Advise for Violet and Sonny Free Samples †MyAssignmenthelp.com

Question: Discuss about the Advise for Violet and Sonny. Answer: Advise for Violet and Sonny After going through the sites that are present in this question, the issue arises if Violet and Sonny can be treated as partners in Busy Bee Florist Shop and consequently if it can be said that they are liable to Friendly Bank for the loan that was taken by the florist shop business. So as to claim the presence of a partnership in the particular case, section 1, Partnership Act (Vic) provides that the elements have to be satisfied for this purpose. As a result, the parties should be carrying on a business, in common and for the purpose of making profit. On the other hand, if given a single element is missing, such relationship cannot be treated as a partnership. When determining the meaning of the term 'carrying on business' , the issue may arise if there should be some repetitiveness of action as against a one-off action in this regard, there are several decisions given by the court where the courts have stressed upon the need for repetitiveness of action or the continuity of action . For example, in one case, the group of depositors subscribed for purchasing the shares offered trust in media submarine cable corporations. These shares were sold to investors by the trustees, and they also provide them with certificates. Therefore the issue was with the rest can be treated as a partnership (Smith v Anderson, 1880). If a particular relationship can be described as partnership: in order to determine if a particular relationship can be considered as a partnership, the board shall look at the nature of the trust and also the relationship of the persons who are involved in it. For example in the above-mentioned case, it was noted by the court that there was no authority on part of the trustees to speculate. Similarly, the trustees did not have individual rights and obligations. As a result of the circumstances, the court arrived at the conclusion that in the present case, they trust cannot be treated as a partnership because there was no association for getting on the business. A somewhat similar decision was also given in Canny Gabriel Castle Advertising Pty Ltd v Volume Sales Pty Ltd., 1974. Another relevant provision in section 2 of the Partnership Act (Vic) that has provided the rules that need to be applied in order to decide if a relationship is a partnership of not. But, it is worth mentioning that these rules alone cannot be used for deciding this question. Therefore, while dealing with the issue of the presence of a partnership, the court reflects on all the conditions so as to find the real substance of the agreement. Similarly, the express and the implied intentions of the parties are also kept in mind for this purpose. For example, Roper J had mentioned that after it has been discovered that the parties had the intention of doing everything that would make them partners, the intention declared by the parties, not to become partners cannot be treated as valid (Wiltshire v Kuenzli, 1945). Therefore, the most significant issue that needs to be considered is the intention of the parties, irrespective of the description of relationship mentioned by the party. For ex ample in Stekel v Ellice (1973), the defendant had given employment to the plaintiff in his accounting firm in 1967. According to the agreement between the parties created in 1968, the plaintiff was mentioned as a salaried partner. The agreement provided that the term of employment was in April 1969. It was also mentioned in the agreement that the capital of the partnership business belonged to the defendant and the defendant will bear all the losses, if any. At the same time, the agreement also provided that the parties were going to enter a further agreement after April 1969. In this agreement, the plaintiff will become a full partner. However, the agreement was never created afterwards. In August 1970, there was a complete breakdown of relations between the parties. The plaintiff left the business and he also took his clients with him. Under the circumstances, the plaintiff won the declaration from the court regarding the definition of the partnership and an order to wind up the partnership. The issue before the court was if the arrangement was a partnership agreement or it was merely an agreement for employment. The court held that a partnership was present and the continued even in the absence of an explicit agreement (Exparte Coral Investments Pty Ltd., 1979). Sharing the profits: Section 2(3) of the Act provides that when a person receives a share and profits, it is a prima facie proof that such person is a partner. But merely receiving a share on a payment that depends on the profit of the business does not in itself establishes that the person can be treated as a partner. According to the bigger thing that exists in the integration of this clause is related with the use of expression prima facie, that has qualified with evidence. Hence, it appears that the presence of a profiteering scheme can be treated as evidence concerning the existence of a partnership. But this fact alone cannot establish the presence of a partnership created between the parties (Television Broadcasters Ltd v Ashtons, 1979). Cox v Hickman (1880) is also a very significant gains in this regard. In this case B. and J. Smith were trading as partners. The company faced financial problems. Therefore, they entered the deed of arrangement with its creditors. Therefore th e property of the business and partnership was assigned to them. They were allowed to continue with the business under a new name. The future income was decided to be divided by all the creditors. It was also provided by this arrangement that when the creditors have been paid in full, the business will be returned to Smiths. However, Cox and Wheatcroft, two creditors who have been appointed as trustees but Cox had not acted as trustees. In the same way, Wheatcroft acted as a trustee for very short time. After Wheatcroft had seized the way, the other trustees incurred debts to Hickman. Some bills of exchange were given by them that were drawn on the partnership. Under these circumstances, Hickman wanted that Cox and Wheatcroft should be held liable regarding these bills. But the board decided that Cox and Wheatcroft were not held as partners. In the same way, Hickman did not have any knowledge regarding the deed of arrangement. As a result, Cox and Hickman were allowed to deny their liability although they were entitled to share the profit of the business. The court was of the opinion that only the fact of sharing the profit was not sufficient to consider them partners. It also stated that the arrangement, which provided that the future profits are to be applied to be the old debts and the creditors ready to quit their right of being paid from the capital does not appear to be a partnership of third parties who were not aware regarding the deed. Profit-sharing: Therefore the board was of the opinion in this case that the persons sharing the net profits of the business can be considered as partners but is not applicable in on the cases. For this purpose, the sense in which the term 'sharing the profits' has been used, needs to be examined. For instance, in the present case, the court doubted if the creditors, who were going to receive the exact amount of debt out of the profits, can be treated as sharing the profits. The assets of the business was assigned to the trustees. In order to carry on the business and to divide the profit of the business to all the creditors and not only to the creditors who was signed with the deed, until the whole debt has been repaid. As a result of the opinion mentioned by the court in this case, this is treated as a common canon. Section 2(3) (a) to (e) of the Partnership Act provides the white cases where this presumption cannot be made. Hence, thelaw provides that receipt of debt at the liquid ated demand by a person out of the profits of the business does not in itself establish that that person is a partner and therefore liable. This rule has been firmly established in Cox v Hickman (1860). On the other hand, if the circumstances revealed the presence of a partnership under the law, the lender can be considered as a partner, regardless of their stated intention (Re Ruddock, 1879). Badeley v Consolidated Bank (1888) is another example of such a situation. The lender (plaintiff) . In this case money was given to the borrower, and also the security over the plant that belongs to the borrower. At the same time, the lender was going to receive interest, as well as a share, from the profits made by the business. The borrower also agreed that the loan money is going to be applied to carry out the work concerning the business. In the same way, a right was given to the lender according to which she may enter the property if the borrower becomes bankrupt. The Appeal Court reiterated the need for finding out the "real agreement" that had been concluded between the parties. Therefore, it was held by the court that only the fact of sharing the profit is not sufficient for the purpose of inferring a partnership. Therefore in this case, the court expressed the opinion that the real truth was mentioned in the formal document that had been signed by the parties. Therefore, it can be described as the contract of loan on security. The court also noted the fact that the lender was not going to share the loss, if any, suffered by the business. In the present case, Violet can be described as a partner in Busy Bee Florist Shop, although it has been mentioned that the lender (Violet) will not be considered as a partner. But Sonny cannot be treated as a partner due to the reason that according to the law, even if the receipt of share of the profit is prima facie evidence that the person is a partner, but only this fact alone is not sufficient to make the person, a partner. According to the law, a contract for remuneration of a servant or agent out of the share in the profit of the business does not in itself make the person as a partner and hence liable for the outstanding amounts of the business. References Badeley v Consolidated Bank (1888) 38 Ch D 238 Canny Gabriel Castle Advertising Pty Ltd Anor v Volume Sales (Finance) Pty Ltd (1974) 131 CLR 321 Cox v Hickman (1880) 8 HL Cas 268 Exparte Coral Investments Pty Ltd [1979] Qd R 292 Re Ruddock (1879) 5 VLR 51 (IP M) 51 Smith v Anderson (1880) 15 Ch D 247 Stekel v Ellice [1973] 1 WLR 191 Television Broadcasters Ltd v Ashtons Nominees Pty Ltd (No 1) (1979) 22 SASR 552 Wiltshire v Kuenzli (1945) 63 WN 47