topic: companies and partnership law

please do refrain from using any law concepts or terms that are not taken from the study guide (other than cases e.g DINKO LUKIN v BRANKO LOVRINOV AND ANDJELKA LOVRINOV) assignment must be done uing partnership and companies law perspective.

Question 1 40% of this assignment
Read the case of DINKO LUKIN v BRANKO LOVRINOV AND ANDJELKA LOVRINOV No. SCGRG-95-541 Judgment No. 6614 [1998] SASC 7105 (9 April 1998) available in Appendix A in the Study Guide, and answer the following questions:
1) In your own words, explain why the judge decided that the partnership had ended by 31 December 1993.

2) In relation to partnership property, the Partnership Act 1891 (SA) contains s20. Part of the dispute in this case was in relation to the rights to a tuna quota granted by the Commonwealth Government in 1984. In your own words, explain how the judge applied this section and why he decided that these rights to the tuna quota were not the property of the partnership.

Question 2 60% of this assignment
Adam and Zac were friends who enjoyed fossicking around in caves and old mines as a hobby. One day when exploring an abandoned opal mine shaft they found rocks which they thought might contain opals. They retrieved them and had them examined and were delighted to find they did contain some opal. This inspired them to consider obtaining a precious stones prospecting permit to be allowed to explore further. They were granted a permit and pegged out a small claim. Over the following months, they were excited to find more of the precious stone and decided they should embark on further exploration in a more serious way.
They agreed that Zac should remain in the area and continue with the explorations, whilst Adam would return to his part-time work and return to the mine on alternate weeks. Any income they made would be shared with Zac taking 2/3 and Adam 1/3. As they needed funds to purchase appropriate machinery, they each mortgaged some personal property to obtain a bank loan of $60,000 and in addition contributed $20,000 each from personal funds.
The loan was made out in both names and a joint bank account was ed. The machinery was purchased and Zac applied for the opal development lease but on the application form he only entered his name. Being friends they did not prepare any written agreement but agreed that as long as they worked together they had a partnership with both having an equal say in how their business would develop.
For the first year, they were very pleased with the amount of opal they extracted and were able to sell to the local jewellers for cutting, polishing and manufacture and were able to pay off some of the loan. In the second and subsequent years the amount declined and the stone was more and more difficult to find. By the end of the third year, Zac complained that the amount he derived from the mine was only just enough for him to live on and he began to take on other work within the town. Adam began to cut back on how often he returned to work the mine and eventually he stayed away for all of twelve months whilst Zac continued work, supplemented with other outside work.
Zac decided that he could earn more by abandoning the mining work and devoting more time to other work. In addition he decided that since there was still some time before the lease would expire, he could transfer it to someone else and recoup some funds to add to his income, which he did. He was particularly happy with the fact that the value of leases had risen considerably and he was able to obtain a very good price for it. In addition he sold the original machinery so as to pay off some of the bank loan. However there was still about one third outstanding and the bank was demanding payment of the monthly instalments which were defaulted on.
When Adam heard what had happened, he claimed that since they were still in partnership, Zac had no right to make such unilateral decisions and if he wanted to act like that, then he could pay off the bank loan by himself! He also claimed that he was entitled to his share of the profit from the transfer of the lease since it was partnership property, to which Zac argued that since it was in his name only, it belonged to him.

1. Explain whether Adam and Zac formed a partnership. 40%
2. Assuming a partnership did exist
1) explain who has ownership, entitlements and obligations for the various assets and liabilities. 40%
2) explain whether or not the partnership was dissolved at any stage. 20%