slatter, veldhuis and greckol jJa

2.2: Actions by or against partners and partnerships

Case Summary

The Defendants appealed a trial Judgment in which damages were awarded to former clients of a disbarred lawyer due to breach of duty and negligence. The Defendant lawyer had counterclaimed against the Plaintiffs for repayment of amounts advanced under a loan and retainer agreement. At Trial, Justice Martin disallowed the Counterclaim, in part because the Counterclaim was brought by the Defendant in his individual capacity. The loan and retainer agreement was entered into by the disbarred lawyer’s former law firm, and thus the Defendant as an individual was not the proper party to bring the Counterclaim. Her Ladyship indicated that the wording of Rule 2.2 supported this conclusion, which states: “[a]n action by or against 2 or more persons as partners may be brought using the name of the partnership.”

On appeal, the Court of Appeal allowed the Counterclaim. The Court noted that Rule 2.2 is permissive, rather than mandatory. The Rule thus allows an action to be brought by a partnership using the name of the partnership, but does not require it. The Court also noted that there was no harm in coming to this conclusion, as the law firm was a party to the Action, and no prejudice resulted by virtue of the Defendant bringing the Counterclaim in his individual capacity.

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