Liam and Daniel have been partners since 1990 in a garage trading as L & D Vehicle Repairs. They have no partnership agreement. They have always purchased their stock from Car Parts (Garages) Co. Liam has just learnt that Daniel has been a sleeping partner in Car Parts (Garages) Co for the last year. When challenged, Daniel replied that Car Parts (Garages) Co wrote to L & D Vehicle Repairs suggesting a merger of the 2 businesses but, as Liam always said it was good to keep their business small, Daniel thought that Liam would not agree to the merger; instead, he negotiated his personal involvement with Car Parts (Garages) Co.
Which one of the following is CORRECT?

Correct answer: (C)
Have a look at ss.29-30 PA 1890.
In the absence of consent from Liam, Daniel is likely to be liable to account to Liam under s.29 PA 1890 for the benefit he has received.
On the bare facts, there is no clear evidence that Car Parts (Garages) Co is a competing business. If it is, then Daniel has been engaged in a competing business without Liam's consent under s.30 PA 1890 and he will be liable to account for all profits made by him in that business. Further information is needed.
Liam has no power to expel Daniel (s.25 PA). If Daniel retires from the firm, Liam acting alone cannot continue as a partner because the definition of partnership will no longer be fulfilled (s.1 PA 1890).