Making partners accountable - Rochwerg v Truster reaches Australia

Graw, Stephen (2020) Making partners accountable - Rochwerg v Truster reaches Australia. James Cook University Law Review, 26. pp. 75-97.

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Abstract

The relationship between partners is governed by the terms of their agreement (if any), the fiduciary duties they owe one another and the provisions of the relevant Partnership Act. The latter two can be varied but, in the absence of a variation, the rights co-exist.

One aspect of the relationship affected by both the partners’ fiduciary duties and the Partnership Act provisions (and, quite often, by some express term of their partnership agreement) is the obligation to act for the common good. In equity it is encapsulated in the ‘no conflict’ and ‘no profit’ rules. They are reinforced by three sections of the Partnership Acts – imposing duties ‘to render true accounts and full information of all things affecting the partnership’, to account to the firm for any non-consensual benefit derived ‘from any transaction concerning the partnership or from any use … of the partnership property, name or business connexion’ and not to carry on ‘any business of the same nature as and competing with that of the firm’ or, at least not to do so without the consent of the other partners.

Much of the case law on the partners’ duties to account have concentrated on their fiduciary obligations or on individual sections of the Act, with virtually no analysis of how the sections interact (or could interact) with each other. That has been rectified by a decision of the Court of Appeal for Ontario, adopted in Australia by the Supreme Court of Victoria. Unfortunately the Victorian decision falls short of a complete analysis and, while it is a useful addition to the jurisprudence, it remains up to future courts to define the exact parameters of the relationships between those three sections.

Item ID: 65925
Item Type: Article (Research - C1)
ISSN: 1839-2792
Keywords: Partners; fiduciary duties; 'no conflict' rule; 'no profits' rule; duty to render true accounts and full information; duty to account for benefits derived from thransactions concerning the partnership or from any use of the partnership property, name or business connexion; duty not to compete with the firm,partners' statutory duties.
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Date Deposited: 03 Mar 2021 00:20
FoR Codes: 48 LAW AND LEGAL STUDIES > 4801 Commercial law > 480103 Corporations and associations law @ 100%
SEO Codes: 94 LAW, POLITICS AND COMMUNITY SERVICES > 9499 Other Law, Politics and Community Services > 949999 Law, Politics and Community Services not elsewhere classified @ 100%
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