Background
Douglas Ponsford and Mesud Sali formed an equal partnership around 2010, trading as “Move On Now” (MON), to purchase and sell residential properties in England. Mr Ponsford supplied the finance — funding acquisitions, refurbishments, and mortgage payments — while Mr Sali contributed structuring expertise, including the use of Assisted Sales Agreements (ASAs) that gave MON effective control over properties without registered title. Each partner held a 50% share in the vehicle company, Move On Now Limited. Properties were held in Mr Ponsford’s name (or in a few cases third parties’ names) on trust for the partnership, with restrictions registered on title to protect Mr Sali’s interest.
The relationship deteriorated in early 2021. By September 2021 Mr Sali had acknowledged in writing that he had misappropriated approximately £625,000 in sales and remortgage proceeds relating to three properties (9 Moxon Close, 109 Albert Carr Gardens, and 7 Scott Road) and that the partnership owed Mr Ponsford around £494,000. In December 2021 Mr Ponsford commenced proceedings and obtained a worldwide freezing order; in January 2022 Meade J appointed him receiver and manager of the partnership. A consent order of March 2022 (the Hansen Order) fixed dissolution at 1 December 2021 and directed accounts and inquiries under the Partnership Act 1890. A disputed preliminary issue about whether 2 Walsingham Road (2WR) was a partnership asset or held on trust for Mr Sali personally was first decided in Mr Sali’s favour by Master Marsh, but that ruling was reversed on appeal by Trower J in October 2024, restoring 2WR to the partnership estate.
The substantive account hearing came before Master McQuail on 10–11 February 2026, supported by two reports from independent forensic accountant Thomas Wacher (dated June 2022 and August 2025). The disputed items included property valuations, the proper characterisation of sums Mr Sali had received or retained from the partnership, the applicable interest rate on those sums, post-dissolution profits and Mr Sali’s entitlement to 5% interest under section 42 of the Partnership Act 1890, and Mr Ponsford’s claim for remuneration as receiver and manager.
The Court’s Holding
Master McQuail accepted the legal framework put forward by Mr Ponsford’s counsel, Mr Francis Tregear KC, drawing on section 44 of the Partnership Act 1890 and the winding-up principles summarised in Lindley on Partnership (21st ed). The court confirmed that the account-taking process is a financial accounting exercise, not a forum for complaints that properties were sold at an undervalue or that business decisions were commercially unwise; such objections fall outside the scope of the accounting inquiry. Post-dissolution profits were attributed 100% to Mr Ponsford as the partner actively managing the winding-up, with Mr Sali entitled only to 5% simple interest on his partnership share pursuant to section 42 — the claimed contractual rate of 20% having been rejected by Master Marsh in the earlier preliminary-issue judgment and not reinstated.
The court found Mr Wacher to be an honest and independent expert whose methodology — netting third-party owner debts against property values and applying conservative realisation adjustments — was sound and necessary given the complexity of MON’s affairs. Mr Sali’s alternative balance-sheet figures, which used his own (higher) property valuations and ignored Mr Wacher’s adjustment methodology, were rejected. Mr Sali’s challenges to specific line items (including a submission that Mr Wacher had made an accounting blunder of approximately £1.8 million, addressed in a supplementary letter from Mr Ponsford’s solicitors with Mr Wacher’s input) were not accepted.
On credibility, Master McQuail preferred Mr Ponsford’s evidence and that of bookkeeper Lynda Apps (described as plainly honest) over Mr Sali’s. The court found Mr Sali to be an aggressive, evasive, and unhelpful witness whose conduct since 2021 demonstrated a determination to exit the partnership on his own terms regardless of his legal obligations. Claims raised for the first time in the witness box — that documents supporting his expenditure were at 2WR, and that he had paid half the cash rents to Mr Ponsford — were given no weight because they had not been put to Mr Ponsford in cross-examination. Mr Ponsford’s claim for remuneration at 15% (derived from Official Receiver insolvency rates) was noted to be unsupported by adequate evidence and non-compliant with PD69 para 9.4, leaving the appropriate rate to be determined.
Key Takeaways
- A partnership account-taking under section 44 of the Partnership Act 1890 is a strict financial exercise; complaints about the commercial wisdom of individual transactions or alleged undervalue sales are not justiciable within that process.
- Where one partner is appointed receiver and manager under a court order, post-dissolution profits are attributed to that managing partner and the outgoing partner receives only 5% simple interest on his share under section 42, unless a higher contractual rate is proved — a bare assertion of 20% will not suffice.
- A partner’s restriction on title, while giving an effective veto over property sales, does not exempt him from his continuing duty of good faith during the winding-up; deliberately impeding the receiver by refusing to remove restrictions can be taken into account when assessing his conduct.
- Expert evidence raised for the first time in written closing submissions (here, an alleged £1.8 million accounting error) may be addressed through a supplementary response from the opposing party, which the court will consider.
- A receiver appointed under PD69 who seeks remuneration must comply with para 9.4 of that Practice Direction; reliance on Official Receiver insolvency rates without appropriate evidential foundation risks an adverse finding on quantum.
Why It Matters
This judgment provides a careful application of the Partnership Act 1890 winding-up framework to a modern residential-property partnership that operated partly through Assisted Sales Agreements — a relatively novel structure whose legal efficacy the court noted was open to doubt, but which did not prevent the standard accounting rules from applying. Practitioners advising on partnership dissolutions will find the court’s restatement of the Lindley principles (particularly the restriction of complaints about commercial decisions to proceedings outside the account) a useful reference point, as well as its treatment of post-dissolution profit attribution and the section 42 interest entitlement.
The case also highlights the evidential burden on a defendant who wishes to displace a detailed forensic accountant’s report: vague oral assertions and last-minute challenges unsupported by documentary evidence will be insufficient. The outcome of the preliminary-issue appeal (confirming that 2WR was a partnership asset) reshaped the entire balance sheet, underscoring how pivotal asset-characterisation disputes can be to the final accounting in a multi-property partnership dissolution.