Peter Holmes Investments Pty Ltd v S&C Nicola Pty Ltd

Adoption of Referee's report

1. In Chocolate Factory Apartments v Westpoint Finance [2005] NSWSC 784 at [6]-[8] McDougall J summarised the principles which apply when the Court is deciding whether to adopt or reject the report of a referee. The parties agreed that I should apply those principles.
2. Generally speaking, the Court is reluctant to allow an application concerning the adoption of a referee's report to become a forum for rearguing factual issues which have been heard and determined by the referee. The reference proceedings are supposed to be an alternative to judicial determination, rather than a warm-up round. Therefore, the Court will usually intervene only if satisfied that the referee has made an error of law, or has taken an incorrect approach to the task, or has made a manifest error of fact.
3. But, as his Honour's statement of the principle makes clear, these are only general principles to guide the exercise of the Court's discretion. The weight which the referee's decision carries, and how that is to be balanced against the undesirability of further debate (including, in particular, further fact-finding), is a matter of judgment for the Court.
4. In the present case, the Referee's report needs to be evaluated in the light of the task referred to him by the Court. That task was, in effect, the conduct of the relevant accounting proceedings under Part 46 of the Uniform Civil Procedure Rules 2005, subject to any specific direction of the Court.
5. The taking of an account is a multi-step process. Its form is well settled: see for example Glazier Holdings Pty Ltd v Australian Mens Health (No 2) [2001] NSWSC 6 at [36]-[45]; Agricultural Land Management Ltd v Jackson (2014) 48 WAR 1 at [334]-[335]; Eastlake v Eastlake [2015] NSWSC 1772 at [49].
6. The first step is to identify the accounting party, if that has not already been done in the Court order for the account. The accounting party is then required to prepare and submit its version of the account, showing all items of income and expenditure. The non-accounting party may then require the accounting party to "vouch" (that is, produce evidence in support of) specified items in the account which the non-accounting party wishes to scrutinise. Other forms of discovery may also be appropriate, such as requiring the accounting party to provide a sworn explanation of items in it.
7. When these preliminaries have been completed, the non-accounting party identifies the challenge which that party makes to the accounting party's statement of account. These challenges may identify additional income which the non-accounting party claims the accounting party received, or ought to have received ("surcharges"). Or the non-accounting party may identify items of expenditure which it claims should not be allowed ("falsifications"). The result is a list of specific items in dispute, which disputes are then resolved in the ordinary way, by reference to evidence and submissions from the parties.
8. For the purpose of determining the claims and counter-claims of the parties, the onus of proof is governed by the maxim that "he who alleges must prove". Where the accounting party claims an entitlement to deduct an item of expenditure and this is the subject of a falsification by the non-accounting party, the onus lies on the accounting party to justify the item. Where the non-accounting party alleges a "surcharge" in the form of a missing item of income, the onus lies on the non-accounting party.
9. The taking of an account is thus a type of legal procedure which results in the determination of legal rights and liabilities as between the parties to the account. It is not an inquisitorial process. It is a precision-guided adversarial one.
10. There was another significant feature of the reference in the present case. The parties were in dispute about the amount owing to Manotik as builder. The dispute concerned whether some of the expenses paid by PHI on Manotik's behalf were costs of the project.
11. In the usual case where the winding up of a partnership is carried out by a receiver, such a question would not be determined by way of reference. One of the receiver's tasks would be to determine the external liabilities of the partnership, and, to the extent that the receiver had assets of the partnership in hand, to satisfy those liabilities: see Milevski v Paltos [2022] NSWSC 261 at [200]-[201]. This would be done in the first instance by negotiation between the receiver and the third party claiming to be a creditor. If necessary, it would be determined in separate proceedings between the receiver and the third party.
12. In the present case the builder, Manotik, was a party to the proceedings. There was thus no difficulty with the amount due to Manotik under the building contract being determined by the Referee. But this task was conceptually separate from (and anterior to) the determination of the rights of the partners inter se.
13. The Referee's report did not expressly recognise that there were in fact two separate and distinct tasks involved. Nor did the Referee set out to follow the steps in the accounting procedure which I have described. There appears to have been no formal process of identifying items in a statement of account, or recognition of where the onus lay in determining whether an item should be included or excluded from the ultimate calculation. Instead, the Referee seems to have started with some accounts and supporting documents provided to him and to have undertaken his own review of those accounts and supporting documents, supplemented by submissions from the parties.
14. None of this is a criticism of the Referee. He was not asked by the parties to follow the standard accounting procedure, nor did the Court's order expressly require him to do so. But it was, I think, a relevant factor in considering the extent to which, in the case of doubt or uncertainty, the Court might be justified in reconsidering the Referee's conclusions.

Manotik insurance premiums

1. It is convenient to deal first with the dispute about the partners' liability to Manotik.
2. The building contract between PHI (on behalf of the partners) and Manotik was prepared using a standard form which was completed in handwriting. The contract price was identified in a schedule which had evidently contemplated the insertion of a fixed price, with adjustments to that price for variations, prime cost items, etc. But instead the space for specifying the price was completed, in handwriting, "cost plus 10% plus GST (estimate $4,000,000)".
3. The contract contained space for the specification of materials, goods and services for which the builder would not be responsible. This was completed, in handwriting: "Owner shall provide [sic] all expenses and cost plus 10% for builder's margin plus GST".
4. It was agreed for the purposes of the reference that PHI had paid out the sum of $356,000 to, or for the benefit of, Manotik. PHI claimed that it was entitled to add a further $68,915 for insurance premiums it had paid. PHI's contention was that these premiums were costs of the project.
5. In his report, the Referee stated: I note that the Partnership Agreement requires the partnership to maintain certain insurances. Based on the invoices, I have identified those payments I conclude are required for the partnership to maintain, and excluded those amounts that appear to be Manotik insurances. On this basis, I conclude that $52,328 should be included as partnership expenses and $16,587 as being payments on behalf of Manotik. Therefore, payments made to Manotik total $372,587, being $356,000 plus $16,587.
6. The figure of $52,328 to which the Referee referred was a premium for home owner's warranty ("HOW") insurance. The remaining $16,587 represented contract works insurance premiums. Initially, counsel for PHI contended that both of these expenses did not fall within the definition of "cost" within the contract and should be borne by Manotik.
7. It is convenient to deal first with the HOW insurance. The insured under the policy was Manotik. But the risk covered by the policy was the risk that Manotik would be unable to meet its obligations to the owner under the contract. The policy only responded in that circumstance. Moreover, the risk was specifically limited to a particular project and the premium was no doubt calculated by reference to the risk associated with default on that project.
8. In these circumstances, I put to counsel for PHI that the policy was exclusively for the benefit of the owner and could properly be seen as a cost of the project. It is clear that the mere fact that an expense is incurred in the first instance by the builder does not mean that it is not a "cost" of the project. Indeed, in the ordinary course, all of the expenses would be incurred in the first instance by the builder. Eventually, counsel for PHI abandoned the contention that the HOW premium was not a "cost" for the purposes of the contract.
9. This leaves the contracts work insurance. The building contract provided: 38.1 The builder must insure against: (a) loss or damage to the building works and any goods and materials on the site relating to the building works against theft, fire, explosion, lightning, hail, storm and tempest, vandalism, civil commotion and earthquake; and (b) public liability for an amount of $10,000,000 for any one claim. 38.2 The above insurance policies must be in place before the builder commences the building works and must be maintained: (a) in the case of the building works policy, to and including the date of practical completion; and (b) in the case of the public liability policy, for the duration of the contract. 38.3 If the owner asks, the above insurances must note the names of the owner and the lending body as being in the class of the insureds under the above insurance policies. … 38.6 On the settlement of any claim under the building works policy the builder is to: (a) immediately be paid any part of the settlement moneys relating to loss suffered by the builder relating to any work that is the subject of the claim but for which the owner has not paid the builder, and (b) carry out the reinstatement of the building works and be paid the balance of the settlement moneys for the reinstatement works. 38.7 The owner must ensure that the building works are insured from the date of practical completion.
10. Consistently with this provision, the insurance in question was obtained in the name of Manotik as builder. The policy cover was: All activities of construction in connection with commercial building works, including but not limited to: • Project/construction management • Development Business/Products of the Named Insured: • Sales • Visiting suppliers or manufacturers • Trade fairs and exhibitions And all other ancillary activities

Interest insured: Insured Project(s): Policy Limit(s): Comprising the construction works, ancillary and temporary works and all materials and other things for incorporation in or carrying out the works, including sheds, huts, on site amenities, formwork, falsework, scaffolding, hoardings and other interests as provided in the Policy against Damage occurring from an Event in the Geographical Limits to any Insured Project during the Construction Period or the Defects Liability Period. Maximum Project Value: (any one Insured Project or Stage) $2,700,000 Maximum Construction Period: (any one Insured Project or Stage) 24 months Testing and Commissioning Period: Included Maximum Defects Liability Period: (any one Insured Project or Stage) 12 months

1. Counsel for SCN and Manotik submitted that the Referee had been correct to say that the Partnership Agreement required this insurance to be obtained. Clause 9(e), which dealt with the management of the project, provided: The parties must ensure that the Partnership: … (iv) Maintains insurance with a financially sound and reputable insurer against other hazards and risks and liability to persons and property to an amount and in the way customarily insured against by companies conducting businesses similar to the business including public risk insurance for not less than $20 million …
2. But clause 9 refers to the maintenance of insurance by "the Partnership". No doubt the fact that Manotik held contract works insurance would have been sufficient coverage for the partners for practical purposes (there was no reference before me to any insurance having been obtained by the partners after practical completion, which was when Manotik's contract works insurance obligation ran out under cl 38.7 of the building contract).
3. Clearly, if Manotik was entitled to charge the partners for the cost of its contract works insurance, then, as between the partners, that cost would have been a partnership expense. But the real question was whether Manotik was entitled to do so. This was a question which arose as between Manotik and PHI under the building contract. It had nothing to do with the Partnership Agreement.
4. It is clear that in referring to "cost", the building contract was referring to costs attributable to the project. In my view, Manotik's contracts works insurance was not such a cost.
5. The insurance covered any and all construction works, and associated activities, being carried out by Manotik over the insured period. In fact at the time there were at least two projects being undertaken by Manotik: the Clyde Road project and the Pacific Parade project. There may have been others. It was not suggested that the cost of the insurance could in some way be apportioned between the projects. In my view there was no direct relationship between the cost of the insurance and the conduct of any particular project.
6. It is true that building contracts commonly require the builder to obtain contract works insurance, as in this case. This serves at least two commercial purposes of the owner. One is to ensure that if a claim is made by a third party who may suffer injury as a result of the contract works there is an available insured defendant in the shape of the builder to meet that claim. Another is to ensure that if the works are damaged, insurance funds will be available to complete them.
7. The builder's maintenance of contract works insurance is therefore in the commercial interest of the owner. But the insured interest remains that of the builder. That can be seen in the wording of the building contract in the present case. Clause 38.3 provided for the owner to be noted as an insured, but as an additional one. Clause 38.6 ensured that any insurance proceeds received by Manotik for damage to the building works would be applied towards the cost of undertaking, or completing, those works, but in doing so the clause clearly acknowledged that the insurance belonged to Manotik, not PHI.
8. In my opinion, the existence of an obligation on the builder to maintain contract works insurance does not, as between the owner and the builder, make the cost of doing so a cost of the project. It was therefore erroneous to include the cost of the contract works policy in the amount due to Manotik.

Rent received on property

1. As I have mentioned, PHI has remained in possession of some of the units which were constructed. Since mid-2019, PHI has apparently received income from renting out those units. The issue (which does not seem to have been presented to the Referee) was whether PHI had to give credit for that rent as partnership income.
2. Clause 4 of the Partnership Agreement provided: 4. Overview of the purpose of the Partnership The Partnership proposes: (a) To acquire properties at … Clyde Rd, Dee Why ('the Properties'); (b) To design and construct a complex of 12 strata title units on the Properties and to sell either the subdivided lots or the developed buildings (the Partnership Development'); (c) To appoint [Manotik] to design and construct the Partnership development and pay [Manotik] 10% on top of the Partnership Development costs; (d) In consideration for a discounted rate of 10% rather than 25% the Partnership will provide a Maintenance account in the sum of $80,000 at all times to be retained in the partnership for payment of defects and maintenance for a period of 6 years; (e) To divide the expected profits from the sale of strata title lots or buildings amongst the Partners.
3. Clause 6 of the Partnership Agreement provided: 6. Contribution of capital and share of profits and losses (a) The parties must contribute the capital required to complete the project in the following proportions and will share in the profits and losses of the venture in the same proportions. (i) Party 1 [SCN] 50% (ii) Party 2 [PHI] 50% (b) If a Partner pays money on behalf of the Partnership, the other Partners must make a contribution as soon as practicable after being informed of the payment, to restore equality of contribution between them. (c) Despite (a) and (b) above Party 2 has agreed to fund the whole capital of the project on behalf of the parties until completion of the Partnership project and in consideration therefor Party 2 is entitled to be the sole owner of the properties and entitled to 5% interest on the all capital expenditure to be repaid before any profits are distributed. (d) The Partners will retain $80,000 at all times for defects and maintenance of the Partnership development for period of 6 years but only to pay up to 15% of the project costs towards any defects in the Partnership Development being the amount of the discount provided by the builder.
4. Counsel for SCN submitted that the completed units, prior to sale, constituted a partnership asset. PHI was therefore obliged to give credit to the partnership for the benefit received from that asset, in the form of rent. Counsel referred in particular to s 29(1) of the Partnership Act 1892, which provides: Every partner must account to the firm for any benefit derived by the partner without the consent of the other partners from any transaction concerning the partnership, or for any use by the partner of the partnership property, name, or business connexion.
5. In response, counsel for PHI pointed out that it was specifically provided in the Partnership Agreement that all of the development costs, including the costs of purchasing the property, were to be borne by PHI, and PHI was to remain the owner of the property throughout until it was paid. Counsel submitted that the venture was best characterised as one where the parties had agreed to share the benefit of the capital profit made on the sale of the property in developed form. Income otherwise derived by PHI from ownership of the land was not an incident of the venture.
6. These submissions paralleled arguments which were put by PHI to the Court of Appeal in support of Sackar J's original decision that the interest to which PHI was entitled under the Partnership Agreement was not a partnership expense. In addressing those arguments, Macfarlan JA, who gave the leading judgment, stated (J2 at [15]-[19]): If the partnership … had been wound up immediately after the respondent paid for and acquired the properties, each of the two parties would, to put the position in simplistic terms, have been entitled to half the net proceeds of sale of the properties after deduction of the respondent's [PHI's] costs of purchasing them. The respondent could not reasonably have argued that it was entitled to be paid the costs that it had incurred and then in addition receive half of the gross proceeds of sale of the properties. The costs of acquisition would thus have been treated as a partnership expense, with the profits remaining after their deduction to be divided equally. The result would have been that each party bore one half of the costs of acquisition of the properties. The position is the same in respect of the interest of 5% per annum that the partnership agreement provided be paid to the respondent. Just as the respondent could not reasonably have argued that the cost of acquisition of the properties was not a partnership expense, so also it cannot successfully contend that the agreed 5% interest be treated differently. … … The respondent's construction requires a finding that the references to 5% interest are to an independent obligation of the appellant [SCN], quite separate from questions of partnership expenses and the division of partnership profits. In light of the context in which they appear, that would in my view require a clear contractual indication that that was what was intended and I can see none. ... The construction which I favour recognises the "primacy financially" accorded to the respondent and its expenses (as referred to by the primary judge …) but that primacy is reflected in the stipulation for those expenses to be treated as partnership expenses and deducted before profits are divided. On this basis, the ultimate burden of the 5% interest is borne by the partners in equal shares. This is no more surprising than the undoubted effect of the agreement (see particularly cl 6(a)) that the partners bear equally the acquisition and development costs paid by the respondent. ...
7. This reasoning treated the agreed interest allowance as a cost of holding the property and therefore as a partnership expense. In other words, upon entry into the Partnership Agreement, PHI effectively held the property for the benefit of the partners. Whether this was a trust in a strict sense, or only in an "analogical and metaphorical" sense (see Sze Tu v Lowe (2014) 89 NSWLR 317 at [122]-[126]), does not matter for present purposes. It would ordinarily mean that the partners would thereafter share any income from the property. The contrary result would have required a sufficiently explicit agreement by the parties, and there is no sign of any such agreement.
8. For these reasons, I concluded that the rent should be brought to account.

$100,000 payment by PHI to SCN

1. This issue concerned a cheque (number 274) drawn on 25 September 2018 in favour of SCN. The cheque was presented by SCN and debited to PHI's account on 27 September.
2. Also on 25 September 2018, another cheque (number 275) in the same amount was drawn on the same account of PHI. This cheque was deposited into the bank account used for the Pacific Parade partnership and debited to PHI's account on the same date as cheque 274, namely 27 September 2018.
3. Cheque 275 was referred to in the Referee's report when dealing with the Pacific Parade partnership. But cheque 274 was not. The contention for PHI at the hearing before me was that the Referee had overlooked it. According to counsel for PHI, the cheque should have been taken into account as a repayment of capital to SCN on the partnership account.
4. Counsel for SCN did not dispute that the money had been paid by PHI to SCN. But counsel submitted that it was by no means self-evident that the cheque was referable to the Clyde Road partnership. As counsel pointed out, PHI and SCN were party to numerous dealings outside that partnership (and the Pacific Parade partnership).
5. Initially, the submission by counsel for PHI was that it was so clear that the payment was referable to the Clyde Road partnership that the Court should simply correct the account accordingly. But in the course of the argument, counsel recognised that, given that there was no reference to the cheque in the report, it was unclear what had happened. Counsel suggested that the matter should be remitted to the Referee.
6. In my view, this concession underlined the difficulty in PHI's case on this point. The evidence did not establish that an error had actually been made. On the material before me, it was possible that the remittal of the issue to the Referee would only result in a determination that the $100,000 was referable to some other set of dealings between PHI and SCN.
7. In deciding whether to remit this issue for redetermination by the Referee, I thought that the way in which the reference had been conducted was relevant. The parties agreed in the course of the hearing before me that, as PHI had paid most, if not all, of the costs, it was the accounting party. Had the formal procedure which I have described been followed, it would have been up to PHI to identify and claim the payment as a deduction, and, if any question had arisen, to prove that it was referable to the Clyde Road project.
8. It is possible that the way in which the account was taken before the Referee led to the payment in question being overlooked. But I did not think that, in the circumstances, the Court should remit the issue to the Referee to give PHI a further opportunity to present its case on this contestable point.

$76,667 credit allocation

1. It was common ground that on 8 August 2019 a payment of $76,667 was made by SCN in favour of PHI. The Referee in his report found: PHI accepts that it received $76,667 from S&C on or about 8 August 2018. Appendix D of the Bishay Report [one of the accounting reports before the Referee] indicates the payment was made on 8 August 2019 in respect of the purchase of units. I conclude that this sum is not a capital contribution, but should be accounted for as part settlement of any amounts owing from S&C to PHI as a consequence of my determinations.
2. At the hearing before me, counsel for PHI submitted that, rather than being credited against the HNH loan, this payment should be credited to SCN on the Clyde Road partnership account (along with the $100,000 payment in cheque 274 to which I have just referred). This was a minor point. There was no dispute that the money should be credited. The only question was which account it should be credited to.
3. I rejected the claim concerning the $100,000. No error was demonstrated in the Referee's reasoning about the $76,667. I saw no reason to disturb the Referee's allocation.

Remaining steps to complete account

1. The defects liability project on the development has not expired. As we have seen the Partnership Agreement provided for a sum of $80,000 in partnership funds to be retained against the possibility of a claim. The Referee addressed that in the report, directing that PHI retain that sum.
2. Initially, counsel for PHI complained about this aspect of the Referee's decision. But as I have already pointed out, PHI was the accounting party. Consistently with this, PHI had been credited with the proceeds of the sale of the units which had been sold. The requirement that it withhold $80,000 simply had the effect of setting that sum aside from those proceeds. In the end, counsel did not press the point.
3. It also remains necessary for partnership tax returns to be lodged. The sale of the property will have given rise to a taxable capital gain. It will be necessary to work out the cost base for the purpose of calculating that gain. On the other hand, the rental income on the units which I have decided should be brought to account appears to be a revenue receipt. The 5% interest allowance in favour of PHI may likewise be a deduction on revenue account.
4. The figures produced by the Referee do not appear to have distinguished between income and capital account. That distinction will have to be made for tax purposes. Presumably that can be done by someone else, based on the Referee's figures.
5. When I raised this issue with the parties, they agreed a form of order to provide for the necessary tax return or returns to be prepared and lodged, and for the cost of that to be shared between the parties as a partnership expense.

Set-off and payment

1. The orders made by Sackar J in September last year were made by consent, based on terms of settlement which had been agreed between the parties. Those terms of settlement provided that any amount ultimately due from PHI to SCN would be set off against the amount owing by SCN on the HNH loan. The terms of settlement went on to provide for SCN to purchase some of the remaining units from PHI. The purchase was to take place in accordance with a timetable which was to begin fourteen days after the delivery of the Referee's report.
2. These steps have not been undertaken. The parties agreed at the hearing before me that the fourteen day period should be taken as running from the date of orders which I made.
3. Counsel for PHI urged me to go further. Counsel proposed a set of orders based on the agreed short minutes which required SCN to complete the purchase in accordance with a specified timetable or face forfeiture of its rights.
4. I was not prepared to make these orders. While there was no reason to think that SCN would fail to comply with its obligations, if it did so there might be room for argument about whether those obligations could be specifically enforced. And there was no basis whatever in the original terms of settlement for the further forfeiture provisions proposed on behalf of PHI.
5. As counsel for SCN rightly submitted, the proper course, if SCN did not comply with its obligations, was for PHI to make an application under s 73 of the Civil Procedure Act 2005 for orders to enforce the compromise. Any factual or legal issues which might arise about enforcement were matters to be dealt with in any such proceedings.

Orders

1. The orders made by the Court on 19 August were (excluding annotations): 1. Subject only to the amendment provided for by paragraphs 2 and 6, pursuant to UCPR 20.24, paragraphs [23]-[132] of the report of Tony Samuel dated 12 April 2022 are adopted. 2. Order that Peter Holmes Investments Pty Ltd pays to S&C Nicola Pty Ltd the sum of $476,061.20 being the net profit payable by Peter Holmes Investments Pty Ltd to S&C Nicola Pty Ltd for a 50% share of profits of a property development project at [XX] Clyde Road Dee Why NSW 2099. 3. Order that S&C Nicola Pty Ltd pays to Peter Holmes Investments Pty Ltd the sum of $208,742 being the principal and interest payable by S&C Nicola Pty Ltd to Peter Holmes Investments Pty Ltd in relation to the 'HNH Loan' referred in paragraphs 28-51 of the Statement of Claim. 4. Order that the amount determined and ordered to be paid pursuant to Order 2 is to be offset against the amount determined and ordered to be paid pursuant to Order 3, with the remaining balance of $267,319.20 being payable by Peter Holmes Investments Pty Ltd to S&C Nicola Pty Ltd. 5. Order that the amount of $267,319.20 payable by Peter Holmes Investments Pty Ltd to S&C Nicola Pty Ltd is to be applied as credit towards S&C Nicola Pty Ltd's purchase of Unit [XX] and Unit [XX], [XX] Clyde Road Dee Why in accordance with clauses 6 - 8 of the terms of settlement agreed by the parties and dated 7 September 2021 (Terms of Settlement) and S&C Nicola Pty Ltd is to notify Peter Holmes Investments Pty Ltd in writing within fourteen (14) days of the making of these orders as to the extent to which the amount is to be applied towards the purchase price of Unit [XX] and/or to Unit [XX]. 6. Order that Peter Holmes Investments Pty Ltd pays to Manotik Pty Ltd the sum of $84,290.80 being the balance payable to Manotik Pty Ltd for building works done pursuant to a building contract dated 10 April 2017 concerning [XX] Clyde Road Dee Why. 7. Order that Peter Holmes Investments Pty Ltd is to pay $80,000 into a bank account to be opened in the names of the plaintiff and the first defendant to be maintained for the payment of any further defect rectification costs incurred in respect of the property at [XX] Clyde Road Dee Why with the balance of that account (if any) to be paid equally to the plaintiff and the first defendant on or after 1 August 2025. 8. Order that within 42 days Peter Holmes Investments Pty Ltd prepares, and Peter Holmes Investments Pty Ltd and S&C Nicola Pty Ltd cause to be lodged with the Australian Taxation Office, all outstanding tax returns with respect to their partnership concerning a property development project at [XX] Clyde Road Dee Why NSW and that: 1. as applicable, the tax returns are to be prepared on the basis of the findings set out in the report of Tony Samuel dated 12 April 2022 as varied by Orders 2 and 6; and 2. the costs to Peter Holmes Investments Pty Ltd of preparing the partnership tax returns is a cost of the partnership; and 3. 50% of the reasonable costs of preparing the tax returns as may be incurred by Peter Holmes Investments Pty Ltd is to be offset against the monies payable by Peter Holmes Investments Pty Ltd to S&C Nicola Pty Ltd pursuant to Orders 4 and 5. 1. Costs reserved. Any party who wishes to make an application for costs in respect of these proceedings, or any part of them is to file and serve on each of the other parties' written submissions, limited to 10 pages, together with any evidence which is relied upon, within 14 days of the Court handing down its detailed reasons for these orders. 2. Any party who wishes to respond to any application for costs made by any other party is to file and serve any reply submission, limited to 10 pages, together with any evidence relied upon, within 14 days thereafter. 3. All costs issues are to be determined on the papers unless the Court otherwise orders.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 12 September 2022