Case information

Commercial law — Partnerships — Parties owning commercial building together — Applicants seeking to buy out respondents and arguing that the parties had been involved in a partnership — Parties bringing competing motions for summary judgment — Motion judge finding in favour of respondents, concluding there was no partnership, only a tenancy in common, and ordering sale of property — Court of Appeal upholding motion judge’s conclusion but varying procedure for sale of property — When is a partnership created? — Are subjective intentions important to the creation of a partnership? — What is the appropriate remedy for the dissolution of a partnership? — Partition Act, R.S.O. 1990, c. P.4, s. 2 — Partnerships Act, R.S.O. 1990, c. P.5, ss. 2, 3, 22, 32.

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The parties own a commercial property together in Toronto. The applicants wished to buy out the respondents, through the mechanism of the Partnerships Act, R.S.O. 1990, c. P.5. The respondents counter-claimed for a sale of the property under the Partition Act, R.S.O. 1990, c. P.4. The parties brought competing motions for summary judgment.

The motion judge rejected the claim that the parties owned the property as a partnership, and found that the parties were co-owners as tenants in common only. The motion judge found for the respondents, and granted them the unilateral right to sell the commercial property at its highest market value, dispensing with the need to secure the applicants’ consent to the sale, for a period of 90 days, failing which the parties could ask the court for an extension or to resolve any impediments to sale. The Court of Appeal allowed the applicants’ appeal in part; while it upheld the finding that there was no partnership in this case, it found that the motion judge had erred in dispensing with the applicants’ consent to the sale of the property. The Court of Appeal instead directed a reference for sale of the property to an associate judge of the Superior Court, who could make any necessary directions to determine the procedure for the sale; furthermore, any of the parties were allowed to make an offer to purchase the property.