"Unveiling Juridical Legacy: Catalytic Partnership Cases Shaping the Ugandan Business Law Landscape"

INTRODUCTION.[i]

These are just some of the partnership law cases with enduring legal impact in Uganda.

The Formation and Management of Business Firms

Dr. Okello N David v Komakech Stephen 2006

The facts briefly are Dr Okello .N. David, brought a suit against the defendant Komakech Stephen for a declaration that a partnership subsists between himself and the defendant a settlement of partnership accounts for general damages, interest and costs.

ISSUE

On whether there was a partnership between the parties.

The court held

That not every partner in a partnership should get actively involved in the management of a partnership business.

Court held further, that Section 2(1) of the Partnership Act defines a partnership as the relationship, which subsists between persons carrying on a business in common with a view of profit. The fact that there is no partnership agreement is irrelevant because a partnership can be formed informally or by the conduct of the parties. See Bubare Company Vs Mbale Kente [1982]HCB 143.

Section 24 of the Act provides that property purchased with money belonging to the partnership or firm is deemed to have been bought on account of the firm.

In the instant case the relationship between the plaintiff and the defendant which the plaintiff describes as a partnership and which the defendant describes as a loan agreement was not reduced into writing or a written agreement.

It was the court’s well-settled view and I quote

“The defendant disputed the existence of a partnership were not written and because the plaintiff was not in the daily management of the taxi business. As it was held in Bubare Company vs. Mbale Kente (supra) a partnership can be informal. It is also trite that not every partner in a partnership should get actively involved in the management of the partnership business for a partnership to exist. In fact, there are partnerships with inactive partners known as sleeping partners. The defendant sought to explain away the joint account was opened by himself and the plaintiff as an account on which to pay back the money the plaintiff had lent to him because the plaintiff feared his account being regularly credited. If that was the case the plaintiff would equally be afraid of a joint account operated by himself and the defendant being regularly credited the defence also submitted that if there had been a partnership the joint account and the vehicle the parties bought would have been in the names of the partnership. PW2 Ataro Cecilia explained that the account could not have been a partnership account because the partnership between the parties was not registered.

Key Takeaways From the Above Decision.

1. REGISTRATION OF A PARTNERSHIP.

The court discussed that the absence of formal registration of the partnership does not necessarily invalidate its existence. While registration might provide legal advantages, it is not the sole determinant of whether a partnership is valid

The fact that there is no partnership agreement is irrelevant because a partnership can be formed informally or by the conduct of the parties. See Bubare Company Vs Mbale Kente [1982]HCB 143.

2. Property Ownership:

Section 24 of the Partnership Act was referenced, which states that property acquired using partnership funds is considered to be owned by the partnership or firm. This reinforces the idea that the ownership of property can be indicative of a partnership.

3. A partnership can be informal based on the conduct of the parties. It is also trite that not every partner in a partnership should get actively involved in the management of the partnership business for a partnership to exist. In fact, there are partnerships with inactive partners known as sleeping partners as held in Bubare Company vs. Mbale Kente [1982] HCB 143.

4. Involvement in Management:

The court clarified that not all partners need to be actively involved in the day-to-day management of the partnership business for a partnership to be valid. There can be partners who are not actively participating and are often referred to as "sleeping partners.

5. Lastly, section 31 of the Partnership Act imposes upon the transfers the duty to render true accounts and full information of all things affecting the partnership to any partner of his legal representative. If a partner fails in this duty imposed in breach of the partnership agreement.

Overall, the case underscores the fact that the existence of a partnership can be established through various means, including conduct, actions, ownership of property, and the nature of business activities, even in the absence of a formal written agreement or registration. The court focused on the substance of the relationship rather than just its formalities.

Other Legal Precedents:

Referencing similar cases that reinforce partnership principles:

In Allport Ports Freight Service v Julius Kamanyi and anor 1996, the court found that if two or several persons jointly purchase goods for resale with a view of dividing up the profits, a partnership is created and each of them will be liable to third parties, court furthermore stated that a partnership need not be established formally and in writing, and what is sufficient to establish is the existence of a community of interest.

BUBARE COMPANY VS MEBLE KENTE [1982] HCB 143

Three partners carried on a retail business. Each of them contributed, however after some time the defendant became uncooperative and refused to sign the partnership agreement and share the partnership money. The other partners applied for the dissolution of the partnership.

Whether the partnership exist?

Court Held That

There was ample evidence that the 3 persons were carrying on a business of shop keeping with the view of making profits. The fact that there was no written agreement between the partners when the partnership was being formed was immaterial since a partnership had been formed informally or by the conduct of the partners. As there was no partnership agreement, the partnership would be governed by provisions of the partnership act. The partnership was dissolved.

KEY TAKE AWAYS.

1. Partnership Formation: Three partners were involved in a retail business together. Despite the absence of a written partnership agreement, their conduct and actions indicated that they were working together to make profits, constituting an informal partnership.

2. Existence of Partnership: The central question was whether a partnership existed between the three individuals. The court found that ample evidence demonstrated that they were engaged in a business (shopkeeping) with the intention of making profits, thereby establishing the existence of a partnership.

3. Formal Agreement Not Essential: The absence of a written partnership agreement at the time of formation was deemed immaterial. The court recognized that partnerships can be formed through informal means or by the conduct of the partners. Since there was no written agreement, the partnership was considered to be governed by the provisions of the Partnership Act 2010

4. Dissolution Granted: The court ruled in favor of the partners who sought dissolution due to the defendant's uncooperative behavior. As a result, the partnership was dissolved based on the circumstances presented.

In summary, the case involved a dispute between partners in a retail business where one partner became uncooperative. Despite the lack of a written partnership agreement, the court recognized the existence of a partnership formed through the conduct of the partners. The court invoked provisions of the partnership act and granted the dissolution of the partnership due to the uncooperative partner's actions.

IN REGARDS TO PARTNERSHIP PROPERTY AS PER SECTION 22 OF THE PARTNERSHIP ACT 2010.

PETRO SONKO AND ANOTHER v PATEL AND DAMIANO KIWANUKA [1954] 20 EACA 99

The second respondent and the plaintiffs were partners. The first respondent was a judgement creditor who sought to recover money from the second respondent as a judgement debtor. Insofar as partnership dealings are concerned, the second respondent (sleeping partner) had advanced Sh 2000 to the partnership for the purpose of buying coffee but the first respondent interpreted this to be a loan agreement and to that extent sought to attach the proceeds of that “loan transaction” between the second respondent and the other partners

HOLDING:

The “agreement for the loan” shows that Damiano was to advance Sh 2000 for the purpose of buying coffee… Not a word is said about repayment. As this was money contributed by a partner in the firm, this advance clearly became an asset of the partnership and cannot be attached.

IN REGARDS TO PARTNERSHIPS SHARING PROFITS AS PROOF FOR EXISTENCE OF A PARTNERSHIP AS PER SECT 3 (b) OF THE PARTNERSHIP ACT, 2010

THE CASE OF REAMTON LTD v UGANDA COOPERATIVE CREAMERIES AND KAWALYA [1996] 3 KALR 28

The facts briefly are The plaintiff entered into a loan understanding with the respondent wherein advances were made towards the respondents to assist in the purchase of coffee. In turn, the respondent undertook to pay back the loan and also provide 30% of the profits to the plaintiff. Upon failure to pay the loan, the respondent alleged that the two parties were partners and as such could not be asked to repay the money. However, the facts suggested that the respondent was in the habit of getting loans.

Court held as Follows,

That sharing of profits does not of itself infer the existence of a partnership between persons in business. Much as sharing of the profits might suggest that the persons are partners, if there are other circumstances to be considered, the sharing of profit is merely a factor in the decision. It is necessary to examine all the facts of the case.

NANKYA T/A OFFENDERS REHABILITATION INTERNATIONAL V TINASAH INVESTMENT (MA 648 of 2011)

The facts briefly are;

In October 2009 while in the course of her employment at Offenders Rehabilitation International, the applicant issued a Local Purchase Order for supply of wheelbarrows and rolls of barbed wire to the defendant. The defendant delivered the same to the ORI offices on Mawanda road which were received by the applicant. Upon returning to said offices to collect payment a few days later, the defendant was shocked to learn that ORI had vacated its premises. Investigations revealed that ORI was an unregistered entity. The defendant then sued for special damages in Civil Suit No. 257 of 2010 upon which the applicant was sued and served as a second defendant. The present suit is thus an application under Order 30 Rule 8(2)(b) that her name be struck off the pleadings as far as she is not and has never been partner of ORI and was only engaged as a casual employee of the same. The applicant contended that no notice as to the capacity in which she was served under Order 30 Rule 5 was issued to her and that because no such notice was served, the latter part of the rule provides that the person shall be deemed to be served as partner.

Key Take Aways:

Under Order 30 Rule 5: The applicant argued that no notice regarding the capacity in which she was served was issued to her, and according to Order 30 Rule 5, a person shall be deemed to be served as a partner if no such notice is served. However, the court clarified that Rule 5 only applies when summons are issued to a firm and served as per Order 30 Rule 3.

Application of Rules: The court pointed out that Rule 3 applies when persons are sued as partners in the name of their firm. In this case, the applicant was sued in her individual name, and any inclusion of "trading as" was considered a potential misnomer.

Capacity and Connection to Offenders Rehabilitation International (ORI): The court noted that the fact that the applicant claimed to have acted in the course of her employment did not inherently make the suit against her incompetent. The court emphasized that the applicant's actual connection to ORI needed to be established through oral evidence (viva voce), and not through the nature of this type of suit.

In Regards to Unregistered Entity: The court stated that since ORI was alleged to be an unregistered entity, laws related to partnerships and the Business Names Registration Act (BNRA) might not apply directly. The court suggested that if the use of ORI's name was fraudulent or part of a conspiracy to defraud, different legal considerations might be applicable.

In summary, the case involves a dispute between a defendant and an applicant who was sued as a second defendant in relation to a purchase order issued by the applicant while employed at ORI. The court emphasized the need for establishing the applicant's actual connection to ORI through oral evidence and discussed the applicability of specific legal rules based on the circumstances of the case, particularly related to partnership and the status of ORI as an unregistered entity.

IS PRESENCE OF A PARTNERSHIP DEED PROOF ENOUGH TO SHOW EXISTENCE OF A PARTNERSHIP.

ABUBAKER WALAKIRA V ABUBAKER WALUSIMBI CIVIL SUIT NO. 579 OF 2012

The facts briefly are by a Deed of Partnership dated 23rd July, 2008, the plaintiff and the defendant entered into a business association wherein the plaintiff offered his land, for the partnership business and it was agreed that the defendant was to put up developments on the said land for purposes of the business. It was further agreed that the plaintiff was entitled to 40% shareholding while the defendant was entitled to 60% shareholding in the business.

In 2012, the plaintiff sued the defendant seeking for the dissolution of the partnership, for the defendant to render accounts in respect of the business, an order for valuation of the business and payment of the profits apparently due to the plaintiff, It was the plaintiff’s case that the defendant had breached his obligations under the Partnership Deed, had taken over sole management of the business, banked all the profits on his personal account and failed to pay the plaintiff his entitlements of the proceeds from the business.

On the other hand, the defendant contended that the Partnership agreement was breached by the plaintiff when he refused to vacate the land in order to pave way for development as had been agreed and that ever since the establishment of the Partnership.

ISSUES BEFORE COURT

Whether in the circumstances, the Partnership still exists and is operational.

Whether there was a breach of the terms of the Partnership Deed by any of the parties.

Holding

The court held that it was apparent that the Partnership Deed did not have a clause in relation to the dissolution or mode of dissolution of the partnership

That the Partnership Deed defined the relationship between the parties but did not provide for the event of the partnership coming to an end.

Court agreed with the submission of Counsel for the defendant that in such an event, the subsequent existence of the partnership could not be perceived from the Partnership Deed but from extrinsic evidence and from the conduct of the parties.

The definition of a partnership in the Partnerships Act is instructive in determining whether a partnership still subsists between the parties. Section 2(1) of the Act states as follows;

“Subject to subsection (2), a partnership is the relationship which subsists between or among persons, not exceeding twenty in number, who carry on a business in common with a view to making profit”.

It appears to me, from the above, that in order to say that a partnership is in existence and operational, there must be business being carried on by the partners. David.J Bakibinga in his Partnership Law in Uganda, states as follows, and I agree: “The High Court of Nothern Nigeria (as it then was) held that no partnership existed between the parties. The court further stated;… the existence of partnership depends on the carrying on of business in partnership and not on the agreement to form a partnership … if the parties have begun to carry on business (though prematurely) they will be regarded as partners.

In similar tone, Jones S.P.J. thus observed in Bank of the North Vs Dabare 1976 NCLR 448 (High Court of Kano) (see Bakibinga supra pg 37).The question of whether a partnership exists is one of mixed law and fact. The law is contained in ss.1 and 2 of the Partnership Act, 1890 of the United Kingdom. The facts are the common business activities of the parties as provided by their words and actions including if one exists, a written partnership agreement”

It was the evidence of both the plaintiff and the defendant that upon the execution of the Partnership Deed, the business was commenced. However, the defendant led evidence that the parties ceased to carry on business upon incorporating a company that took on all the businesses of the partnership. It appears to me that upon incorporation of Jazzbridge Hotel Limited, business started to be carried on under the name Jazbridge. The documents and receipts tendered in evidence all bear the name Jazzbridge.

That there is no proof that the partnership had registered a business name so as to be compelled to file a notice of cessation of business with the Registrar, in accordance with Section 14 of the Business Names Registration Act. Even then, the wording of the said section does not imply that incase the parties do not file a notice of cessation of business, then the business is to be presumed as being in existence even when it was ended by the parties.

It is my finding that in the circumstances of this case, the plaintiff and the defendant ceased to carry on business under the partnership.

KEY TAKEAWAYS.

Partnership Dissolution:

The central issue before the court was whether the partnership still existed and was operational. The court noted that the Partnership Deed did not contain a clause specifying the dissolution or the process of dissolution of the partnership. While the Deed defined the relationship between the parties, it did not address the termination of the partnership.

Determining Partnership Existence:

The court relied on the definition of partnership under the Partnerships Act, which states that a partnership is a relationship between persons who carry on a business in common with the intention of making a profit. The court noted that for a partnership to exist, business activities must be actively carried out by the partners. Mere agreement to form a partnership is not enough; actual business operations are necessary.

Evidence and Conduct:

Both parties agreed that they began business activities upon signing the Partnership Deed. However, the defendant argued that they stopped operating under the partnership upon incorporating a company named "Jazzbridge Hotel Limited," which took over the business. The court considered the evidence presented, including documents and receipts that bore the name "Jazzbridge." The court emphasized that the evidence of actual business activities and conduct played a crucial role in determining whether a partnership existed.

Incorporation and Business Continuation:

The court found that the partnership ceased to carry on business when the parties incorporated "Jazzbridge Hotel Limited" and began conducting business under that name. The court noted that there was no requirement for the partnership to register a business name, and even if such a requirement existed, it wouldn't imply the continuation of the partnership after incorporation.

Legal Interpretation:

The case underscores the importance of interpreting partnership existence based on both legal principles and the actual conduct of the parties. The court took into account legal definitions, past court decisions, and the factual circumstances of the case to determine whether the partnership was still operational.

Partnership Act and Business Name Law:

The court referred to the Partnership Act to define the nature of a partnership, highlighting that business activities are a fundamental component. It also mentioned the Business Names Registration Act but clarified that registration or lack thereof did not automatically imply the existence or cessation of a partnership.

In summary

The case highlights the significance of active business operations, conduct, and legal definitions in determining whether a partnership continues to exist. The court's decision was based on the evidence presented, the conduct of the parties, and the relevant legal principles.

PERSONAL LIABILY OF PARTNERS.

National Drug Authority V John Chris Bakiza Civil Suit No 34 Of 2008

The case involved allegations of the defendant's firm not remitting rental funds collected on behalf of the plaintiff, leading to financial loss. The defendant raised various defenses and counterclaimed for costs arising from a previous case. The court determined whether the plaintiff's claims are valid and whether the defendant's counterclaim is justified.

KEY TAKE AWAYS.

Sharing of Profit as Evidence: Receiving a share of the profits from a business is considered prima facie evidence of being a partner in that business according to section 3(c) of the Partnership Act cap 114.

Sole Proprietorship vs. Partnership: The Business Names Registration Act cap 109 distinguishes between a sole proprietorship and a partnership. A sole proprietorship involves a single individual carrying on business, while a partnership involves two or more individuals or legal entities coming together to carry on business for profit.

Changes in Registration Details of a Business: If there are changes in the details registered for a firm or individual, the Act mandates that these changes must be reported to the registrar within a specified period. Failure to do so can result in penalties.

Who has Authority upon Demise of a Partner: After the death of a sole proprietor, without proper legal documentation like probate or letters of administration, no one has the authority to execute documents on behalf of the estate of the deceased proprietor.

Business Name Removal: If a firm or individual registered under the Business Names Registration Act ceases to carry on business, there is a requirement to notify the registrar within a specific timeframe. Failure to do so can result in penalties, and the registrar may remove the name from the register if there's reasonable cause to believe the business is not active.

Partnership Liability:

The court emphasized that a law firm formed as a partnership is not a separate legal entity like a company. It is the individual members of the firm who collectively carry on business under the name and style of the firm. The defendant's representation as a senior partner in the firm places him outside the scope of being considered merely an employee and establishes him as a member of the partnership carrying on business.

Deceased Partner's Liability:

The court cited section 16 (3) of the Partnership Act 2010, which states that the estate of a deceased partner cannot be held liable for partnership debts incurred after the partner's death. Since both the service agreement forming the basis of the claim and the work executed under it were done after the death of Francis Kabyesiza, his estate cannot be held accountable for the partnership's obligations. Both the service agreement which formed the basis of the plaintiffs claim and the work done under it were executed and done after the demise of Francis Kabyesiza and the estate cannot be held liable under the deed.

Representation and Liability:

Despite the defendant testifying that there was no partnership between himself and the late Francis Kabyesiza, the court held that the defendant is bound by his earlier representation as a "Senior Partner in the Firm." This representation placed personal liability on him for any losses incurred due to his representation, and he is deemed personally liable based on section 16 of the Partnership Act 2010.

Doctrine of Estoppel:

The plaintiff's counsel relied on the doctrine of estoppel against the defendant's denial of liability. The defendant's representation as a senior partner led the plaintiff to believe in the partnership, and therefore, the defendant cannot deny this representation to avoid liability.

On whether there was a cause of action: The court referred to the case of Auto Garage and Another versus Motokov [1971] EA, which outlines the elements of a cause of action: the plaintiff must have a right, that right must have been violated, and the defendant must be liable. In this case, the plaintiff had a right under the service agreement to have its rent collected and remitted, the defendant failed to remit the agreed amount, and the defendant's personal liability is established based on his representation as a senior partner.

Obligatory Reporting of Death: According to Section 14(1) of the Business Names Registration Act, partnerships are required to report the death of a member, while in the case of a sole proprietorship, the legal representative of the deceased's estate must report the death within three months. Failure to report constitutes an offence.

Continuation of Business: If a business continues after the death of its owner or partner, it is considered part of the deceased's estate. The legal representative with probate or letters of administration should notify the registrar about the change in ownership.

Liability of Associates: Even without a formal partnership deed, the associates of Messieurs Kabyesiza and Company Advocates, by undertaking obligations in the service agreement, became personally liable for the obligations outlined in the agreement.

Advocate's Personal Responsibility: Advocates have personal responsibility for their clients' work, even if carried out by clerks. They are personally liable for the manner in which they carry out their duties, including supervising non-professional employees.

Liability for Clerks' Actions in Firms: The court went ahead to discuss the liability of clerks in Partnerships case of Lloyd versus Grace, Smith And Company [1912] AC 716, particularly the judgement of Lord Macnaughten. The facts were that a firm of solicitors allowed their clerk to conduct the business of the firm. In the course of conduct of that business the clerk dishonestly misappropriated the property of Mrs Lloyd for his own benefit by fraudulently presenting documents for her to sign.

His Lordship held that the general rule was that the master is answerable for every fraud of the servant or agent as is committed in the course of the service and for the master’s benefit though no express command or privity of the master is proved. Lord Macnaughten further agreed with the proposition of law that all deceits and frauds practised by persons who stand in the relation of agent, general or particular, do not fall upon their principals. For, unless the fraud itself falls within the actual or the implied authority of the agent, it is not necessarily the fraud of the principal.

Similarly the case of Smith And Company[1912] AC 716 highlights that a firm may be liable for the actions of its clerks or employees, particularly if the master benefits from those actions was held liable for the fraud of his agent because in that case Mrs Lloyd put herself in the hands of the firm when she did not know the exact position Mr Sandles (the clerk) who spoke and acted as if he was one of the firm.

Liability of Associates: The defendant's colleagues would also have been liable if the suit against them had not been withdrawn. The fact that they continued the business and undertook responsibilities suggests their liability.

In summary, The court determined that the defendant's representation as a senior partner, even if he denied the existence of a partnership, established his personal liability for the plaintiff's claims under the doctrine of estoppel and section 16 of the Partnership Act 2010. The court found that the plaintiff's suit had a valid cause of action against the defendant personally and lastly court also found that if a business continues after the death of its owner or partner, it is considered part of the deceased's estate.

Similarly, in Francis Sembuya v All Ports Services (U) Ltd Civil Appeal No. 6 of 1999.

It was held that any person who by words spoken or by conduct represents himself, or who knowingly suffers himself to be represented, as a partner in a particular firm is liable as a partner to anyone who has, on the faith of any such representation, given credit to the firm, whether the representation has or has not been made or communicated to the person so giving credit by or with the knowledge of the apparent making the representation or suffering it to be made.

Other Persuasive Authorities : Drawing Insights From Influential Cases in Regards To Partnership Contributions:

The Case of W v Commissioner of Taxes, Pocock v Carter 1912. In W V Commissioner of Taxes, it was held that a partnership must have four essential elements the first one being each partner must pool something into the business i.e. money, labour or skill. It is therefore essential to note that contribution is not only monetary but also includes other things that could be beneficial for the business being carried out. The Excerpt of the Judgement.

The four neccessary ingredients for a valid partnership.

Similarly, in the case Pocock of V Carter 1912, where the partners were involved in a tailoring business in a building that belonged to one of the partners. This building was found to be her contribution to the partnership and was commercially viable because it contributed to the business by providing a location.

Whereas the case of Dawson V White affirms the principle of quantification as the court found goodwill not to be an asset of the firm as it could not be quantified and valued. Key Take Aways

• Partners may choose with whom they want to be associated.

• A partnership agreement may contain a termination provision or some other mechanism by which to remove a partner.

• Absence of such method renders use of another mechanism which is dissolution of the firm.

• Where partners wrongfully dissolve a firm, these partners are liable to the expelled partner for breach of the partnership agreement.

• Removal of a partner from a firm confers a right on the removed partner to an account of his interest against the continuing partnership i.e. where the other partners continue in the same business.

• Goodwill as Property: Goodwill can be distributed upon dissolution of a partnership where it has been agreed in a partnership deed. It can also be distributed by implication basing on ordinary course of business where distribution is not provided for under the partnership deed
  

Similarly, in the case of Miles V Clark 1953, the court opined that the parties’ connections were not partnership assets since they had not been quantified regardless of their usefulness.

The Facts briefly are The defendant took out a lease for certain premises for conducting the business of fashion and commercial photographers, he also furnished and bought photography equipment. The plaintiff later joined the business and they agreed to share the profits and pay the plaintiff 125 pounds. They both wanted to legalise the partnership but never did. They quarrelled and the partnership was dissolved. Key Take Aways

Partnership Formation: The court determined that a partnership existed between the defendant and the plaintiff based on the sharing of profits and the intention to conduct business together, despite the absence of a formal partnership agreement.

Partnership Property:

The court held that assets contributed by the partners for the purpose of the partnership, such as stocks of films (stock-in-trade), became part of the partnership property and couldn't be taken out again by the individual partners. This emphasizes the concept of joint ownership of assets for partnership purposes.

Implied Terms:

The court inferred terms into the partnership arrangement based on what was necessary for the efficient functioning of the partnership. It emphasized that only agreements that were essential for the partnership's operation should be assumed.

Whereas For The Use of Assets: The assets contributed by each partner, like stocks of negatives in this case, were considered to be used for the business's benefit as long as the partnership was ongoing. This reinforces the principle that partnership assets are meant for the partnership's collective use.

Goodwill: While the goodwill of the plaintiff was acknowledged, the court ruled that it wasn't a specifically agreed-upon asset of the partnership. Goodwill and reputation of individual partners were determined not to be part of the partnership assets.

Limited Transfer of Assets:

Only assets that were used in the course of carrying on the business were considered to change hands and become part of the partnership property. This means that assets that were not actively utilized for the business, such as the lease, furniture, fittings, and equipment of the studio, remained the separate property of the defendant and did not become part of the partnership assets.

Separate Property: Certain assets, including the lease, furniture, and equipment of the studio, were not considered part of the partnership property. These assets were deemed to remain the separate property of the defendant, highlighting the distinction between partnership assets and individual property. Below is part of the excerpt of the Judgement.

Overall, the case underscores the principles related to partnership formation, and reinforces the importance of examining the conduct and actions of parties involved in determining the existence and scope of a partnership the treatment of partnership assets, the implied terms of partnership agreements, and the distinction between partnership and individual property.

The above persuasive decisions all point towards the aspect of contribution and what amounts to contribution to join a partnership.

In Uganda the case of Francis Sembuya V Allports (u) Ltd court found that there is no legal requirement that parties should contribute in equal portions.

Additional Noteworthy Cases: Exploring Further Partnership Cases With Distinct Legal Implications:

A-Tec Industries Uganda Ltd and Anor V Gunter Piber and Anor HCT Misc. Application No.55/2012. Court found that an MOU should depict and embody the understanding of parties without creating any right or obligation of a legally binding nature, and furthermore, unless it specifically states that it shall have legal effect.

Okwera Donation Henry V Abdullah Salleh 1982, The Court dissolved a partnership due to the misconduct of one of the partners. It found that as the defendant had behaved in complete disregard of the partnership deed through misappropriation of partnership funds and property, this amounted to misconduct of such nature as to destroy mutual confidence between the parties.

Mcleod vs. Dowling (1927) 43 TLR 655 a partner who sent a notice of dissolution died before the notice had been received by the co-partner and the court held that the partnership had been ended by death and as a result, the surviving partner was able to acquire the business and goodwill on the terms laid down in the articles. LASTLY ELIGIBILITY AND QUALIFICATIONS TO PRACTICE LAW IN UGANDA.

KATUNGI TONY V AG (Miscellaneous Cause 204 of 2017) The applicant was brought under Sections 8(1), (2), (3), (4), (5) and (6) of the Advocates (Amendment) Act No. 27 of 2002, Section 33 of the Judicature Act, Section 98 of the Civil Procedure Act, and Order 52 rules 1 and 3 of the Civil Procedure Rules seeking the following orders:

That the decision of the Law Council to subject the Applicant to an additional year of supervised practice be reviewed and set aside for being unreasonable, unjust, unfair, illegal, irrational and made in bad faith. A declaration that the Applicant has satisfied all the statutory requirements for the issuance of a certificate of eligibility by the Law Council to enable him enroll as an advocate of the High Court of Uganda. That the Law Council be directed to immediately and unconditionally issue the applicant a certificate of eligibility to enrol as an advocate; and/or in the alternative a Declaration/order relieving the Applicant of the requirement of obtaining a certificate of eligibility from the Law Council for the submission to the Chief registrar for enrolment. COURT HELD:

That Section 8(8)(b)(ii) and 8(10) of the Advocates (Amendment) Act upon which the Law Council based its decision does not apply to the applicant since he is a holder of a degree in law granted in Uganda and it is Section 8(8)(a) that applies. Court further held that

Where a public body like (the Law Council) is empowered by statute to issue guidance or advise or prescribe professional requirements for admission for eligibility for enrolment as an advocate, such power should not include the power to alter the main objectives of the Act. The courts attention is supposed to focus on the entire Act and the spirit for its enactment

The Applicant had been awarded a Diploma in Legal Practice from Kenya School of Law and enrolled as an Advocate of the High Court of Kenya. This meant that section 8(9) of the Advocates (Amendment) Act would have been applicable in considering whether he had satisfied the requirements as to the acquisition of professional skill and experience

That Section 8(8)(b)(ii) and 8(10) of the Advocates (Amendment), 2002 cited by the Law Council in their decision does not apply to the Applicant since he is a holder of a Degree in law granted in Uganda and it is section 8(8)(a) that applied to him This implies that a Ugandan who has obtained a law degree from Uganda but opts to study in another law school in a common law jurisdiction, and is enrolled in that jurisdiction, would be entitled to be enrolled on the same grounds as a Ugandan who obtained qualification from Uganda and qualified from Law Development Centre provided he complies with section 8(8) (a) of the Advocates (Amendment) Act 2002.

KEY TAKE AWAYS. Legal Basis of the decision:

The Law Council's decision was based on Section 8(8)(b)(ii) and 8(10) of the Advocates (Amendment) Act. However, the court determined that these sections did not apply to the applicant. Instead, it was Section 8(8)(a) that was applicable in the applicant's case. What are the Qualifications needed? The court established that the correct section applicable to the applicant was Section 8(8)(a), which implied that a Ugandan who earned a law degree in Uganda but chose to study in a law school in a common law jurisdiction and became enrolled there would be eligible for enrollment under the same grounds as a Ugandan who qualified in Uganda and at the Law Development Centre (LDC). This meant that compliance with Section 8(8)(a) was sufficient for enrollment. Notice of Eligibility: The court rejected the applicant's argument that the issuance of a notice of eligibility by the Secretary of the Law Council, which could be published in the gazette, meant that the applicant was deemed eligible for enrollment and that the process could not be revoked except if a member of the public raised an objection. The court held that if the Law Council mistakenly issued a notice of eligibility, it had the authority to revoke it. I quote

The Applicant contends that because the secretary Law Council issued him with a notice of eligibility for publication in the gazette, she was satisfied that the Applicant qualified for eligibility for enrolment and the same process could not be revoked unless member of the public raise a satisfactory objection. We do not agree with this position. If the Law council issues a notice of eligibility in error, it can rightly recall the same. However, the Law Council needs to always carry out the necessary due diligence prior to such issue of notices to avoid confusion regarding the eligibility process.

Obviously the Respondent’s intentions are to protect the legal profession from quack lawyers or persons with quack qualifications. This is particularly important today where quacks are infiltrating the profession. This important duty of the Law Council cannot be underscored.

Further,

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[i] Law Point Uganda encourages the readers to go back and read the full cases and supports the case-based method of learning which according to William Glanville in the Book Learning the Law 15th Edn Published in 2013 by Sweet & Maxwell Pg. 72 , he states that ‘Some teachers of law do not recommend the use of case books, although the numbers who adopt such a high-minded line is undoubtedly dwindling. In their view, the only way to become a proficient lawyer is to sit down and read cases, not contenting oneself with the headnote or any other simplified version of the case, but reading through the whole of the statement of facts and the whole of the judgments.