8/10/2019 The Second Issue is Whether AAA Associates Would Be Liable Under Torts for the Injury Sustained by the 2 Female

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The second issue is whether AAA Associates would be liable under torts for the injury

sustained by the 2 female university students.

Based on Section 7 of the Partnership Act 1969 , it provides that every partner is an agent of

the firm and his other partner for the purpose of the business of the partnership. Under this Section

and act done by a partner, on behalf of the firm and within the scope of his actual authority will bind

the firm whether or not the act was done in carrying on the partnership of the business in the usual

way. However, where a partner has no actual authority to bind the firm, the fact of being a partner

confers a prima facie authority to do so provided that 4 conditions are fulfilled. Which are, the act

done must be the type of business that is carried out by the firm, the business is carried in a usual

way, third party must know or believe the person whom he enters

.

On the other hand, Section 12 of the Partnership Act 1969 , it explains the general rule for

liability for torts whereby any wrongful act or omission of any partner acting in the ordinary course

of the business of the firm or with the authority of his co-partners, loss or injury is caused to any

person not being a partner in the firm, or any penalty is incurred the firm is liable therefore to the

same extent as the partner so acting or omitting to act.

In applying this to the above situation, the partners had committed a wrongful act undertorts whereby, they had negligently failed to put up a signage to show that their renovation work at

the hostel is still in progress and hence had cause injury to the two female students.

Under Section 12 of the Partnership Act 1969 , the liability of partners can be seen in two

instances where firstly, there is liability where the result of the wrongful act or omission is done in

the ordinary course of business of the firm and secondly there is liability where the wrongful act or

omissions is done with the consent of the other partners.

Firstly, a partner can be liable if the wrongful act or omission was done in the ordinary

course of business. What is meant by ordinary course of business of a firm was explained by

Mahoney J.A in the case of Walker v European Electronics Pty Ltd . Whereby he states that In

considering whether the act of a person is done in the ordinary course of the business of the firm

which he is a member, it is of course necessary to determine what the business of the firm is.

Sometimes the business of the firm described in the partnership agreement. In such a case the court

will decide as a question of fact, whether the act in question was done in the ordinary course of

carrying the business. In this case, the court held that, receivership work was within the ordinary

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course of business of a firm of accountants and this is the kind of thing which accountant of their

kind are apt to do and what they habitually did.

In referring this to the above situation, to determine whether the injury was done in the

ordinary course of the firms business, the type of business which the AAA Associates firm carries

must firstly be identified. Based on the above situation, the act of the partners in engaging in

renovation work of the Universitys hostel is the kind of thing which a construction firm would apt to

do and what they habitually did. In this situation, the female students had sustained injuries when

the renovation work was still in progress. Hence, it can be said that the partners s negligent act of

failing to put up signage to show that the renovation work was still progress was made in the

ordinary course of business which is when the renovation work was still in progress.

Secondly, partners can be held liable where the wrongful act or omissions is done with the

consent of the other parties. Although a firm cannot be assumed to have given one of its members

authority to commit a wrong yet where it has given him authority to do a class of acts on its behalf, it

is liable for its torts either in the manner of doing such acts or in doing them in circumstances in

which they ought not to be done at all.

In referring this to the above situation, the injury was caused during the renovation work,

and it can technically be assumed that it had been consented by all the partners for the renovation

work to be done. This is because it was done for the partnership business which is a construction

firm.

This point can be illustrated in Estate Realities Ltd v Wignall whereby, in this case the court

held that although the breach of fiduciary duty occurred during the course of business of a

partnership , a party through absence does not knowingly assist in that breach and did not receive

and deal with the property concerned with knowledge of that breach did not by virtue of his

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membership of the partnership become himself a constructive trustee of the property was not liable

to account for his share of any profit the partnership obtained from it.

In applying this to the above situation Ace would not be liable for the injury sustained by the

two female university students, due to the fact that he does not have any knowledge when the

contract to renovate the Universitys hostel was entered by Abe and Annie. Moreover, Abe was

absent when the contract was signed as he was hospitalised for one month due to his illness.

Therefore, Abe could not be made liable for the injury caused to the two female students and only

Abe and Annie would be liable.

As a conclusion, all the partners can be held liable under tort for the injury sustained by both

the female students and not Ace.