The appellant, a limited partner in an oil and gas exploration fund, brought an action against the general partner after the general partner sold the partnership's non-producing lands to its parent company.
The appellant alleged that the sale breached s. 55(b) of the Partnership Act by making it impossible to carry on the ordinary business of the partnership, and that the general partner breached its fiduciary duty.
The Supreme Court of Canada dismissed the appeal, finding that the partnership continued to exist and receive revenue, so its ordinary business was not rendered impossible.
The Court also held that the general partner did not breach its fiduciary duty, as the partnership agreement permitted conflicts of interest and the sale was made in good faith for fair value.
