I still believe that this statement is the 'killer blow':
5.2 Having determined that there is at least one passenger on board, the next question is whether any payment has been given or promised which, if it had not been given or promised would mean that the passengers would not have been carried. If there is any payment which could fall into this category, consider what would have happened if the passenger had presented himself for carriage and announced that such a payment would not now be made. Would the passenger still be carried?
I read this to mean that if your mate decides not to pay - you still have to take him flying otherwise you're in breach of the regulations.