Question

Wilfred and Barry are good friends and they have always wanted to sell durian together as the price of the fruit had increased tremendously due to demands from China. Both of them decided to set up a stall to sell various species of exotic durian including the renowned “Musang King”. They both agreed that they should sell the fruit whenever the harvest is ripe mainly in the months of April, May, August, September and November every year. Whenever there is no durian harvest, both of them will concentrate on other matters. Wilfred has taken the initiative to purchase a stall and attained the necessary license to trade. He made all other arrangements to set up their new stall near Jalan Pudu and ordered RM15,000 worth of durian for the coming season. The business grew and both Wilfred and Barry took a profit of RM10,000 in the first season. However, Wilfred (unknowingly to Barry) started selling other fruits like apple and grapes (where he also kept all the profits secretly). Wilfred also contracted with Hermes to sell his home farmed rambutan at the durian stall where Hermes shares takes 70% of the profit from the rambutan sales. Wilfred employed Donald as an assistant and agrees to reward him with 20% commission for every durian he sells. Wilfred desperate for making more profits began selling expired grapes. In one incident, Vincent had food poisoning after eating grapes bought from Wilfred. Vincent intends to sue Wilfred for RM10,000.

You are required to answer the following questions:

 

1. Explain, by referring to the relevant sections of the Partnership Act 1892 (NSW) and case law, whether a partnership exists amongst the persons involved in the business stated above? (6 marks)

 

2. Can Vincent sue Wilfred, Barry, Hermes and Donald jointly or any one of them individually for the damage? Give reasons for your answer relying on the relevant provisions of the Partnership Act 1892 (NSW) and relevant case law. (4 marks)