Libby gets engaged to Drew Kirk (Dan Paris) and Karl gives her away at the wedding.
A few months later, Karl, Susan and Libby attended Malcolm's wedding.
She slaps Karl across the face and asks him to leave.
Karl moves into a flat and the distance between Karl and Susan is widened when an old university friend, Martin Chester (Gil Tucker), arrives in Erinsborough and comforts Susan.
Karl assures Tom he will always consider him as his father, but he decides to track down his biological father, Ronald Davies-Smythe (Tony Hawkins). Karl clashes with Libby's boyfriend, Darren Stark (Todd Mac Donald), and a feud between Karl and Darren's mother, Cheryl (Caroline Gillmer) begins.
They later call a truce and when Cheryl is knocked down by a lorry, Karl tries to help her. Karl later realises that Cheryl may have been allergic to the drugs he gave her and thinking he caused Cheryl's death, Karl stops practising medicine.
However, when Karl saves Malcolm's life by performing a tracheotomy on him, he decides to resume practising medicine and takes over the lease on the surgery at the Lassiter's Complex.
Darcy tries to convince Karl to sell the practive to a private medical company, but Karl refuses and offers to buy Darcy out of the partnership.
Susan regains her memory halfway through their vows.
Karl is fined for drink-driving after he has a few glasses of wine at a medical conference and is stopped by the police.
When Malcolm leaves home, he sends his friend Joel Samuels (Daniel Mac Pherson) to Erinsborough to stay with Karl and Susan.
Karl become attracted to his receptionist, Sarah Beaumont (Nicola Charles).