In the case of Kang-Kem v Paine  the plaintiff; Kang-Kem has taken action on the defendant; Paine, to try and establish whether or not there is a legally binding partnership between the two parties. The Partnership Act 1892 Section 1. Defines partnership as: "Partnership is the relation which exists between persons carrying on a business in common with a view of profit"
Kang-Kem claims that they and the defendant; Paine commenced trading as a partnership in 1992 and are still involved in a continuing partnership for the purpose of running a restaurant known as Milano Junction CafÃÂ© Restaurant at The Junction, Newcastle and a restaurant known as Milano's on the Lake at Pelican on Lake Macquarie and orders that the affairs of the partnership be wound up, that a receiver be appointed and that an account be taken.
Paine, in response; states that they were the sole proprietor of the junction restaurant, with only the 'operating rights' being given to the plaintiff as arranged with the sublease; that she opened an ANZ bank account in her name shortly before the Junction restaurant opened and deposited in it $100,000 to be used for the fit-out of the restaurant.
The defendant says that she lent $100,000 to the plaintiff and that he acknowledged his obligation to repay.
The court came to the conclusion that a partnership did not exist, arising from a certain number of facts:
ÃÂ§ The lessee of the premises was the defendant. The sum of $100,000 needed to set up the restaurant was provided by the defendant.
ÃÂ§ Income and expenditure relating to the Junction restaurant were included in income tax returns of the defendant in certain years.
ÃÂ§ The plaintiff himself represented the Junction restaurant business to have been owned solely by the defendant until about 1997,