Khan and Another v Miah and Another [2000]

This case relates to partnership law and the starting point from which a partnership can be said to have commenced.

It was held that a partnership could be said to have arisen before a business started trading. In this case, the purported partners had committed capital and spent time and money acquiring business premises and obtaining planning consent for carrying on business as restaurateurs.  These and other activities were part of the joint venture of the business, which was carried on with a view to a (admittedly eventual) profit.

Here the House of Lords reversed a decision by the Court of Appeal. The Court of Appeal believed there was a rule that a partnership could only exist once trading had commenced and had focused on the distinction between contemplating or agreeing to become partners and actually becoming partners.  The House of Lords held there was no such rule in law. Instead the question is when do they embark on the activity required by the joint venture of the business with a view to making a profit.

An interesting additional point in the judgement of Lord Millet concerns the implied terms of a partnership under the Partnership Act 1890 if no other terms, written or implied, apply.  The Judge noted that these were default provisions only and were not statutory presumptions. It would only need slight evidence to rule out the default provisions found in the Act.  The House of Lords allowed the appeal and restored the orders of the trial Judge.