SEMESTER II 2023/2024 SESSION

FACULTY OF LAW AND INTERNATIONAL RELATIONS

DIPLOMA IN LAW PROGRAMME

COURSE NAME : PARTNERSHIP LAW

COURSE CODE : LLD22103
LECTURER : MADAM NOR AIDA BINTI AB. KADIR
GROUP : 9

GROUP MEMBERS
NAME MATRIC NUMBER

1 NUR ARIFFAH FAHIMA BINTI RACIDEE 070701

2 AMIERA SYAHIERA BINTI KHALID 070747

3 NUR FIRJANI BINTI MOHD JAILANI 070809

4 AFFIFAH NABILAH BINTI MOHD AMIZ 070808

5 NABILA HUSNA BINTI KAMARUZAMAN 071083

ASSIGNMENT II: REPORT FOR A CASE STUDY

Executive Summary

This case study report aims to discuss deeper with complete research, upon a case
involving parties as partners in a partnership. The primary focus of this report is to provide
thorough discussion regarding the issues arose in the case. The parties involved in this case
are May and her best friend, Brad. The two best friends has partnered together to establish a
travel agency under the name of ‘Fun&Friends Travel Agency’. Both May and Brad has
decided to put up their partnership agreement for a period of 10 years. The only way the
partnership could be dissolve before the expiration of 10 years is by mutual agreement of both
parties. The problem came when May, discovered that Brad was getting commission using
the name of their business. Not only that, Brad also had diverted some of their regular clients
to another travel agency. The law governing the parties in this case is the Partnership Act
1961.

The first issue concerning this case is in what manner, could the firm can be dissolved.
This issue arose as Brad rejected May decision to terminate their partnership due to the
agreement they had when they established the firm. The second issue being addressed in this
case are whether May can take any legal action upon Brad, as he was receiving commission
while working in the ‘Fun&Friends Travel Agency’ and also diverted their regular clients of the
firm to another travel agency.

This following report will briefly elaborate the problems by providing more context and
legal measures that could be taken in this case. Furthermore, this report will be included with
recommendation and implementation plan as well as relevant exhibit to help with the case.

2
INTRODUCTION

The reason of making this report is to present a well-researched study that has been
done upon the case of May and Brad. This report will provide a deep breadth of understanding
included with extensive information, pointing out the legal actions that could be taken by the
parties in the case.

The problems being addressed in this case are regarding the dissolution of the
partnership and the parties’ relation from one to another.

There are several crucial factors that the parties must take into account before proceed
with the next legal step. The main factor in this case is whether May and Brad have any
documentation when they established the partnership. A partnership agreement would usually
be in the form of writing, which include the parties’ obligations, rights and also regulations. A
written agreement is very important as evidence to protect parties from the exercise of illegal
activities of another member of the partnership. More to that, a written agreement could be a
clarification between parties to ensure that the parties understand the terms and conditions of
the agreement. The second factor that needs to be considered in this case are whether Brad
had booked at the PenangBeauty Hotel using his name or under the name of ‘Fun&Friends
Travel Agency’.

Moving on, recommendations that can be proposed relating to these situations are
practical considerations for contractual clauses and their impact on partnership dissolution
and ways that a partnership can be dissolved other than provided in the agreement.

This report recommendations will be supported with relevant provisions under the
Partnership Act 1961. This analysis of this report will elaborate further regarding the steps
taken to develop recommendation and implementation plan. Not only that, the discussion upon
this case will be strengthen by providing exhibits relating to the case. Moreover, this report
offers alternatives, which will provide the parties’ more options on how they wanted to proceed
with the case.

Conclusively, this report of a case study will provide an insightful interpretation of the
case study with extensive information, providing an in-depth discussion over the situations in
the case, as well as suggesting recommendations, implementation plan and alternatives to
the parties in dispute.

3
ANALYSIS

The word dissolution of a partnership may be understood as altering the business

relationship between the partners and it is the first step in the termination of a partnership
which also occurs when at least one of the partners is no longer part of the business. It also
can be interpreted as a procedure where a firm is brought to an end. Other than that, it also
signifies the termination of the legal relations between the partners and it usually involves the
cessation of the business activities of the partners. Further to this, there are two types of
dissolution namely dissolution without the court’s intervention and dissolution by order of the
court. In this particular case between May and Brad, they set up an agency which regards to
a travel agency under the name of ‘Fun&Friends Travel Agency’ for a term period of 10 years
additionally, both of them agreed to dissolve the firm before the fixed period expires only when
there is a mutual consent between them. There was no issue between them until May knew
that Brad received some commissions from PenangBeauty Hotel and she also found out that
Brad had diverted some of their usual and prospective clients to another travel agency, which
is run by Brad’s fiancée, Julia Tee. From this situation, several issues arise the first issue is in
which particular ways the firm could be dissolved and the second issue is whether May could
take any actions against Brad in respect of the commission received and the diversion of the
firm’s business by the latter.

i) Determine the manner in which the firm could be dissolved.

The problem faced on the first issue is in what manner the firm could be dissolved.
The said firm is a travel agency set up by both May and Brad under the name ‘Fun&Friends
Travel Agency’ where both of them agreed to dissolve the firm before the fixed period
expired only when there is an existence of mutual consent given by both parties. However,
the issue arose when May decided to terminate their partnership unilaterally without having
mutual consent with Brad. In this situation, there are two types of methods to dissolve the
firm namely, dissolution by the court and dissolution without the court’s intervention. The
dissolution with the intervention from the court occurs in several situations whereas by
referring to Section 34(1) of the Partnership Act 1961, the provision explains the
situations where the dissolution may happen without having interference from the court. In
the first situation, If the partnership was formed for a fixed term, it is dissolved when that
term expires. The dissolution can also take effect in a situation where the partnership was
formed for a single adventure or undertaking and it was completed. Lastly, the dissolution
might take place if the partnership was formed for an undefined period, it can be dissolved

4
 by any partner giving out notice to the other partners of their intention to dissolve the
partnership. However, this particular provision will only be applied in the absence of any
contrary agreement between the partners.

Following the next one is the dissolution by the order of the court. Dissolution by
order of the court in a partnership refers to the situation where a court is petitioned to
dissolve a partnership due to certain circumstances which is listed under Section 37 of
Partnership Act 1961. The following circumstances include a permanently unsound mind.
It is when a partner is found lunatic or is shown, to the satisfaction of the court, to be
permanently unsound mind, in either of which cases the application may be made as well
on behalf of that partner by his committee, or next friend, or person having title to intervene
as by any other partner. The next circumstances are incapacity and willful breach of the
partnership agreement. These two situations happened when a partner, other than the
partner suing, becomes in any other way permanently incapable of performing his part of
the partnership contract and willfully or persistently commits a breach of the partnership
agreement or conducts himself in matters relating to the partnership business that it is not
reasonably practicable for the other partner or partners to carry on the business in
partnership with him. This provision also, aside from other circumstances, which are losses
and the just and equitable ground, includes the circumstance of acting a misconduct
behavior by a partner who has been guilty of such conduct in the opinion of the court,
regard being had to the nature of the business, is calculated to affect prejudicially the
carrying on of the business.

In this particular matter. We can relate this situation to the case of Clifford v
Timms whereas the fact in this case ‘if either partner… guilty of professional misconduct
1

of other party... give notice to dissolve...’ is where the appellant in this case had made
scandalous remark. Respondent gave notice to dissolve on the grounds of professional
misconduct. In this case, the court held that the notice given was valid in accordance with
the deed. Since there is an agreement between May and Bard, the agreement is valid to
constitute a partnership, to begin with, likewise, the agreement even though it is in the
form of oral and not written. Thus, the agreement strengthens the fact that May cannot
dissolve the firm as it requires mutual consent from both parties. However, by referring to
the previously- mentioned case, and applying it to May and Bard’s issue, there are a few
potential ways for ‘Fun&Friends Travel Agency’ (see Exhibit 1) could be dissolved. The
first one is the dissolution by mutual consent as per agreement between May and Brad
whereas the firm can be dissolved by mutual consent. However, this requires both parties

1
[1908] A.C. 12

5
 to agree. Since Brad argued that the firm could only be dissolved by mutual consent as
had been agreed upon when they set up the firm, this indicates that he had no intention to
dissolve the said firm aside to oppose firmly May’s idea to make a dissolution and try to
maintain his position as a partner to the firm.

Other than that, May can also ask for the dissolution by the court. Brad’s actions
could potentially be seen as a breach of fiduciary duty. He has been receiving commissions
from PenangBeauty Hotel in the form of cheque (see Exhibit 2), which could be seen as
a conflict of interest, and he has diverted clients to another agency, which could be seen
as competing with the partnership.

ii) Whether May can take any action against Brad in respect of the commission
received and the diversion of the firm’s business by the latter.

As we can see, both are partners of the said travel agency ‘Fun&Friends Travel
Agency. This is said to be so as there is an existence of an agreement between them
(Exhibit 3) and the said agreement complies with each of the criteria accordingly to form
a partnership that was stated under Section 3 of the Partnership Act 1961. This
particular provision defines the word partnership as a relation that subsists between
persons carrying on business in common with a view of profit. The definition of a
partnership is also interpreted as a contractual relationship referring to the case of TAN
ENG CHOONG V FOO KAI YUEN. 2 From this, we can understand there must be a relation
of partners to one another. One of the crucial factors of the relationship in partnership is
to share the responsibility. As we know, in partnership, all partners share the responsibility
of the business. This shared responsibility can lead to better decision-making as each
partner brings a unique perspective and set of skills to the table. This showed that each of
the partners has the right and duties that need to be carried on by each of them. Further
to this, we can cross-refer to Section 21 of the Partnership Act 1961, stating that the
mutual rights and duties of partners, whether ascertained by agreement or defined by this
Act, may be varied by the consent of all the partners and such consent may be either
express or inferred from a course of dealing. Based on this provision, we can classify it
into three parts.

The first one, the rights and duties of partners may be ascertained by agreement
between the partners. These rights and duties may be varied by the consent of all partners.
However, the second part of the provision, even though the Partnership Act provides for

6
 the mutual rights and duties of partners, may be varied by agreement between the partners
and the last part of the provision is the agreement to vary the mutual rights and duties may
be either express or inferred from a course of dealing. From this provision, we know that
there is an agreement between May and Brad. Thus, from the contents of the agreement,
it can be presumed that there must be certain duties and rights of each of the partners that
both of them mutually agreed beforehand stated in the said agreement especially when it
is stated in a written form so that we can see clearly.

Further to this, moving on to the next provision which is Section 26 of the same
Act provides for the rights and duties of partners in the partnership property, including the
firm must indemnify every partner in respect of payments made and personal liabilities
incurred by him in two situations. The first one is in the ordinary and proper conduct of the
business of the firm which is a partnership that is shaped according to the common
objectives of two or more persons and the second situation is in or about anything
necessarily done for the preservation of the business or property of the firm. However,
adding more information regarding the discussion, the partners also have to carry on a
duty of good faith as stated by the judge in the case of VASU DEVAN v VA NAIR whereas
utmost good faith was due from every member of a partnership towards every other
member. 3 If any dispute arose between partners touching any transaction by which one
sought to benefit himself at the expense of the firm, he would be required to show not only
that he had the law on his side, but that his conduct would bear to be tried by the highest
standard of honor. The duty to act in good faith is rendered under Section 30 of the
Partnership Act 1960, where partners are bound to render true accounts and full
information of all things affecting the partnership to any partner.

Moving on to the next provision which is Section 31 of the same Act, acting in good
faith including the duty to account for any benefit derived from any transaction concerning
the partnership whereas every partner must account to the firm for any benefit derived by
him, without the consent of the other partners, from any transaction concerning the
partnership or from any use by him of the partnership property, name, or business
connection. For example, in the case of PATHIRANA v PATHIRANA 4 where in this case,
the partnership belonged to a company that has appointed both plaintiff and defendant as
an agent of the company. Defendant gave 3 months’ notice to terminate the partnership
but negotiated a new agreement with the company to transfer the agency into his name.
Not only that, he also continued to trade in the same way at the same premises of the

3
[1985] 1 MLJ 137
4
[1967] 1 A.C. 233

7
 previous partnership. The court held that the plaintiff was entitled to a share in the profits
from the defendant’s business. The agency agreement was a partnership asset and the
defendant’s use of it was a breach of fiduciary duty.

Lastly, acting in good faith also includes the duty to account for profit derived from
competing businesses. This indicated that any profit from a competing business must be
credited to the partnership account, as is according to Section 32 of the Partnership Act
1961, If a partner, without the consent of the other partners, carries on any business of the
same nature as and competing with that of the firm, he must account for and pay over to
the firm all profits made by him in that business. Further to this, we can further understand
this as in the case of TRIMBLE v GOLDBERG where in this case, a partner is forbidden
from withholding from the firm any opportunity of advantage which falls within the scope
of its undertakings, and from using for his own exclusive benefits, information, knowledge
or resources to which the firm is entitled. 5

Logically speaking, each of the agreements between the parties before a

partnership could be formed must include some guidelines and restrictions for the
partners. This is crucial to inform the partners clearly which regards to their exact duties
and responsibilities.

From all the previously mentioned provisions, we can understand the main point of
the issue that arose between May and Bard, and subsequently, the decision of whether
May can take legal action against Brad is determined by some circumstances. As for the
commission from PenangBeauty Hotel, Brad’s receipt of commissions from PenangBeauty
Hotel (see Exhibit 4) could be seen as a breach of his fiduciary duty to the partnership.
This is because he is receiving a personal benefit from a business transaction that involves
the partnership. If May can prove that Brad did not disclose this commission and that it
was detrimental to the partnership, she may be able to take legal action against Brad for
breach of fiduciary duty. Meanwhile, as for the diversion of the business, Brad’s diversion
of clients to another travel agency, especially one run by his fiancée, could also be seen
as a breach of his fiduciary duty. This is because he is competing with the partnership and
potentially causing it to lose business. If May can prove that Brad’s actions have caused
financial harm to the partnership, she may be able to take legal action against him for this
as well. As for the dissolution of the partnership, while it’s true that their agreement stated
that the firm could only be dissolved by mutual consent, certain actions, such as a breach
of the partnership agreement or fiduciary duty, could give a partner the right to petition for

5
Trimble v Goldberg, [1906 ] AC 494, 75 LJPC 92, 95 LT 163, 22 TLR 717

8
dissolution. If May can prove that Brad’s actions constitute such a breach, she may be
able to dissolve the partnership even without Brad’s consent.

9
 ALTERNATIVE

I. Dissolution by Mutual Consent

The very first alternative to consider is regulated by section 34 (1) of the

Partnership Act 1961 where a partnership may be dissolved at any time by mutual
agreement, especially for those who enter into a partnership for a fixed term. It is a
rational and reasonable method to be considered by May and Brad in order to reach a
legitimate and equitable solution when either of the parties causes loss to the other
party, particularly when it breaches the principle of carrying out the duties of the work
being performed. It is right for Brad to cooperate by giving a mutual agreement since
he had diverted some of their usual and prospective clients to another travel agency,
which is run by Brad’s fiancée, Julia Tee. Plus, Brad also took a commission from
PenangBeauty Hotel which is an accommodation that was always booked for the firm’s
clients who were traveling to Penang through Fun&Friends Travel Agency.
Nevertheless, Brad had opposed accepting a notice from May of her intention to
dissolve the firm. Brad insisted that their partnership could only be dissolved with
mutual consent.

The criteria that should be used to evaluate this dissolution by mutual consent
as an alternative is binding terms in a formal agreement where May and Brad started
a partnership together and signed for a fixed term. This means a partnership may be
dissolved when the fixed period has expired. Besides that, Brad also argued that the
dissolution can only be dissolved with mutual consent as it was drafted officially in their
agreement. These criteria strongly support mutual agreement to be considered as a
way to dissolve their partnership.

II. Dissolution by an Order of the Court

Since Brad resisted giving his permission to dissolve the partnership and the
partnership could only be dissolved with mutual agreement, May was entitled to take
legal action with an application for dissolution by an order of the court. There are
several grounds for dissolution by an order of the court. Section 37(a) of the
Partnership Act 1961 states that in cases of lunacy or permanently unsound mind,
when the court is satisfied that the partner is permanently unsound of mind, an
application can be made on behalf of the partner by their committee, next friend, or

10
person with the right to intervene, just like any other partner. In second place, is the
state of the partner is incapacity as mentioned in section 37 (b) of the Partnership
Act 1961. This situation means that the partner is permanently unable to perform their
required duties as agreed in their partnership agreement. Lastly, one of the grounds
for dissolution by an order of the court is misconduct. Section 37 (c) of the
Partnership Act 1961 rules that a partner's behaviour negatively damages the
partnership either the partner in issue has acted inappropriately, unethically, or
harmfully to the partnership.

In the case of May who sought dissolution by an order of the court, it is the
most relevant to apply for a dissolution under the ground of misconduct as per section
37 (c) of the Partnership Act 1961. This is due to Brad’s improper action in receiving
the commission from PenangBeuty Hotel without May's knowledge which can be
concluded that Brad had conducted a breach of fiduciary duty.

Other than that, he also recommended their usual and potential clients to a
competitive travel firm rather than their own, Fun&Friends Travel Agency. Moreover,
Brad’s fiancée, Julia Tee, operated the other travel agency. This damages the
business and might result in financial loss. Thus, it is the best solution for May to apply
for dissolution by an order of the court on the grounds of misconduct governed by
section 37 (c) of the Partnership Act 1961.

The criteria for evaluating this dissolution by a court order should be legal
compliance. As the partnership was established by May and Brad, both parties have
responsibilities and must fulfill their duties as outlined in the agreement. It means that
their duties must align with legal requirements. Consequently, if misconduct occurs in
either party, legal repercussions will ensue.

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RECOMMENDATION

To start off here, a dissolution of partnership is the termination of the partnership's

business. The Partnership Act of 1961 which focuses on Section 34 outlines several ways in
which a partnership may end. The first method is when its term expires, and this applies where
it was established for only a specified period of time. The other method is through the death
of one of its partners, thus ending it automatically. The third approach is the bankruptcy of a
partner or partnership, which likewise results in the dissolution of the partnership. Not just
that, the fourth method is by the will of all the partners if the partnership was at will, meaning
that the partners had the right to dissolve the partnership at any time. The last and final method
is that by the court on the suit of the partner, where the partnership has been dissolved by the
court on account of certain circumstances.

1. Practical Considerations for Contractual Clauses and Their Impact on Partnership

Dissolution

As for the recommendation based on the issues about May and Brad that've been
discussed in this assignment, which can be specified step by step. To focus on here, this
situation pertains to the part where May cannot take action against Brad in this dissolution of
partnership. First things first, practically, in this situation, it is not unusual for individuals to
desire the right solution at the right time, and this can be illustrated in the case of SIME DARBY
ENERGY SOLUTIONS SDN BHD v. RZH SETIA JAYA SDN BHD (IN LIQUIDATION) &
ANOTHER CASE 6, which clearly demonstrates that this is possible only if all factors are taken
into consideration. To put it another way, the terms and conditions of a contract will not be
binding unless they are expressly provided for in an agreement that has been signed by both
parties. If there is no such clause in the agreement, then there is nothing that should make
them adhere to any provision that has not been mentioned. Some examples to understand
more on this is that if a contract does not state in explicit words that a party shall not take
commissions from a third party, then such party is at liberty to take them without contravening
the agreement, hence the importance of this principle in understanding the legal implications
concerning contracts as well as the rights enjoyed or duties imposed by those involved.

2. Application of Max Media FZ LLC v. Nimbus Media PTE LTD to the Current Case

6
[2024] MLJU 1070

12
 Besides that, the case that we knowingly apply to this situation, which can be referred
to as the case of MAX MEDIA FZ LLC v. NIMBUS MEDIA PTE LTD 7, is obviously noted in
his judgement, Andrew Ang J. said it himself regarding the need to ask about the nature of a
term that according to common law, where there is an express provision within the contract
stating a breach of that term would give the innocent party the right to terminate. With regard
to that case, there was no specific clause mentioned in the agreement regarding the diversion
of clients, nor were the clients of Brad’s also the clients of the partnership itself. Thus, it is
clears that May has certainly no right to terminate the partnership solely because her clients
were taken away by Brad to another travel agency

3. Brad’s Legal Defense and Interpretation of Business Agreements

Despite that, Brad has a point to make in defending the claim that he broke his and
May's partnership agreement. First, Brad may justify himself by claiming that it is not the
essence of their business. By relying on the case of A.W YONG WAI CHOO v. ARIEF
TRADING SDN BHD 8 the court highlighted and looked at the purpose of the parties from the
retrieved evidence in evaluating if there is any partnership between them 9. As a result, there
should be an agreement that must be observed by all involved in a shared enterprise with the
goal of profit. This is due to the fact that they only agree on the terms of doing business, and
one of the services offered is to make necessary arrangements for accommodation at no
additional cost with no specific clause in the agreement stating that the profits should be
divided equally, with the exception that the agreement must be terminated by mutual consent.
As refereeing to the case of DENKA ADVANTECH PTE LTD AND ANOTHER v. SERAYA
ENERGY PTE LTD AND ANOTHER AND OTHER APPEALS 10, the court held that the
plaintiff entitled to the act even though without the agrees of the other as there is no clause of
agreement that prohibit it as it was agreed by the together. Nevertheless, Brad addressed the
concerns posed by May regarding the commission. Regarding the commission made by
PenangBeauty Hotel, there is no cooperation since they have no intention of agreeing to send
the customer to the PenangBeauty Hotel, but Brad chose the hotel because it seemed more

7
[2010] 2 SLR 677
8
[2000] 3 MLRH 888
9
[1992] 1 MLJ 166
10
[2023] 3 MLRA

13
economical and simpler to communicate with. As a result, Brad's accommodation option is
chosen with no aim of receiving a bonus or return, and he is definitely not obligated to do so.

4. Brad’s Defense Strategy and Partnership Preservation

Next, Brad's final argument of defence is that the commission should be viewed as
only a sign of appreciation. As is typical in the business industry. A gesture of appreciation is
a tiny act of kindness to express appreciation. In our daily lives, receiving a thank you note
from a friend for attending a wedding or assisting them with a relocation is a modest mark of
appreciation that shows that your buddy is grateful. As in the case of May and Brad, it is
possible that Brad may benefit from his efforts indirectly made the business hotel more
profitable. Relying on this fact, Brad have grounds to defend. However, the best
recommendation advice for the Brad to avoid the dissolvent of partnership relating to the
business of a travel agency, Fun&Friends Travel Agency is to persuade May to withdraw her
intention to discontinue the agreement. On the reason, this more cost a little than proceeding
the trial.

5. Potential Dissolution of Partnership: May’s Legal Recourse Under Partnership Act

1961

Nevertheless, the Brad action of could be considered make the diverted some of their
usual and prospective clients to another travel agency. Therefore, our recommendation to this
case is May can also dissolve their agreement for the business of the Fun&Friends Travel
Agency under Section 37 (c) of Partnership Act 1961, as it mention that the business affect
prejudicially that business been carrying on. By taking the relevancy to the May and Brad
case. Prejudicially by term can be define having the effect of prejudice which tender to injure
or impair others right. As Brad’s actions that have encouraged them to have regular customers
to the other travel agency with a same nature of business may be affected by the income in
the business in carrying on the agreement. Consequently, May can be permitted to raise the
issue of dissolution of partnership according to the Partnership Act 1961.

6. Potential Legal Action: May’s Case Under Section 32 of the Partnership Act 1961

14
 On behalf of that, this is where the part that May can still sue Brad under the provision
explained in Section 32 of the Partnerships Act of 1961. Here, the section mentions that
the partner is prohibited from engaging in a similar business without the other partner’s
consent. But it happens that the said partner has to hand over all the profits earned therein to
the firm. Reluctantly, since right now we are not sure whether Brad and Julia were ever
involved in any business-related matters together, we can assume that he is or might be
associated with her travel agency, Julia Tees, because they are soon going to get married.
Plus, this issue can be addressed by the example of KUAN KONG HONG v. NG KIM
CHEONG & ANOR 11, in which it was discovered that thirty customers were actually enticed
by the defendant, who made companies leave Limited Liability Partnership (LLP) in favour of
a rival company. Additionally, it was improbable that the thirty clients were all the plaintiff's
clients. The Court of Appeal held that it had been ordered for the matter to be remitted back
to the High Court specifically and limited to the assessment of damages regarding the loss of
profits, arising out of the defendant’s breach of contract. Moving on, by considering May’s
situation, May here can sue Brad under Section 32 of the Partnership Act 1961 for being
involved in another business that has a similar nature to the one they started. As a result, Brad
must be responsible for it all and pay the firm with all the profits that he made from the business
with Julia.

11
[2023] 6 MLRA

15
CONCLUSION

As a summary of this case study, the dissolution of a partnership that was sought by
May for Brad’s misconduct highlights the essential rights of a partnership. The scenario when
May figured out Brad got a commission from PenangBeauty Hotel without her knowledge and
also diverted some of their usual and potential clients to another travel agency operated by
Brad’s fiancée, Julia Tee can seriously cause harm to their travel agency, Fun&Friends Travel
Agency. The Partnership Act 1961 states several grounds to apply for a partnership
dissolution. This case demonstrates how strict it is for a partnership to be dissolved and parties
involved in a dispute must follow the legal procedures properly.

The first discussion on the recommendation for this case is dissolution by mutual
agreement as mentioned in section 34 (1) of the Partnership Act 1961. It says that a
partnership may be dissolved by consent obtained from both May and Brad. It is a fact that
both May and Brad agreed that their partnership could be dissolved by the expiration of their
agreement which is 10 years. However, they also drafted and signed the partnership can also
be dissolved by mutual consent. Implementing this recommendation is rational since it is
legitimate and officially made. As a result, our legal system in governing contractual
partnerships will develop transparency and just decisions in order to protect individual rights
or those who suffer from damages.

The next recommendation that should be applied is section 37(c) of the Partnership
Act 1961 which mentions a partnership may be dissolved by an order of the court on the
ground of misconduct. After Brad refused to give his consent, this is another relevant
recommendation for May to dissolve their partnership legally. Although PenangBeauty Hotel
gave the commission to Brad for helping their hotel by booking the hotel as an accommodation
for clients, Brad indeed received it without May’s knowledge. This situation is explained by
Section 26 of the Partnership Act 1961 where the responsibilities and rights of partners
concerning the property of the partnership. Partners must be paid by the firm for payments
made and liabilities acquired in two situations. Firstly, during regular business operations, and
secondly for actions required to protect the property or business. Partners must also behave
in good faith. This means Brad’s action was deemed to be misconduct. For such illegitimate
action, the court must consider the fairness on behalf of the aggrieved party so that improper
conduct in business and breach of fiduciary duty will not be neglected easily by any parties of
the partnership.

Lastly, another recommendation to be considered relevant and reasonable is that May

could file a lawsuit against Brad according to Section 32 of the Partnership Act 1961 for

16
engaging in activities associated with the company they established. In this situation, Brad
had diverted their regular and potential client to another travel agency which was managed by
his fiancée, Julia Tee. The nature of their business can be categorized as a similar business.
Because of this, Brad must take full responsibility for everything and repay the company for
all of his earnings from his partnership with Julia. This method compensates for the loss
suffered by May and promotes a straightforward and equitable decision.

By implementing these ideas, our judicial system would not only maintain its
fundamental values but would also strengthen the ideals of justice. Maintaining the legality of
contractual partnerships and guaranteeing fair judgment are essential parts of any judicial
system. These methods are critical for establishing a legal system that is both trusted and
safeguarding individual rights.

In conclusion, this case study provides important perspectives into the future judicial
system. It highlights the need to comply with proper procedures and protect individual rights
within the rules governed by the Partnership Act 1961. By applying these proposals, the
judiciary can improve its efficiency and trustworthiness while supporting the development of a
society with greater equity and fairness.

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(EXHIBIT 1)

(EXHIBIT 2)

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(EXHIBIT 3)

(EXHIBIT 4)

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REFERENCES

(STATUTE)

Partnership Act 1961

(CASES)

Sime Darby Energy Solutions Sdn Bhd v RZH Setia Jaya Sdn Bhd (in Liquidation)
and Another Case [2024] MLJU 1070

SIME DARBY ENERGY SOLUTIONS SDN BHD v. RZH SETIA JAYA SDN BHD (IN
LIQUIDATION) & ANOTHER CASE Accessed June 14, 2024

Max Media Fz LLC v. Nimbus Media PTE LTD [2010] 2 SLR 677

Kuan Kong Hong v. Ng Kim Cheong & Anor [2023] 6 MLRA

A.W. Yong Wai Choo v Arief Trading Sdn Bhd [1992] 1 MLJ 166

Denka Advantech Pte Ltd and Another v. Serata Energy Pte Ltd and Another and
Other Appeals [2023] 3 MLRA

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