In 2002, Edward Delgardo completed his plumbing apprenticeship and became a qualified plumber. He then worked as an employee of a plumbing company for six years before starting his own plumbing business. He is operating his business as a sole trader.  Edward is married with two small children. He and his wife live in a house that Edward inherited from his deceased parents. The house is worth $350,000.

New facts: Having operated his business for a while as a sole trader, Edward approaches Ronnie Tran, another plumber who does not have his own business, but who is fully qualified and has a lot of business contacts. Edward suggests that if he and Ronnie were to operate a business together, they could combine their equipment, share the responsibilities, take on much more work, and they could share the profits. Ronnie agrees to this proposal. They decide they will start a 'partnership' in two months time, but before then, Ronnie and Edward enter into a lease for new business premises.