Sandra is a successful real-estate agent with Home Base -;realty Inc. (HBRI). She acts for, among many other People, a struggling small contractor, Herbert Homes :_limited (HHL). HHL buys land, builds a home on it in the ',lope of attracting a buyer, and uses Sandra and IIBRI as is agent to list the property and make the sale.

HHL was short on cash when a desirable, vacant acre of land came on the market. Sandra was to loan HHL $130,000 (the full price of the lot). Rather than take a mortgage on the land for security, as that could interfere with HHL's ability to borrow bank funds to finance construction, Sandra and HHL agreed that her name would go on the deed as well as that of HHL. They further agreed that when the property was sold with a house on it, she would get her usual 6 percent commission on the sale, together with her original $130,000 loan, plus interest of 12 percent to the sale date. The property was purchased, Sandra carried on with her other commitments, and HHL built a house, which two months after completion was sold for $400,000. On the sale, Sandra and HHL signed off on the deed to the new owners, and payment was made directly to the lawyer for the vendors. The lawyer for the vendors splits up the money: $24,000 to HBRI, $137,800 to Sandra, and the balance to HHL. As matters turned out, HHL had not built the house up to standard. The roof leaked, costing the purchasers $22,000 in damages. The purchasers sued HHL

and Sandra as the vendors. Conclusive evidence was presented that they received a faulty house from the vendors. The Provincial Government New Home Warranty Board was advised of the matter, and its investigation showed that while HHL was a registered builder, as one must be under the law to sell a new home, Sandra was not. She has now been charged with a violation of the law. Such an offence usually results in a $500 fine for a first offence. Consider the aspects of partnership law as they may apply, and advise Sandra as to how she should proceed. Consider how she is exposed to risk, and what defences or claims she may raise in civil court against HHL or the purchasers, and against the Crown in Provincial Offences Court. If you were in a position to advise the judge in Provincial Offences Court, what would you do?