In the matter of GPM Constructions Pty Ltd – Oreb v GPM Constructions Pty Ltd [2020] NSWSC 1127

Supreme Court New South Wales

Medium Neutral Citation: In the matter of GPM Constructions Pty Ltd – Oreb v GPM Constructions Pty Ltd [2020] NSWSC 1127 Hearing dates: 23, 24, 25 June; 21 July 2020 Date of orders: 26 August 2020 Decision date: 26 August 2020 Jurisdiction: Equity Before: Emmett AJA Decision: Order that the defendants pay 85% of the plaintiffs' costs of the originating process and the cross-claim. Catchwords: COSTS — Party/Party — General rule that costs follow the event — Application of the rule and discretion — Neither party entirely successful — Determination where one party more successful than the other. Legislation Cited: Nil Cases Cited: Nil Texts Cited: Nil Category: Costs Parties: Peter Oreb (First Plaintiff/First Cross-Defendant) Enter Building Group Pty Ltd (Second Plaintiff/Second Cross-Defendant) GPM Constructions Pty Ltd (First Defendant/First Cross-Claimant) Gregory Stockley (Second Defendant/Second Cross-Claimant) GPM Marine Constructions Pty Ltd (Third Defendant/Third Cross-Claimant) Representation: Counsel: R Glasson (Plaintiffs/Cross-Defendants) S Keizer (Defendants/Cross-Claimants)

Solicitors: Gillis Delaney Lawyers (Plaintiffs/Cross-Defendants) Hunt & Hunt Lawyers (Defendants/Cross-Defendants) File Number(s): 2019/346479

Judgment 1. These proceedings were concerned with disputes arising out of a deed of settlement and release made on 5 June 2019 (the Deed of Settlement). The parties to the Deed of Settlement were the plaintiffs, Mr Peter Oreb (Mr Oreb) and Enter Building Group Pty Ltd (Enter Building) and the defendants, Mr Gregory Stockley (Mr Stockley), GPM Constructions Pty Ltd (the Company), and GPM Marine Constructions Pty Ltd (GPM Marine). The Deed of Settlement was intended to resolve earlier disputes that had arisen between the plaintiffs and the defendants concerning the affairs of the Company and a partnership between Mr Stockley and Mr Oreb (the Partnership). The Partnership was also a party to the Deed of Settlement. 2. The Company and the Partnership were the vehicles whereby Mr Oreb and Mr Stockley engaged jointly in a marine construction business and a residential construction business. Mr Stockley and Mr Oreb were the only members of the Partnership and the only directors of the Company. Each held 50% of the issued shares of the Company. The Partnership owned plant and equipment and buildings used by the Partnership and the Company in the course of a joint marine construction and residential construction business. There was no written partnership agreement or shareholders agreement. 3. After approximately 19 years of combined operations by the Company and the Partnership, the parties ultimately resolved to separate the business of the Company and the Partnership into two separate businesses. Mr Oreb, through Enter Building, was to assume the conduct of the residential construction business and Mr Stockley, through GPM Marine, was to assume the conduct of the marine construction business. Mr Stockley was to acquire Mr Oreb's shares in the Company and Mr Oreb was to resign as a director. The Deed of Settlement provided for the preparation of settlement accounts and distribution of the accrued profits, after adjustments, was to be effected after the settlement accounts were prepared. Completion was to occur on 30 June 2019. 4. Several discrete disputes arising out of the Deed of Settlement led to the commencement of proceedings in the Corporations List of the Equity Division by Mr Oreb and Enter Building against the Company and Mr Stockley. GPM Marine was subsequently added as a defendant in the proceedings. 5. By their further amended originating process filed on 24 June 2020, Mr Oreb and Enter Building sought, in substance: * an order that Constructions produce and provide access to them of a number of categories of documents; * a declaration as to the proper construction of cll 2.1(j) and 2.1(k) of the Deed of Settlement concerning the calculation of profits; * an order that a GPS system for a Komatsu antenna be delivered up to Mr Oreb for auction; * a determination of the timing of the entitlement of Mr Oreb, under cl 4.2 of the Deed of Settlement, to a share of Outstanding Retentions (as defined in the Deed of Settlement), and * an order that Mr Oreb be paid interest on half of the amount of the Outstanding Retentions as and when collected and paid to the Company. * Costs. 1. By their second amended cross-claim, Mr Stockley, the Company and GPM Marine relevantly sought: * damages for alleged breach of the Deed of Settlement concerning the name under which Mr Oreb and Enter Building were to conduct a residential construction business; and * production of books and records of the Company said to be in the custody of Mr Oreb. 1. The proceedings were fixed for hearing before me on 23 and 24 June 2020. By the time of the hearing, the width of the disputes between the plaintiffs and the defendants arising out of the Deed of Settlement had been narrowed significantly. In an endeavour to resolve the remaining issues, I heard argument in relation to each dispute separately. In the course of argument, I indicated provisional rulings in relation to each dispute. Ultimately, following discussion between counsel for the parties, all disputes were resolved either by agreement or as a result of the provisional rulings that I gave in the course of argument. Orders were then made in accordance with the resolution of the disputes as set out in the Appendix to these reasons. 2. That left the question of the costs of the proceedings. Without hearing any argument, I indicated a provisional view that I thought it may be appropriate to make no order as to costs. However, while that was acceptable to the defendants, the plaintiffs indicated that they wished to seek an order for costs. I therefore gave directions for written submissions on the question of costs and heard detailed oral argument on 21 July 2020 following consideration of the written submissions. In order to explain the questions raised concerning costs, it is necessary to say something about the disputes between the parties.