Elvin v Vuleta (No 2) [2026] ACTSC 244 | Case summary

Elvin v Vuleta (No 2) [2026] ACTSC 244 | Case summary | Zoe

Court

Supreme Court of the ACT

Decision date

2026-07-20

Before

McWilliam J

Catchwords

BREACH OF STATUTORY DUTIES – Civil Law (Wrongs) Act 2002 (ACT) – Corporations Act 2001 (CTH) – Australian Consumer Law – professional standards regulating conduct of legal practitioners and administrators – where fraud alleged but lack of specificity in serious allegation – whether claim for breach of directors’ duties maintainable by an individual director and shareholder against administrators – where private rights not created and breaches otherwise not established – claim dismissedCONSUMER LAW – MISLEADING AND DECEPTIVE CONDUCT – whether advice given by administrators and solicitor was misleading or deceptive – whether representations claimed to have been misleading were made – they were not – claim dismissedCONTRACTS – PRIVITY OF CONTRACT – whether director sought advice in personal capacity – where advice provided to company not director personally – no contract establishedEQUITY – UNCONSCIONABLE CONDUCT – where plaintiff not in a position of disadvantage – claim dismissedLIMITATION OF ACTIONS – CONTRACT – PROFESSIONAL NEGLIGENCE – CONSUMER LAW – CONSPIRACY – whether proceedings commenced outside statutory time periods – whether claims statute barred.PROFESSIONAL NEGLIGENCE – CONTRACT – TORT – advice given by solicitor – advice given by administrator – whether individual solicitor or law firm retained – whether client was individual or company – whether advice given breached duty of care of reasonably skilled solicitor or reasonably skilled company administrator – where company entered into voluntary administration – whether company insolvent – whether conduct of administration breached duty of care – where no duty owed to directors or any single creditor – where no act or omission of either solicitor or administrators caused plaintiff loss – whether claims also statute barred – claims dismissedTORT – CONSPIRACY – UNLAWFUL MEANS – whether solicitor and administrator conspired to profit from the plaintiff putting a likely insolvent company into voluntary administration – no conspiracy established – claim dismissed

Source

Original judgment source is linked above.

Catchwords

BREACH OF STATUTORY DUTIES – Civil Law (Wrongs) Act 2002 (ACT) – Corporations Act 2001 (CTH) – Australian Consumer Law – professional standards regulating conduct of legal practitioners and administrators – where fraud alleged but lack of specificity in serious allegation – whether claim for breach of directors’ duties maintainable by an individual director and shareholder against administrators – where private rights not created and breaches otherwise not established – claim dismissedCONSUMER LAW – MISLEADING AND DECEPTIVE CONDUCT – whether advice given by administrators and solicitor was misleading or deceptive – whether representations claimed to have been misleading were made – they were not – claim dismissedCONTRACTS – PRIVITY OF CONTRACT – whether director sought advice in personal capacity – where advice provided to company not director personally – no contract establishedEQUITY – UNCONSCIONABLE CONDUCT – where plaintiff not in a position of disadvantage – claim dismissedLIMITATION OF ACTIONS – CONTRACT – PROFESSIONAL NEGLIGENCE – CONSUMER LAW – CONSPIRACY – whether proceedings commenced outside statutory time periods – whether claims statute barred.PROFESSIONAL NEGLIGENCE – CONTRACT – TORT – advice given by solicitor – advice given by administrator – whether individual solicitor or law firm retained – whether client was individual or company – whether advice given breached duty of care of reasonably skilled solicitor or reasonably skilled company administrator – where company entered into voluntary administration – whether company insolvent – whether conduct of administration breached duty of care – where no duty owed to directors or any single creditor – where no act or omission of either solicitor or administrators caused plaintiff loss – whether claims also statute barred – claims dismissedTORT – CONSPIRACY – UNLAWFUL MEANS – whether solicitor and administrator conspired to profit from the plaintiff putting a likely insolvent company into voluntary administration – no conspiracy established – claim dismissed

Judgment

Source: the ACT Courts (www.courts.act.gov.au). Converted to plain text by ZoeLaw. Not the official version.

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title: Elvin v Vuleta (No 2) Citation: [2026] ACTSC 244 Hearing Dates: 15 April, 2-10 May 2024, 7 June 2024 Decision Date: 20 July 2026 Before: McWilliam J Decision: The proceeding is dismissed with costs. Catchwords: BREACH OF STATUTORY DUTIES – Civil Law (Wrongs) Act 2002 (ACT) – Corporations Act 2001 (CTH) – Australian Consumer Law – professional standards regulating conduct of legal practitioners and administrators – where fraud alleged but lack of specificity in serious allegation – whether claim for breach of directors’ duties maintainable by an individual director and shareholder against administrators – where private rights not created and breaches otherwise not established – claim dismissed CONSUMER LAW – MISLEADING AND DECEPTIVE CONDUCT – whether advice given by administrators and solicitor was misleading or deceptive – whether representations claimed to have been misleading were made – they were not – claim dismissed CONTRACTS – PRIVITY OF CONTRACT – whether director sought advice in personal capacity – where advice provided to company not director personally – no contract established EQUITY – UNCONSCIONABLE CONDUCT – where plaintiff not in a position of disadvantage – claim dismissed LIMITATION OF ACTIONS – CONTRACT – PROFESSIONAL NEGLIGENCE – CONSUMER LAW – CONSPIRACY – whether proceedings commenced outside statutory time periods – whether claims statute barred. PROFESSIONAL NEGLIGENCE – CONTRACT – TORT – advice given by solicitor – advice given by administrator – whether individual solicitor or law firm retained – whether client was individual or company – whether advice given breached duty of care of reasonably skilled solicitor or reasonably skilled company administrator – where company entered into voluntary administration – whether company insolvent – whether conduct of administration breached duty of care – where no duty owed to directors or any single creditor – where no act or omission of either solicitor or administrators caused plaintiff loss – whether claims also statute barred – claims dismissed TORT – CONSPIRACY – UNLAWFUL MEANS – whether solicitor and administrator conspired to profit from the plaintiff putting a likely insolvent company into voluntary administration – no conspiracy established – claim dismissed Legislation Cited: Corporations Act 2001 (Cth), ss 95A, 180, 181, 182, 183, 184, 438A Civil Law (Wrongs) Act 2002 (ACT), ss 40, 42, 43, 102 Competition and Consumer Act 2010 (Cth), Sch 2 – Australian Consumer Law s 18 Fair Work Act 2009 (Cth) Legal Profession Act 2006 (ACT) Legal Profession (Solicitors) Conduct Rules 2015 (ACT) Limitation Act 1985 (ACT), s 11, 13, 16B

Parties

Applicant/Plaintiff:

Elvin

Respondent/Defendant:

Vuleta (No 2)

Legislation Cited (10)

Civil Law (Wrongs) Act 2002(ACT)

Corporations Act 2001(Cth)

Competition and Consumer Act 2010(Cth)

Fair Work Act 2009(Cth)

Legal Profession Act 2006(ACT)

Legal Profession (Solicitors) Conduct Rules 2015(ACT)

Limitation Act 1985(ACT)

(LP Act), Legal Profession (Solicitors) Conduct Rules 2015(ACT)

(Solicitor Conduct Rules), the Civil Law (Wrongs) Act 2002(ACT)

Corporations Act 2001(ACT)

Cases Cited (26)

[2020] VSCA 196

At the beginning of December 2015, the plaintiff in this proceeding was facing a perfect storm of stressful events. He was the sole director, secretary, shareholder and owner of Foot and Thai Massage Pty Ltd (the Company), which ran a massage business in the Territory from around 1 November 2010. The business was: (a) the subject of two unfair dismissal claims being pursued in the Fair Work Commission (FWC), with a conciliation conference scheduled in respect of one of those claims for 17 December 2015 (FWC proceedings); and (b) the subject of an outstanding tax debt to the ATO and historically behind in paying quarterly tax obligations pursuant to BAS that had been lodged.
There were also claims of underpayment of wages for employees of the business surfacing, giving rise to a potential investigation by the Fair Work Ombudsman (FWO), and the plaintiff had separate personal litigation on foot, in that he was also separating from his partner and involved in proceedings in the Family Court of Australia.
On 2 December 2015, the plaintiff consulted the first defendant, who was a director of Chamberlains Law Firm (the Solicitor). The content of the advice given, who was retained to provide such advice and the identity of the client are all matters of dispute.
The plaintiff then met with Mr Senatore, the second defendant in this proceeding. That meeting occurred at the recommendation of the Solicitor. Again, the content of the discussion and the advice given is the subject of dispute. The plaintiff resolved to put the Company into voluntary administration on 15 December 2015 (VA). On that day: (a) the plaintiff appointed the second and third defendants as the administrators of the Company (Administrators); and (b) a complaint was made to the FWO by one of the Massage Therapists about contraventions of the Fair Work Act.
Following their appointment, the Administrators proceeded to negotiate a deed of company arrangement (DOCA), which was unanimously approved by creditors on 18 March 2016 and formally executed on 11 April 2016. The Administrators then became the Deed Administrators, with responsibilities limited to administering the Deed Fund and ensuring compliance with the DOCA. Under the DOCA, the business of the Company was sold to a third party, Mr Ngo, for $150,000. The plaintiff had claimed a “director’s loan” estimated to be $200,000. Under the DOCA, the plaintiff agreed not to prove the debt. The Administrators ceased to have control over the Company’s affairs and the Deed period ended on 17 October 2017.
From that date, control of the Company shifted to the new sole director, Mr Ngo, who was not a party to this proceeding. Mr Ngo endeavoured to continue the massage business, but the Company then faced an investigation by the FWO and further court proceedings commenced by the FWO in the Federal Court of Australia in June 2018 (FWO proceeding). Ultimately on 13 August 2019, Mr Ngo again put the Company into liquidation.
Judgment on liability was delivered in the FWO proceeding on 14 October 2021: Fair Work Ombudsman v Foot & Thai Massage Pty Ltd (in liquidation) (No 4) [2021] FCA 1242. Following a further hearing on penalties, the Federal Court made orders in 2024, which included (among others), an order requiring the plaintiff in this proceeding to personally pay penalties, as an accessory to contravening conduct under the Fair Work Act 2009 (Cth), in the aggregate sum of $150,450: Fair Work Ombudsman v Foot & Thai Massage Pty Ltd (in liquidation) (No 8) [2024] FCA 483 at [240].

The plaintiff commenced this proceeding on 16 June 2022. He made it clear to the court that the FWO proceeding was the catalyst for this proceeding.
The plaintiff has come to regret losing control of his company when he resolved to put it into VA. He now believes the proper course of action would have been to sell the company for a value that he says would have been over $1.5 million, which would have enabled the repayment of debts, including recovery of a personal director’s loan that he says he made to the company of $200,000. Alternatively, the company should have been wound up and deregistered.
The plaintiff believed that the steps he took in entering into the VA process, proceeding with the DOCA and selling the Company, would mean that he had no future liability for any debts or claims that were made against the Company. He contended that the main reason for the DOCA was to extinguish those claims for underpayments. In the events that transpired in the FWO proceeding, that was not the case and he feels he was either misled about that or that the Administrators were negligent in not taking any steps to establish the position of the FWO and its potential status as a creditor or claimant and not procuring deeds of release from the employees in respect of any entitlements they were owed under the VA. This was said to have left open the potential for future claims by the FWO against the Company.
He feels the advice that he received from the Solicitor and the Administrators to the effect that the best course of action was to put the Company into VA was self-interested and there was an unspoken agreement that they would refer work to each other at the expense of the plaintiff as the sole director and shareholder of the Company.
In this proceeding, the plaintiff’s claims against the Solicitor (as distinct from the law firm), were as follows: (a) A professional negligence claim based in tort and in contract in respect of advice given by the Solicitor during a one-hour meeting on 2 December 2015. (b) A claim in equity for unconscionable conduct, the conduct being an existing relationship or foreseeable future relationship with the Administrators that may affect the plaintiff’s and the Company’s interests concerning the VA and the DOCA. (c) A claim for breach of statutory duties, relying on the Legal Profession Act 2006 (ACT) (LP Act), Legal Profession (Solicitors) Conduct Rules 2015 (ACT) (Solicitor Conduct Rules), the Civil Law (Wrongs) Act 2002 (ACT) (Wrongs Act) and the Competition and Consumer Act 2010 (Cth) (Consumer Act). (d) A claim in the tort of conspiracy by unlawful means between the Solicitor and Mr Senatore.
The plaintiff’s claims against the Administrators were as follows: (a) A professional negligence claim based in tort and in contract in respect of advice given by Mr Senatore prior to the VA and in respect of the Administrators in their conduct of the Company’s administration during the VA. (b) A claim in misleading and deceptive conduct against Mr Senatore under the Australian Consumer Law in respect of representations asserted to have been made before and during the VA, namely: (i) the plaintiff needed to act urgently to place the Company into administration; (ii) that he would make sure the Company avoided liability for two unfair dismissal claims; (iii) that the plaintiff would have no personal liability to any creditors of the Company and the plaintiff’s ex-partner; and (iv) that the DOCA would extinguish all claims against the Company. (c) A claim for breach of statutory duties. (d) A claim in equity for unconscionable conduct, including fraud against each of the Administrators. (e) A claim in the tort of conspiracy by unlawful means between the Solicitor and Mr Senatore.
Although the third defendant, Mr Cussen, was a joint administrator, he was not involved in any meetings with the plaintiff prior to the VA and Mr Senatore was the lead on the administration itself.

The plaintiff sought relief which he said fell into two types: (a) The first was compensation relating to the penalties personally awarded against the plaintiff, which he argued was not payable to him but was instead payable to the FWO. (b) The second was compensation arising for personal loss said to have been suffered by the plaintiff. The plaintiff’s position was that if he had simply sold the business to another buyer and deregistered the Company, he would not have been personally liable for the underpayments claimed against the Company in the FWO proceeding (and costs of the FWO proceeding). Instead, he was advised to enter into VA which led to the DOCA, and which gave him no personal protection against any subsequent proceeding brought by the FWO.
The plaintiff’s claim also dealt with other losses, such as loss of income from 15 December 2015, loss of repayment of the director’s bank loan of approximately $200,000, loss of opportunity to profit from the sale of the business (estimated at $1,647,000), the loss of professional fees paid to the Administrators and legal expenses associated with the FWC proceedings.
There was also a claim for exemplary and/or aggravated damages in the sum of $150,000. The basis for seeking such damages was submitted to be the intentional and calculated way in which the defendants deliberately and intentionally misled or deceived the plaintiff, unlawfully conspired to promote their own interests, their financial gain at the plaintiff’s expense, the gravity of their conduct, the contemptuous manner in which the plaintiff felt he was treated by the defendants, the self-interest and motivation of the defendants’ conduct with the knowledge that it was likely to cause harm to the plaintiff, and the emotional and psychological distress caused to the plaintiff by that conduct. Summary of findings
For various reasons that will be explained, none of the plaintiff’s claims are maintainable at law.
The plaintiff’s belief that he could have somehow avoided a penalty proceeding making him personally responsible for historical underpayments to former employees and recovered the money he invested in the Company by taking a different course to the one that was taken was not grounded in the reality of the circumstances.
Neither external administration nor winding up and deregistering a company who has underpaid employees will prevent the FWO from seeking the payment of personal penalties by those found to be accessories to a corporate employer’s contraventions under the Fair Work Act. This was explained by Katzmann J in FWO v Foot & Thai Massage (No 4) at [918]-[925] (in respect of the company) and [950]-[952] (in respect of the plaintiff personally).
VA had the effect of extinguishing all claims for employee entitlements against the Company that existed as of 15 December 2015. It did not extinguish or protect the plaintiff from subsequent claims made by the FWO against the plaintiff personally.
In addition, save for the conspiracy claim, the plaintiff’s allegations as to entering into the VA or the conduct of the VA were in fact claims that could only have been brought by the Company. The key difficulty for the plaintiff was simply that the Administrators did not owe duties of care to him, whether as the sole director, as shareholder or as an individual creditor (assuming without deciding that to be the case because the director’s loan debt was not adjudicated). While the Administrators may have owed duties to the Company, the Company was not a party to this matter.
For example, a claim that the Administrators were negligent in selling the business of the Company at an undervalue was properly understood as a claim about a loss to the Company, not to the plaintiff. In any event, accepting that a sale for a higher price would have permitted a greater return to creditors, the plaintiff’s belief in what the business was worth did not match the market, and the entire argument overlooked the position he adopted in December 2015 that he did not want to walk away from the business.
By way of another example, the plaintiff argued that when the employees were paid some of their entitlements under the DOCA, the Administrators should have obtained deeds of release from the employees or former employees so as to extinguish their claims. The failure to do so permitted the employees to later claim for underpayments either in the FWC proceedings or through the FWO proceeding against the Company, which had not been deregistered (a separate omission that the plaintiff alleged was negligent).
Any claim for losses arising out of that conduct was properly to be brought by the Company (again, putting to one side whether the claim had any underlying merit). The plaintiff was not even a party to the FWC proceedings and had no personal liability. The plaintiff had no standing to bring any cause of action to recover those perceived losses, because he had neither sought nor been granted leave to bring a derivative proceeding within the Court’s general equitable jurisdiction: see Chahwan v Euphoric Pty Ltd [2008] NSWCA 52 at [124]-[125];Re DH International Pty Ltd (in liq); Challis v Hoffmann [2017] NSWSC 870; 121 ACSR 585 at [28]-[29].
Otherwise, insofar as the plaintiff’s claims concerned his personal losses, no causal connection was established. The primary harm or loss suffered by the plaintiff personally was in the form of penalties sought by FWO as the employment regulator, and legal costs associated with the FWO proceedings. That loss arose from the plaintiff’s conduct of the business prior to any advice being requested from either the Solicitor or the Administrators. Whatever advice was given about the effect of a DOCA on a potential claim for underpayments, the advice was not the cause of the plaintiff’s liability in the penalties awarded by the Federal Court.
Likewise, the plaintiff’s alleged loss in the form of an inability to recover a director’s loan was not attributable to any conduct of the defendants. Assuming in the plaintiff’s favour for the purpose of the argument that there was such a loss proved, the fact that there was no recovery of the loan was a product of the Company being insolvent and the plaintiff not being a secured or priority creditor. The lack of solvency arose before the plaintiff sought the involvement of the defendants.
In respect of the claims separately made against the first defendant, these were not maintainable because I have found that any (limited) retainer for the provision of legal services was between the Company and Chamberlains Law Firm, not the individual Solicitor and the plaintiff. Again, the plaintiff could not bring an action on behalf of the Company.
A further hurdle for the plaintiff was that any claims he was entitled to bring in his own right faced limitation defences raised by the defendants which had expired before the plaintiff commenced this proceeding. There was no fraud in the conduct of any of the defendants which may have affected the operation of any statutory limitation periods. The statutory bars to the plaintiff’s claims were also fatal to the plaintiff’s success.
Those are the key reasons why each of the plaintiff’s claims against the defendants must fail.

The plaintiff claimed that the Solicitor and Mr Senatore formed a common intention to use the VA of the Company to make money for themselves at the expense of the plaintiff. How the plaintiff put his case on the conspiracy claim was succinctly captured in a paragraph from one of his affidavits which was treated as a submission: I infer that [the Solicitor] and Mr Senatore shared a common state of mind which was to use VA to generate professional fees for themselves. It follows that they intended to use the VA to cause me financial harm. I was the sole director and shareholder and was the only person that stood to receive any financial benefit from the company. The fact is that the only people who benefitted from the VA of [the Company] were [the defendants] through their businesses Chamberlains and Deloitte.
I have rejected that claim because there was just no evidence that the relevant defendants had any intention other than to advise the Company about the options available to it in the difficult financial circumstances in which it was then facing, which included likely insolvency. The mere fact that the defendants knew there may be a reasonable prospect that they would be involved in providing professional services to the Company in any VA and further, that either or both of them (or their employers) might be remunerated for those services, does not establish any conspiracy because it does not prove that either the Solicitor or the Administrators acted unlawfully, nor that they had an intention to injure the Company, let alone the plaintiff.
The plaintiff cannot ignore that the Company had a significant tax debt. He explained how that arose, in that he chose to spend half a million dollars renovating the business premises, rather than paying the tax. He believed the business would make that money back and be able to pay the tax in the longer term but the profit that the business was making was derived in part from an underpayment of employee wages and failure to pay superannuation. There was unlawful conduct that had occurred, but it was not at the hands of the defendants. Contrary to the plaintiff’s view of the circumstances, the Company benefitted from the VA because it was in the Company’s interests to be conducted lawfully and the priority creditors (the ATO and the employees) benefitted by an arrangement that recovered some of the money owed to them.

The FWC proceedings were the catalyst for the plaintiff attending the Solicitor’s office. There were two employees of the Company who had been dismissed, or alternatively, constructively dismissed. They commenced proceedings in the FWC for unfair dismissal, and they also made claims that they had been underpaid. The Company was the sole defendant to those proceedings. Capital Lawyers were engaged to advise and appear for the Company in the FWC proceedings. The plaintiff’s recollection in this proceeding was that he wanted a second opinion on the advice given by Capital Lawyers. However, the documentary evidence suggested differently. In the course of providing advice to its client (the Company), Capital Lawyers recommended on 30 November 2015 that the Company seek advice about insolvency. According to the file notes in evidence, the recommendation was for the plaintiff to seek advice from the Solicitor at Chamberlains.
The plaintiff appears to have followed that advice, because he saw the Solicitor on 2 December 2015. At the end of the meeting, the plaintiff paid $550 inclusive of GST to the receptionist at Chamberlains. This was the Solicitor’s hourly rate.
What was said at that meeting will be discussed in further detail when dealing with the negligence and misleading and deceptive conduct claims. For the purposes of the conspiracy claim, part of the Solicitor’s advice was to recommend that the plaintiff call Mr Senatore regarding potential insolvency issues.
The Solicitor then rang Mr Senatore. Mr Senatore’s evidence, which I accept, was to the following effect: (a) At the time he spoke with the plaintiff, he had an existing professional relationship with Chamberlains through other directors and a former principal at Chamberlains. (b) He may have had up to 10 current and previous matters with Chamberlains. (c) He knew the Solicitor employed at Chamberlains professionally, having worked with him on a few matters in the year or so leading up to the events in question here. However, his professional relationship with other directors in the firm was more established. (d) The effect of the Solicitor’s phone call was that he had been contacted by a man who owned a massage business in Canberra that had run into some financial issues involving the ATO, that might have also had some employee problems, and that Mr Senatore might have been able to assist.
Following that phone call, either the plaintiff contacted Mr Senatore or vice versa. It does not matter. Because the business was apparently undergoing renovations, they met at a carpark outside the business in Phillip. There was a dispute about the date, but it was some time prior to 8 December 2015. I accept that the purpose of that meeting was for the plaintiff to seek advice about the options available to the Company. One of those options was VA. Mr Senatore explained the benefits of a VA, which included potentially saving the business through maintaining credibility with the creditors by being proactive.
There was a factual dispute about whether Mr Senatore said that he trusted the Solicitor. Memories fade with time and I have assumed in the plaintiff’s favour that whatever words were used by Mr Senatore, they conveyed to the plaintiff Mr Senatore’s trust in the Solicitor. No financial documents were provided at this time.
The plaintiff believed that he had a second meeting with the Solicitor of an hour’s duration at a coffee shop on or about 6 December 2015 whereby he gave advice convincing the plaintiff to place the Company into VA. On balance, I do not accept that meeting occurred. First, that was not the Solicitor’s recollection. Second, the Solicitor’s recollection was supported by the fact that none of the usual indicia of a meeting for a professional purpose (giving advice) existed, namely: (a) There was no file note of the meeting and the Solicitor’s recollection was that it did not occur. (b) There was no fee charged for the alleged meeting, in circumstances where the previous meeting had resulted in a fee paid immediately.
There was also no reason for a meeting with a lawyer in circumstances where the plaintiff had by that stage contacted the person with commercial expertise in the area of voluntary administrations. It is implausible that the Solicitor would have proceeded to advise on the commercial course of action for the Company when he was the person who had directed the plaintiff to see Mr Senatore. I consider this to be an example of the plaintiff’s memory being unreliable due to the passage of time.
The plaintiff did, however, meet with Mr Senatore for a second time following their initial meeting. Again, recollections differed, but it appears likely that the meeting occurred on 8 December 2015 and that it occurred at Chamberlains, not at the offices of Deloitte. That date is consistent with a Declaration of Independence, Relevant Relationships and Indemnities signed by the Administrators on 17 December 2015 (Administrators’ Declaration) which referred to a meeting occurring on that date. I consider that contemporaneous document to be accurate.
As to the location, the Solicitor’s file note recorded the meeting as occurring with the Solicitor at Chamberlain’s offices. There were two other people present who were prospective purchasers and wanted to buy into the business. The handwritten date was “9/2/15”, but that was obviously incorrect.
Notwithstanding that Mr Senatore did not remember the two other people present (referred to as Kiki and Goran), from the contents of the file note, it is more likely than not that this was the meeting that Mr Senatore recalled as having occurred on 8 December 2015. I make that finding because: (a) The file note recorded that the discussion covered the VA, the sale of the business, the ATO debt and the FWC proceedings. The outcome of the meeting was “Prepare VA documents (Deloitte)” which is what leads me to conclude that meeting occurred prior to 15 December 2015. (b) Following the VA, Goran Josifovski made an offer to purchase the business. However, Mr Senatore had a subsequent discussion with Mr Josifovski on 22 December 2015, where he expressed concerns regarding the extent of the liabilities to be assumed by him and did not proceed with the offer. The timing of that offer and its withdrawal fits with the initial meeting occurring in December 2015 and not in 2016 (as the Solicitor believed).
Although Mr Senatore did not remember the presence of the potential purchasers, his evidence was otherwise broadly consistent with the general file note prepared by the Solicitor. Mr Senatore’s evidence was that the following issues were discussed: (a) The Company’s financial circumstances may not be positive. (b) The ATO had not taken any steps to enforce its debt against the Company, so there was no pressing need to wind up the Company. If the Company was insolvent but there was a chance the business could be saved, the better course was to put the Company into VA. (c) Once a Company goes into VA, claims against the Company “freeze” and although the court can make orders allowing proceedings to continue, a court would only do that in exceptional circumstances.
At the time of the meetings, Mr Senatore had not yet been provided with any formal financial statements of the Company. However, he recalled forming an initial view that the Company could be balance sheet insolvent (that is, the liabilities exceeded the assets), and that there was a good chance that the Company might also be insolvent on a cash flow basis because the Company was struggling to pay its tax debt.
Mr Senatore also said that he became aware of the FWC proceedings, and he knew that there was a conciliation of one of the matters scheduled to occur on 17 December 2015. Again, that evidence was consistent with the misdated file note.
On 15 December 2015, the plaintiff attended another meeting with Mr Senatore. The plaintiff signed a declaration of insolvency, placed the Company into VA and appointed the Administrators to conduct the administration. That is also consistent with Chamberlains having prepared the VA documents between 9 and 15 December 2015, as foreshadowed in the file note of the earlier meeting.

Just dealing with the alleged conspiracy aspect of these interactions, there really was nothing to establish an agreement between the defendants to do anything other than provide advice to the plaintiff about what options a company facing financial difficulties might take and which would be the better course for a director hoping to salvage the business.
The evidence relevant to any agreement and requisite intention was as follows: (a) Evidence from Mr Senatore and the Solicitor, each of whom were cross-examined. Each gave evidence of having an ordinary business relationship, of referring and engaging each other from time to time. Both expressly denied forming any agreement to act unlawfully for mutual profit for themselves or their respective employers. They denied acting in concert with each other with any intention to cause loss to the Company, its business or the plaintiff. Mr Senatore also denied conducting the VA or the DOCA as a sham. (b) The Administrators’ Declaration, which recorded the Solicitor as having referred the Company to Deloitte. In respect of that referral, the Administrators stated: …we have undertaken a number of appointments which have been referred to us by Chamberlains in the usual course of business. We are not paid any commissions, inducements or benefits by Chamberlains to undertake any appointments. There is no arrangement between us and Chamberlains that we will give any work arising out of the Administration to Chamberlains. There is no relationship with Chamberlains which in our view would restrict us from properly exercising our judgment and duties in relation to the appointment. (c) Following the VA, the Administrators did decide to engage Chamberlains lawyers to provide legal services in respect of the Company. The advice concerned which Award applied to the employees of the Company, and what steps were required to be taken in relation to the employees. (d) In late January 2016 or early February 2016, the Administrators and the Company also engaged Chamberlains, to resist proceedings brought by the plaintiff’s ex-partner to stay the VA, with the Solicitor undertaking the carriage of this matter.
I have also made the following assumptions: (a) Each of the Solicitor and Mr Senatore knew that they could be engaged in legal and administrative capacities in any VA, and that if that transpired, their respective employers would charge the Company for their services. (b) Each of the Solicitor and Mr Senatore, being experienced in their respective fields, may have had a common view about the way forward for a Company with solvency concerns. (c) Profit may be a direct pecuniary benefit or an indirect benefit, through increased professional fees for an employer.
As to the fees charged, the contemporaneous documentary evidence in the minutes of meetings of creditors show that: (a) On 1 February 2016, the creditors resolved to determine the Administrators’ remuneration and future remuneration at fixed rates; (b) On 26 February 2016, the creditors resolved to determine the Administrators' additional remuneration for the periods 1-14 February 2016 and 15-26 February 2016, both of which were seconded by the plaintiff himself; and (c) On 18 March 2016, the creditors resolved to determine the Administrators’ additional remuneration, future remuneration, and remuneration as the Deed Administrators at fixed rates, which were passed without objection from any creditors.
Taken together, these matters do not establish that there was any agreement between Mr Senatore and the Solicitor to put the Company into administration with a view to extracting profit with an intention to harm the plaintiff. Even if it were assumed in the plaintiff’s favour that there was a clear recommendation formed between both the Solicitor and Mr Senatore to enter into VA, such a recommendation does not constitute an unlawful agreement with an intention to harm. It simply recognises that a business with debts the magnitude of the Company’s debts – far exceeding its profit and any assets that might be sold – cannot continue to trade. Intervention by way of winding up the Company or a restructure through a VA and DOCA were the two most obvious options, and winding up the Company would have left it and the creditors in a worse position.
Inherent in the plaintiff’s conspiracy claim was the idea that the conduct of the Solicitor and the Administrator was unlawful, that being the giving of advice understood by the plaintiff to be that the Company should be put into VA. The plaintiff contended that what he was told with regard to the prudency of entering into VA was either negligent, misleading or unconscionable. Those matters are the subject of separate findings below. However, the common thread among all the claims was a belief that the plaintiff as director had some other option besides VA, such as selling the Company with the business as a going concern for a price far above what was paid under the DOCA.
As will be explained, the reality was that the Company was insolvent and there was no prospective buyer realistically able to pay more than $150,000 to take on the business at that time.

Dealing with the first of those matters, notwithstanding that the plaintiff signed a declaration of insolvency or likely insolvency, in this proceeding, he disputed whether the Company was insolvent at that time or likely to become insolvent.
I find that the Company was insolvent because the Company had a substantial debt to the ATO which it was unable to pay as and when it fell due, being the essence of the definition of insolvency under s 95A of the Corporations Act. From the proof of debts lodged and financial reports prepared during the administration, as at the date the Company entered VA: (a) The Company owed the ATO $522,866.01 (including a debt of $73,397 for the Superannuation Guarantee Charge); (b) There were unpaid employee entitlements of $938,935.52; and (c) There were also unredeemed gift vouchers of $712,936. These had been recorded as income but were in fact required to be recorded as unearned revenue, which was a liability.
The evidence of Mr Senatore established that on a proper accounting as at 15 December 2015 (including the BAS statements that had not been lodged), the true position of the Company was that it had negative equity of $911,594.01.
There was an expert valuation report providing some evidence of an asserted value of the Company of $1,647,957, but on closer scrutiny, it did not establish that the Company was solvent, nor was the valuation reliable. As the author of it properly acknowledged, the assumptions and parameters contained within it were provided by the plaintiff and the exercise requested was more in the form of a calculation assignment rather than a request for an independent valuation opinion. The financial information provided by the plaintiff was also incorrect. There was a dispute about whether an industry multiplier provided by the plaintiff was appropriate, but it was unnecessary to resolve that because the financial data that was being multiplied to produce a value of a company was factually wrong in that the liabilities were significantly understated.
In any event, whatever theoretical value an expert may have placed on the Company retrospectively, there was no buyer willing to pay anywhere near the amount the plaintiff says in this proceeding the Company was worth. That is demonstrated by the discussion that follows next.

There were a number of potential purchasers identified to the Administrators. The evidence established that, through the DOCA, the Administrators sought to sell the business as a going concern for the highest price. This was confirmed in the Report to Creditors: Prior to our appointment, the Director made approaches to a number of parties to purchase the Business. During the course of our appointment, we have liaised and met with three (3) different individual[s] who have expressed interest in acquiring the business. We note that all three (3) parties appear to have a personal connection with the Director. Accordingly, we seek to pass a resolution of creditors confirming the sale of the Business as a going concern.
The offers made may be summarised as follows: (a) $80,000 offer from the plaintiff’s sister, which offer was then withdrawn by 31 December 2015; (b) $70,000 offer from Goran Josifovski (one of the individuals who attended the meeting with the plaintiff, the Solicitor and Mr Senatore prior to the VA). (c) $100,000 offer from Peter Tzanetos; (d) $140,000 offer from Sarah Clenci, which offer was then also withdrawn on 23 February 2016; and (e) $150,000 offer from Viet Ngo and the plaintiff on terms proposed via the execution of a DOCA, which offer was accepted unanimously by the creditors by resolution on 18 March 2016.
It should be noted that Mr Ngo was not a truly arm’s length purchaser, in that some funding was to be provided by the plaintiff and the documentary records of the Administrators contained a statement by Mr Ngo that he was under the direction of the plaintiff.
Part of the proposal by the plaintiff and Mr Ngo was for the plaintiff to refrain from proving the $200,000 director’s loan. That may have been attributable to a clause in the lease in respect of the premises in Phillip where the business operated. The gist of the clause provided that if the tenant (being the Company) were to be placed under any official management or makes any arrangement, the guarantor (who was the plaintiff) was not to seek to deprive the owner (the lessor) in any way of any dividend or money the owner may receive as a creditor. Importantly though, the plaintiff’s choice not to prove his debt in the administration was not the subject of any recommendation or suggestion by the Administrators.
Viewing the offers that were on the table at various times, it can be seen that the market for the purchase of the business (and the consequent value of the Company) was realistically significantly less than the figures later posited by the plaintiff in this proceeding. The plaintiff’s view that these were the offers made in a fire-sale setting under VA as opposed to what offers may have been made before VA was not in any way substantiated by any evidence.
After exhausting the potential purchasers, the Company in VA was left with two options to put to creditors: either accept the DOCA and the Company would continue to operate as a going concern, or resolve to place the Company in liquidation, which would have resulted in immediate closure of the business, termination of the employees’ employment, sale of the Company’s assets and the business premises vacated.
It is perhaps a very human emotion for a person who loses control of their company to resent the people who advised them on the very thing that causes that loss of control, being VA. That resentment may develop further if they see money from the company being paid to those advisers for services rendered during the VA. However, that is not enough to constitute a conspiracy by unlawful means.
Consistent with the contemporaneous Declaration, Mr Senatore’s evidence was that he used different law firms in Canberra for advice. There was nothing to suggest he had any particular agreement with the Solicitor. Although Chamberlains subsequently gave advice about a distinct aspect of the VA, an agreement to act unlawfully cannot be inferred from that fact alone.
On the contrary, the reasonable and prudent Administrator of a Company that was facing two unfair dismissal proceedings involving allegations of underpayments needed to ensure that, at least during the VA, the employees were paid their proper entitlements. This meant that the Administrators needed to understand the correct award. The evidence established that identification of the appropriate award was not straightforward and the advice was provided by a different legal practitioner at Chamberlains, who Mr Senatore knew to be an experienced employment lawyer.
Similarly, there was nothing to indicate that the Solicitor’s initial referral of the plaintiff and the Company to Mr Senatore was part of any agreement, or a preparatory step, to a sham VA. The conclusion that I drew from the evidence was that the Solicitor referred the Company to Mr Senatore because he was experienced and would be able to assist with the commercial and financial decisions that the plaintiff as director of the Company had to make, not because he hoped to combine with Mr Senatore as part of any agreement with an intention to harm the plaintiff, but because Mr Senatore had the professional commercial expertise that the Company required at the time.
Given the seriousness of the allegations, the civil onus was a heavy one. Ultimately, I was not persuaded that there was anything untoward from the initial referral or from the Administrators subsequently seeking legal advice from Chamberlains. There was no hint in either the conversations that occurred prior to the VA or the subsequent conduct of the Administrators and the Solicitor that there was any agreement outside ordinary dealings in the course of business, where the work involved assisting a Company with legal and financial challenges.
Moreover, and fatal to the conspiracy claim, even if I had accepted that an agreement had formed, and even if I had found that the agreement was unlawful (in the sense of unconscionable or tortious conduct, or conduct giving rise to a statutory cause of action), the facts did not give rise to any available inference of any common intention, either express or concealed, on the part of Mr Senatore or the Solicitor to harm the plaintiff, his business or the Company financially. For those reasons, the conspiracy claims against the Solicitor and Mr Senatore must fail.

Here, the plaintiff alleged a retainer between himself (personally) and the Solicitor.
A duty of care is owed by a solicitor to their client. Generally speaking, solicitors do not owe a duty of care to persons who are not their clients: Hill v Van Erp [1997] HCA 9; 188 CLR 159 at [13]. The scope of the duty will be informed by the terms of the retainer: Hawkins v Clayton [1988] HCA 15; 164 CLR 539 at 544-5; Badenach v Calvert [2016] HCA 18; 257 CLR 440 at [16].
There are exceptions to this, and the process for identifying a relationship where a duty of care may arise was discussed in Caltex Refineries (Qld) Pty Ltd v Stavar [2009] NSWCA 258; 75 NSWLR 649 at [101]. However, as will be explained, the circumstances here were not novel. They involved nothing more than a director of a company seeking advice about that company’s concerns about solvency in circumstances where litigation by former employees had been commenced. The evidence did not establish any retainer between the plaintiff and the Solicitor in those circumstances.
It is true that what occurred was a 1-hour meeting between the plaintiff and the Solicitor and there was then a further meeting with the plaintiff, the Solicitor and Mr Senatore. However, the Solicitor gave advice in his capacity as an employed solicitor of Chamberlains Law Firm (Chamberlains). The plaintiff paid Chamberlains at the end of the initial meeting. There was no fee agreement. No ongoing work was requested. As occurred in CLGC Pty Ltd v Zhang [2021] NSWSC 946 at [145], the Solicitor was the individual through whom Chamberlains undertook the work. If there was any informal retainer, it was with Chamberlains.
Further, the plaintiff was not the personal client of Chamberlains. The Company was the client, and the plaintiff was obtaining advice in his capacity as its sole director. I have made that finding because: (a) The purpose of the meeting was to obtain advice about what I would describe as solvency concerns of the Company. That is clear from the contemporaneous records of Capital Lawyers (who referred the client to Chamberlains), as well as the plaintiff’s own letter written to Chamberlains in April 2021, which recorded the plaintiff speaking to the Solicitor about the FWC proceedings and the financial viability of the Company. (b) It is also clear from the Solicitor’s file note of the meeting, which records that matters relevant to the Company’s solvency were discussed, with the Solicitor writing “Lack of cashflow”, “Behind on BAS lodged since Sep 2014”, “CAB is $300k”, “2 leases” and then listing the assets and liabilities. (c) The Solicitor gave evidence that he did not advise the director personally because of the potential for conflicts which may exist between distressed companies and directors personally. It was his usual practice to refer directors to a separate insolvency practitioner for advice about any personal concerns. (d) Following the meeting, the plaintiff spoke with Mr Senatore about insolvency options for the Company, not any personal concerns.
In light of the surrounding circumstances of the file notes of both Capital Lawyers and the Solicitor’s file note as to what was discussed and the plaintiff’s own recollection at a point in time earlier than the preparation of his evidence in this proceedings, other reasons proffered by the plaintiff as to why he met with the Solicitor were not credible.
Having found that any retainer was with Chamberlains and any duty of care owed to the client was to the Company, the plaintiff’s claim for breach of contract or negligence against the Solicitor cannot succeed.

In respect of the Administrators, the personal harm identified by the plaintiff was: (a) the loss of the opportunity to profit from the sale of the business of the Company; (b) the loss of personal income during the VA and beyond; (c) the loss of repayment of the director’s loan; and (d) losses associated with the FWO proceeding (penalties and legal fees).
The plaintiff also alleged not just financial harm but psychological harm arising as a result of the Administration and the DOCA not extinguishing the FWC proceedings or preventing the initiation of proceedings by the FWO on 22 June 2018. The psychological claim was supported by a report by a psychologist. It diagnosed him as suffering from an Adjustment Disorder with Anxiety and Depression but the contents of the report relied heavily on a factual version of events put forward by the plaintiff that I have not accepted (see the conspiracy claim findings above and the misleading and deceptive conduct discussion below).
Had I found that there was any commercial relationship between Mr Senatore and the plaintiff personally, such relationship could only have existed prior to VA. The reasonably skilled insolvency practitioner or commercial adviser providing advice to the plaintiff would have taken precautions to ensure that the plaintiff was aware that he could not cause the Company to continue to trade if it was in fact insolvent.
Mr Senatore’s practice was also to inform directors of companies that have ATO debts that it is always better to act sooner rather than later, because you never know what the ATO’s intentions are and what it may be doing in the background. For example, the ATO may be getting ready to take enforcement action or be investigating the company and/or its director.
The plaintiff also told Mr Senatore that he was not interested in winding up the Company. As a first step, salvaging the business was the plaintiff’s goal. Had it been necessary, I would have found no duty on Mr Senatore to advise the plaintiff personally about options for the Company selling the business outside any VA or DOCA in circumstances where he already knew the plaintiff did not want to walk away from the business.
There was also no duty to advise about a potential future FWO proceeding because Mr Senatore’s evidence, which I accept, was that he did not know the FWO was investigating the Company until 25 May 2016. Nor was that a fact that he should reasonably have known if proper enquiries had been made, because there was nothing to suggest that the FWO had any involvement with the Company at the time Mr Senatore met with the plaintiff in December 2015.
At the time of these initial discussions, Mr Senatore also did not have information about the personal director’s loan that may have been in the mix. The evidence did not really deal with what further questions he may have asked had he understood the plaintiff to be seeking personal advice. Given this is an alternative reasoning pathway, it is not necessary to go further than to find that there was insufficient evidence to establish that Mr Senatore should have taken care to gather that level of detail in the information at that preliminary stage of interactions with the plaintiff.
Those findings suffice to deal with the personal aspects of the plaintiff’s claimed loss, in that if there was any duty owed to the plaintiff personally, it was not breached. No unconscionable conduct
The claim against the Solicitor was that he acted unconscionably because of his existing relationship or foreseeable future relationship with either or both of the Administrators. The complaint was that the Solicitor had a conflict of interest, arising from there being a likelihood that Chamberlains would be instructed by the Administrators once the Company had entered into external administration.
The claim against the Administrators was that the plaintiff was in a position of disadvantage or vulnerability in respect of his dealings with the Administrators and further that the fees charged by the Administrators were unconscionable.
The applicable principles were discussed in Stubbings v Jams 2 Pty Ltd [2022] HCA 6; 276 CLR 1 at [39]- [45], discussed in Wu v Wu [2024] ACTCA 8 at [108]-[109] and [122]. A finding of unconscionable conduct requires three elements to be established, although not as separate elements, with the assessment made by reference to a precise examination of the facts and scrutiny of the exact relationship giving rise to the claim in equity: (a) a relationship that places one party at a “special disadvantage” vis-à-vis the other; (b) knowledge of that special disadvantage by the stronger party; and (c) unconscientious exploitation by the stronger party of the weaker party’s disadvantage.
This cause of action is not maintainable because of the lack of any personal relationship established with the Administrators of the Solicitor.
Further, as with the conspiracy claim, the mere fact of a prior, existing or potential professional relationship with an experienced administrator does not establish unconscionable in itself. Having rejected the plaintiff’s contention that he was in any way the client of either the Solicitor or the Administrators, there was no apparent conflict of interest.
Separately, I would not have found that the plaintiff was in a position of disadvantage. He had a good command of English. He did not have a disability or incapacity that made him vulnerable. Although he did not have the expertise of a lawyer or insolvency practitioner, he had been the director of the Company through which the business operated for many years. He was experienced both in operating the business and the affairs of the Company.
I further accept the Administrators’ submission that none of the substantive events in the matter happened at a speed that might impact upon the relationship. The plaintiff made decisions with breaks in between the meetings with the Solicitor and Mr Senatore and thus had time to reflect on what he had been told.
Finally, with regard to the Administrator’s remuneration, the evidence as to the fixing of that remuneration has been set out above in relation to the conspiracy claim. There was nothing unconscionable about the process or the amounts charged and of course, those fees were charged to the Company, not the plaintiff.
For the above reasons, this claim is not made out.

Dealing first with the claim against the Solicitor, the plaintiff argued that the Solicitor gave advice that voluntary administration was the “best option” or the “only option”. The Solicitor maintained that he did not make any statements of that kind to the plaintiff. I accept that evidence because it was implausible that the Solicitor would give such advice in a one-hour meeting without any documents, where the inherent nature of that advice was more commercial rather than legal and where the outcome of the meeting was that the Solicitor subsequently rang the person better qualified to form a view about such matters, being Mr Senatore, to ask him to assist the plaintiff with decisions about what the Company should do. The Solicitor’s contemporaneous file note was consistent with the Solicitor’s evidence, in that there was no reference to such advice being given. I consider that such critical advice would ordinarily have resulted in some recording of the Solicitor’s expressed view.
I also considered the plaintiff’s memory on the content of this meeting to have been unreliable and tainted by subsequent events. He believed that his initial purpose for the meeting included a second opinion with regard to the FWC proceedings and at a different time believed that he discussed the employment contracts of the Company with the Solicitor, or the property relationship claim being made by his ex-partner. I have explained above why I did not accept those matters as having been traversed with the Solicitor at that time, or at all. It appears that the plaintiff’s memory about the employment contracts of the Company was tainted by the fact that during the VA period, Chamberlains Law Firm did prepare new employment contracts, with that task being undertaken by a different director of the firm, being Mr Scott Chamberlain. These matters revealed the plaintiff’s memory on this meeting to be inherently unreliable and why I could not accept the plaintiff’s recollection to be credible on this point. On balance, the file note recording what was discussed was the most reliable evidence. The representation alleged against the Solicitor was not established.
Even if it had been, I would have accepted the Solicitor’s submission that the plaintiff had not established reliance on the representation. I did not accept that the Solicitor met the plaintiff in a coffee shop to convince him to put the Company into VA. I found that the plaintiff met with Mr Senatore as recommended and that he did so 3 times. I also accept the plaintiff’s evidence that he undertook some research about VA before 15 December 2015. In those circumstances, I would not have accepted that anything the Solicitor said about VA at an initial meeting without being provided with any documents was relied upon by the plaintiff. That is a separate reason why the plaintiff’s claim in misleading and deceptive conduct against the Solicitor does not succeed.

The plaintiff alleged that Mr Senatore represented to him that putting the Company into VA would “resolve the future of [the Company]…so that [the plaintiff] would have no personal liability to any of the claimants and or creditors of the [the Company]”.
The various assertions made by the plaintiff were helpfully summarised by the Administrators as follows: (a) “we will fix it”; (b) “if you act now your problems stop here it’s that simple”; (c) “VA was the best option and I needed to act urgently to put [the Company] into VA”; (d) “VA was the best option to avoid the unfair dismissal claims and any underpayments claims that might come up”; (e) “VA [was] the solution”; (f) “there were [no risks]”; (g) “If [the plaintiff] put [the Company] into VA, [Mr Senatore] would [make] sure that [the Company] avoided having to pay any money to [the claimants] in relation to the FWC proceeding”; (h) “[Mr Senatore] would resolve the future of [the Company] so that [the plaintiff] would have no personal liability to any of the creditors of [the Company]; and (i) “VA would “fix [the plaintiff’s] court case with [the ex-partner] as it would look like the Company is in trouble” and not [worth much] if anything.”
Mr Senatore’s evidence was that he was confident that he did not tell the plaintiff that putting the Company into VA would insulate him from personal liability. It was not his usual practice to make comments of that kind, and he did not depart from his usual practice on this occasion.
I accept that evidence. It is implausible that an experienced insolvency practitioner would make any statement about a director’s personal liability, when the evidence revealed that his experience had been the opposite – for example, his experience that the ATO may be working in the background to bring a claim against the director.
Mr Senatore also denied telling the plaintiff that putting the Company into VA would avoid the FWC proceedings against the Company nor did he accept he had given an opinion as to whether a VA would have the effect of enabling the Company to avoid whatever claims the ex-partner may bring.
I accept that it is unlikely that Mr Senatore made any statements about those matters because the evidence did not suggest that Mr Senatore had the information specific enough to understand the nature of the claims being brought by those third parties.
Mr Senatore did accept that he said the following: (a) the problems the Company was facing were problems that he had dealt with previously and was comfortable dealing with; (b) he could begin as administrator of the Company as soon as the plaintiff signed the necessary resolutions and appoint him in the role; and (c) claims against the Company “freeze” upon it going into VA and although the court can make orders allowing proceedings to continue, a court would only do that in exceptional circumstances.
I accept that evidence as having the ring of truth about it. I do not accept that the statements alleged by the plaintiff were made and I consider it is more likely that the plaintiff’s memory has been affected by the passage of time. It may be that the plaintiff misunderstood what was meant by a “freeze” on claims, but that does not mean that the statements made by Mr Senatore conveyed the representation for which the plaintiff contended or that they were otherwise likely to mislead. Mere confusion does not establish misleading and deceptive conduct. I was not satisfied that any of the statements made by Mr Senatore involved a real chance of being understood to mean that the plaintiff would escape personal liability for any future claims.
Finally, I do not accept that Mr Senatore represented that there was any urgency, although he did accept that he said if you are going to put a company into VA, the sooner that happens, the more options you have because you are being proactive and may preserve credibility with creditors. Mr Senatore’s evidence, which I accept, was that without the financial statements and understanding of the Company, the director is in the best position to know how urgent putting the company into external administration truly is. As I am not satisfied that any of the representations alleged against Mr Senatore were made, the questions of reliance and any consequent loss need not be considered.

The established principle is that an allegation of fraud should be clearly and distinctly pleaded: Permanent Trustee Australia Ltd v FAI General Insurance Co Ltd (in liq) [2003] HCA 25; 214 CLR 514 at [38]. The plaintiff alleged that Mr Senatore engaged in dishonesty and fraud by “dishonestly defrauding creditors” of the Company during the VA and administration of the DOCA. This was pleaded as part of a breach of statutory duty claim, but such an allegation requires a clear statement of the conduct and what was fraudulent about it; what it was that the plaintiff alleged to constitute knowledge of dishonesty.
On the pleading, it was entirely unclear what the conduct was that the plaintiff viewed as dishonest or defrauded creditors. Any separate allegation of fraud was insufficiently exposed to enable any proper consideration of the allegation. Further and better particulars were requested from the plaintiff, but he declined to give them. The plaintiff’s affidavit evidence included a submission that the Administrators made misleading and deceptive representations in treating the business of the Company as though it was being liquidated when that was not the case, and by doing so misled or deceived the creditors of the Company.
I do not accept that this is what the Administrators did. As explained by Mr Senatore in his evidence, once the Company went into VA and he was able to understand the monthly expenses and access the financial statements, it became apparent that the business was making a monthly loss. The financial picture was much worse than the plaintiff appreciated. A timely sale was required to avoid the financial state of the Company deteriorating further.
Otherwise, the plaintiff’s complaints about aspect of the Administrators’ conduct appear to have been already considered with respect to the conspiracy, negligence or misleading and deceptive conduct claims.
Where a serious allegation such as fraud is made in civil proceedings, the strength of the evidence necessary to establish a fact on the balance of probabilities may vary and a court should not lightly make a finding that a party to civil litigation has been guilty of fraudulent conduct: Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; 110 CLR 445 at [2]. Without more, the allegation of fraud was not made out on the evidence.

A claim for a breach of statutory duty is distinct from the tort of negligence but is equally a claim in tort: Stuart v Kirkland-Veenstra [2009] HCA 15; 237 CLR 215 at [130], cited by Refshauge J in Stojkoski v Belconnen Concrete Pty Ltd [2013] ACTSC 13; 274 FLR 316 at [87].
In respect of the breach of statutory duties alleged against the first defendant, the plaintiff relied on the following statutes: (a) LP Act; (b) Solicitor Conduct Rules; (c) Wrongs Act; and (d) Consumer Act.
The specific duties said to have been breached were not specified. Those statutes certainly govern a solicitor’s conduct and are relevant to the determination of other causes of action in negligence, breach of contract and for misleading and deceptive conduct. However, save for the last of the statutes listed, which presumably was a reference to a claim for misleading and deceptive conduct under the Australian Consumer Law, they do not create private rights to sue for a breach of statutory duty.
In any event, all of the conduct that was the subject of complaint overlapped with the plaintiff’s other causes of action. There are cases where a breach of statutory duty claim may affect an outcome in respect of another claim. For example, where a claim in negligence has succeeded and there is a defence of contributory negligence, a finding of a breach of statutory duty affects that defence: s 102 of the Wrongs Act. Here though, the addition of alleged breaches of statutory duty added nothing over and above the plaintiff’s other claims. As those claims have not succeeded, it is unnecessary to deal with the plaintiff’s arguments on statutory duties.
Similarly, with regard to the Administrators, the plaintiff claimed breaches of the following statutory duties: (a) Directors’ duties set out in ss 180-184 of the Corporations Act 2001 (Cth). (b) A duty to act in the best interests of creditors of the Company (reflected in s 438A of the Corporations Act 2001 (ACT)). (c) Professional duties under the Australian Professional Ethics Standards 110 Code of Ethics for Professional Accountants and the Australian Restructuring, Insolvency and Turnaround Association Code of Professional Practice. (d) Section 18 of the Australian Consumer Law.
As stated at the outset of these reasons, the statutory duties under the Corporations Act are owed to the Company, not to a director, shareholder or creditor personally. As stated in Mackes at [193], any action for remedies for breach of ss 180, 181 of the Corporations Act 2001 (Cth), or the general law duties from which those provisions are derived, is ordinarily to be commenced by the company (see also ASIC v Maxwell [2006] NSWSC 1052 at [104]).
As with the Solicitor, it is the case that the Administrators are required to comply with codes of professional conduct. However, these do not of themselves create a separate private cause of action for breach of statutory duty.
Once appointed, the Administrators’ duty was to act in the interests of all creditors. There is nothing to indicate that the Administrators had any separate duty to act in the interests of a single creditor.
Otherwise, the conduct that was the subject of complaint under these causes of action has already been addressed with regard to the conspiracy, negligence, breach of contract, unconscionable conduct and misleading and deceptive conduct claims. For the reasons explained in respect of those claims, the plaintiff has not established that the Administrators acted in a way that constituted any breach of a statutory duty actionable by the plaintiff personally.

The plaintiff commenced proceedings on 16 June 2022.
Section 11 of the Limitation Act 1985 (ACT) provides: 11 General (1) Subject to subsection (2), an action on any cause of action is not maintainable if brought after the end of a limitation period of 6 years running from the date when the cause of action first accrues to the plaintiff or to a person through whom he or she claims. …
For the plaintiff’s claimed breach of contract against the Solicitor, the cause of action accrued on the date of the breach (2 December 2015). Similarly, any personal contractual claim against Mr Senatore could only have been based on conduct from 2- 15 December 2015. These dates were more than six years before 16 June 2022. Had there been any contract between the plaintiff and either the Solicitor or Mr Senatore, any claims founded on a breach of those contracts would have been statute-barred.
For the plaintiff’s claims in tort, the causes of action accrue when harm is suffered. The Solicitor submitted that there are three possible dates on which the causes accrued: (a) 2 December 2015, being the date on which the plaintiff met the Solicitor and a chain of events was set in train; (b) 15 December 2015, being the date on which the plaintiff placed the Company into voluntary administration and consequently lost control of the Company to the administrators; or (c) 11 April 2016, being the date on which the DOCA was executed and the plaintiff ceased as a director and shareholder of the Company. This was the latest possible date that the plaintiff first suffered loss, harm or damage, given that he expressly pleaded that he suffered loss when the Administrators failed to sell the Company as a going concern (by which I took to mean outside the VA process, because the Company was in fact sold as a going concern under the DOCA).
Again, had there been any personal duty owed to the plaintiff, the cause of action based on tort was more than six years before 16 June 2022, when the plaintiff commenced proceedings (and more than 3 years in respect of any personal injury damage claimed by the plaintiff: see s 16B of the Limitation Act). Those claims also would have been statute-barred.
The limitation period in respect of misleading and deceptive conduct is governed by the Australian Consumer Law. In that regard, s 236 provides: 236 Actions for damages (1) If: (a) a person (the claimant) suffers loss or damage because of the conduct of another person; and (b) the conduct contravened a provision of Chapter 2 or 3; the claimant may recover the amount of the loss or damage by action against that other person, or against any person involved in the contravention. (2) An action under subsection (1) may be commenced at any time within 6 years after the day on which the cause of action that relates to the conduct accrued.
For the plaintiff’s claims in misleading and deceptive conduct, the causes of action accrue when damage is suffered: Batterham v Clayton Utz Partnership [2022] FCA 1435 at [32]. As submitted by the Administrators, had the representations been made and reliance placed on them, there were two possible dates on which the causes of action arose: (a) 15 December 2015, being the date on which the plaintiff placed the Company into voluntary administration and consequently lost control of the Company to the administrators; or (b) 11 April 2016, being the date on which the DOCA was executed and the plaintiff ceased as a director and shareholder of the Company. (This was the latest possible date that the plaintiff first suffered loss, harm or damage, given that he expressly pleaded that he suffered loss when the second and third defendants failed to sell the Company as a going concern).
Each of these dates was also more than six years before 16 June 2022, and would have been statute-barred.
Otherwise, the plaintiff had an interesting argument about the Deed of Company Arrangement and whether it fell within the 12-year limitation period provided for by s 13 of the Limitation Act. However, as that claim was clearly only maintainable by the Company, it is unnecessary to consider that argument further.

Elvin v Vuleta (No 2)

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment

Parties

Legislation Cited (10)

Cases Cited (26)