The plaintiffs delayed in the prosecution of these proceedings and as I already noticed in my reasons it was not until October 1998 that the plaintiffs certified that the matter was ready for trial. Of course, most of the delay was due to the plaintiffs' solicitors but this plaintiff must be held responsible for that. It is also to be noted that this plaintiff did not bring its proceedings until 25 September 1997.

I believe that if the plaintiffs had asserted their rights in a timely fashion the trial of this action could have been completed by 1993.

In my opinion the plaintiffs ought to be entitled to an account of profits for the four years for the loss of profits in the financial years 1990 to 1993 inclusive.

They should not be entitled to an account of profits before that time, because they made a commercial decision not to proceed in the matter. They should not be entitled to an account of profits after that time because they did not prosecute this matter appropriately. In my opinion to allow an account of profits as claimed would be unfair. The remedy in equity must fit the particular facts and circumstances of the case. In Warman International Ltd v Dwyer (supra) at 561 the Court said:

"In the case of a business it may well be inappropriate and inequitable to compel the errant fiduciary to account for the whole of the profit of his conduct of the business or his exploitation of the principal's goodwill over an indefinite period of time. In such a case, it may be appropriate to allow the fiduciary a proportion of the profits, depending upon the particular circumstances. That may well be the case when it appears that a significant proportion of an increase in profits has been generated by the skill, efforts, property and resources of the fiduciary, the capital which he has introduced and the risks he has taken, so long as they are not risks to which the principal's property has been exposed. Then it may be said that the relevant proportion of the increased profits is not the product or consequence of the plaintiff's property but the product of the fiduciary's skill, efforts, property and resources. This is not to say that the liability of a fiduciary to account should be governed by the doctrine of unjust enrichment, though that doctrine may well have a useful part to play; it is simply to say that the stringent rule requiring a fiduciary to account for profits can be carried to extremes and that in cases outside the realm of specific assets, the liability of the fiduciary should not be transformed into a vehicle for the unjust enrichment of the plaintiff."

Therefore I would allow the plaintiff an account of the defendant, Mr Gregory Pickering's profits for the years ended 1990, 1991, 1992 and 1993.

The period over which I believe the plaintiff should be entitled to an account of profits recognises that if the plaintiff had commenced its proceedings in or about 1989 the matter would have been completed within about four years.

In that respect I am making similar but not the same assumptions made by Mr Holland in his alternative calculation.

I shall identify how I would calculate the account of profits over that period of time but it would be appropriate at this stage to make one further matter clear. Mr Holland assumed that the plaintiff should have compound interest over that period of time to the date of trial. That is not an assumption I would make. In my opinion it would be appropriate to allow the plaintiff to have an account of profits for the years which I have mentioned together with compound interest on those profits over those years. Thereafter because the plaintiff did not prosecute its claim in a timely fashion it would be appropriate to award simple interest on the calculation arrived from 1994 to trial.

An account of profits would carry interest: Warman International Ltd v Dwyer (supra) at 570. In some instances equity might allow compound interest in other instances simple interest: The Commonwealth v SCI Operations Pty Ltd [1998] HCA 20; (1998) 192 CLR 285 at 316. In this case compound interest should be allowed over the period for which the account is taken and simple interest thereafter. I think to allow interest in that way would do justice between the parties. Interest is awarded in equity for compensatory purposes: Re Dawson (dec'd) at 407. The plaintiff should not be compensated in interest during the period it sat on its rights.

Even if equity would refuse an award of interest the plaintiff would be entitled to statutory interest. Section 30C of the Supreme Court Act provides for an award of interest to be included in the judgment "unless good cause is shown to the contrary ..." upon the application of a party in favour of whom a judgment for the payment of damages, compensation or any other pecuniary amount has been or is to be pronounced.

An order for payment of a sum of money on an account of profits would be a pecuniary amount and the plaintiff would be thereby entitled to interest unless good cause to the contrary was shown. Delay may disqualify a party from receiving interest for the whole period where the party has been guilty of inexcusable delay: Duke Group Limited (In Liquidation) v Pilmer & Ors [1999] SASC 97; (1999) 73 SASR 64 at 178.

I shall proceed on the some basis as did Mr Holland. I shall calculate the total gross sales for those years and deduct the total expenses. I shall arrive at a net profit to which I shall add a notional interest income for each of those years.

I will thereby arrive at a net income from which I will deduct the income tax expense for each of those particular years. That will give a net income for those four years to which I shall add simple interest to the date of trial. I shall then add to that calculation the income tax expense which would be borne by Dadeeton Pty Ltd on receipt of those moneys. In other words I shall gross up those figures by 36 per cent.

I set out my calculations to arrive at the net income after taxation.

2. Further assumes that the defendant earned compound interest on the net profit in 1991, 1992 and 1993.

3. Assumes that income tax would be payable on notional interest income.

Before I add back the income tax that would be payable by the plaintiffs on the receipt of the money I have to consider the question of simple interest on the amount of $603,461 which would have been awarded in 1993 if the plaintiff had pursued its remedies in a timely way. The simple interest earned between 1993 and trial would also attract income tax.

Interests rate varied between 1994 and trial in 1999. Mr Holland's schedule of interest rates show that interest rates on commercial bills varied between 4.89 per cent and 7.5 per cent.

It would be appropriate, in my opinion, to allow simple interest at the rate of 6.5 per cent on the net income after tax for a period of five years. Interest calculates at $196,124.

In my opinion the simple interest, which I have awarded in lieu of the compound interest, which was sought, will also attract income tax in the plaintiff's hands. Therefore the income tax payable has to be added to the total sum of $799,585 at the rate of 36 per cent which gives rise to a further figure of $287,850.

The total of the account therefore is $1,087,433.

But that calculation is made with complete mathematical exactitude and does not take into account one important factor. Some allowance has to be made for the skill, expertise and other effort which the defendant has exerted in preserving the trust property and exploiting the Authority. This is an appropriate case, in my opinion, to make some allowance for skill, expertise and other expenses; Warman International Ltd v Dwyer (supra) at 562. Such an allowance cannot be made with any exactitude. The sum to be allowed for that skill, expertise and other effort could only be allowed over the same period for which compensation is to be awarded. The defendant's efforts in the other years must be ignored. I think an allowance of $150,000 would be appropriate to recognise those matters.

Of course like the orders and declarations made in paragraphs 3-6 hereof no order for payment of compensation should be made unless the plaintiff, Smoothpool Nominees Pty Ltd, makes restitution of the amount paid by Mr Gregory Pickering in October 1982.

Upon that basis, in my opinion, Dadeeton Pty Ltd is entitled to a sum of $937,433 from the defendant Mr Gregory Pickering.

"That upon payment by the plaintiff, Smoothpool Nominees Pty Ltd, to the defendant of the sum referred to in paragraph 3 hereof, the defendant, Mr Gregory Pickering, pay to the plaintiff, Dadeeton Pty Ltd, the sum of $937,433, being a sum inclusive of interest."

185. I turn to the claims against the third and fourth defendants.

186. The plaintiff also seeks orders against the third and fourth defendants. It rightly points out that the third defendant has received all of the benefits of the exploitation of the Authority since 1982 and that the fourth defendant has received distributions from the third defendant since 30 June 1993.

187. In my reasons I concluded that both the third and fourth defendants were the agents of Mr Gregory Pickering and both had been formed for the specific purpose of receiving the proceeds of the exploitation of the Authority [1556]. I also found that both the third and fourth defendants had been aware from the date in which Mr Pickering had become a director of each of those entities of his breaches of trust. It follows that third and fourth defendants acquired their assets during the relevant period between 1990 and 1993 in circumstances where they were aware of Mr Gregory Pickering's breach of trust and aware that he had acquired the Authority for less than full value.

188. In those circumstances the third and fourth defendants are liable to be declared constructive trustees in respect of those assets which represent distributions to the third and fourth defendants over that period of time.

189. The court must decide before imposing a constructive trust upon a party whether there is an equitable remedy which would be sufficient to do justice between the parties but which falls short of the imposition of a trust; Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101 at 113.

190. In this case the plaintiff's rights against the third and fourth defendants are no greater than the rights it enjoys against Mr Gregory Pickering. Indeed in respect of the fourth defendant its claim for compensation against that defendant is significantly less than that which it has against the first and third defendants. That is because during the relevant period Silver Glow Pty Ltd only received one distribution from the trust, of which the third defendant is trustee.

191. In this case, in my opinion, it would be appropriate to simply order the third and fourth defendants to pay to the plaintiff compensation. It is not necessary, in my opinion, to impose a constructive trust upon either defendant. The imposition of a trust upon the assets of the third and fourth defendants would be unduly burdensome, especially so in circumstances where the third and fourth defendants are in a position to satisfy the claim for compensation.

192. The third defendant received all of the gross sales of the abalone in each of the years 1990 to 1993. It had very little other income except some interest income. It incurred all of the expenses.

193. In my opinion it is in exactly the same position as the first defendant and liable to the plaintiff, Dadeeton Pty Ltd, for the same amount.

194. I would make an order subject to the same condition as before:

"That the third defendant pay to the plaintiff, Dadeeton Pty Ltd, the sum of $937,433."

195. Of course the payment by either defendant will discharge the other defendant to the extent of the payment.

196. Silver Glow Pty Ltd is in a different position. It had received, by 30 June 1993, the sum of $200,000 in one distribution on 30 June 1993 from the Pickering Family Settlement. As the Pickering Family Settlement's sole income was from the proceeds of exploitation of the Authority that sum of $200,000 is also the product of the exploitation of the Authority. It would have to pay simple interest on that amount for five years at the rate of 6.5 per cent, $65,000.

197. In my opinion it would be appropriate to make an order again subject to that condition:

"That Silver Glow Pty Ltd pay to the plaintiff, Dadeeton Pty Ltd, the sum of $265,000."

198. Again, of course, the payment by Silver Glow Pty Ltd of that sum would discharge the first and third defendants to the extent of that payment.

1. I extend the time within which the plaintiffs, Smoothpool Nominees Pty Ltd and Dadeeton Pty Ltd have to commence proceedings against the third and fourth defendants until 13 May 1999.

2. There will be a declaration that on 21 October 1980 the defendant, Gregory James Pickering, became the trustee of Abalone Authority No. 17 issued by the South Australian Department of Fisheries which he held on trust for Smoothpool Nominees Pty Ltd.

3. Upon payment of the sum of $514,544 by Smoothpool Nominees Pty Ltd to the defendant, Mr Gregory Pickering, the Deed of Settlement of 25 October 1982 is set aside.

4. Upon compliance by the plaintiff, Smoothpool Nominees Pty Ltd, with the payment to the defendant in paragraph 3 hereof it is declared:

4.1 Since a date sometime after 25 October 1982 and before 30 June 1983 Gregory James Pickering has held Abalone Authority W17 issued by the South Australian Department of Fisheries on trust for Dadeeton Pty Ltd.

4.2 The transfer of the beneficial interest in December 1992 of the Licence and Authority by the defendant Gregory Pickering to Greg Pickering Investments Pty Ltd is void and of no effect.

5. Upon compliance by the plaintiff, Smoothpool Nominees Pty Ltd, with the payment to the defendant in paragraph 3 hereof it is ordered: Gregory James Pickering at his expense in all things:- 5.1 Execute the following documents to effect the registration of the transfer of the legal interest in Abalone Authority W17 to Dadeeton Pty Ltd:- 5.1.1 Application to Transfer Abalone Fishery Licence; 5.1.2 Statutory Declaration; 5.1.3 Application for Revocation of Registration as Master; 5.1.4 Other documents required by the Director of Fisheries, and; 5.2 Do all such things and provide such information as is necessary to Dadeeton Pty Ltd to effect the registration of the transfer of the legal interest free of encumbrances in Abalone Authority W17 to Dadeeton Pty Ltd, pursuant to Regulation 9 of the Regulations subject to the consent of the Director of Fisheries of the Department of Primary Industries and Resources in the State of South Australia. 5.3 In the event Gregory James Pickering refuses or neglects to carry out the steps referred to in paragraphs 5.1 and 5.2 herein within fourteen (14) days of any request by Dadeeton Pty Ltd, Dadeeton Pty Ltd be at liberty to deliver such documents to the Registrar of this Court and the Registrar be appointed to execute the documents for and on behalf of the defendant Gregory James Pickering pursuant to Section 13 of the Enforcement of Judgments Act 1991 (SA). 6. Upon compliance by the plaintiff, Smoothpool Nominees Pty Ltd, with the payment to the defendant in paragraph 3 hereof it is ordered: 6.1 That the defendant, Mr Gregory Pickering, pay to Dadeeton Pty Ltd the sum of $937,433 inclusive of interest. 6.2 That the defendant, Greg Pickering Investments Pty Ltd, pay to the plaintiff, Dadeeton Pty Ltd, the sum of $937,433 inclusive of interest. 6.3 That the defendant, Silver Glow Pty Ltd, pay to the plaintiff, Dadeeton Pty Ltd, the sum of $265,000 inclusive of interest.