A business owner established a business and opened a bank account in his name, through which the business funds were managed. At the same time, the other partners were responsible for operating the business. However, the owner gave the partners access to the account and did not supervise their actions. During this time, the partners withdrew funds from the account without his knowledge, contrary to the agreement between the parties, and without authorization.
The Court held that the partners must return the amount they misappropriated, even though the business owner bore contributory fault. Contributory fault enables a fair and efficient allocation of liability between the parties. However, recognizing the contributory fault in cases of theft would incentivize theft and such a defense is not applicable in these circumstances towards the negligent party. Here, although the business owner was negligent in granting access and failing to supervise their actions amounts to contributory fault because their actions involve theft, this does not detract from the partners’ duty to repay the full amount.