Limited partners beware, general partners’ continued delight: Ontario Court of Appeal

Law360 Canada (May 9, 2025, 12:23 PM EDT) --

Jonathan Zepp

Matthew McGuigan

We wrote an earlier article on the Ontario Superior Court of Justice (ONSC) decision in Anthony v. Binscarth Holdings GP Inc., [2024] O.J. No. 1580, which was under appeal. In its recent decision, Anthony v. Binscarth Holdings GP Inc., [2025] O.J. No. 739, the Ontario Court of Appeal upheld the decision of the ONSC confirming that limited partners cannot cause the partnership to make cash distributions.

Appeal Court decision

The limited partners appealed the lower court decision, reiterating their argument that they were entitled, on an annual basis, to a distribution of the net income of the partnership. The limited partners once again based their argument on s. 11(1) of the Limited Partnerships Act, which states:


The Court of Appeal ultimately upheld the Superior Court decision on the same grounds. Particularly, the Court of Appeal focused on two key findings.

Firstly, the plain wording of s. 11(1) of the Act did not support the limited partners’ position. In agreement with the Superior Court, the Court of Appeal held that “saying that a limited partner is entitled to a ‘share’ of the profits is not the same thing as saying that a limited partner is entitled to payment of that share.” Similar to the Superior Court, the Appeal Court found support for this holding in the fact that the Act makes other express references to the term “payment” — choice of wording that the legislature did not use in s. 11(1). If the legislature had intended for s. 11(1) to require distributions, it would have used the same phrasing.

Secondly, the limited partners’ position was in direct conflict with the limited partnership agreement, which granted the general partner the sole discretion to make cash distributions. The Court of Appeal held that the limited partners entered into the agreement willingly, and thus they could not rely on an interpretation of the Act that would lead to a result that was fundamentally inconsistent from the agreement.

Key takeaways

The recent Court of Appeal decision in Anthony confirms that limited partners and general partners alike should remain cognizant of the following:


Jonathan Zepp is a managing partner at Robins Appleby LLP. Matthew McGuigan is an associate at Robins Appleby LLP. Zepp and McGuigan both work in the firm’s business and transactions group, regularly advising general partners and limited partners with respect to limited partnership matters.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the author’s firm, its clients, Law360 Canada, LexisNexis Canada or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

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