Partnership Case Law

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PARTNERSHIP CASELAW |
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This section of the website provides access to all cases summarised in the Partnership Law Updates which have been issued since January 2000 to date. Therefore this Archive operates as a guide to some of the interesting partnership cases decided in common law jurisdictions in recent years. Special thanks are due to Professor Dick Webb (Emeritus Professor of Law in the University of Auckland) for alerting me to many developments contained in this section and to Dr Keith Fletcher of the University of Queensland. .PARTNERSHIP LAW CASESJanurary 2000_______________________Partnership by Holding outPlaintiffs instructed first-named defendant as their solicitor - Plaintiffs’ funds dissipated by the first-named defendant - First-named defendant’s wife also worked as a solicitor in the practice - Plaintiffs instructed the defendant as a result of their friendship with his wife - Husband and wife conducted themselves as partners in everything they did socially - Whether wife was a partner in the practice - Whether wife was liable as a partner by holding outPalter v Zeller and Lieberman (1997) 30 OR (3d) 796. In this case, the Court of Justice of Ontario considered both the allegation of a partnership between the two defendants, and the allegation that the second-named defendant had held herself out to be a partner with the first-named defendant. The first-named defendant, Zeller, had set up in practice as a lawyer and after his marriage to the second-named defendant, Lieberman, she joined him in practice. This fact was advertised by an announcement which was published by Zeller to the effect that Lieberman had “joined me in the practice of law”. There was no indication given in the firm’s stationery or business cards that they were partners in this practice. The plaintiffs had been friendly with Lieberman before she met Zeller and arising out of this friendship they instructed Zeller on a number of occasions. After Lieberman joined the practice, the plaintiffs entrusted their savings to Zeller and signed blank documents in connection with the use of the funds. When Zeller dissipated this money, the plaintiffs sought to make Lieberman jointly liable with Zeller for the loss on the grounds that either she was Zeller’s partner or that she had allowed herself to be held out as his partner under the Ontario equivalent of s 14(1) of he Partnership Act 1890. The plaintiffs’ sought to support their claim that the husband and wife were partners as a matter of law by the fact that the plaintiffs had a social relationship with both defendants and it was clear from this relationship that the defendants were partners in everything they did, in the sense that they treated each other as equals. In the work context, the plaintiffs claimed that the defendants were equals since they looked totally equal at work, having equal-sized offices. Wilkins J rejected this claim out of hand since he could found not even a scintilla of evidence to support a finding of a partnership between the defendants. He noted that, although the plaintiffs presumed that the defendants were partners, the mere fact that lawyers may be married and behave in an equal social and marital relationship has no impact upon the question of whether they are partners as a matter of law. He held that what is important to this issue is how they conduct their business affairs together, not how they conduct their personal affairs.The plaintiffs’ second claim was that even if Lieberman was not a partner as a matter of law, she allowed herself to be held out as a partner in the firm and therefore should be liable under the Ontario equivalent of s 14(1) of the Partnership Act 1890 since the plaintiffs had relied on this fact. Again the plaintiffs supported their claim of a holding out by the fact that the defendants treated each other as equals in everything they did. The plaintiffs alleged that they had relied on this holding out of partnership by virtue of the...
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