Two years ago, John and Brian entered into a home renovation business in Adelaide. Their plan was to eventually expand the business and open branches in other states. The agreement was that John would seek new business offers and Brian would renovate the homes. They would share the profit equally. Business was good at the outset. There was a clause in the agreement that expressly prohibited either of them from buying any building tools or machinery for the business for more than $20 000 without written authority from the other. Purchases were not to be made on credit. Recently, unbeknown to John, Brian bought a new mini hydraulic excavator for business use from JCB Ltd for $25 000 and the purchase was made on credit. Brian insisted that John should pay half of the purchase price, but John refused.

JCB Ltd has sent the invoice.

i.State whether the business structure established by John and Brian is a partnership or a joint venture, giving reasons for your answer. Make sure to apply relevant Acts and case law to support your answers.

ii.Advise JCB Ltd in relation to the business structure which you chose in your answer to (i) above.

iii.How would your advice to JCB Ltd differ if the facts involved the other business structure, which was not chosen in your answer to (i) above?