1)Scenario and Questions

Natalie (Nat) and Melanie (Mel) are friends who are studying business at a university in Adelaide.However, their true passion is health and fitness.Nat is seriously into yoga and is a qualified yoga instructor. Mel is a pilates enthusiast and recently completed her pilates instructor course.

Nat and Mel met earlier this year at an online tutorial and, despite Nat being 10 years older than Mel, they became good friends. They shared videos of each other doing yoga and pilates.One evening, over virtual drinks, they came up with the idea of formulating their own method of exercise, combining Yoga and Pilates called "Yogilates", and decided to set up a studio to record instructional videos for online distribution. The next day, even after the wine had worn off, they were still keen on the idea. They proceeded by:

Creating a YouTube channel account with the username "Nat and Mel's Yogilates". They did this following a brief discussion about whether to use YouTube, TikTok or both.Mel thought TikTok was a better option, but Nat thought it wouldn't work because the videos are too short.Mel, not wanting to get into an argument with her older friend, agreed they would use YouTube.

Creating a Google AdSense account which was linked to a joint bank account which they opened online.

Nat told Mel they could use the garage at Nat's house for a yoga studio. Nat fit-out her garage as a fitness studio with padded mats and various pictures of bamboo, rocks and water.The centrepiece of the fit-out was a large banner with a logo comprised of the words "Nat and Mel's Yogilates" superimposed on a green and gold yin-yang symbol. When Mel saw the new garage-based studio she smiled and said: "nice logo, did you design that?"Nat replied: "yeh I just pulled it together from some pictures I found on the internet." The next day Mel moved her laptop, video-recording equipment and gym equipment (worth approximately $5,000) to the studio at which time she said: "this will come in handy for our videos."

Besides this, they did not formally register the business or document the nature of their commercial relationship. Over the next few weeks, they developed a hybrid yoga / pilates system and created a series of twenty x 10-minute instructional YouTube videos. The YouTube Channel was initially successful and over a period of three months they generated approximately $3500 in advertising revenue. However, enthusiasm began to wane and the following problems emerged:

Nat discovered that Mel had been re-editing videos as memes with catchy music and posting them on TikTok.Mel had made some money from this via her own TikTok account and kept the money for herself. Nat confronted Mel about this via text message. Mel responded by sending the following text message:

Mel: "You don't own me ... I can do what I want. It was you that wanted to stick to YouTube and do these super-long videos."

A few days later, they both discovered that their idea wasn't very original and that "Yogilates" was a system already developed by someone else, and that the logo they used included an image and words that were subject to a registered trade mark.They received a letter via email from lawyers representing the owner of the registered trade mark. The letter demanded that they cease and desist with their use of the logo as well as the word Yogilates. The letter also notified them that they were being sued for trade mark infringement, with the owner of the trademark seeking compensation.

After they received this letter, the following text message exchange occurred:

Mel: "I am totally over this, you should never have stolen that guy's logo. You are on your own".

Nat: "You can't do that, we are partners. You need to pay the TikTok money to the joint bank account."

Mel: "I don't think so boomer. I am done here."

Based on this information, you need to use the IRAC method to answer each of these questions:

A.Did a partnership exist between Nat and Mel?

For questions B and C, you should assume that a partnership does exist.

B.Is Mel liable to pay the money she earned from the TikTok videos to the partnership bank account?

C.Who is liable for any compensation payable as a result of the trade mark infringement?