Professionals often carry on their professional practice as partners in a partnership or limited liability partnership. Partnerships can be created simply by conduct and the application of the Partnership Act or by a simple or complex partnership agreement.
Joint Venture Contract – Fiduciary Duties?
In other cases professionals associate in practice by participation in a contractual joint venture which, depending on the agreement and the circumstances, may or may not at law also be a partnership but, in any event, may attract the duties and obligations of partners, including fiduciary duties.
Some professionals may consider that they are only sharing space with other professional and may be very surprised to find that the arrangement gave rise at law to unexpected obligations.
Duty of Honest Performance
The recent decision of the Supreme Court of Canada in Bhasin v. Hrynew, though not a case about partnerships, nonetheless has a wide-ranging impact on professionals carrying on practice together simply by contract not amounting to a partnership.
“Commercial parties reasonably expect a basic level of honesty and good faith in contractual dealings…”
The Supreme Court of Canada recognized that “Commercial parties reasonably expect a basic level of honesty and good faith in contractual dealings…” The court recognized and articulated a new duty upon contracting parties, holding that:
“It is appropriate to recognize a new common law duty that applies to all contracts as a manifestation of the general organizing principle of good faith: a duty of honest performance, which requires the parties to be honest with each other in relation to the performance of their contractual obligations.”
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Experience – Litigation and Arbitration
Some of our lawyers have experience in partnership and contractual disputes between professionals, including the resolution of those disputes by trial or other proceedings in the Ontario Superior Court of Justice, including in the Commercial List in Toronto, and by commercial arbitration under the Arbitration Act and the International Commercial Arbitration Act. We also have experience in similar disputes between shareholders in start-up, closely-held and family owned companies.
An understanding of the practice details of dentists, doctors, accountants, lawyers, architects, engineers, planners, realtors, graphic designers and web designers is required to provide efficient and effective legal representation when they are in dispute.
We routinely speak at Continuing Professional Development seminars for the legal profession, including on matters related to partnership, joint venture and closely-held company disputes.
David Alderson, lawyer at this firm, was a panelist at the Law Society of Upper Canada Continuing Professional Development program, The Annotated Partnership Agreement, on the panel entitled “Review of the Differences (Legal and Drafting) Between a Partnership and a Joint Venture – Understanding the Significant Consequences”, and was a member of faculty for the Osgoode Professional Development program Shareholder Litigation and the Closely-Held Company.
Injunctions and other Urgent Remedies
We are regularly retained to bring or respond to injunctions and other urgent remedies. The need for such steps is often present in partnership disputes, particularly when a partner has been excluded from the business or there are financial irregularities in the practice.
We have considerable experience in seeking and responding to motions for summary judgment in commercial matters. The Supreme Court of Canada in Hryniak v. Mauldin changed the law relating to summary judgment. David Alderson, lawyer at this firm (though not at the time of the hearing), was co-counsel on that case. This case has had such a significant impact on civil legal proceedings in the courts in Ontario, including with respect to the access to justice, that it has, in the course of one year since the decision was released, been cited in more than 3,000 reported decisions of the courts in Canada and over 1,900 cases in Ontario alone. You can read his recent chapter on summary judgment in the Annual Review of Civil Litigation.
Lawyers at our firm have appeared as counsel on appeals before the Divisional Court of the Ontario Superior Court of Justice, the Ontario Court of Appeal, the Federal Court of Appeal and the Supreme Court of Canada.
Please contact Gilbertson Davis LLP to arrange an initial consultation. In disputes of this type it is often important to promptly commence initial first steps following legal advice.
Click here for our related webpage on Partnership Disputes.