Stephen Jourdan KC and Ciara Fairley appear for the successful Respondent in important appeal concerning correct approach on the winding up of a partnership
On 12 December 2025, the Court of Appeal handed down judgment in Cobden v Cobden.
Stephen Jourdan KC and Ciara Fairley appeared for the successful Respondent, Matthew Cobden. They were instructed by Peter Williams of Ebery Williams with invaluable support from Gemma Staddon.
The Judgment provides valuable guidance about the proper approach of the court on the dissolution of a partnership and the circumstances in which former partners may be permitted to buy each other out in preference to a court directed sale of assets. The case concerned one of the largest dairy units in the UK but the decision will be of interest to practitioners more generally – including anyone practising in the field of partnership law. It is the only reported case in this jurisdiction in which a buy-out has been directed between equal partners.
The dispute
The case concerned one of the largest dairy units in the UK. Matthew Cobden had farmed in partnership with his brother, Daniel Cobden, in Somerset for many years, under a partnership at will with each partner having an equal share.
In 2022 their relationship broke down and the partnership was dissolved. They could not agree whether
- the partnership assets should be sold on the open market, with each brother permitted to bid; or
- whether one brother or the other should be entitled to buy the other’s share at a price based on valuation evidence – what is known as a “Syers order” after the House of Lords decision in Syers v Syers (1876) 1 App Cas 174
The trial judge’s decision
The trial Judge, HHJ Russen KC, determined that a Syers order should be made in Matthew Cobden’s favour. He reviewed the authorities, including the decision of the Court of Appeal in Bahia v Sidhu [2024] EWCA Civ 605, which was handed down after the end of the trial but before judgment was given. He explained that such an order is only to be made in exceptional circumstances. He held that there were such exceptional circumstances for reasons summarised by him as follows:
“The equal partners in a partnership at will have, since its inception, shared an understanding that one partner would himself carry on the business when the partnership eventually comes to an end, by being permitted to buy out the other partner at a fair price to be determined at that end point, and that partner has devoted himself accordingly to the firm’s business and its development in anticipation of that event.
The understanding is sufficiently clear from the dealings between the partners and the subsequent reliance upon it (throughout the life of their partnership) sufficiently identifiable and substantial to support the conclusion that it would be unfair and inequitable for the other, at the partnership’s end, then to insist that both partners’ shares in the partnership assets should be liquidated through their sale.
Any consideration of the “detrimental” nature of the first partner’s reliance (“the partner has devoted himself accordingly”) must make allowance for the fact that the relationship between the partners arises out of their shared endeavour in making profits and that he has benefited equally from any profit during the life of the partnership; and also that any unequal injections of capital will be reflected in the partners’ respective capital accounts. Nevertheless, the court is entitled to consider his individual efforts in developing the partnership business and to do so with particular focus upon a comparison with the business as it was at the partnership’s inception and the relative efforts of the other partner in that regard.
The understanding and reliance upon it give rise to an ‘equity’ in the first partner which may operate to prevent the liquidation of the partnership’s assets if the court concludes that, in all the circumstances, an order for sale would be unfair and unjust.
Other factors, such as the likely adverse impact a sale may have on third parties (including employees of the business and others whose financial interests may be damaged by a sale) or upon the business’s customer base, may feed into the court’s assessment of the equity in deciding what is fair and just.
The court is entitled to act upon the equity where expert valuation evidence supports the conclusion that the price payable under the Syers order is equivalent to what the other can reasonably have expected to receive for his own share. The likely costs of a sale and any potential adverse tax consequences resulting from a sale may be factored into the court’s comparison of the two.
The court is entitled to act upon the equity despite any suggestion by the second partner that he would be willing to pay more for the first partner’s share than is offered in return, as the price of himself carrying on the business, and notwithstanding the prospect that such a sale might have produced a greater financial return for him than that indicated by the valuation evidence accepted by the court.”
He referred to the equity in question as a “proprietary estoppel-ish” equity.
The grounds of appeal
Daniel appealed against that decision on three grounds:
- The order was contrary to the principles derived from Bahia v Sidhu.
- The supposed “proprietary estoppel-ish” equity was not established on the facts.
- The Judge was wrong to make a Syers order on the basis of the expert valuation evidence, which recognised that the farm might have sold for substantially more than the valuation if exposed to the open market.
There were two grounds relied on in a Respondent's Notice to uphold the judgment on additional grounds to those given by the Judge:
- If the decision in Bahia meant that the Judge was not entitled to make a Syers order, then Bahia should not be followed. Instead, the broader approach taken by the Court of Appeal in Toker v Akgul (unreported Court of Appeal judgment 2.11.1995) should be adopted.
- In the light of the events which had occurred since the order under appeal, it would be wrong to set that order aside.
The Court of Appeal’s decision
The Court of Appeal dismissed the appeal on all three grounds. It was, therefore, unnecessary to consider the Respondent’s Notice grounds. Judgments were given by Newey LJ and Lewison LJ. Lewison LJ agreed with Newey LJ and Nugee LJ (who had been part of the Court in Bahia) agreed with both judgments.
On the first ground of appeal, the Court interpreted the decision in Bahia as meaning that a sale on the open market is the normal manner of sale, but there may be cases in which an open market sale would either
- not be the best means of achieving full value, or
- would be unfair.
The Court rejected the argument that a Syers order may only be made if it is the best way of achieving full value. Such an order may also be made where a sale would be unfair or unjust.
The Court rejected any suggestion that the categories of case were closed, but held that one situation where it might be unfair or unjust is where the constituent elements necessary for an estoppel to arise have been proven on the facts.
On the second ground of appeal, the Court held that the Judge’s primary findings of fact on detrimental reliance were sparse. But there was no challenge to the lack of reasons given for the Judge’s decision. In those circumstances, the Court had to consider the underlying material to which the Judge referred in order to understand his reasoning. The Court was able to identify reasons for the Judge’s conclusions which cogently justified his decision. While he did not express all of these with clarity in his judgment, he made sufficient reference to the evidence that had weighed with him to enable the Court, after considering that evidence, to follow that reasoning with confidence.
On the third ground of appeal, the Court held that the Judge was entitled to decide that the valuation evidence provided a reliable indication of the market value of the partnership’s assets and that the making of a Syers order in reliance upon it did not involve an unwarranted gamble with Daniel’s prospects under the usual form of winding up. Newey LJ said:
“In the circumstances, the Judge was entitled to consider that the possibility that, in the event, the farm might sell for more than Mr Townsend anticipated should not deter him from making a Syers order. Were such a possibility an absolute bar to a Syers order, it is hard to see how such an order, which inherently involves sale on the basis of a valuation, could ever be made. Yet Bahia v Sidhu confirms that there are situations in which a Syers order can be appropriate.”
A copy of the judgment can be downloaded below.
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