Partnership law has business partnerships end automatically on death of any one partner, unless agreed otherwise, a rule that made a nonsense of the late Peter Webb’s will. The High Court rewrote his will, achieving his intended plan, allowing both his widow and extended family to inherit partnership assets.
Mr Webb farmed in partnership with his two brothers on a property at Hikurangi in Northland, as Webb Brothers Partnership.
His will, signed two months prior to his death, supposedly intended that his continuing share of annual farm income go to his spouse Nazreem and that she later receive one-quarter of his assets, the balance going to their nieces and nephews.
One major legal complication arose on his death.
There was no continuing partnership. Terms of his will were predicated on the assumption that the farming partnership would continue, with his estate slotting in as replacement partner on his death.
In the case of Webb Brothers Partnership, this was a legal impossibility. Their partnership dissolved automatically on his death in March 2023.
Partnership Law Act states that death of one partner brings a business partnership to an end; a rule necessary because partnership law holds each and every partner fully liable for all partnership debts.
Partners may agree otherwise, but this must be spelt out in their partnership agreement.
Written terms of Webb Brothers Partnership explicitly stated their partnership ended on death of any of the three brothers.
In the High Court, Justice Isac was told the will as signed did not achieve Mr Webb’s intentions.
Using Wills Act powers, the will was corrected by Justice Isac to ensure both Mr Webb’s widow and their nieces and nephews inherit.
Without this correction, a three-quarter share of Mr Webb’s assets would go to his brothers, rather than his nieces and nephews as intended.
The court was told all three brothers, each aged in their eighties, died within three months of each other; Peter being the first.
re Estate of Peter Webb – High Court (15.12.25)
26.051