Business Law BUS 1044 Assignment 2: Case Study and Analysis

This document presents a comprehensive solution to a Business Law assignment (BUS 1044, Assignment 2) focusing on key legal concepts within the context of Canadian business law. The assignment begins with an analysis of the case *Ellerforth Investments Limited v Typhon Group Ltd*, exploring the judge's conclusions and the grounds for partnership dissolution under the *Partnership Act*. It further examines fiduciary duties within partnerships, providing examples of breaches. The assignment then shifts to a scenario involving a sole proprietorship, evaluating the liabilities and advantages/disadvantages of this business structure. It also provides advice to a potential investor. Finally, the assignment concludes with a discussion of business ethics, addressing breaches of duty in various workplace scenarios and the importance of providing a safe workplace, including the policies an employer should prepare.

Running Head: Business law 1
Business Law BUS 1044; Assignment 2 CRN 82607
Student’s Name
Institutional Affiliation

Business law 2
Table of Contents
Table of Contents...........................................................................................................................2
Question 1........................................................................................................................................3
Question 2........................................................................................................................................4
Question 3........................................................................................................................................5

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Question 1
Ellerforth Investments Limited v Typhon Group Ltd 2010 ONCA 275
a) What was the judge’s conclusion?
The judge found it to be within both justice and equity to order a termination of the partnership
under section 35 of the Partnership Act on two grounds. The contractual relationship between the
two parties thus came to an end.
b) What were the 2 grounds for dissolving the partnership on the just and equitable grounds?
The first ground was that, the judge found that the two parties were apart in their intentions for
the future of the partnership. They no longer shared a common goal with regards to what their
relationship was to yield in the future. Secondly, the judge found that even if the relationship
were to continue then it would never be productive because there was lack of mutual trust among
the parties. Neither did they have confidence in each other, making it difficult to continue
partnership.
c) Explain 2 other grounds for dissolving partnership in the Partnership Act
There are many other grounds provided for dissolution of partnership in the Act. One of them is
by illegality of business as stipulated in section 34 of the Act. Where a business that the partners
are engaging in is illegal then the courts have to dissolve the partnership. The other ground is
through the expiry of the terms or notice as provided in section 32; which would in turn make the
partnership itself to have expired. Such a relationship is a strong ground for dissolution.
d) Explain fiduciary duty in partnerships and give 2 examples of how partners can breach
their fiduciary duties.
Fiduciary duties refer to the obligations that a person who manages other people’s money or
property act in the best interest of those people rather than the individual’s. In partnerships,
partners have, like the directors, a duty of care to the partnership. They can be deemed to be in
breach of this duty when they take a number of actions; for example, when a partner fails to
disclose profits to the others, hiding them for their individual gain, they are in breach of their

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fiduciary duty. Another instance is when a partner is not loyal to the partnership; for example if
they act by favouring another business at the expense of the partnership then they are in breach
of their fiduciary duty to the partnership.
e) Explain the conflicting views held by the appellant and respondent as to the future of the
partnership
The partners held different views as to the fundamental issues regarding the initial objective of
the partnership. The appellant expressed desire to retain partnership property for an unspecified
period of time into the future. The respondent on the hand wished to get rid of the property; and
was reluctant to continue to spend the funds needed to renovate the building to be presentable for
the business in question.
f) What happens to a partnership of 10 partners when one partner dies, and is there anything
that can be done to avoid those consequences under the Partnership Act?
According to section 33 of the Act, every partnership is terminated where there is death or
insolvency of a partner. If the remaining partners want to remain in partnership then it would
require that they have a buy-sell agreement in place (Arthurs, 2018). This will enable the
remaining 9 partners to buy the ownership rights of the departed partner.
Question 2
a) Explain the extent of liability Sabreena faces if the business fails
The type of business Sabreena intends to create is a sole proprietorship, where one person owns
the business. She would be liable for all debts owed to creditors if the business were to fail
(Scarborough & Cornwall, 2011).
b) Advantages and disadvantages of forming a sole proprietorship
One of the advantages is that the owner, being the only one who owns the business, enjoys
control of all profits coming from the business. The next advantage is that this kind of business is
very easy to form. There is only little paper work and procedures required to form this type of
business.

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There are a few disadvantages involved, too. Like the way the owner enjoys all profits, he/she is
also liable for all losses and liabilities that the business incurs. The other disadvantage is the
difficulty in convincing outsiders to fund the business, thus the business may find it hard to
grow.
c) Advice to Sabreena’s mother concerning investing in the business
The mother would need to avoid taking part in the management of the business so as to avoid
losing her position as a limited partner with limited liability. Also, she would need to avoid an
inclusion of her surname into the business because it is contrary to section 6 of the act and would
make her lose her limited partner status.
Question 3
a) (i) Identify and explain who is in breach of duty
The employee, Ahmed, is in breach of duty. He owes his employer an ethical duty to be
honest. He influenced the employer’s decision negatively by lying and is therefore in breach
of that duty.
(ii) Sonja’s boss is in breach of duty in this case. She owes a duty to Sonja to ensure that the
work she does as an employee is only that work which was agreed upon. If there is new
equipment for new work then at least she should be trained for the same.
(iii) Manjeet is in breach of duty here. He owes his employer a duty to arrive at work in good
time. If he is unable to arrive in time, he is supposed to inform the employer so that the latter
seeks a solution. This is also an ethical breach.
b) Why it is in the employer’s interest to provide a safe workplace
First, if the workplace does not attain the required health standards then the employees may
become sick and it would be upon the employer to pay for their treatment and this is costly in
terms of both time and money (Clarkson, Miller, & Cross, 2014, p 663). Secondly, it may cause
harm to third parties and if it is a business then the owner is bound to lose customers.
c) The policies that an employer has to prepare

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The employer has a duty to prepare a policy that deals with issues of violence at the workplace.
Secondly, one is required in their capacity as an employer to prepare a policy that would deal
with the issue of harassment at the workplace.
References
Books/ Articles/ Reports
Arthurs, H. (2018). The hollowing out of corporate Canada? Globalizing Institutions, 29-51.
Clarkson, K. W., Miller, R. L., & Cross, F. B. (2014). Business Law: Texts and Cases. Nelson
Education. p. 663
Scarborough, N.M., and Cornwall, J.R. (2011). Essentials of entrepreneurship and small
business management: Pearson.
Cases and Statutes
Ellerforth Investments Limited v Typhon Group Ltd 2010 ONCA 275
Partnerships Act 1990.