Actually that's a fair point Keef.
The actual rule in the ANO says something along the lines of "only one payment may be made".
So, if the only payment is for use of a syndicated aeroplane, and not a penny goes to the instructor, it is legal. (There is another rule against hiring of a 2-seat aeroplane unless it's on public CofA, so the student would either have to be syndicated, or getting that for free too!).
That said, any such activity needs to be insured, and whilst there are "off the shelf" insurance packages for either type-approved microlights, or public CofA aeroplanes, other combinations may be problematic.
G