3. David would make capital contributions to the limited partnership.
4. Lynda would make no capital contributions to the limited partnership.
5. Lynda’s company, [Canadian Home Publishers Inc.] would be the
general partner and would retain Lynda as publisher. She would
manage the business.
[ 9] The issues between Lynda and David remained but the litigation relating to the partnership fell into abeyance. The magazine became financially successful and it appears David was
content to receive his 50 per cent of the net profits. By the date of
his death, David had received in excess of $26 million. The magazine itself was valued, at one point for sale purposes, in excess of
$50 million. The litigation remained in abeyance from 2004 until
after David’s death on October 25, 2012, when the respondents
obtained orders to continue the existing litigation. Once it was
apparent that David’s estate would be pursuing the old litigation,
this application was brought as an initial step to define the rights
of the parties. In particular, the appellant sought a declaration
that Canadian Home Publishers had been dissolved as a limited
partnership upon David’s death and that the interest of David’s
estate in Canadian Home Publishers was limited to payments in
respect of David’s share of profits to the date of his death and
repayment of his remaining capital contribution to Canadian
Home Publishers. In effect, the appellant sought a declaration
that David’s estate did not have any interest in the residual value
of Canadian Home Publishers upon dissolution of the limited
The Decision Below
[ 10] The application judge made two findings. The first finding
was that on David’s death, there was no longer a limited partner
for the limited partnership and thus the limited partnership was
dissolved. As a consequence, the general partner, Canadian Home
Publishers Inc., had to wind up the limited partnership, Canadian
Home Publishers, and distribute its assets: at paras. 12-13. This
finding is not the subject of this appeal.
[ 11] The second finding was that any residual assets remaining,
after distribution of the amounts contemplated by s. 24 of the
LPA, were to be divided as between Canadian Home Publishers
Inc. and David’s estate on a 50/50 basis: at paras. 16-18.
[ 12] In reaching this conclusion, the application judge held
that, while s. 24 of the LPA provided for the distribution of capital
contributions and profits on dissolution of the limited partnership, the LPA was silent in respect of the distribution of the