JUDGMENT

Gunn Chit Tuan SCJ:

This appeal involves the construction of s. 35(1) of the Partnership Act 1961 (our Act), which is concerned with the dissolution of a partnership by death or bankruptcy and is as follows:

35(1) Subject to any agreement between the partners, every partnership is dissolved as regards all the partners by the death or bankruptcy of any partner.

On 1 October 1988, Lee Choo Yam Holdings Sdn. Bhd., Hew Hee @ Hew Tin Hee and Cheh Yah Chok (the respondents) filed an originating summons for an order for a declaration that the partnership and business of Tai Kwong Goldsmiths & Jewellers stand dissolved under s. 35(1) of the Partnership Act 1961, and that a receiver be appointed for the purposes of a dissolution of the said business. The originating summons was served on Khoo Yoke Wah, Lee Kim Seng, Lee Choo Keong, Lee Choo Leong, Lee Wah Hoong, Lee Bon Chai @ Lee Kim Hooi (the appellants) and on one Eng Chek Song @ Eng Hup Choon who did not oppose it.

The relevant facts found by Annuar J in the High Court were that the appellants, the respondents and the said Eng Chek Song as partners of Tai Kwong Goldsmiths & Jewellers were carrying on the business of goldsmiths and jewellers. One Lee Choo Meng, who was the most senior partner managing the business died in August 1988 whilst another partner, Ngai Ngan Tong, died in April 1988.

When the partnership was formed on or about 15 September 1958, there were 18 partners. Since the formation of the partnership until the death of the said Lee Choo Meng in 1988, there were several changes in the constitution of the partnership firm. Some partners died while others joined as new partners or merely stepped into the shoes of a deceased partner. Nobody suggested that any of those changes dissolved the original partnership and it is also not disputed that when one Lee Toh Seng who joined the partnership in 1973 died on 9 April 1982, his legal administratrix and administrator were taken in as partners. But when the said Lee Choo Meng died testate on 25 August 1988 and his widow wanted to step into his shoes in the partnership, that was opposed by the respondents who then contended that the death had dissolved the partnership.

Mr. Sri Ram, the leading Counsel for the appellants, stated that they accept the proposition that by reason of the terms of s. 35(1) of the Partnership Act 1961, the death of a partner, in the absence of an agreement to the contrary, dissolves a partnership. It was common ground between the parties in the Court below that the agreement envisaged by s. 35(1) need not be in writing but may be evinced from the conduct of the parties and all the circumstances of the case. But the learned Judge held that there must be cogent proof of an agreement made between the parties at the time they first entered into the partnership and should have been made prior to the death of the partner. For the appellants, it was submitted that the learned Judge was wrong in law in concluding as he did. It was submitted that the true principle is that a contrary intention, namely that death does not dissolve a partnership, may be deduced from the conduct of the surviving partners and the heirs of the deceased partner.

Counsel also referred to a letter dated 12 May 1982, written by a firm of solicitors to the manager of the Development and Commercial Bank Berhad (p. 138 of the appeal records) to inform him that three partners of the partnership had withdrawn from it with effect from 30 April 1982. There was never then any suggestion that the withdrawal of those partners had brought the old partnership to an end. Mr. Sri Ram also submitted that in this respect, our common law is the same as the Indian common law. And until the Partnership Act 1961, came into force on 1 July 1974, the law of partnership in Peninsular Malaysia in this regard was governed by the repealed s. 206(j) of the Contracts (Malay States) Ordinance 1950, which was ipsissima verba with s. 253(10) of the Indian C