(Court of Appeal for Ontario) A Mr Olson and a Mr Gullo had formed a partnership to develop a tract of land. Mr Gullo nevertheless bought and sold part of the land for his own account at a substantial profit which he planned to pocket. The trial judge held that Mr Olson was entitled to recover the whole of the profit.
Held: The appeal was allowed.
Morden ACJO said that he had ‘concluded . . that it was contrary to principle and authority . . to deprive the defendants of their one-half share in the transaction in question’. He explained: ‘We must, however, begin our consideration with the basic premise that the profit in question is the property of the partnership, not of all the partners except the defaulting partner. To exclude the wrongdoer would be to effect a forfeiture of his or her interest in this partnership property. The point may be understood by considering a starker form of wrongdoing – a case where a partner misappropriates partnership funds for his own benefit. In such a case I am not aware of any principle or decision to the effect that not only must the partner account to the partnership for the money but must also suffer a forfeiture of his or her interest in it. In fact, the case law of which I am aware is to the contrary.’
(1994) 17 OR (3d) 790
Cited – Hosking v Marathon Asset Management Llp ChD 5-Oct-2016
Loss of agent’s share for breach within LLP
The court was asked whether the principle that a fiduciary (in particular, an agent) who acts in breach of his fiduciary duties can lose his right to remuneration, is capable of applying to profit share of a partner in a partnership or a member of a . .
Lists of cited by and citing cases may be incomplete.
Commonwealth, Company, Agency
Updated: 04 May 2022; Ref: scu.569930