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Case Reporter – Connor v Wallis – 2022 BCSC 351

Ty Schmidt Case Reporter

Written by Ty Schmidt – Supervised by Professor MacPherson

In situations where one member of a partnership unilaterally dissolves the partnership and seeks a payout of their interest, at what date should the assets be valued in determining what is owed to them? According to the Supreme Court of British Columbia in the recent decision of Connor v. Wallis, 2022 BCSC 351, subject to any other agreements by the parties, it is the date at which the one partner has effectively left the management of the partnership in the control of the other partners.

This case revolves around a dispute among three ex-partners who had entered into a partnership in 2017 for the purpose of purchasing, managing and renting out two different two-bedroom townhouses in Kamloops, BC. Pursuant to an oral agreement, each partner possessed a one-third interest in the partnership. One partner, Stephen Connor, unilaterally dissolved the partnership on September 7, 2020, and subsequently sought a buyout of his one-third interest so that the two remaining partners could continue ownership without him. The two other partners (“Respondents”) agreed to the buyout, but the three were not able to agree on the process of how to divide the assets. In particular, the parties disagreed on the date at which the two townhouses should be evaluated in determining the precise amount of the payout.

In an email dated September 23, 2020, Connor wrote to the Respondents stating that as of October 1, 2020, he would be removing himself from all day-to-day operations of the properties. This, inter alia, brought the Respondents to the position that October 1, 2020, should be the date the properties should be valued. By contrast, Connor believed that the assets should be valued as at the date of the hearing. The BCSC agreed with the Respondents’ position of October 1, stating that Connor’s partnership interest “secures the value of his one-third interest and does not give him an interest in the assets themselves”. (1)

This judgment notes that BC’s Partnership Act (2) is silent with regard to when partnership assets are to be valued for sharing the value amongst partners. As such, jurisprudence will be the key piece of guidance for disputes of this nature, and this case can help provide some insight for individuals (or their counsel) who are trying to plan how assets can be divided in the dissolution of a partnership.    

(1) Connor v Wallis, 2022 BCSC 351 at para 49.

(2) Partnership Act, RSBC 1996, c 348

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