Business
assets purchased using partnership funds and recorded in partnership accounts
are partnership assets, even where they are registered in the name of one
partner only.
The High Court was asked to rule on
ownership of a north Canterbury irrigation water consent as part of a family
dispute over a farming partnership at Emu Plains, Waiau. Ian Gardner farmed in partnership with his
son Andrew but claims the partnership is now dissolved. The High Court has been asked to rule on who
owns what proportion of the business. In
a preliminary skirmish, ownership of rights to irrigation water was at
issue. Andrew claims the resource
consent for water is his own personal property.
He made application for the consent, the consent was issued in his name
and he says this right to water is part of his long-term business strategy for
the farm. Associate Judge Osborne ruled
the water consent is a partnership asset.
It was paid for out of partnership funds and is recorded in the farm
accounts as a partnership asset. While son
Andrew did the leg-work, the resource consent was purchased for the benefit of
the farming partnership, not Andrew personally.
Gardner
v. Gardner – High Court (25.08.15)
15.092