CERTIFICACIONES SANITARIAS

A partner can apply to the court to dissolve the partnership if another partner has become incapable to perform as a partner in the partnership

277_{Ibid, at 199} 278

R. C. Banks, Lindley & Banks on Partnership, (London: Sweet & Maxwell, 19th ed, 2010), p.836

279_{Ibid, p.825, at 24-67} 280

Besch v Frolich (1842) 41 ER (597)

281

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business282. Incapacity would include both physical and non-physical causes. Incapacity refers to inability to perform, either under the Mental Capacity Act 2005, or due to another reason, such as professional disqualification. Incapacity must be permanent as stated in section 35(b)283. However, a temporary medical condition, or one which is expected to improve, is not permanent. However, as Sir John Romilly, MR, pointed out in Whitwell v Arthur284, recovery from ill- health can occur, and so incapacity must be evaluated on a case-by-case basis. Accordingly, a judge may either close the case, or as in Whitwell, refrain from dissolving the partnership but order a stay of proceedings285 to avoid the possibility of a fresh suit. A further characteristic of the permanent incapacity is that that partner must be active in the business and not a dormant partner. Thus, the likelihood of an order for dissolution would also depend on how active the partner is and how it would influence the business of the firm286.

Permanent capacity may be partial, the partner being unable to discharge some of his duties -permanently. Partial capacity may be caused from either mental or physical incapacity287 and is assessed objectively in the light of one’s mental or physical state, not upon the subjective opinion of his colleagues or some reduction of work output. As Langdale MR set out in Sadler v Lee288, an affliction which does not prevent the partner from continuing to work is not enough to serve as grounds for dissolution. It must be an incapacity which prevents performance, however partial. Otherwise, the partner’s responsibility

282

PA 1890 s.35(b), Mental Capacity Act 2005 s.18(1)(g)

283

Twomey, M., Partnership Law,(Dublin: Butterworths, 1st ed, 2000), p.633

284_{Whitwell v Arthur (1865) 35 Beav 140} 285

Ibid, at 141

286 _{Morse G., Partnership Law (Oxford: Oxford University Press,7}th _{ed,2010), p.236} 287

R. C. Banks, Lindley & Banks on Partnership, (London: Sweet & Maxwell, 19th ed, 2010), p.826

288

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continues and the partnership cannot be dissolved on these grounds289. Concerning the degree of incapacity deemed sufficient by the courts to warrant dissolution, there is a difference of attitude over time in the courts. In older cases, permanence of incapacity was the overriding factor in the courts determining grounds for dissolution. The modern trend in cases is to assess whether the incapacity is sufficient to warrant dissolution290. Incapacity could be ether A) non-physical, such as mental incapacity or B) physical incapacity of any kind.

A) Non-physical incapacity: mental incapacity

Mental incapacity is defined in statute291 as the inability of person to make a decision because the mind or brain is impaired or its functioning disturbed. The mental incapacity of a patient is assessed according to the behaviour or circumstances of a person, if they have been diagnosed with a condition which affects the way their mind or brain works292. All persons are presumed to have capacity unless otherwise established293. Assumptions must not be made as to the capacity of a person to not have mental capacity for any superficial reason unrelated to an established condition294.

Section 18(e) of the Mental Capacity Act 2005 shows that mental incapacity is one of the causes of dissolution of a partnership, whereby the effect of the court’s decision will be to dissolve a partnership of which the patient is a

289

Ibid, at331

290

Blackett-Ord M., Partnership Law,(Sussex: Tottel, 3rd ed, 2007), p.375

291 _{Mental Capacity Act 2005 s.2(1)} 292

Bartlett, P., Blackstone’s Guide to the Mental Capacity Act 2005, (Oxford: Blackstone,2nded, 2008), p.314

293

Mental Capacity Act 2005 s.1(2)

294

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member. In Jones v Lloyd295, a case dated before the Court of Protection was given the powers to make orders for dissolution in 1959 which demonstrates that pre-Act that the mental incapacity of a partner was grounds for dissolution. Where the Mental Capacity Act 2005 does not provide for dissolution, the judges may resort to order dissolution under Partnership Act 1890 section 35(f) “just and equitable” grounds296

. This approach could accommodate a rising number of cases arising from a modern trend accepting that insufficient capacity is enough to justify dissolution of a partnership.

The power of court to make an order of dissolution of a partnership in these circumstances is given to the Court of Protection297, which will represent and protect the interests of a patient who suffers an impairment or disturbance of the mind or the brain298. If a professional assessor caring for the person concerned has a reasonable belief that the person in his care lacks the capacity to agree to actions or decisions, then an order for dissolution of the partnership of which the patient is a member can be made299. If an application for dissolution under section 18(1)(g) of the Mental Capacity Act 2005 failed due to there being unresolved financial matters, an order could be sought from under section 35(b) of the Partnership Act 1890300.

In the case of mental incapacity, the partner himself under section 18(1)(g) will not be able to petition court for dissolution, as a person suffering from an impairment of or disturbance to the mind or brain cannot be allowed to represent

295

[1874] L.R. 18 Eq 265

296

R. C. Banks, Lindley & Banks on Partnership, (London: Sweet & Maxwell, 19th ed, 2010), p. 826

297 _{Mental Capacity Act 2005 s.45(1)} 298

Ibid, ss.2(1) and 3

299 _{Bartlett, P., Blackstone’s Guide to the Mental Capacity Act 2005, (Oxford: Blackstone, 2}nd _{ed, 2008),}

p.315

300

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himself in court301. Therefore, the Court of Protection awards a lasting power of attorney to a done to manage property, assets and welfare302. Either the Court of Protection itself or any other innocent co-partner or co-partners of the patient are at liberty to petition for dissolution.

B) Physical incapacity

Section 35(b) of the Partnership Act 1890 gives the right to partners to apply to the court to dissolve a partnership when one partner becomes permanently incapacitated303 not mentally, i.e. physically from performing his part of the partnership contract304. Thus, physical incapacity would require evidence that the inability to perform duties or work is permanent, and that the medical condition is not temporary. In the case of Whitwell v Arthur, the application for dissolution was deemed reasonable but the improved condition of the patient both before and during the hearing showed that there was a need to prove that the condition of paralysis was permanent305. In this case, medical evidence was expected to show further improvement of the patient306. Therefore, Lindley suggests that unless it is clear that the condition is permanent, there should be an allowance for time to show whether the condition has stabilised before presuming permanence, and that medical evidence would almost always be required to show this307.

Under section 35(b), any partner other than the patient may apply for dissolution. It is easily understood why a mental health patient cannot represent

301

Twomey, M., Partnership Law,( Dublin: Butterworths, 1st ed, 2000), p.632

302

R. C. Banks, Lindley & Banks on Partnership, (London: Sweet & Maxwell, 19th ed, 2010), p.820

303

The matter of permanent incapacity has been dealt with above under “Permanently Incapable of Performing Duties”.

304

PA 1890 s.35(b)

305_{Whitwell v Arthur (1865) 35 Beav 140} 306

Ibid,at 141

307

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himself before the court but not why this should equally apply to a patient suffering physical incapacity. Twomey suggests that the logic for refusing the patient suffering physical disability at work from petitioning for dissolution is rooted in a Victorian mentality which places the fault for the incapacity with the patient. Thus, the law views the patient as having been guilty of wilful breach, by reason of being incapacitated. For example, a person who becomes blind will be viewed in the same manner as someone who is found guilty of misconduct. A partner who has acted recklessly in business and even with wilful neglect may petition for dissolution - but not a disabled person308. On this point the law appears to be manifestly unjust. In spite of legislation such as the Equality Act 2010309 the law on partnership has not been updated to ensure that ‘fair and reasonable steps’ must be taken to ensure the fair and non-discriminatory treatment of people with physical disability. It is surprising that no effort has as yet been made to try to close this obvious conflict in the law.

To conclude this section, there are two types of incapacity: physical and mental. In this author’s opinion the court should dissolve a partnership when another partner becomes physically incapacitated. The court will recognise the right to dissolve in this situation to be invoked when the partnership requires physical labour. An example of a partnership requiring physical labour is where two or more partners share labour and earnings, contribute skills but no capital; they jointly undertake services to customers and distribute payment in agreed proportion. By contrast, if the partnership does not require physical labour, the

308

Twomey, M., Partnership Law, (Dublin: Butterworths, 1st ed, 2000), p.632.

309

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court should not dissolve the partnership if one partner became physically incapable.

However, the court should dissolve a partnership if one partner has mental incapacity. The reason for this is that each partner is an agent for the other. Therefore, if a partner is suffering a defect of reason and he cannot do anything for the partnership, the court should dissolve by their discretion. Failure to dissolve would expose the partner still enjoying capacity to the risk of liability for the acts of a partner who lacks full reasoning ability.