Redfern Farm Services Ltd. v. Wright Michael and Kyle Wright and their father Wi

Question

Redfern Farm Services Ltd. v. Wright Michael and Kyle Wright and their father Willim Wright all carried on business as farmers in Manitoba. Each had separate farm property registered in their own name but they carried on the business of farming indiscriminately as to who owned what. They fed and pastured the animals together and carried on other aspects of their business together. The three operations were all quite intertwined. They did carry on the crop production aspects of their businesses separately, but that was only a small unprofitable part of the overall operation They also maintained separate herds of cattle and kept the profit for themselves when they were sold. Note that although the herds were separately identifiable they were fed, corralled and nurtured as one common herd. In response to questioning by a representative of Redfern Farm Services with respect to the grain operation the father said "I order the seed, I order the fertilizer, I order the spray, I order the day custom applicator, I talk to Darryl, I'm the one that does the crop rotations, I use everybody's fields as my own. I'm the one that pays the bills." The father bought the supplies used by all and owed $55,365.82 to Redfern which was not paid. Redfern sued all three. Are Michael, Kyle and William partners? What factors do the courts consider in determining whether a partnership exists? What are the consequences of a finding that there is a partnership relationship? Please answer these questions in case format. tt gatu i s Rvk 5

Explanation / Answer

Main issue:- The main issue, in this case, is to find out where there is a partnership between Michael, Kyle, and William. The children stated that along with their father, they operated the farms separately and no profit was shared from their respective farm operations whether net or gross

The course of action:- In order to determine the existence of a partnership, the court will look into following factors:-

1.whether there is a partnership agreement
2. whether the parties intend to make a profit
3. how losses and profits are divided
4. whether the parties are involved in the management of the business

Legal Issue:- The court has to decide whether there is a formal partnership among the Michael, Kyle, and William.

Ruling:-

The court decided that the operations of the farm were conducted co-operatively. In fact, some of the lands were owned by all the three members irrespective of the fact that who is paying for the parcel. In fact, the farm animal was also fed and pastured together. However, the court was not sure about the running of the associated grain operation. The credit of farmers was a joint account and all the parties paid for it. When the operations were liquidated, it was found by the court that monies distributed and the debts paid did not follow a logical business pattern. The court came to the conclusion of the existence of partnership when the revenue and expenses were not distributed jointly in the same way and thus all the three members are liable for the debt of $55,365.82.

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