Our client was a GP who had worked in a large GP practice for several years; he worked very hard and very long hours; he was a professional to the highest standards with dedication and commitment to the Partnership and to his patients.
After some years of consistently long hours and hard work he was finally offered and he entered into a GP Partnership Agreement with his co-partners. The terms were not as he had wanted because they failed to recognise his efforts; he was not given equal parity with the existing partners despite his hard work which was disproportionate to that compared with his co-partners. His share of the partnership and therefore his profits and drawings were lower than those of others. Nonetheless given that he had committed so many years of his life to the Practice he decided to accept them. He chose not to renegotiate the terms to his favour at the time he entered into the Partnership Agreement and was happy to accept those as they were.
Our client received several verbal assurances from the senior partners to remedy the situation to provide fairness to him. This was never done.
A few years later the Practice developed ambitious plans to build a large a medical centre. It had successfully obtained the necessary funding and approvals to proceed.
Our client was asked to enter into agreements (Property Agreements) for new premises for the Practice with complex arrangements with PFI funding and mortgage arrangements under which our client was to provide personal guarantees.
Our client wished to stall entering into the Property Agreements to renegotiate better terms of the partnership for himself.
The status of partners in law is not like that of employees and therefore partners do not get the legal protection afforded to employees under employment laws. In this respect our client’s position was weaker than that of an employee.
The Partnership Agreement defined “Lease” and “Property” under the Agreement as follows:
“The Property” is the “leasehold property which is occupied by the Partnership for the purposes of the Practice details of which are set out in schedule 1 and or any additional or substituted property so occupied by the Partnership”.
Clause 4.1 stated that the “Practice shall be carried on by the Partnership from the Property… In accordance with the provisions of the Lease”.
There was no specific property which had been referred to in the Partnership Agreement but, even if there had been, the other Partners could have substituted another Property which was occupied by the Partnership. In this respect the definitions were vague and unhelpful.
The Partnership Agreement also set out that:
“each of the Partners shall at all times conduct himself in a proper and responsible manner and use his best skill and endeavour to promote the Practice” and that the Partners shall
“comply with all such decisions of the Partnership as made by the terms of this agreement be binding upon him”
Another clause contained limitations on the partners authority whereby “no partner acting alone shall
16.2.3 Knowingly cause or permit or suffer to be done anything whereby any of the property of the Partnership may be taken in execution or otherwise endangered”
16.3 Any partner in breach of the limitations imposed by this clause 16 shall indemnify the other Partner and keep them indemnified from and against all losses, damages, actions, proceedings costs and expenses arising directly or in directly out of such breach without prejudice to any power of the other Partner to expel him by reason of the beach”.
The definition of Property and Lease were very wide thereby enabling the Partnership to take on a new property and lease under the terms of the existing Partnership Agreement.
The Partnership Agreement also contained a provision for the management of the Practice. That a unanimous special resolution of not less than both of the Partners would be required for “the opening or closing of any office of the Practice or the acquisition sale or disposal of any freehold or leasehold premises”.
We were asked to advise on what our clients rights were and what he could do as an existing partner. In amongst all of the above we found a solution to the benefit of our client; we advised him of the different options available to him and ways to proceeds o that he could make an informed decision.
At the end of the case our client had clear path and direction set to enable him to deal with the matter in a way which was ultimately to his long term financial benefit.
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