Proprietary Estoppel as a Fifth “Exceptional Circumstance” for Syers Orders in Partnership Dissolutions: Commentary on Cobden v Cobden [2025] EWCA Civ 1612

Proprietary Estoppel as a Fifth “Exceptional Circumstance” for Syers Orders in Partnership Dissolutions:
Commentary on Cobden v Cobden [2025] EWCA Civ 1612

1. Introduction

Cobden v Cobden is a significant Court of Appeal decision on the dissolution of partnerships and the circumstances in which the court may depart from the usual rule of ordering an open-market sale of partnership assets. The case lies at the intersection of:

  • Section 39 of the Partnership Act 1890 (entitlement to have partnership property realised and distributed on dissolution);
  • The line of authority starting with Syers v Syers (1876) 1 App Cas 174 (permitting a “Syers order” – a court-ordered buy-out at valuation instead of sale); and
  • Modern proprietary estoppel jurisprudence (Thorner v Major, Gillett v Holt, Guest v Guest) and the fairness/unconscionability analysis that underpins it.

In short, the Court of Appeal holds that where the ingredients of a proprietary estoppel-type equity are made out as between partners – specifically, a long‑standing shared understanding that one partner will ultimately buy out the other at a fair price, and substantial reliance on that understanding – those facts can themselves amount to “exceptional circumstances” justifying a Syers order.

This develops and supplements the four “exceptional circumstances” categories identified in Bahia v Sidhu [2024] EWCA Civ 605; [2025] Ch 55, and confirms that the categories listed in Bahia are illustrative, not exhaustive. The core test remains whether a normal open-market sale would be unfair or unjust in all the circumstances.

The decision also contains important guidance on:

  • The use of proprietary estoppel principles to shape the manner in which existing property interests are realised, rather than to create new proprietary rights;
  • The role of expert valuation evidence in supporting a Syers order; and
  • The limited scope of appellate intervention in fact-finding and evaluative judgments.

2. Factual Background

2.1 The Cobden family farm

The case concerns Witcombe Farm in Somerset, a longstanding family farming enterprise. In 1998 the parents transferred the farming business to their three sons: Matthew (the respondent), Willy, and Daniel (the appellant), in equal partnership shares.

From 1998 to 2006 the three brothers farmed as equal partners. In 2006, Willy exited the partnership and was bought out by Matthew and Daniel, who thereafter carried on the farm as equal partners in a partnership at will, with no formal written partnership agreement.

The Judge (His Honour Judge Russen KC, sitting as a High Court Judge) found that:

  • Matthew was the “driving force” behind the business and the expansion of the dairy unit; and
  • Daniel’s main interest lay in machinery and vehicles rather than the dairy expansion.

2.2 The “crucial” 2005/2006 conversation and shared expectation

At or around the time of Willy’s buyout (2005/2006), the Judge found that there was a pivotal conversation between Matthew and Daniel (the “2005/2006 Conversation”). The findings (which were not effectively challenged on appeal) included that:

  • Daniel told Matthew that “one day he would have to buy Daniel out of the Partnership”.
  • This was linked to Daniel’s and his wife Georgina’s desire not to live at Witcombe but rather near Taunton.
  • Matthew understood that he would in due course become the sole successor to the farm, on the implicit understanding that he would buy Daniel out at a fair price when the time came.

This conversation, at the inception of the two‑brother partnership, was found to be the foundation of Matthew’s expectation that he would eventually buy Daniel out.

2.3 Major expansion and family company structure

Between 2013 and 2015, the partnership invested heavily in constructing a large new dairy unit, increasing milking from around 300 to about 1,000 cows. The expert valuer Mr Townsend (Savills) described it as one of the largest dairy units in the country.

Crucially:

  • The herd itself was not owned by the partnership but by Cobden Farms Ltd, a wholly-owned subsidiary of Cobden Investments Ltd.
  • Following the father’s death, Cobden Investments Ltd was owned 12.5% by Matthew, 12.5% by Daniel, and 75% by the brothers’ mother, Gill.

The business became highly profitable, achieving profits exceeding £800,000 in 2023.

2.4 Breakdown of relations and competing buyout proposals

In 2021, the brothers considered purchasing nearby Bearley Farm. Daniel ultimately decided he did not want to make further investments with Matthew. This refusal, and Daniel’s later involvement (with his wife’s family) in acquiring Bearley Farm independently of the partnership, were found by the Judge to have precipitated the eventual dissolution.

In April 2022:

  • Matthew, advised by independent consultant Mr Bray and using an earlier valuation by Mr Townsend, offered Daniel £3 million for his share in the partnership, two buildings, and Daniel’s interest in Cobden Investments Ltd. The estimated value of Daniel’s interest was £2.9 million; Matthew deliberately offered “over the odds”.
  • Daniel did not engage with the offer. Relations deteriorated further.

In August 2022 Daniel countered by offering to buy Matthew out for £3,852,500. Shortly afterwards (25 August 2022), Matthew served notice dissolving the partnership at will.

2.5 Proceedings at first instance

Matthew issued proceedings the next day seeking:

  • A declaration that the partnership was dissolved (or an order for dissolution);
  • A declaration that Daniel was required to sell his partnership interest to him at fair value, either by contractual term or via an “equity” (proprietary estoppel); and
  • Accounts and inquiries.

At trial in May 2024:

  • Mr Townsend valued the land and buildings at approximately £8.04 million (including adjustments and a 5% margin of tolerance in Daniel’s favour).
  • Other assets (livestock, machinery, crops, fodder) were valued at about £3 million on an updated basis.
  • The Judge adopted a total partnership property value (before encumbrances) of £11.04 million.

The Judge concluded that Matthew had acquired a “proprietary estoppel-ish” equity entitling him to a Syers order: that is, an order that he could buy Daniel’s interest at a price fixed by valuation, rather than the assets being sold on the open market. He expressly treated this equity as an “exceptional circumstance” justifying departure from the normal rule under s.39 of the Partnership Act 1890 that assets be sold on dissolution.

3. The Appeal and the Court of Appeal’s Decision

3.1 Grounds of appeal

Daniel appealed, advancing three main complaints:

  1. Misapplication of Bahia v Sidhu: he argued that Bahia confined Syers orders to four “exceptional” categories, none of which applied here.
  2. Equity not established: the “proprietary estoppel-ish” equity was said not to meet the classical elements of proprietary estoppel (assurance, reliance, detriment, unconscionability).
  3. Impropriety of valuation-based Syers order: Daniel contended that a valuation-based buyout was wrong where there was a realistic possibility that an open-market sale would achieve a higher price, particularly in light of Bahia’s criticism of relying on untested expert valuations.

3.2 Outcome

The Court of Appeal (Newey, Nugee and Lewison LJJ) unanimously dismissed the appeal. The key holdings are:

  • A “proprietary estoppel-ish” equity can, in principle, constitute an exceptional circumstance justifying a Syers order, and Bahia’s four categories are not exhaustive.
  • On the facts, the trial Judge was entitled to find that:
    • there was a long-standing shared understanding that Matthew would buy Daniel out at a fair price when the partnership ended;
    • Matthew had devoted himself to the development of the business in reliance on that understanding; and
    • it would be unfair and unjust (i.e. unconscionable) to require an open-market sale.
  • The reliance on expert valuation evidence (with appropriate adjustments, including a 5% uplift in Daniel’s favour and cost/tax considerations) did not make the Syers order an “unwarranted gamble” against Daniel’s interests.

4. Summary of the Judgment

4.1 The central legal issue

The core legal question was: In what circumstances can the court, on dissolution of a partnership at will, depart from the usual order for an open-market sale and instead compel one partner to buy out the other at a valuation (a “Syers order”)?

Bahia v Sidhu had recently clarified that:

  • The normal course is sale of partnership assets on the open market (typically by auction) to maximise realised value and fairness to all partners.
  • A Syers order is an exceptional departure from that norm, justifiable only when a sale would be unjust or would not maximise value or would unduly advantage/disadvantage one side.

The Court of Appeal in Cobden had to decide whether a proprietary estoppel-type equity can itself supply the necessary exceptional circumstances.

4.2 Key holdings in brief

  1. Scope of Syers orders after Bahia
    The court reaffirmed that there is no absolute rule mandating sale of partnership assets: the court has a discretion, rooted in s.39 of the Partnership Act and the equitable jurisdiction preserved by s.46, to make alternative orders where that is necessary to avoid unfairness or to serve justice between the partners.
  2. “Fifth category” of exceptional circumstances
    The Court endorsed the Judge’s articulation (in para 392 of his judgment) of a fifth type of case where exceptional circumstances may justify a Syers order:
    where equal partners have, from the inception of the partnership, shared an understanding that one of them will ultimately carry on the business by buying out the other at a fair price at the end of the partnership, and that partner has devoted himself accordingly to developing the business, such that it would be unfair and inequitable to insist on liquidation by sale.
  3. Proprietary estoppel as justification for a Syers order
    The Court accepted that a “proprietary estoppel-ish” equity – i.e. the classic ingredients of proprietary estoppel applied not to create a new title, but to regulate how existing interests are realised – can make it unfair to follow the usual sale route and thereby justify a Syers order.
  4. Findings of equity upheld
    Applying the deferential appellate standards in Henderson v Foxworth, Volpi, Sprintroom, and Piglowska, the Court held that the Judge’s fact-finding and evaluative conclusions on the existence of the equity and unconscionability were well within the range of reasonable decisions.
  5. Valuation evidence adequate
    Given the quality of Mr Townsend’s valuation evidence, the explicit allowance of a 5% margin of tolerance to Daniel, and the savings in sale costs and taxation, reliance on expert valuation as the basis for a Syers order did not unfairly prejudice Daniel or render the order improper.

5. Precedents and Authorities Cited

5.1 Partnership dissolution: Syers orders and the norm of sale

5.1.1 Section 39 Partnership Act 1890

Section 39 guarantees each partner, on dissolution, the right:

  • to have partnership property applied in payment of debts and liabilities; and
  • to have the surplus applied in payment of what is due to the partners, and
  • for that purpose, to apply to the court to wind up the business and affairs of the firm.

Ordinarily, this leads to a sale of the partnership property as the mechanism for realisation. But the section does not stipulate that sale on the open market is the only permissible mode of realisation.

5.1.2 Syers v Syers (1876) 1 App Cas 174

Syers is the origin of what is now known as a “Syers order”: a court-directed buy-out of one partner’s share at a valuation, instead of sale of the assets. In that case:

  • The plaintiff had only a one-eighth interest in a music hall and tavern partnership;
  • The House of Lords considered that a sale “to the hammer” would be undesirable given the nature of the business and the smallness of the plaintiff’s stake.

Lord Cairns LC emphasised that:

“the ordinary course would be ... to direct a sale ... My Lords, those provisions are moulded in every case by the Court to meet the circumstances of the particular case”.

Cobden builds on this: acknowledging that the court may, in exceptional cases, diverge from the normal sale route, and clarifying what can count as “exceptional”.

5.1.3 Hammond v Brearley [1992] 12 WLUK 185

Though not discussed in detail in the text provided, Hammond v Brearley is cited in Bahia as an example of a case where a sale would not maximise the value of anyone’s share because the assets were worth little if separated from goodwill, and selling the business as a whole would be disproportionate. It illustrates another type of exceptional circumstance justifying a Syers-style solution.

5.2 Bahia v Sidhu [2024] EWCA Civ 605; [2025] Ch 55

Bahia is the immediate backdrop to Cobden. Andrews LJ’s judgment in Bahia re‑established the general rule and delineated four types of case where “exceptional circumstances” may justify departure from open-market sale:

  1. Where one partner has a very small stake and sale as a going concern would cause disproportionate injury to majority partners and/or third parties;
  2. Where, as in Hammond v Brearley, open-market sale would not maximise value because the assets are worth little if sold separately and sale of the combined business would be disproportionate;
  3. Where the partnership agreement (or inferred contractual intention) provides for a buy‑out on termination, even if its formal terms have been breached;
  4. Possibly, where a partner intends to use the auction process abusively to drive up the price to the detriment of a partner who wishes to buy.

Andrews LJ stressed:

  • These are examples of when a sale would not serve the interests of justice – not an exhaustive code (paras 44–46);
  • In the “normal situation” where assets can be sold on the open market without unfairness, the Syers discretion is not even engaged (para 46);
  • It is “self‑evident” that where property can readily be sold at auction, an actual sale is usually a better measure of value than an untested expert opinion (para 53).

In Bahia, the trial judge erred by treating Syers vs sale as an open choice between equally fair alternatives; the Court of Appeal made clear that a Syers order is only justifiable where an open-market sale would be unjust or unfair.

In Cobden, Lewison LJ summarises the “take home message” from Bahia (para 57):

a Syers order may be made where it is necessary to do so in order to avoid unfairness or injustice.

5.3 Proprietary estoppel authorities

5.3.1 Thorner v Major [2009] UKHL 18; [2009] 1 WLR 776

Lord Walker identified the three classic elements of proprietary estoppel:

  1. Representation/assurance;
  2. Reliance by the claimant; and
  3. Detriment in consequence of that (reasonable) reliance.

5.3.2 Gillett v Holt [2001] Ch 210

Also by Robert Walker LJ, Gillett emphasised that the “fundamental principle” permeating all elements of proprietary estoppel is the prevention of unconscionable conduct; the court must look at the matter “in the round.” This is central to the fairness/unconscionability analysis in Cobden.

5.3.3 Guest v Guest [2022] UKSC 27; [2024] AC 833

In Guest, Lord Briggs clarified that:

  • The purpose of proprietary estoppel is to prevent or undo the unconscionable repudiation of promises or assurances about property upon which the promisee has relied to their detriment.
  • The “normal and natural” remedy is to hold the promisor to the promise, though that starting point may be tempered by practicality and proportionality considerations (paras 75, 94).

Cobden draws directly on this: if proprietary estoppel can justify transferring property outright to fulfil a promise, it can a fortiori justify modifying the method by which existing joint property is realised (e.g. replacing sale by a valuation buy-out).

5.4 General estoppel theory: Spencer Bower

Lewison LJ cites Spencer Bower on Reliance-Based Estoppel (5th ed, 2017) at para 1.8 to capture the “animating principle” of all reliance-based estoppels: preventing a party from unjustly denying an assumption or belief which they have induced and upon which the other has acted. This underpins the conclusion that a proven estoppel can provide the necessary unfairness/injustice to trigger a Syers order.

5.5 Appellate review of fact and evaluation

The Court refers to several authorities that constrain appellate interference with trial judges’ findings of fact and evaluative judgments:

  • Henderson v Foxworth Investments Ltd [2014] UKSC 41; [2014] 1 WLR 2600 – appellate courts will interfere only where there is an identifiable error (e.g. material legal error, critical finding with no evidential basis, clear misunderstanding or failure to consider relevant evidence) or where the decision cannot reasonably be explained.
  • Volpi v Volpi [2022] EWCA Civ 464; [2022] 4 WLR 48 – an “unbalanced” evaluation is only appealable if it is rationally insupportable; silence on a piece of evidence does not prove it was overlooked.
  • In re Sprintroom [2019] EWCA Civ 932; [2019] 2 BCLC 617 – an appellate court asks whether there is a flaw in the reasoning (gap in logic, inconsistency, failure to consider material factors) that undermines the conclusion; it does not re‑weigh the evidence afresh.
  • Piglowska v Piglowski [1999] 1 WLR 1360 – reminders about reading judgments sensibly, recognising the “exigencies of daily courtroom life.”
  • D J & C Withers (Farms) Ltd v Ambic Equipment Ltd; English v Emery Reimbold & Strick Ltd [2002] EWCA Civ 605; [2002] 1 WLR 2409 – the Court of Appeal may look at the underlying material where reasons are sparse; if a cogent rationale can be reconstructed, the judgment will not be overturned merely for imperfect expression.

These authorities underpin the Court of Appeal’s refusal to treat the Judge’s relatively brief proprietary estoppel analysis as a reasons error and its acceptance of his evaluation of fairness/unconscionability.

6. The Court’s Legal Reasoning

6.1 When is a Syers order permissible after Bahia?

6.1.1 The default rule and the discretionary exception

The Court affirms:

  • The default position on dissolution is that each partner is entitled to have the partnership assets sold, usually on the open market, to maximise value and ensure fairness.
  • However, there is no absolute rule that the assets must be sold; the court has a discretion (rooted in s.39 and facilitated by s.46’s preservation of equitable rules) to “mould” the relief to the justice of the case.

As Andrews LJ put it in Bahia, and as Lewison LJ reiterates:

A Syers order may be made where it is necessary to do so in order to avoid unfairness or injustice.

6.1.2 Non-exhaustive nature of Bahia’s four categories

The trial Judge took the view – and the Court of Appeal agreed – that the four categories listed at para 44 of Bahia were intended as examples, not a closed list. This is clear from:

  • Andrews LJ’s description of them as “types of case in which ‘exceptional circumstances’ have been found to exist, or where it has been envisaged there might be justification for departing from the general practice”;
  • Her statement that all these are “examples” of situations where auction would not serve justice (para 45);
  • Her earlier, more general formulation that there may be cases where an open-market sale “would not be the best means of achieving full value, or would be unfair” (para 28; emphasis added).

The Court in Cobden therefore felt free to recognise a further, “fifth” situation where exceptional circumstances may arise.

6.1.3 The “fifth example”: shared understanding of future buy-out

The Judge’s long passage at para 392 of his judgment (expressly adopted by the Court of Appeal as capturing the basis of his decision) effectively sets out this fifth example. Stripped to essentials, it is:

  • Equal partners in a partnership at will have, since inception, shared an understanding that:
    • one partner will carry on the business when the partnership ends; and
    • this will occur by that partner being allowed to buy out the other at a fair price at the end-point.
  • The “staying” partner has devoted himself to the business and its development in anticipation of that future buy-out.
  • This reliance is identifiable and substantial when viewed in the context of:
    • their equal share in profits during the life of the partnership; and
    • capital injections reflected in capital accounts.
  • It would be unfair and inequitable if, at the end, the outgoing partner were allowed to insist on liquidation through sale.
  • The court may also take account of:
    • effects on third parties (employees, other stakeholders, e.g., Gill as majority shareholder in the dairy herd company);
    • tax consequences; and
    • costs of sale.
  • If reliable expert valuation evidence indicates that the buy‑out price corresponds to what the outgoing partner could reasonably expect from a sale, the Syers order is a just mode of realisation despite any assertion that he might achieve more at auction or that he would himself pay more to buy the other out.

This is the new doctrinal contribution of Cobden: a proprietary estoppel-based equity, allied to practical and third‑party considerations, can amount to the “exceptional circumstances” needed for a Syers order.

6.2 Proprietary estoppel as the substantive equity

6.2.1 Why proprietary estoppel?

The Judge and the Court of Appeal accepted that proprietary estoppel is used here in an “unusual” way. Typically, proprietary estoppel is invoked to acquire, or prevent the loss of, a proprietary interest. Here, the parties already had clear proprietary interests as equal partners; the estoppel was used instead to shape how those existing interests should be realised on dissolution.

Newey LJ’s reasoning is straightforward:

  • If proprietary estoppel can in appropriate cases justify conferring full ownership of property on a claimant (e.g., the farm in Thorner, the farm in Guest),
  • then as a matter of principle it can also justify the lesser step of regulating the manner in which jointly-owned property is dealt with (e.g., mandating a valuation buy-out instead of sale).
  • Therefore, a “proprietary estoppel-ish” equity is capable of making a normal sale unfair and thus of justifying a Syers order.

6.2.2 Application of the proprietary estoppel elements

Although the trial Judge did not explicitly tick through assurance/reliance/detriment/unconscionability one by one, the Court of Appeal could reconstruct his reasoning and found his conclusions sound.

(1) Assurance / Shared understanding

  • The 2005/2006 Conversation was a central finding: Daniel told Matthew that one day Matthew would have to buy him out.
  • That conversation occurred:
    • at the critical moment of buying out Willy and restructuring the partnership; and
    • against the backdrop that Daniel and Georgina wanted to live elsewhere.
  • Over time, this developed into (and remained) a shared understanding that Matthew would be the long‑term successor to the farm, buying Daniel out at a fair price when the time came.
  • Later conversations, notably in October 2021, reinforced that understanding (Daniel reacted positively to the idea of being bought out).

The Court accepted that, taken as a whole, this was sufficiently clear to found a proprietary estoppel-style expectation.

(2) Reliance

Matthew’s evidence (accepted by the Judge as honest and reliable) was that:

  • He invested all his time and available money in the partnership business in reliance on the understanding that he would one day buy Daniel out and farm on his own account.
  • He drove the development of the business, including the large-scale dairy expansion, believing that this would increase both brothers’ shares but also place him in a position to afford the buy-out.
  • He would not have undertaken the substantial dairy investment in 2013 had it not been for the 2005/2006 understanding.

The Court concluded that the Judge was entitled to find that Matthew’s devotion to the business’s growth constituted reliance on the shared understanding that he would eventually acquire the business outright by buying Daniel out.

(3) Detriment

Detriment in proprietary estoppel is not confined to direct financial loss; it includes significant changes of position taken in reliance on the assurance. Here:

  • Matthew expended very substantial time, energy, managerial skill and risk‑taking to expand and develop the business, especially the dairy, in anticipation of his future position as owner.
  • The Judge specifically acknowledged that:
    • Matthew had also benefited from those efforts via profits and capital growth; and
    • Capital injections would be reflected in the capital accounts.
  • Nevertheless, he concluded that, viewed comparatively, Matthew’s efforts in transforming the business from its 1998–2006 position to a large, highly profitable operation, relative to Daniel’s contribution, amounted to detrimental reliance.

The Court accepted this as a permissible evaluative conclusion: in the partnership context, detriment is assessed in the round, taking into account the mutual profit-sharing but also unequal contributions and expectations.

(4) Unconscionability / unfairness

This is the linchpin of both proprietary estoppel and the Syers-order discretion. The Judge concluded that it would be “unfair and unjust” (i.e. unconscionable) to require an open-market sale, given:

  • The long-standing shared understanding of a future buy-out;
  • Matthew’s heavy reliance and disproportionate contributions to building up the business;
  • Serious consequences of sale for third parties and broader family interests, including:
    • Adverse tax liabilities for both brothers (£373,500 and £470,000 estimated);
    • Complications for Gill as 75% shareholder in the herd-owning company if the herd had to be realised;
    • Risk of staff departures and collapse of the business prior to or during an extended sale process, due to employment uncertainty.

The Court of Appeal held that, if the Judge’s findings on understanding and reliance were justified (and they were), he was more than entitled to view an open-market sale as unfair and unjust in the sense used by Bahia.

6.3 Standard of appellate review and acceptance of the Judge’s findings

Daniel attempted to argue, in effect, that because the Judge had not explicitly addressed each estoppel ingredient and certain contextual issues, the equity could not properly have been found. The Court rejected this approach:

  • Per Piglowska and Withers, a judgment is not defective simply because it could have been better structured; appellate courts read judgments sympathetically.
  • Per Henderson, Volpi and Sprintroom, appellate intervention in findings of fact or evaluative assessments (such as whether reliance was detrimental or whether conduct was unconscionable) is tightly constrained.
  • The Judge had expressly found Matthew’s evidence to be honest and reliable on key points; that provided a strong evidential foundation for his conclusions on the equity.

The Court carefully reconstructed the Judge’s reasoning from the text and the evidence, concluding that his findings on:

  1. shared understanding;
  2. reliance;
  3. detriment; and
  4. unfairness/unconscionability

were not “rationally insupportable” and thus not appealable.

6.4 Use of expert valuation in a Syers order

Daniel argued that a valuation-based buy-out was inherently suspect given that an actual sale might produce a higher price, invoking Bahia’s observation that a real auction is a better measure of open-market value than an untested expert opinion.

The Court accepted the Judge’s response:

  • Mr Townsend’s valuation was carefully reasoned; he was experienced in valuing similar property, and while comparable transactions were scarce, he expressed strong confidence in his figure.
  • The Judge adopted:
    • the median of Mr Townsend’s estimated range for land value increases between 2023 and trial;
    • a 5% “margin of tolerance” added in Daniel’s favour, explicitly conceded by Matthew; and
    • the higher (2023) valuation of crops, reflecting the likely position at completion of the buy-out.
  • The Judge also took into account:
    • savings in costs of sale; and
    • potential adverse tax consequences of a third-party sale.

Newey LJ made an important conceptual point: if the mere possibility of a higher auction price were enough to bar a valuation-based buy-out, Syers orders could never be made. Yet Bahia and Syers clearly contemplate that such orders are sometimes appropriate. The proper test is fairness, not the theoretical possibility of squeezing out every last pound of value.

7. Complex Concepts Explained in Plain Terms

7.1 Partnership at will

A partnership at will is a partnership with no fixed term and no written agreement specifying duration. Any partner can end it at any time by giving notice. Here, Matthew’s notice in August 2022 dissolved the partnership.

7.2 Syers order (buy-out order)

A “Syers order” is shorthand for a court order (derived from Syers v Syers) where, instead of selling the partnership assets on the open market, the court orders one partner to purchase the other’s share at a price determined by an independent valuation:

  • The “buyer” partner keeps the business/assets;
  • The “seller” partner exits, receiving a cash sum representing the fair value of his/her share.

This is exceptional because it deprives the outgoing partner of the usual right to benefit from competitive bidding in an open-market sale.

7.3 Proprietary estoppel

Proprietary estoppel is an equitable doctrine used to prevent unfair outcomes where:

  1. One party makes a promise or assurance relating to rights in property (usually land);
  2. The other relies on that promise (e.g., by working for free, investing, or changing life plans);
  3. The relying party would suffer a detriment if the first party reneges; and
  4. It would be unconscionable (grossly unfair) to let the promisor go back on their word.

The remedy is flexible: the court tries to remove the unfairness. Often that means making the promise good (e.g., giving the claimant the farm), but the court can adjust the remedy if full performance would be disproportionate.

7.4 “Proprietary estoppel-ish” equity in Cobden

What is unusual here is that:

  • Matthew and Daniel already had clear rights as equal partners;
  • Matthew did not ask for extra property; he asked the court to respect an understanding about how their existing rights would be separated at the end: that he would buy Daniel out at a fair price.

The Court treated the assurance, reliance, and detriment as giving rise to an “equity” which:

  • does not create a new title, but
  • operates to shape the court’s choice between:
    • selling the assets; or
    • ordering a valuation-based buy-out.

In effect, the equity makes sale unfair and thereby triggers the Syers-order discretion.

7.5 Unfairness, injustice, and unconscionability

Throughout the judgment, the terms “unfair”, “unjust” and “unconscionable” are used almost interchangeably. In this context they mean:

  • Not merely that one party would get less money than in an ideal world; but that
  • Given the shared understanding and heavy reliance of one party, it would be morally and legally unacceptable (by the standards of equity) to let the other party insist on strict legal rights (a sale) that ignore that understanding and reliance.

7.6 Open-market sale vs expert valuation

An open-market sale (often auction) is normally preferred because:

  • It exposes the property to real buyers;
  • Competitive bidding tends to reveal the true market price.

Expert valuation is a professional estimate of that price, based on evidence and judgment, but without actual bidders. It is inherently approximate; real sales can be higher or lower.

In Bahia, the Court warned against favouring expert valuations over actual sales in the absence of exceptional circumstances. In Cobden, those exceptional circumstances were present – so valuation was acceptable, particularly when:

  • Valuations were robust and independently done;
  • A generous margin was added for the outgoing partner; and
  • Tax and cost savings offset the lack of auction upside.

7.7 Appellate deference to first-instance judges

The Court of Appeal emphasised that appellate courts:

  • Do not re-try the case;
  • Will not overturn fact-finding or nuanced value judgments (like whether reliance was detrimental or conduct unconscionable) unless there is a clear error or the conclusion is simply unsustainable.

This protects the trial judge’s role as primary assessor of witnesses, especially where credibility and impression are critical (as in disputes between family members).

8. Impact and Future Significance

8.1 Extension of Bahia – the fifth category

The most direct doctrinal impact is that Cobden adds a fifth example of “exceptional circumstances” justifying a Syers order:

A long-standing shared understanding between equal partners in a partnership at will that one partner will eventually buy out the other at a fair price, coupled with substantial reliance by the “staying” partner in devoting himself to building up the business, such that forcing a sale would be unfair and unjust.

Courts can now explicitly treat proprietary estoppel-type equities as a basis for departing from the normal sale route, provided the evidence clearly supports the estoppel elements and a sale would be unfair.

8.2 Family and farming partnerships

The facts will resonate in many family farming and family business cases where:

  • Informal understandings exist about succession (“X will take over the farm one day, and Y will be bought out”);
  • One family member works significantly harder or invests more, in the belief that the business will eventually be theirs;
  • There is no formal written partnership or shareholders’ agreement capturing succession or exit terms.

Cobden confirms that such understandings can have real legal consequences on dissolution:

  • If clearly proved and relied on, they can support a Syers order favouring continuity of the business; and
  • The court can consider broader impacts (employees, tax, other family shareholdings) when deciding whether sale would be unfair.

8.3 Guidance for drafting and advising

For practitioners, this case reinforces several points:

  • Document exit arrangements: If the parties intend that one partner will have the right (or, conversely, no right) to buy out the other at a fair price on dissolution, it is far better to record this in a partnership or shareholders’ agreement. Such agreements may themselves bring the case within Bahia’s third category.
  • Beware of informal promises: Off‑the‑cuff family assurances can, with time and reliance, crystallise into binding equitable expectations that shape dissolution outcomes.
  • Consider third-party implications: Tax liabilities, employees, and the structure of associated companies (e.g. a separate company owning key assets like a herd) can support an argument that sale would be unfair or destructive.

8.4 Limits and safeguards

Despite broadening the range of exceptional circumstances, the decision does not undermine the central message of Bahia:

  • Open-market sale remains the norm on dissolution; the Syers jurisdiction remains exceptional;
  • Courts must identify a specific unfairness or injustice that would result from following the normal rule;
  • Evidence of clear, longstanding understandings and significant reliance is required to invoke this fifth category;
  • Valuation-based orders will only be appropriate where valuation evidence is robust and the outgoing partner is not being exposed to undue risk compared with a sale (e.g., through valuation uplifts and considering tax/cost savings).

8.5 Procedural and appellate implications

The decision also serves as a reminder that:

  • Trial judges should, where possible, structure their reasoning clearly around the elements of any estoppel relied upon, but
  • Appellate courts will not lightly treat imperfectly structured reasoning as an error justifying reversal, particularly where the evidential basis is clear and the outcome is within the range of reasonable decisions.

9. Conclusion

Cobden v Cobden is a pivotal case on partnership dissolution and equitable intervention. It:

  • Affirms the core message of Bahia v Sidhu: open-market sale is the default, and Syers orders are exceptional, justified only to prevent unfairness or injustice;
  • Recognises a new, fifth example of “exceptional circumstances” where a Syers order is appropriate: a long-standing, relied‑upon understanding between partners that one will ultimately buy out the other at a fair price;
  • Confirms that proprietary estoppel principles can be used not only to confer new property rights but also to regulate the manner of realising existing rights on dissolution;
  • Illustrates the importance of careful fact-finding and the high threshold for appellate courts to interfere with a trial judge’s evaluative conclusions;
  • Provides practical guidance for family partnerships and professional advisers on the real-world consequences of informal understandings about succession and buy-outs.

In doctrinal terms, the case stands for the proposition that where one partner has, in reasonable reliance on a shared understanding of a future buy‑out, devoted himself to building up the partnership business, it may be unconscionable to subject the assets to open-market sale on dissolution. In such a scenario, a Syers order – structured around fair, expert valuation and informed by the impact on third parties – can be the appropriate means to “prevent or undo” the unconscionability, in line with the modern law of proprietary estoppel and the equitable jurisdiction preserved under the Partnership Act 1890.

Case Details

Year: 2025
Court: England and Wales Court of Appeal (Civil Division)

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