Question
Bill Murphy once had fame and fortune as a result of a role he played in a movie about groundhogs. Bill has now fallen on
Bill Murphy once had fame and fortune as a result of a role he played in a movie about groundhogs. Bill has now fallen on hard times. So Bill decided to try to profit on his past glory by developing a theme park in Ontario based loosely on the movie called "Groundhog World". Bill needed money to launch Groundhog World, so he approached his wealthy friend, Huma Kodar, for help. Huma agreed to give Bill $3million to fund Groundhog World. Bill agreed that he would pay Huma back over ten years. Instead of interest, Huma agreed that she would accept ten percent of the profits of Groundhog World, plus the payment of the principal amount owing. There was no written agreement between Bill and Huma. Bill registered "Groundhog World" as a business name and it opened in Peterborough in the summer of 2021. Huma and Bill agreed that Bill would run the day-to-day operations of Groundhog World since Huma already had a successful career as an investment banker. Huma would defer to Bill in terms of operational decisions on a day-to-day basis. However, Huma was not content to simply give Bill so much money. She demanded, and Bill agreed, that she be able to view the books and finances of Groundhog World whenever she wanted. Huma and Bill also agreed that they would meet monthly to discuss the operations of Groundhog World. Huma, being quite astute, also insisted that her name never appear on any contracts, invoices, letterhead, or other materials related to Groundhog World, and she did not sign any purchase orders or contracts related to the business. The issue of the nature of the relationship between Bill and Huma has recently come under scrutiny. Mila was a guest at the park when a Groundhog World employee negligently ran her over with a golf cart. It is clear that Groundhog World is vicariously liable for its employee's negligence. The real question is whether Mila can sue Bill and Huma, on the argument that they are in a partnership with each other. Given Huma's wealth, Mila would prefer to characterize their relationship as a partnership so that she can access Huma's assets.
I - ISSUE: identify the legal issue(s) raised by the facts
R - RULE: state the law/legal principles (include law of torts, Ontario Partnerships Act, case law) A - APPLICATION: apply the legal rules to the facts
C - CONCLLUSION: state your conclusion, and explain why you selected it over the alternative
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