Frank, David and Margaret were partners in a small law firm located in Sydney. They had been partners for many years and over that time built a successful legal practice in the area of commercial law and insolvency. Although they did not have a written contract, they shared profits and losses equally. The practice was successful and after ten years Margaret decided she wished to leave the partnership and become a sole trader. When Margaret left, she ensured that her name was removed from the firm's letterhead. A formal email was also sent on behalf of the firm to all clients advising them that Margaret was leaving the firm.

After Margaret left, the law firm got into financial difficulties and has received a number of claims from creditors. All debts were incurred after Margaret left and set up her own sole trading practice.

1. Appraise whether Margaret is liable for the debts of the partnership?

2. Compare whether the position be different if the debt had been incurred before Margaret left?

Refer to relevant sections and case law