According to s9 of Partnership Act 1958 (VIC), every partner is the principal in the business and the agent of the firm and each partners, because of the definition of partnership in s5 Partnership Act 1958 (VIC) that a partnership is a relationship between people who carry on a business in common with a view to make a profit. As Mercantile Credit Co Ltd v Garrod, although Parkin fraudulently sold a car to the third party which is not corresponding to their partnership agreement, the court claims that this conduct is one of the normal businesses carried by the garage.
Thus, borrowing money from Rich to buy reference law book is one of the normal business for the solicitor firm since lawyers need these reference law book to hold their business of lawsuit case. In terms of s9 (VIC), every partner who does the ordinary course of business of the firm of which he is the member bind the firm and partners. It is said that, the firm and Harry and Moe are liable when Joe takes the money and go to South America never to be seen or heard again.
In addition, the action of borrowing money from Rich by Joe for law books can be assumed as the conduct in the ordinary course of business: s14 (VIC) and the money of a third party (Rich) is received by a partner (Joe) acting his obvious authority : s15 (VIC). Therefore, there is a liability for the firm and all partners by any tortuous behavior. Based on s 16 (VIC), the liability caused in tort is joint with the co-partners as well as separate with each partner and the firm. Hence, there are several opportunities for the plaintiff to prosecute. Rich has the limitation to sue Joe, since Joe has been disappeared and never been heard again.
According to the statutory provision of liability of partners in tort, the liable in tort of the partners are jointly and respectively, the plaintiff can several prosecute the firm or some of the partners and/or all of the partners. As a result, an action can be brought by Rich against Harry and Moe individually and separately, Harry and Moe jointly, and Rich can also sue the firm. ——————————————– [ 1 ]. (1962) 3 All ER 1103 [ 2 ]. Ciro, T and Symes, C Corporations Law In Principle, 8th ed, Lawbook Co, 2009 topic 25 [ 3 ]. Ibid [ 4 ]. Ibid