Samuel, Thomas and Peta decided to start up an internet business reselling products over the vast online marketplace. They were keen to purchase goods from unfortunate companies that had gone into liquidation and resell the goods at a substantial gain.
The proposed form of the new venture was not decided upon. Peta used $100,000 equity in her home to finance the start-up costs of the new venture. All three parties joined forces and worked together in the business venture. The business was profitable and the three venturers decided on the following payment arrangements.
Peta was not paid anything for the 1st year but there after was paid $6,000 per month. Samuel and Thomas characterised the payments to Peta as "a gratuity" - "a thank you for putting up her family assets as the bulk of the collateral". Samuel and Thomas were not paid as employees but through consultancy arrangements with the venture.
Samuel and Thomas deny the existence of any partnership.
With reference to case law and the Partnership Act, discuss whether or not the venture is a partnership.