Partnership Disputes - Boodle Hatfield

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Partnership Disputes

On behalf of Ivor Farman, successfully defending a claim brought against him by his former partner in Gradient Capital Partners LLP, Scott Pagel.  Gradient Capital Partners LLP was a joint claimant with Mr Pagel.

Mr Pagel’s claim against Mr Farman was issued in April 2011 and alleged that Mr Farman had overdrawn his share of the LLP’s profits by approximately £5 million.  Mr Farman strongly denied the claim and as part of his defence noted that he had made a gift of approximately £3.8 million to Mr Pagel on the basis that Mr Pagel was at risk of insolvency.  Mr Pagel accepted that the gift had been made by Mr Farman, however Mr Pagel denied that he had been at risk of insolvency and that the gift had been made on that basis.  This resulted in Mr Farman bringing a counterclaim for the recovery of the gift, based on his mistaken belief as to the reason for the gift.

Both the claim and the counterclaim proceeded to trial, which began on Tuesday 11 June 2013.  Mr Pagel, as the claimant, gave his evidence first, with his cross examination continuing until Thursday 13 June 2013.  On Friday 14 June 2013, after three days of the claimants’ evidence and before Mr Farman’s evidence was required, Mr Pagel withdrew his claim against Mr Farman in its entirety and agreed to pay Mr Farman’s legal costs of defending the claim brought against him.  Mr Farman successfully defended the claim brought against him without needing to enter the witness box. 

Mr Farman’s counterclaim against Mr Pagel proceeded, with the Court appreciating that the counterclaim was “relatively brief”.  Ultimately, judgment in respect of the counterclaim was given in favour of Mr Pagel.