Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

FactsZara had been a licensed paralegal for five years, specializing in Landlord Tenant law, when she was offered a partnership position in a small Toronto

FactsZara had been a licensed paralegal for five years, specializing in Landlord Tenant law, when she was offered a partnership position in a small Toronto firm. At that time, there were two partners:Saul, a paralegal who specialized in civil litigation in the Small Claims Court; and Marco, a lawyer who specialized in criminal law and Highway Traffic Act cases. The following is a transcript of what was said prior to Zara signing the partnership agreement:Zara: Would I be specializing in Landlord and Tenant cases? That is my preference.Saul: That is certainly our hope, though the partnership agreement doesn't say that. We are using a standard form partnership agreement that we downloaded from the internet.Marco:Our Landlord and Tenant business has been growing steadily and we would expect it to continue to grow. That is why we would like you to join us. You will start with about 50% of your time doing Landlord and Tenant cases, and it should grow to about 90% of your practice in a few years.Zara Very good.(continued)

Saul: As you can see in the agreement, you will contribute $25,000 to the partnership on joining, which will be used only for partnership expenses, but you will make that investment back over the next few years from the profits of the firm. You will receive15 percent of the partnership profits for the first three years, and then it will increase by 3% each year until you receive 33% of the partnership profits. We have spent many years investing and building the firm, so that is why we are getting a higher percentage for your beginning years.Zara The agreement looks fine. I am prepared to sign and to contribute the $25,000.Two years later, Zara is very unhappy. The volume of Landlord Tenant work in the firm did not increase, but rather decreased by 50%. Three months after she joined the firm, a major client,LandBig Corporation, moved all of its Landlord Tenant and Small Claims business to another law firm. Because of this, Zara has been spending most of her time doing summary conviction cases in criminal court, which she doesn't like. Also, the firm's profits have decreased because of the loss of revenues from LandBig Corporation. Therefore, Zara's take home earnings have decreased. Her partnership income started at $75,000 per year, but two years later, she was taking home only $50,000 per year.As a partner, Zara has access to all partnership communications. Recently, she stumbled upon the following email chain between Marco and Saul one month before she joined the firm

:Marco We need a new partner for the Landlord Tenant business to service LandBigCorporation, which is always litigating with its tenants and suppliers. They have 5properties of 50 apartments each - that's 250 tenants. We can't afford to lose this client!

Saul Yes, we need to keep LandBig happy. It could lead to more tenancy work, civil litigation, and other business. Very profitable! I am a little concerned, however, because LandBig's president told me a few weeks ago that she is considering moving all of their business to another law firm, so we need to keep LandBig and we need to keep these Landlord Tenant files! Saul: All the more reason we need to bring in someone new ASAP!

Zara is seeking your professional opinion about whether she has a claim against the other two partners, for failing to disclose the details of the discussions regarding LandBig Corporation.Review the Supreme Court of Canada case of Bhasin v. Hrynew, [2014] 3 SCR 494, 2014 SCC71 (CanLII) and relevant cases which develop the Bhasin case.

Please provide partnership agreement based on this case.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advanced Financial Accounting

Authors: Richard E. Baker, Valdean C. Lembke, Thomas E. King

5th Edition

0072444126, 978-0072444124

Students also viewed these Law questions