Diva is a beauty therapist who runs a mobile business in the Penrith area, seeing customers in their own homes. Diva has a lot of established customers but she she is getting a bit tired of travelling around to their houses. Liam is a friend of Diya's. He has recently inherited some money and wants to start a new business. When Liam asks if she would like to join him in setting up a new Day-Spa, Diya is reluctant at first because she knows Liam doesn't have any experience in the beauty industry, although he does have general business experience. After some consideration, Diya agrees to see her clients in Liam's new spa (called Serenity Spa) on the condition that her own business stays separate.

Diva does not contribute any money or work towards setting up the new spa premises. Liam purchases all the equipment, does all the decorating and signs the lease himself. Diva makes it clear to liam that she will keep all her own customers, and the fees they pay her, but that she will pay him a set amount each fortnight for use of the business name as well as the spa itself and its equipment. Diva and Liam also consider merging their websites, and Diya gives Liam copies of several parts of her website text she wrote and some photographs she had taken to use on the Serenity Spa website.

One day Diya and Liam have a heated argument about the rent and Diya decides not to work from Serenity Spa any more. Diva starts seeing her customers in their own homes again, and returns to using her own website, but she continues to use the Serenity Spa name and logo on her website and on her invoices. Liam, who is now having financial problems, claims that he and Diya are partners in Serenity Spa.

a. Is Liam correct about the partnership? How does the law determine whether or not a partnership exists? (4 marks)

b. Diya wants to stop Liam using the text and photographs from her website on Serenity Spa's website. Is she legally entitled to do so? Explain your answer (2 marks)