Blisset v Daniel: 1853

The court considered the limits on a power of expulsion from a partnership.
Held: (Page-Wood V-C) Construing the articles, two-thirds of the partners could expel a partner by serving a notice upon him without holding any meeting or giving any reason. But the power must be exercised in good faith: ‘the literal construction of these articles cannot be enforced’ and, after citing from the title ‘De Societate’ in Justinian’s Institutes, went on: ‘It must be plain that you can neither exercise a power of this description by dissolving the partnership nor do any other act for purposes contrary to the plain general meaning of the deed, which must be this, that the power is inserted, not for the benefit of any particular parties holding two-thirds of the shares but for the benefit of the whole society and partnership . . .’ In the Australian case of In re Wondoflex Textiles Pty. Ltd. [1951] V.L.R. 458, 467, Smith J. also contrasted the literal meaning of the articles with the true intentions of the parties: ‘It is also true, I think, that, generally speaking, a petition for winding up, based upon the partnership analogy, cannot succeed if what is complained of is merely a valid exercise of powers conferred in terms by the articles. . . . To hold otherwise would enable a member to be relieved from the consequences of a bargain knowingly entered into by him. . . . But this, I think, is subject to an important qualification. Acts which, in law, are a valid exercise of powers conferred by the articles may nevertheless be entirely outside what can fairly be regarded as having been in the contemplation of the parties when they became members of the company; and in such cases the fact that what has been done is not in excess of power will not necessarily be an answer to a claim for winding up. Indeed, it may be said that one purpose of [the just and equitable provision] is to enable the court to relieve a party from his bargain in such cases.’
Page-Wood V-C
(1853) 10 Hare 493
England and Wales
Cited by:
AppliedEbrahimi v Westbourne Galleries Ltd and Others (on Appeal from In Re Westbourne Galleries Ltd) HL 3-May-1972
Unfair Prejudice to Minority Shareholder
A company had operated effectively as a partnership between two and then three directors. No dividends had been paid, but the directors had received salaries. One director was removed and sought an order for the other to purchase his shares, or . .
CitedWood v Woad CEC 1-Jun-1874
Declaration, alleging that the plaintiff was a member of a mutual insurance society, which insured members against losses to ships entered and insured in the books of the society, on a deposit being made of 5l. per cent, on the amount insured ; that . .
CitedRidge v Baldwin (No 1) HL 14-Mar-1963
No Condemnation Without Opportunity For Defence
Ridge, a Chief Constable, had been wrongfully dismissed because he was not given the opportunity of presenting his defence. He had been acquitted of the charges brought against him, but the judge at trial had made adverse comments about his . .

Lists of cited by and citing cases may be incomplete.
Updated: 08 October 2021; Ref: scu.180984