Question

Dr. Fazlee is one of the prominent medical practitioner in Skudai. Mr. Raman approach Dr. Fazlee to open a polyclinic and they will become partner of the business under the name of Sekudaiii Polyclinic. After certain negotiation, they agree to certain terms and conditions and all the agreed terms reduced into a partnership agreement. The operation of the Sekudaiii Polyclinic started on 1st January 2017. The salient features of the said partnership agreement are as follows: 1. Dr. Fazlee will run the polyclinic as a registered medical practitioner and manning the Skudai Polyclinic. Dr. Fazlee will have 40% of equity in the partnership. 2. Mr. Raman will manage the administration of the polyclinic and also will fund the 100% of the polyclinic operation until the polyclinic hit the 500,000 sale profit (the event). The fund advanced by Mr. Raman will be refunded accordingly when the event took place. Mr. Raman also will have 60% of equity in the partnership. After a year of the establishment of the Sekudaiii Polyclinic, Dr. Suzy approach Dr. Fazlee to invest in her clinic in Skudai under her new established clinic named Susiku Clinic Sdn. Bhd. The whole operation of Susiku Clinic fully incharged by Dr. Suzy while Dr. Fazlee is only become a shareholder of the clinic holding the 30% shares only. Mr. Raman become angry knowing and filed a legal suit against Dr. Fazlee claiming the damages for the loss of profit of Sekudaii Polyclinic that eventually reduced after the establishment of Susiku Clinic.

Advise Mr Raman as Plaintif and Dr. Fazlee as Defendant.

This question is from "Business Law" subject please need help

Answer 1

If we look at the partnership act, it states that the partners should not be involved in competing businesses. As from the case given it is clear that Mr. Raman and Dr. Fazlee opened a polyclinic in partnership so none of them should be involved in any action or business that can be challenged. When  Dr. Fazlee entered in the new contract with Dr. Suzy, Dr. Fazlee breached the core of the partnership.

So I will advise Mr. Raman to sue Dr. Fazlee to compensate for the damage or losses the partnership clinic faced due to the establishment of the new clinic as he did not take the prior approval from Mr. Raman before investing in the new clinic.

On the other hand, Dr. Fazlee can be advised to defend himself by arguing that he only invested in the new clinic as a business opportunity and there was no intent to harm the business interest of the partnership. He can also argue that he only invested and took the shares in the new clinic and does not have any involvement in the operations of the new clinic