S.22 requires that partner must act with the utmost fairness and good faith towards “a the other members of the firm in the business of the firm”(general fiduciary duty of partners) S.31-33 (specific fiduciary duties) (McKnight v. Hutchinson) S.31 partners bound to render accounts and full info of all things – affecting partnership S.32 partners must account for any benefits derived w/out consent of – other partners S.33 requires partners account for profits mad from engaging in – competing business Rochwerg v. Truster Rochwerg became a director of a corporation (which entitled him to shares and stock options) that was the client of his partnership accounting firm Issue: whether the other partners were entitled to an accounting for the shares and stock options? Held: No written partnership agmt so governed by no obligation to account under s.30; PA must account under first branch of s.29(1) the partnership” and under the – “concerning second branch of s.29(2) benefit derived from use of partnership business connection – McKnight v. Hutchinson (example of fiduciary duties of partners) Facts: Law partnership that ended when McKnight learned that Hutchinson had received earnings from part ownership in a private company Held: Relevant sections of PA are ss.22(1), 31, 32(1) and 33 and these obligations can be varied by consent of partners. Funding The funding of a partnership is usually done by a portion of trade credit and typically a loan (bank or other lenders) Partners are the equity investors could make cash contributions but invest could be in – form of property or services (or combo) Typically partners will share profits in proportion to relative contributions, but not necessarily if nothing is said, the default under s.27(a) is an equal share in capital, – profits and losses Possible (although rare) that a partnership interest may be considered a security and if so would be subject to provincial securities legislation If partner does not take part in management of business (dormant partner) Loans from persons other than bank Dissolution A partnership can be dissolved by the act, death, bankruptcy or dissolution of a partner.
S.22 requires that “a partner must act with the utmost fairness and good faith towards the other members of the firm in the business of the firm”(general fiduciary duty of partners) S.31-33 (specific fiduciary duties) (McKnight v. Hutchinson) S.31 – partners bound to render accounts and full info of all things affecting partnership S.32 – partners must account for any benefits derived w/out consent of other partners S.33 – requires partners account for profits mad from engaging in competing business Rochwerg v. Truster Rochwerg became a director of a corporation (which entitled him to shares and stock options) that was the client of his partnership accounting firm Issue: whether the other partners were entitled to an accounting for the shares and stock options? Held: No written partnership agmt so governed by PA no obligation to account under s.30; must account under first branch of s.29(1) – “concerning the partnership” and under the second branch of s.29(2) – benefit derived from use of partnership business connection McKnight v. Hutchinson (example of fiduciary duties of partners) Facts: Law partnership that ended when McKnight learned that Hutchinson had received earnings from part ownership in a private company Held: Relevant sections of PA are ss.22(1), 31, 32(1) and 33 and these obligations can be varied by consent of partners. Funding The funding of a partnership is usually done by a portion of trade credit and typically a loan (bank or other lenders) Partners are the equity investors – could make cash contributions but invest could be in form of property or services (or combo) Typically partners will share profits in proportion to relative contributions, but not necessarily – if nothing is said, the default under s.27(a) is an equal share in capital, profits and losses Possible (although rare) that a partnership interest may be considered a security and if so would be subject to provincial securities legislation If partner does not take part in management of business (dormant partner) Loans from persons other than bank Dissolution A partnership can be dissolved by the act, death, bankruptcy or dissolution of a partner.
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