The Court of Appeal (CoA) has found that an individual, who resigned from a farming partnership in 2010, was entitled to the value of her share of partnership assets at retirement, despite no financial terms of retirement having been agreed.

Sheep grazing

In Procter v Procter & Ors [2024] EWCA Civ 324, Suzanne Procter and her brothers were partners in a Farming partnership with their father.

  • In 2010, Suzanne resigned from the partnership.
    • There was no provision in the partnership deed for one partner to resign unilaterally, but the other partners accepted that Suzanne had ceased to be a partner.
    • No financial terms of Suzanne’s retirement were agreed.  
  • After the death of the siblings’ father in 2014, Suzanne brought a claim against her brothers in the High Court on the basis that she was entitled to the value of her share of the partnership's assets as of the date she resigned in 2010.
  • The High Court limited Suzanne’s claim to a quarter share of a 1994 tenancy, which had significant value.
    • At the time of Suzanne’s retirement, no one realised this tenancy subsisted.
  • Suzanne’s brothers appealed to the Court of Appeal (CoA).

The CoA found that:

  • When a partner resigns from a partnership, there is a ‘technical dissolution’.
    • Suzanne ceased to be a partner and the business relationship between her and the other parties came to an end.
    • There was no dissolution in respect of all the partners (a ‘general dissolution’). There was no full-scale winding up of the partnership. There was only a dissolution in respect of Suzanne as the outgoing partner.
  • To determine the entitlement of a partner on their retirement, the first port of call is the Partnership agreement.
    • If the partnership agreement makes an express provision for the outgoing partner to receive a payment in respect of their partnership share or expressly provides that their share shall vest in the continuing partners without payment, that determines conclusively what the outgoing partner is entitled to.
  • If the partnership agreement does not deal with entitlement on retirement, it is necessary to determine whether anything was agreed between the parties at the time of the relevant retirement.
  • In this case, there was no relevant provision in the partnership agreement and there was no ad-hoc agreement made at the time of Suzanne's retirement.
  • Suzanne had not agreed to hand over her share in the partnership assets to the other partners without payment, nor had she agreed to the terms on which she might do so.
    • Suzanne’s resignation was simply saying that she wished to cease being in partnership with her father and brothers.
    • She was not agreeing to give up her valuable proprietary interest in the partnership's assets.
  • The other partners had, in effect, taken over the partnership's assets, but Suzanne had not assigned or lost her interest in the net assets as they stood in 2010.
    • The continuing partners had continued to use Suzanne’s share of the assets in the business without accounting for them.
  • The remaining partners had to account to Suzanne for the value of her quarter share in the 1994 tenancy, based on its market (not book) value at the time of her retirement, plus 5% interest thereafter.

The appeal was dismissed.


If ever there was a case demonstrating the importance of a partnership agreement dealing with partnership changes, this is it.  One of the judges noted that after two substantial trials and judgements, there remains the question of valuation and interest payments, about which, disputes continue.

It was noted that legal costs were already 'very much higher' than £850,000.

Useful guides on this topic

Partnership agreements: What should be considered?
Partnership agreements can be invaluable to clarify everyday matters and settle disputes within a partnership. What sort of things should be discussed for inclusion in a partnership agreement? Why are they important?

Partnerships: Capital Gains Tax
How does Capital Gains Tax (CGT) work for partners and partnerships? What is HMRC’s Statement of Practice D12? How are transactions between partners treated? What if the partners are connected persons for CGT?

Farming: Tax Overview
What is farming? What are the tax consequences and tax considerations of farming? What are the features of agricultural tenancies? What expenses can farmers claim for tax purposes? Are there special tax and accounting rules for farmers? What are the VAT rules for farmers?

Farming: Capital allowances
What types of expenditure may qualify for capital allowances in farming businesses? What farming-specific points need to be considered?

External link

Procter v Procter & Ors [2024] EWCA Civ 324