Answer:

I would like to advise MMA and PBB that a partnership exists.

In the matter of whether a partnership exists arises before a partnership is

registered or a partnership agreement is executed. As a result, pre-partnership
undertakings are frequently used to determine whether a partnership has been
formed.

In the case of Miah v Khan (2000), the business associates agreed to create a
restaurant and invested money in renovating the space and acquiring a permission
to convert the leased space. They formed a joint account under two identities and
obtained a bank loan to purchase equipment. According to this case, it was held
that a partnership can form even before actual trading begins. There is no legal
requirement that joint venture partners become partners once trading begins. The
joint venturers had done enough to establish the business and were ready to be
regarded partners at this point.

This is contrary to the case Keith Spicer v Mansell where D and Bishop started a
business together, and after the company was formed, the latter placed an order
for items. They were sued because the goods were not paid for. As there was no
business in common, the court held that a partnership did not exist. They were
simply getting ready to do business as a company.

In applying to the issue above, the partnership may have existed even before their
business started since Dana, Jan and Jones executed a joint venture agreement to
open a gym to train fighters in mixed martial arts. This is in line with the case Miah
v Khan. All three of them have already started preparation for their business as
Dana took a lease worth RM60,000 per year with Boris, Jan purchased 100 rowing
machines from MMA Bhd worth RM600,000, for use in the gym and Jones took a
loan from PBB in the amount of RM1 million for the employment of three coaches
from American Top Team. Furthermore, the difference can be seen from the case
Keith Spicer v Mansell where in this issue, the business that each partner made all
have business in common since it is for the preparation to open a gym which
made the partnership already existed even if they are not registered yet.

According to Section 3(1) of the Partnership Act of 1961, a partnership is a legal

association between two or more people who are carrying on a business in
common for profit. For instance, in Aw Yong Wai Choo v Arief Trading Sdn Bhd,
the court would consider the agreement, the circumstances of the case, and
whether Section 3(1) was met in order to determine if a partnership existed.

Applying to the issue at hand, Dana, Jan and Jones all have business in common
and all three of them have the same view of profit since they all are making
preparations to open a gym and not other business which means that Section 3(1)
is met. In reference to the case of Aw Yong Wai Choo v Arief Trading Sdn Bhd,
Dana, Jan and Jones have orally agreed that only Dana has the mandate to take
any loan for their business and any profits made would be shared equally.

Furthermore, in establishing the existence of a partnership, it can be seen in the

case of Chooi Siew Cheong v. Lucky Heights Development where it is involved in a
joint venture agreement in which the landowner contributed land to developers
who built residences and shoplots. It was held that there was no partnership
because both parties intended to run their own businesses; thus, there was no
business in common. The courts must consider section 4 and the parties'
intentions while assessing whether the partnership exists. The difference can be
seen in the case Gulazam v. Noorzaman & Sobath where the plaintiff, a police
officer, made arrangements with the defendants to sell, rear, and buy cattle, with
the plaintiff providing funds and the defendants rearing and selling the cattle, with
profits shared. It was held that the business had the characteristics of a
partnership.

Applying to the issue above, Dana, Jan and Jones business had the characteristics
of a partnership since they all business in common and their profits made will be
shared equally which is in line with the case of Gulazam v. Noorzaman & Sobath
and can be seen contrary to the case of Chooi Siew Cheong v. Lucky Heights
Development.

Moving on, the court will also view it objectively whether there is a present
fiduciary relationship between partners to determine whether the intention of
partnership exists. Fiduciary relationships are those in which partners have the
highest trust and confidence in one another. There is no business in common
under section 3(1) if there is no fiduciary relationship. In light of the issue at hand,
all three of them have the utmost trust and confidence with one another since
they have orally agreed that only Dana has the mandate to take any loan for their
business and any profits made would be shared equally.

According to Section 7 of the Partnership Act 1961, it states that every partner is
an agent of the firm and his other partners for the purpose of the business of the
partnership; and the acts of every partner who does any act for carrying on in the
usual way business of the kind carried on by the firm of which he is a member
bind the firm and his partners, unless the partner so acting has in fact no authority
to act for the firm in the particular matter, and the person with whom he is
dealing either knows that he has no authority or does not know or believe him to
be a partner. For instance, the case of Union Bank of Australia v Fisher (1893) has
a test where for an act to be in the usual way of business of the kind carried out,
the act must be necessary not merely convenient for the carrying on of such
business.

In applying to the issue above, MMA may sue Dana since Dana, Jan and Jones
have a partnership together for their business. In referencing Section 7, all three
of them are agents of the business and any act they carried binds the business
and the partners. In this issue, Jan purchased 100 rowing machines from MMA
Bhd which is worth RM600,000, for use in the gym. This is considered necessary
since rowing machines are needed for opening a gym which is in line with the case
of Union Bank of Australia v Fisher (1893). Since Dana, Jan and Jones have orally
agreed that only Dana has the mandate to take any loan for their business and in
this issue Jan did not make a loan with MMA as he just purchased the 100 rowing
machines. Thus, MMA may sue Dana for the 100 rowing machines which is worth
RM600,000 for the use of the gym since he is one of the partners from their
business with Jan and Jones.

Section 10 of the Partnership Act 1961 states that if it has been agreed between
the partners that any restriction shall be placed on the power of any one or more
of them to bind the firm, no act done in contravention of the agreement is binding
on the firm with respect to persons having notice of the agreement.

In applying to the current issue, PBB cannot sue Dana since Jones is the one who
took the loan from PBB in the amount of RM1 million for the employment of three
coaches from American Top Team. In referencing Section 7 and 10, Dana, Jan and
Jones have orally agreed that only Dana has the mandate to take any loan for their
business. So the loan that Jones took from PBB did not bind with their partnership
agreement. Thus, PPB may sue Jones for the loan he took from them which is in
the amount of RM1 million for the employment of three coaches from American
Top Team.