Substance Over Form Gives Gay Man Share of Profits

The court has awarded a gay man, who gave up his career to help his partner build a business, a share in the profits after their personal relationship fell apart.

The claimant, who had worked as a computer systems manager at a merchant bank, gave up that job in June 1993 after his partner had set up a fitness business the previous April. The two worked in the business full time, although it was carried out in the name of the claimant’s partner alone and the claimant received state benefits for a period whilst working in the business.

In 2002, their personal relationship broke down and the claimant sought an equal share in the business on the basis that he had been actively and continuously involved in the running of it.

The court agreed that he was due an equal share in the business which (in legal parlance) was held by his ex-partner on constructive trust for the two of them.

The conclusion was based on the court’s acceptance of the proposition that there had been an understanding that the business was to be shared beneficially between them. Once that was accepted, all that was necessary for the claimant to show was that the defendant acted to his detriment or significantly altered his position in relation to the prior agreement.