Problem 4 (25 marks)

Peter and Paul formed a delivery business on May 1st known as P

& P Delivery and filed a partnership registration. It was agreed that

initially the business would use Peter's car and, as business expanded, Paul's

car could also be used. The business operated from a small office in Peter's

home. Both parties took a salary based upon the number of hours that they worked

at $15.00/hour and it was agreed that any additional monies, after expenses

would be divided on the same basis.

Both parties worked in the business for six (6) months. However,

Paul refused to make his car available and, as a result, Peter was required to

rent an additional car at a cost of $400.00 per month to accommodate the

additional employee that was hired. As well, although Peter and Paul had

originally worked the same hours, Peter found that he was now working twice as

many hours as Paul. Paul, it was discovered, had signed with Uber as a driver

and found it more lucrative to drive for Uber than to deliver parcels at the

rate charged by P & P Delivery. He had made $30,000.00 from Uber during the

6 month period.

On November 1st, Peter advised Paul that his services were no

longer required and that there was no partnership since Paul did not provide

his car. Paul sued for a declaration that he was a partner and that he was

entitled to 50% of the business. Peter counterclaims, claiming that he was

entitled to 50% of the money earned by Paul driving for Uber. Paul then advises

that all of his Uber earnings were earned by his corporation, Paul's Speedy

Delivery Ltd., and that Peter has no right to proceed against the

Corporation.

Required: What will be the result of the lawsuit? Be certain to

refer to and explain the applicable legal principles as part of your answer.

NOTE: Please make the problem answer as detailed as possible using financial law terms as well as explaining them.