The case centred on whether a letter dated 18 March 1986 from Pridie Brewster and countersigned by Harris constituted a legally binding agreement in respect of the future merger of the practices. The judge held that it did.
He said that in the years following the letter the two firms were never formally merged but Harris worked on a part-time consultancy basis for Pridie Brewster and in turn Pridie Brewster carried out work for Mr Harris’s clients and paid him fees under the terms of the agreement.
However, in late 1998, following dissatisfaction over a number of matters, Harris began negotiations for the transfer of his business to another firm of accountants, Harris Krafton.
He claimed that the March 1986 letter was a gentleman’s agreement, not a binding legal document, and informed Pridie Brewster that as a result of a severe loss of confidence in the way they had dealt with certain accounting matters, he was not prepared to proceed with the final merger.
However, finding that Pridie Brewster was entitled to damages, Deputy High Court Judge David Vaughan QC said today that he had no doubt that the March 1986 letter constituted a legally binding agreement to merge the two practices.
He said he was satisfied that ‘Mr Harris regarded that what he had reached was something binding which would protect his wife in the event of death and himself in the event of incapacity, and impose liability on the partners of Pridie Brewster.’
Unless the parties are now able to reach an agreement the amount of damages payable will be decided at a future hearing.
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