Mateo Ronaldo & Saira Corrigan recently received their CPA designations, and decided to start their own accounting firm in Toronto, Ontario. Their primary focus was conducting business valuations for litigation purposes. They were concerned about how to set up their practice, and debated the pros and cons of establishing a professional corporation or a limited liability partnership. Ultimately, they started their practice as Ronaldo & Corrigan LLP. Since they had taken a Business Law course in their program, they also negotiated and signed a partnership agreement. The agreement dealt with the usual matters, but Saira felt that it was also important for them to have a clause that said "The parties agree that, if either of them leaves the partnership, the party that leaves cannot set up a competing accounting practice in the Greater Toronto Area for 2 years after that party leaves the partnership."

On September 4, 2019, Saira received a call from Rob Shapiro, a family lawyer. Rob was seeking a business valuation for a client who was going through a divorce, for the purpose of determining division of property between the spouses. Saira agreed to take on the file (project), and asked Rob to send her specific documents related to the business. Rob sent two sets of documents, one large package by courier on September 11, 2019, and additional documents by secure email on September 15, 2019.

Saira received the courier package, and proceeded to conduct a business valuation based on the information provided in that package. On the morning of September 15, 2019, Saira received some disturbing news regarding a family member, and as a result of her distress, she overlooked the email from Rob with the second set of documents.

When Saira sent the business valuation to Rob Shapiro, he seemed a bit surprised. "Did you get both sets of documents that I sent to you?" he asked Saira. "Yes, of course," said Saira. She ignored the question about the second set of documents and replied, "I reviewed all the documents that you sent to me". Later that day, Saira checked her email and realized that she had not seen Rob's email with the additional documents. Embarrassed by her mistake, she decided to say nothing.

Meanwhile, Mateo met Joseph, a local businessman, at a community event. Joseph was complaining about his bookkeeper going on maternity leave, and how he needed someone to do some basic accounting for his business. Seeing an opportunity, Mateo offered Joseph his business card.

"Look", said Joseph, "I'm not interested in retaining an accounting firm. I'll pay you cash for some work that you can do on the side. It's a win-win situation for both of us." Mateo was a bit uncomfortable, but he agreed, and started doing some accounting work for Joseph on Sundays. He did not tell Saira, and kept the cash that Joseph paid him for his work.

Months later, Saira met Rob at a social function hosted by a business contact at Kit Kat Bar & Lounge. Unfortunately, Saira had too much to drink that night. Rob mentioned that the client had been disappointed by the business valuation, as he thought that the supplementary documents sent by email should have resulted in a different value.

"Well, who knows," said Saira. "I never looked at those documents. Anyways, the guy settled the case and now it's over, so everyone is happy."

By midnight, Saira was clearly drunk. She ordered another drink at the bar, and the bartender refused to serve her. Mateo, who was also drinking heavily, convinced the bartender to give Saira a few more drinks, telling the bartender that he would make sure that Saira got home safely. In fact, Mateo soon left with another friend, and when the bar closed, Saira stumbled out of the bar alone. Sadly, Saira walked into oncoming traffic, and while she was not hit by a car, she fell and seriously injured her leg. After months of pain, surgery and therapy, Saira could only walk with the use of a cane.

Meanwhile, Mateo continued the practice as a business valuator on his own, as Saira was unable to work for 10 months. During this time, Mateo purchased a photocopier for the firm that was designed to make both black/white and colour copies. He asked the supplier if it could also make copies on card stock, and the supplier assured him that it could, although there was nothing written on the purchase order/invoice about photocopying on card stock. The description of the photocopier on the purchase order/invoice simply said "black/white & colour photocopier Model N12345".

When the photocopier was delivered, however, Mateo discovered that it would not make colour copies. While he was still able to use the copier for basic copying, he needed to outsource the colour copying that made up 10% of the total copying done in his practice. He also tried making a copy on card stock, and to his surprise, the machine broke down and would no longer work. Mateo contacted the supplier of the photocopier immediately, and asked that they replace the copier with one that could provide the services that he had been promised. The supplier refused to do anything to help Mateo.

At this point, Mateo decided to exit the partnership with Saira. Although Saira was very disappointed, they followed the terms of the partnership agreement and arrived at a reasonable value that Saira would pay Mateo for his share of the partnership. Although Saira still experienced pain in her leg (and likely would experience this pain for the rest of her life), she was now able to return to work. She was thrilled that she was able to get a job with a major accounting firm called Thornton LLP.

Saira worked for Thornton LLP for 5 years, and quickly distinguished herself as a hard worker. She was promoted to the position of Manager, and then Director of Small Business Consulting. After 5 years, Thornton LLP merged with another accounting firm, and there was a change in leadership. Saira's boss changed, and seemed to be unfriendly from the start. Saira was very surprised when her boss asked to meet with her one day and told her that she was going to be moved to the Winnipeg office, where she would be Director of a smaller team than she currently had. Saira was shocked.

"But I can't move to Winnipeg - I have family commitments in Toronto," she told her new boss. The boss seemed sympathetic but offered her two options - either take the job in Winnipeg, or be demoted to the position of Manager of an even smaller team in Toronto, where she would report to one of her current team members.

With this new position, Saira's salary would also drop by 20%. Saira was outraged, and stormed out of the office as she said "I quit!"

Saira ultimately decided to start her own practice under the name Corrigan Accounting Professional Corporation.

Discuss all the legal issues raised in this scenario. Identify relevant parties and all potential legal arguments. Analyze the legal arguments thoroughly, and comment on the likely outcome for each legal issue.