Dr Cheema and Dr Jones, pursuant to the terms of a written partnership agreement. Three new doctors then joined the partnership, without signing any formal partnership agreement. The two original partners then fell out and the question which arose was whether the new partnership, created by the arrival of the three new doctors, had continued on the terms of the original written partnership agreement or had taken effect as a partnership at will, which could be terminated on notice given by any of the partners. The point mattered because Dr Jones, one of the two original partners, had given notice to dissolve the new partnership. The validity of the notice was disputed by Dr Cheema. At first instance David Pittaway QC, sitting as a Deputy Judge of the High Court decided that the new partnership had taken effect as a partnership at will, with the consequence that the notice of dissolution was valid and had dissolved the new partnership.

Dr Cheema appealed against this decision to the Court of Appeal. The appeal was dismissed. In her judgment, with which Newey and Longmore LJJ agreed, Asplin LJ summarised the position in the following terms, at [23];

“[23] In my judgment, the judge’s conclusion reveals no error of law. First, it seems to me that on the basis that all of the discussions from April 2016 onwards were focused on a new partnership agreement to be entered into between all five doctors and that there is no reference to the April Agreement as a fall-back position, it is quite proper to infer that Dr Jones and Dr Cheema intended to abandon the April Agreement and to enter into a new contractual relationship as from 1 July 2016 which would supersede the Old Partnership. The fact that a new agreement was never signed does not undermine that inference.”

It seem to me that Cheema v Jones has limited relevance in the present case. In Cheema v Jones, on very different facts to those found by the Judge in the present case, the judge at first instance found that there had been no agreement for the new partnership to continue on the terms of the original partnership agreement. The Court of Appeal found no error of law in the judge’s conclusion. In the present case the Judge made very different findings of fact; namely that the parties, including both Defendants, had agreed to the 2016 Partnership continuing on the terms of the 2014 Partnership Agreement, subject only to the addition of the Second Defendant as a new partner and the revision of the profit shares, which did not include any revision of the Claimant’s priority right to the Annual Payment.

In summary therefore, it seems to me that Ground 3(5) fails. The Judge was entitled to find as a fact and did find as a fact that the parties agreed to the 2016 Partnership continuing on the terms of the 2014 Partnership Agreement, subject to the addition and revision mentioned in my previous paragraph. I will refer to this agreement, as found by the Judge, as “the 2016 Agreement”.

This clears the way for consideration of the principal argument in Grounds 1-4, which is that the 2016 Agreement could not have taken effect because it infringed the terms of Clause 44. The argument is that the 2016 Agreement constituted a variation of the 2014 Partnership Agreement within the terms of Clause 44. As such, the 2016 Agreement was neither valid nor binding unless (i) it was agreed in writing, and (ii) was signed by all Partners (as defined in the 2014 Partnership Agreement), and (iii) was in the form of an addendum to the 2016 Agreement. Given that the 2016 Agreement did not satisfy any of these conditions, it was not valid or binding upon the parties, with the result that the 2016 Agreement, as in Cheema v Jones, took effect as a partnership at will, which was capable of being terminated by the Defendants’ notice of dissolution of 5^th November 2021.

It is at this point, as it seems to me, that the misconception lying behind the arguments in support of Grounds 1-4 becomes apparent. The Defendants’ argument proceeds on the basis that the 2016 Agreement constituted a variation of the 2014 Partnership Agreement, which was caught by the terms of Clause 44. In my view this analysis is not correct. As the Judge found, and as the Defendants accept, the addition of the Second Defendant to the Medical Partnership brought about a dissolution of the 2014 Partnership and its replacement by a new partnership; namely the 2016 Partnership. It follows that the 2016 Agreement was not, as a matter of law, a variation of the 2014 Partnership Agreement. The 2014 Partnership Agreement governed the 2014 Partnership, and ceased to apply once the 2014 Partnership Agreement was dissolved by the addition of the Second Defendant as a partner in the Medical Partnership. The 2016 Agreement was a new agreement. It had to be because the Second Defendant had not been a partner in the 2014 Partnership and had not been a party to the 2014 Partnership Agreement. What the parties effectively agreed, by the 2016 Agreement, was that they would adopt the terms of the 2014 Partnership Agreement as the terms of the 2016 Partnership, subject to the addition of the Second Defendant as a partner and subject to the revision of the profit share provisions. It is possible to refer to this adoption of the terms of the 2014 Partnership Agreement as a variation of the 2014 Partnership Agreement, but this was not, strictly, what occurred. The 2016 Agreement was a new agreement, not a variation of the 2014 Partnership Agreement.

The Judge clearly appreciated this point. As the Judge found in Paragraph 20, the Second Defendant agreed to be bound by terms of the 2014 Partnership Agreement. As the Judge also found, in Paragraph 21, there was nothing in the 2014 Partnership Agreement which “prevented a, technically, new partnership from being bound by its terms”.

In support of his argument in relation to Clause 44, Mr Coppel relied upon the decision of the Supreme Court in MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2018] UKSC 24 [2019] AC 119. In that case the defendant company entered into a written licence agreement with the claimant company which contained, at clause 7.6, a no oral modification clause in similar, but not identical terms to Clause 44. The defendant fell into arrears with the payments due under the licence agreement and was locked out of the premises which were the subject of the licence agreement. The claimant also commenced proceedings for the arrears of the licence payment. The director of the defendant claimed that he had agreed a revised payment schedule with one of the claimant’s employees, by way of variation of the licence agreement. At first instance the judge held that the variation of the licence agreement, which would otherwise have been effective, was prevented from taking effect by clause 7.6 of the licence agreement. The Court of Appeal allowed the defendant’s appeal against this decision, holding that the parties had been entitled to agree to depart from what had been agreed in clause 7.6, and thereby to agree an effective oral variation of the licence agreement. The Supreme Court (Lord Briggs JSC dissenting) overturned this decision. While it would have been open to the parties to agree to dispense with the restriction on oral variations in clause 7.6, on the evidence the parties had not done this. They had simply agreed an oral variation of the contract. In those circumstances, the parties were bound by clause 7.6, and the oral variation was of no effect.

The distinction between the present case and MWB is an obvious one. MWB was concerned with the question of whether two parties to an existing contract had agreed an effective variation of that contract. In the present case the question is whether Clause 44 operated to prevent parties, namely the Claimant, the Defendants and Dr Jagadish, who were not identical to the parties to the 2014 Partnership Agreement, from agreeing to adopt the terms of the 2014 Partnership Agreement as the terms of their new partnership (the 2016 Partnership). I cannot see how Clause 44 was capable of operating to prevent this, given that it was confined to variations of the 2014 Partnership Agreement. Indeed, it would be very strange if a provision in an agreement made between the Claimant, the First Defendant and Dr Jagadish, could prevent those parties and the Second Defendant from agreeing to adopt the terms of that agreement as the terms of their new agreement.

In summary, the misconception in the Defendants’ arguments in support of Grounds 1-4 seems to me to be that those arguments treat the 2016 Agreement as a variation of the 2014 Partnership Agreement. As a matter of general language it may be convenient to refer to the 2016 Agreement as a variation of the 2014 Partnership Agreement but, as I have explained, this was not what it was. The 2016 Agreement was a new agreement, by which the parties thereto agreed to adopt the provisions of 2014 Partnership Agreement as the provisions governing their new partnership. In common with the Judge, I cannot see how Clause 44 or, for that matter, any other provision in the 2014 Partnership Agreement prevented this adoption from taking effect.

In his oral submissions Mr Coppel stressed that both in terms of the statements of case of the parties in the action and in terms of the agreed issues for the Trial, the parties were concerned with the question of whether there had been a variation of the 2014 Partnership Agreement, as from 1^st April 2026, or a partnership at will. Given this binary position, so it was submitted, Clause 44 could not be avoided by resort to an argument that the terms of the 2014 Partnership Agreement were agreed as the terms of a new partnership as from 1^st April 2016.

I do not think that the problem with the Defendants’ case, which I have identified above, can be avoided in this way. So far as the statements of case were concerned I note, from examination of the Claimant’s Particulars of Claim, that the Claimant pleaded her case on the basis that “the Original Partnership Agreement”, which I am referring to as the 2014 Partnership Agreement, was subject to a variation, which the Claimant referred to as “the 2016 Partnership Agreement”. The pleaded case was that it was by this 2016 Partnership Agreement that the Second Defendant joined the Medical Partnership. I cannot see how the pleaded case in the Particulars of Claim was inconsistent with the argument, ultimately accepted by the Judge, that the parties to the 2016 Partnership agreed to be bound by the terms of the 2014 Partnership Agreement. Still less, can I see that such an argument was precluded by the pleaded cases of the parties.

Ultimately, this part of the Defendants’ argument begs the question of what is meant by a variation of the 2014 Partnership Agreement. If the issue in the present case had been whether the Claimant, the First Defendant and Dr Jagadish had agreed a variation of the 2014 Partnership Agreement between themselves, not involving the introduction of a new partner or the departure of an existing partner, I can see that Clause 44 would, on the authority of MWB, have applied to such a variation. As I have explained however, the 2016 Agreement was not, strictly speaking, a variation of the 2014 Partnership, but an agreement by the partners in the new 2016 Partnership to be bound by the terms of the 2014 Partnership Agreement. I cannot see that the Claimant’s pleaded case in the action was inconsistent with this analysis let alone, as I have said, that the Claimant was precluded from advancing this case.

The same analysis seems to me to apply to the formulation of the first issue which was before the Judge at the Trial. This formulation of the first issue did identify the question as being whether the 2014 Partnership Agreement was subsequently varied, but this again begs the question of what was meant by a variation. Again, I cannot see that this formulation of the issue was inconsistent with or precluded the argument that, on the dissolution of the 2014 Partnership, the parties to the 2016 Partnership Agreement agreed, by the 2016 Agreement, that their new partnership should continue on the same terms as the 2014 Partnership Agreement.

Even if I am wrong however, in the analysis set out above, the Judge did conclude that the parties, by the 2016 Agreement, agreed that their new partnership, the 2016 Partnership, should continue on the same terms as the 2014 Partnership, subject to the addition of the Second Defendant as a partner, and the revision of the profit sharing provisions in Schedule B. If in doing so, and contrary to my view, the Judge went beyond the scope of the first issue she was asked to decide, and/or went beyond the scope of the Claimant’s pleaded case, it seems to me that a complaint to this effect, now and without more, is effectively water under the bridge.

There is another means by which the Judge’s conclusion can be tested. In the course of his submissions, I asked Mr Coppel what the terms of the 2016 Partnership were, if the 2016 Agreement was deprived of any effect by Clause 44. Mr Coppel’s answer was that the 2016 Partnership took effect as a partnership at will, the remaining terms of which were supplied by the Partnership Act 1890 (“the Act”). By way of example, Mr Coppel referred me to Section 24 of the Act. Section 24 of the Act contains a short set of rules relating to the interests and duties of partners “subject to any agreement express or implied between the partners”. I was also referred to Section 32, which contains provisions governing the dissolution of a partnership, again “Subject to any agreement between the partners”. It struck me as a bizarre result that these provisions in the Act should supply the terms of the 2016 Partnership, in circumstances where the parties to the 2016 Partnership had expressly agreed to provisions which were inconsistent with the terms of both Section 24 and Section 32 of the Act.

Mr Coppel also drew my attention to the provisions of Clause 5, which appear to contemplate the continuation of the partnership constituted by the 2014 Partnership Agreement; that is to say what I am referring to as the 2014 Partnership, notwithstanding the departure of an existing partner or the arrival of a new partner; see in particular Clause 5.4, which refers to an addendum to the 2014 Partnership making “any such provision as all the partners agree to be appropriate in the event of a New Partner joining the Partnership.”. Provisions of this kind do appear to contemplate a change in the identity of the partners in the 2014 Partnership being dealt with by an addendum to the 2014 Partnership Agreement, which in turn might be thought to support the argument that Clause 44 would apply to any such addendum. In my view however, whatever interpretation one puts on provisions in the 2014 Partnership Agreement such as Clause 5.4, they were not capable of changing the legal effect of a new partner joining the Medical Partnership; namely the dissolution of the 2014 Partnership and its replacement by a new partnership, namely the 2016 Partnership, the terms of which, as a new partnership, the partners in the 2016 Partnership were free to agree between themselves, without being constrained by the terms of Clause 44.

My analysis thus far has disregarded the point that the Judge had another ground for concluding that the 2016 Agreement was not invalidated by Clause 44. The Judge also decided that, if the 2016 Agreement was caught by the terms of Clause 44, the terms of Clause 44 were satisfied by the notification given to the NHS on 31^st May 2016.

The notification in question was given to the NHS by a letter dated 31^st May 2016, and sent by email that day. In that letter, which was signed by the Claimant, the First Defendant and Dr Jagadish (although Dr Jagadish’s signature is dated 6^th June 2016), the partners in the 2014 Partnership advised the NHS that the Second Defendant had joined the Medical Partnership. This letter (“the First Notice”) enclosed two pages from the 2014 Partnership Agreement, comprising Clause 1 (which set out the names of the parties to the 2014 Partnership Agreement) and Schedule B, amended to show the Second Defendant as an additional partner (identified as Partner 4), with an entitlement to 10% of the net profits of the 2016 Partnership. The purpose of the First Notice was stated to “to inform you [the responsible officer within the NHS] that Mrs Geetha Bhat has joined us as a non-clinical partner”. The Judge accepted the argument of Mr Warner, at the Trial, that the First Notice satisfied the requirements of Clause 44, if Clause 44 applied.

For ease of reference, I set out Clause 44 again:

“No variation to this Partnership Deed shall be valid and binding on the Partners unless agreed in writing and signed by all the Partners. Any variation should take the form of an addendum to this Agreement.”

In my view, if Clause 44 did apply to the 2016 Agreement, the First Notice was sufficient to satisfy Clause 44. The first sentence of Clause 44 required a variation to the 2014 Partnership Agreement to be in writing and signed by all the Partners. The First Notice was in writing, and was signed by the parties to the 2014 Partnership Agreement; namely the First Defendant, Dr Jagadish and the Claimant. The First Notice was addressed to the NHS and was clearly drafted for the purposes of informing the NHS, for the purposes of the GMS Contract, that the Second Defendant had joined the Medical Partnership. I cannot see however that the fact that the First Notice does not appear to have been drafted for the purposes of effecting a variation of the 2014 Partnership Agreement prevents the First Notice from comprising the agreement in writing required by Clause 44. The test seems to me to be one of content, not intention. If the First Notice was signed by the partners in the 2014 Partnership, and recorded the agreement of the partners that the Second Defendant should be added to the Medical Partnership, with an amendment to the profit sharing provisions in Schedule B, then it seems to me that this was sufficient to satisfy the requirements of the first sentence of Clause 44.

This leaves the second sentence of Clause 44, which stated that any variation should take the form of an addendum to the 2014 Partnership Agreement. Mr Coppel argued that this requirement was compulsory, so that the relevant variation would not take effect if it was not contained in an addendum to the 2014 Partnership Agreement. The First Notice could not be described as an addendum to the 2014 Partnership Agreement. As such, the First Notice, even if it was capable of satisfying the first sentence of Clause 44, could not satisfy the second sentence of Clause 44. It seems to me however that there is a change of language between the first and second sentences of Clause 44. The first sentence sets out the requirement for signed writing, and sets out the consequences if the relevant variation is not in written form and signed by the partners. By contrast, the second sentence uses the word “should” when referring to the addendum. I do not think that “should” can be read as “must”, particularly in circumstances where the language is different in the first sentence of Clause 44. In my view the second sentence of Clause 44 does no more than what it says; namely that a variation should take the form of an addendum to the 2014 Partnership Agreement. There is no sanction expressed, if this requirement is not complied with. In my view a variation which satisfies the first sentence of Clause is not deprived of its effect if it does not take the form of an addendum to the 2014 Partnership Agreement.

The other argument I need to deal with, in the context of the First Notice, is Ground 3(d). The argument in Ground 3(d) is that the Judge went wrong in directing herself that Mr Ojo, as the Defendants’ solicitor advocate at the Trial, had accepted and had not argued against the Judge’s rulings (i) that the First Notice constituted a written variation of the 2014 Partnership Agreement for the purposes of Clause 44, and (ii) that compliance with the second sentence of Clause 44 was not compulsory.

For ease of reference, I set out again Paragraph 21, where the Judge set out her conclusions in relation to Clause 44, and recorded the position of Mr Ojo:

“21.

There is nothing in the Original Agreement that prevented a, technically, new partnership from being bound by its terms. Quite the contrary, clause 5.3 provides expressly that death, retirement or expulsion will not determine the partnership which may only be [wholly] dissolved if all of the parties unanimously agree in writing, or a dissolution is imposed by judgment or statute. To the extent that the addition of the second defendant as a party required writing pursuant to clause 44 of the Original Agreement, I agree with Mr Warner that the document sent to NHS dated 31 May 2016 (although not signed by Dr Jagadish until 6 June 2016) setting out the joinder of the second defendant as a partner and signed by all the then partners, constitutes a written variation for the purposes of clause 44. Mr Ojo, rightly, did not argue otherwise. The provision as to a variation taking the form of an addendum to the original agreement does not appear to be mandatory, as Mr Ojo also, quite properly, accepted.”

The documents before me on the hearing of the Appeal included a transcript of the Trial. Mr Coppel took me to the transcript of the third/final day of the Trial and the closing submissions of Mr Ojo. I was shown an extract from these submissions where Mr Ojo argued that the First Notice constituted only a variation of the GMS Contract, and could not also do duty as a variation of the 2014 Partnership Agreement for the purposes of Clause 44. I was also shown a further extract from these submissions, in Mr Ojo’s final reply to Mr Warner’s closing submissions, where Mr Ojo, in answer to a question from the Judge, made it clear that it was his submission that a variation of the 2014 Partnership Agreement, in order to be effective, not only had to be in writing and signed by all the Partners (Mr Ojo submitted that this meant executed), but also had to be expressed to be an addendum to the 2014 Partnership Agreement. I was also referred to Mr Ojo’s skeleton argument for the Trial. Mr Ojo did not, as I read the skeleton argument, articulate his position on Clause 44 as clearly in the skeleton argument as he did in the extracts from his closing submissions to which I was referred. I stress that this is not a criticism. In any event, I note that the skeleton argument did take the point that there had been no deed of variation of the 2014 Partnership Agreement, with the consequence that what Mr Ojo referred to as “the second partnership” took effect as a partnership at will. There was therefore no concession made in the skeleton argument that there was anything to satisfy Clause 44, in terms of variation of the 2014 Partnership Agreement.

On the basis of the relevant extracts from Mr Ojo’s skeleton argument for the Trial, and on the basis of extracts from the transcript of Mr Ojo’s submissions at the Trial which I was shown by Mr Coppel, it appears that the Judge did misdirect herself. It appears that the Judge was mistaken in recording (i) that Mr Ojo did not argue against the proposition that the First Notice could do duty as a variation of the 2014 Partnership Agreement within the terms of Clause 44 and, (ii) that Mr Ojo accepted that the First Notice did not have to be in the form of an addendum to the 2014 Partnership Agreement. In theory therefore, Ground 3(d) is made out.

I do not see however how this assists the Defendants, either in relation to the dispute over the effect of Clause 44 or more generally in relation to the Appeal. I say this for three reasons.

First, it is clear that the Judge did not decide the issues arising in relation to the effect of the First Notice on the basis of what she understood (wrongly it appears) not to have been argued by Mr Ojo and/or on the basis of what she understood (wrongly it appears) to have been conceded by Mr Ojo. It is clear from Paragraph 21 that the Judge reached her own conclusions on these issues, on the basis of her acceptance of the submissions of Mr Warner for the Claimant. After reaching those conclusions, the Judge then recorded the position of Mr Ojo. Putting the matter another way, if one notionally deletes the references to the position of Mr Ojo in Paragraph 21, the reasoning and conclusions of the Judge still stand. It is clear that the Judge would have reached the same conclusions as she reached in Paragraph 21, even if she had recorded Mr Ojo as opposing these conclusions.

Second and even if one assumes, contrary to my view, that the Judge’s reasoning and conclusions in Paragraph 21 cannot stand because they were founded on a misunderstanding of Mr Ojo’s submissions, this does not assist the Defendants. For the reasons which I have set out I agree with the Judge’s conclusions on the effect of the First Notice, whether or not the Judge’s reasoning was undermined by reliance upon a misunderstanding of Mr Ojo’s submissions.

Third, it is important not to lose sight of the fact that the First Notice constituted an additional ground for the Judge’s conclusion that the 2016 Agreement was not invalidated by Clause 44, on the basis that, if the 2016 Agreement was caught by the terms of Clause 44, the terms of Clause 44 were satisfied by the First Notice. This disregards the Judge’s principal conclusion, which was that, by the 2016 Agreement, the partners in the 2016 Partnership agreed to be bound by the terms of the 2014 Partnership Agreement. For the reasons which I have explained, and in common with the Judge, I do not consider that Clause 44 was engaged at all, in relation to the 2016 Agreement.

I therefore conclude that Ground 3(d), although technically made out, does not assist the Defendants.

In summary therefore, the position in relation to the First Notice seems to me to be as follows. If, contrary to my view and contrary to the view of the Judge, Clause 44 applied to the 2016 Agreement, I consider that the Judge was right to conclude that compliance with Clause 44 was achieved by the First Notice and its attachment.

I have so far considered Grounds 1-4 by reference to the events in 2016, when the Second Defendant joined the Medical Partnership, and by reference to what I have referred to as the 2016 Agreement and the First Notice. This is not however the limit of the Defendants’ arguments in support of Grounds 1-4. Applying my reasoning as set out above, the arrival of the Second Defendant into the Medical Partnership had the effect of the dissolution of the 2014 Partnership, and its replacement by the 2016 Partnership. Dr Jagadish however left the 2016 Partnership with effect from 31^st March 2017. Applying the principles set out Lindley, as quoted earlier in this judgment, the departure of Dr Jagadish would have created a technical dissolution of the 2016 Partnership and its replacement by a new partnership between the Claimant and the Defendants, which I will refer to as “the 2017 Partnership”. In theory, it is open to the Defendants to argue that the 2017 Partnership took effect as a partnership at will, in the absence of valid variation of the terms of the 2014 Partnership Agreement.

The problem with this argument is however obvious. If the Judge was right in her finding that the partners in the 2016 Partnership agreed that the terms of the 2016 Partnership should be those of the 2014 Partnership Agreement, save for the identity of the partners and the profit share arrangements, the question becomes whether the dissolution of the 2016 Partnership and its replacement by the 2017 Partnership effected any change in the terms upon which partners in the 2016 Partnership had agreed. The Judge answered this question in the following terms in Paragraph 23, which I repeat for ease of reference, and in Paragraph 24:

“23.

In 2017, when Dr Jagadish retired from the partnership, there was, again, a technical dissolution. However, in my view, in light of clause 5.3 of the Original Agreement, this did not result in a substantive dissolution of the partnership. On 16 February 2017, the claimant sent an email to NHS saying, “Please find attached Contract Variation to come into effect from 2 April 2017, Duly signed by all partners, no changes to partnership, only removal of Dr Jagadish all rest is the same”. The defendants were both copied into this email and did not demur. Again, the variation of the GMS Contract signed by all four partners in February 2017 and sent to NHS setting out the departure of Dr Jagadish, constitutes a written variation within the meaning of clause 44 of the Original Agreement.

24.

In the circumstances, I am satisfied that all the parties agreed to be bound by the terms of the Original Agreement when the second defendant was admitted as a partner. There was no departure from those terms in 2017 on Dr Jagadish’s retirement from the partnership in light of the above-mentioned email of 16 February 2017. Accordingly, the partnership was at all material times governed by the terms of the Original Agreement and did not become a partnership at will.”

The Judge thus found that there was no departure from the terms which the partners in the 2016 Partnership had agreed, when Dr Jagadish retired from the 2016 Partnership. Those terms were the terms of the 2014 Partnership Agreement, save only for the identity of the partners and the profit share. It is not entirely clear to me what finding, if any, the Judge made as to the revised profit share when Dr Jagadish retired, but I do not see that this matters in circumstances where it is clear that, in all other respects save for the identity of the partners, the terms of the 2016 Partnership continued to govern the 2017 Partnership.

Given the Judge’s findings, and applying my reasoning in relation to the 2016 Agreement and the 2016 Partnership, I cannot see any room for the argument that Clause 44 applied as to prevent the terms of the 2014 Partnership Agreement from taking effect as the terms of the 2017 Partnership. Clause 44 did not apply and did not have this effect. Again, the Defendants’ argument proceeds on the misconceived basis that the dissolution of the 2016 Partnership and its replacement by the 2017 Partnership constituted a variation of the 2014 Partnership to which Clause 44 applied.

Even if however the above analysis is wrong, the Judge had another ground for concluding that Clause 44 did not prevent the terms of the 2014 Partnership Agreement from applying to the 2017 Partnership. In Paragraph 23 the Judge made reference to the email sent to the NHS by the Claimant on 16^th February 2017. Attached to the email was a notice of variation signed by all four partners in the 2016 Partnership (“the Second Notice”). The Judge concluded that the Second Notice could be relied upon as a variation of the 2014 Partnership Agreement, for the same reasons as she had relied upon in relation to the First Notice. For the reasons which I have already set out in relation to the First Notice, it seems to me that the Judge was correct in this conclusion if, contrary to my view, Clause 44 was capable of preventing the 2017 Partnership from taking effect as a partnership on the terms of the 2014 Partnership Agreement.

In summary, it seems to me that the Judge was correct to conclude that both the 2016 Partnership Agreement and the 2017 Partnership took effect as partnerships on the same terms as the 2014 Partnership Agreement, subject only to the changes in the identity of the partners and the changes in profit shares.

Drawing together all of the above analysis, I can summarise my conclusions on Grounds 1-4 in the following terms:

Drawing together all of the above analysis, it follows that the Judge was correct to conclude, in Paragraph 27, that the Defendants’ notice of dissolution had no effect. It did not comply with the terms for termination to which the 2017 Partnership was subject. As such, the Medical Partnership, strictly the 2017 Partnership, was not terminated by the notice of dissolution on 5^th November 2021, but continued until 18^th April 2023; being the date at which it was accepted by the Claimant that the Medical Partnership had been brought to an end.

I therefore conclude that Grounds 1-4 fail as grounds of appeal.

This means that the Claimant’s right to the Annual Payment continued until 18^th April 2023. Whether the arrears of the Annual Payment which the Judge found to have accrued are payable depends however upon whether the Judge was correct to conclude that the Claimant was entitled to payment of these arrears in advance of the taking of a dissolution account. This brings me to Grounds 5 and 6.