Partnership Law Assignment: Liability for Debt of the Firm

Part 1: Wood v Fresher Foods Case Scenario

The following question relate to a New Zealand High Court Judgment Wood v Fresher Foods Ltd - [2008] 2 NZLR 248 (Woods v Fresher Foods) posted on Blackboard. Further instructions follow the questions below.

1. Woods v Fresher Foods is a judgment concerning a partnership. Outline the legal nature of a partnership, especially those aspects that are most relevant to the issue(s) of Woods v Fresher Foods. (5 marks)

2. Woods v Fresher Foods is about the meaning of s 39 of the Partnership Act 1908 (s 33 Partnership Act 2019). What legal principles does Woods v Fresher Foods establish? As part of your answer explain why the judge refers to the case of Elders Pastoral Limited v Rutherfurd in his judgment? (5 marks)

3. Woods v Fresher Foods is a valuable precedent for understanding the meaning of s 39 of the Partnership Act 1908. Use the legal principles set out in Woods v Fresher Foods (which you have discussed in question 2 above) to answer the question set out below.

Rian Williams has worked in partnership with two others – Jim McElvoy and Jane Downey - for 20 years. All the business cards, letterhead and marketing materials of the firm have Rian’s name on them since he first became a partner.

Rian wants to retire at the end of the year and travel the world. He has one main client he has worked extensively with for years and he has already told her at a meeting that he is looking forward to leaving work and going to France for the summer.  He has a second large client who he has worked with under a contract drawn up by that client’s lawyer. Rian read the contract many years ago before he signed it but has long since forgotten what it contained.

The partnership also has clients continually coming and going and Rian has quite a high public profile as he writes a weekly newspaper column about his area of expertise. His name appears at the bottom of the newspaper column as “Rian Williams of Downey, Williams and McElvoy”. 

Rian is concerned about his personal liability for debts of the firm incurred before and after he retires. The firm plans to remove Rian’s name from all the marketing materials of the firm but Rian wonders if this will be enough on its own.  Advise Rian of the relevant law about his liability for debt of the firm before and after retirement and what he should do on retirement to reduce the risk of personal liability as much as possible.  (10 marks)

Assignment part one is made up of a fact scenario and questions relating to aspects of partnership.

The introductory work you do in weeks one and two in class on business entities and on partnership (including chapters 4 & 5 of Walker) should help you understand the topic better and will help you to some extent. There is also the CCH Australia and New Zealand database available through the library or under the course resources tab. Partnerships are under Business Law/Business Law Guide Commentary/Business Organisations – Partnerships.

Questions 1-3 are short answer questions but should be properly answered with a coherent answer. For example; a list of bullet points is not acceptable. Also an answer in note form is not acceptable. Note that question 3 has more marks than the other two questions which indicates a longer answer is necessary.

You do not have to use law style referencing (footnotes) for this assignment part 1. (Note however that you must use law style referencing for the next assignment which is assignment part 2). 

For referencing you can reference in text (similar to an exam answer). You can refer to Walker as “Walker”. Include a page number if you are referring to a specific page. Case names can be referred to in text using the proper citation (follow the citation from Walker) the first time you use it. If you refer to the case again then may use just the party’s names.

The Partnership Act can be referenced in text as “The Partnership Act 1908” or “the Act”. This section is repeated in the new Partnership Act 2019 (the new Act) as section 33. Since the law remains the same for these two sections you do not have to refer to the new Act if you do not wish to.

Quotes or close paraphrases should be in quotation marks. If you quote from a source acknowledge you are quoting and show in your answer that you understand what the quote means.

You are not expected to find other sources for this Assignment Part 1. If you decide to use sources other than Walker, the Partnership Act (and class materials) then identify those other sources in your bibliography and refer to them in text by the author’s name.

The word limit is 900 words plus or minus 10%. This will be taken as between 800 and 1000 words in total.