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Common Law and Partnerships Act

In Tim Ludwig Professional Corporation v. BDO Canada LLP (Ont CA, 2017) the Court of Appeal contrasts the role of the common law of partnerships with the Partnerships Act:
[33] BDO submits that the motion judge erred in relying too heavily on the common law of partnerships, rather than solely on general principles of contractual interpretation. I do not agree with this submission. In my view, s. 45 of the Partnerships Act imports the common law rules into the analysis of a partnership agreement, except to the extent they have been varied by the agreement or the Act. The relevant common law principles, which inform the construction of a partnership agreement, are explained in Lindley & Banks as follows:
• Because an expulsion from a partnership is expropriatory in nature, depriving the partner of future profits, an expulsion provision in a partnership agreement will be construed strictly: para. 10-123.

• Partners are fiduciaries among themselves and the utmost good faith is owed from every member of a partnership towards every other member: para. 16-01.

• Where a discretion is conferred on the management of the firm or on a majority of partners, a partner will normally be entitled to expect that it will be exercised rationally and in good faith and not arbitrarily or capriciously: at para. 16-09.



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