Salmon v Albarran

Medium Neutral Citation: Salmon v Albarran [2025] NSWCA 42

Hearing dates: 10, 11 March 2025;
14 March 2025 (written submissions)

Decision date: 21 March 2025

Before: Ward ACJ at [1];
Leeming JA at [4];
Ball JA at [261]

Decision: 1. Appeal dismissed.
2. Notice of motion dated 14 August 2024 dismissed.
3. Appellants to pay the respondents’ costs in this Court.

Catchwords: EQUITY — fiduciary duties — solicitor — claim against solicitor personally by other side in litigation — whether client gave informed consent to solicitor continuing to act — solicitor subsequently in breach of duty by putting forward settlement deed in which solicitor received a benefit — whether error in finding by primary judge that breach not dishonest — whether primary judge could accept concession that liability in equity depended on finding of dishonesty — whether claim statute-barred absent dishonesty
RECEIVERS — instrument appointing receivers expressed to be signed, sealed and delivered — whether a deed — whether primary judge erred in finding instrument was not a deed and therefore six year limitation period applicable — whether receivers breached fiduciary duties or were knowingly involved in breach of duty by solicitor — whether any breach was dishonest — whether any claim against receivers statute-barred
PROCEDURE — appeals — notice of appeal — failure to identify grounds briefly and specifically — failure to comply with statement as to challenge to findings of fact — failure to comply with page limit — unnecessary to address numerous subgrounds of appeal and submissions

Legislation Cited: Conveyancing Act 1919 (NSW), s 38
Corporations Act 2001 (Cth), ss 513A, 513B, 513C
Legal Profession Act 2004 (NSW), s 347
Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015, r 32
Limitation Act 1969 (NSW), ss 11, 47
Limitation of Actions Act 1958 (Vic), ss 5, 21
Partnership Act 1892 (NSW), s 10
Uniform Civil Procedure Rules 2005 (NSW), rr 15.1, 36.16, 51.18, 51.36

Cases Cited: Albarran v Members of the Companies Auditors and Liquidators Disciplinary Board (2007) 231 CLR 350; [2007] HCA 23
Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (1990) 169 CLR 279; [1990] HCA 11
Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd [2008] NSWCA 243
Baulkham Hills Private Hospital Pty Ltd v G R Securities Pty Ltd (1986) 40 NSWLR 622
Berry v CCL Secure Pty Ltd (2020) 271 CLR 151; [2020] HCA 27
BH Australia Constructions Pty Ltd v Kapeller (2019) 100 NSWLR 367; [2019] NSWSC 1086
Boardman v Phipps [1967] 2 AC 46
Boensch v Pascoe (2019) 268 CLR 593; [2019] HCA 49
Cassaniti v Katavic (No 2) [2023] NSWCA 107
Comptroller of Stamps v Associated Broadcasting Services Ltd [1990] VR 335
Comptroller of Stamps v Associated Broadcasting Services Ltd [1990] VR 345
Crackin’ Snack Pty Ltd v Gameking Australia Pty Ltd [2024] NSWCA 182
de Robillard v Council of the New South Wales Bar Association; Council of the New South Wales Bar Association v de Robillard (No 2) [2024] NSWCA 299
Dibb v Transport for New South Wales [2024] NSWCA 157
Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22
Feldman v Nationwide News Pty Ltd (2020) 103 NSWLR 307; [2020] NSWCA 260
Fox v Percy (2003) 214 CLR 118; [2003] HCA 22
G R Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631
Gerace v Auzhair Supplies Pty Ltd (in liq) (2014) 87 NSWLR 435; [2014] NSWCA 181
Gould v The Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490; [1916] HCA 81
In the matter of Terra Cresta Business Solutions Pty Ltd, Black J, 2 July 2020
Jeffreys v Sheer [2025] NSWCA 31
Lee v Lee (2019) 266 CLR 129; [2019] HCA 28
Leverton v Predny [2024] NSWSC 1638
Lewis Securities Ltd (in liq) v Carter [2018] NSWCA 118; 355 ALR 703
Litigation Fund WCX Pty Ltd v Homebuilding Pty Ltd [2025] NSWCA 16
Maguire v Makaronis (1997) 188 CLR 449; [1997] HCA 23
Massoud v Nationwide News Pty Ltd; Massoud v Fox Sports Australia Pty Ltd (2022) 109 NSWLR 468; [2022] NSWCA 150
Mohareb v Saratoga Marine Pty Ltd [2020] NSWCA 235
Moussa v Camden Council (No 8) [2025] NSWSC 186
Nikolaidis v R [2008] NSWCCA 323; 191 A Crim R 556
O’Brien v Australian Broadcasting Corporation (2017) 97 NSWLR 1; [2017] NSWCA 338
Pantorno v The Queen (1989) 166 CLR 466; [1989] HCA 18
Pittmore Pty Ltd v Chan; Chan v Tan (2020) 104 NSWLR 62; [2020] NSWCA 344
Prothonotary of the Supreme Court of New South Wales v Nikolaidis [2010] NSWCA 73
R v Birks (1990) 19 NSWLR 677 at 685
Royal Guardian Mortgage Management Pty Ltd v Nguyen [2016] NSWCA 88; (2016) 332 ALR 128
Salmon v Albarran [2023] NSWSC 1238; 414 ALR 36
Salmon v Albarran (No 2) [2024] NSWCA 99
Salmon v Bank of Western Australia [2009] FCA 1473
Salmon v R [2012] NSWCCA 119
Sedgwick Australia Pty Ltd v JLOC Super Pty Ltd [2024] QCA 218
Segboer v AJ Richardson Properties Pty Ltd [2012] NSWCA 253
Simic v NSW Land and Housing Corporation (2016) 260 CLR 85; [2016] HCA 47
State of New South Wales v JR; State of New South Wales v Dickens; State of New South Wales v Jensen [2024] NSWCA 308
Taouk v Ho [2019] NSWCA 156
Tatham v Huxtable (1950) 81 CLR 639; [1950] HCA 56
Twigg v Twigg [2022] NSWCA 68; 402 ALR 119
Watson v Foxman (1995) 49 NSWLR 315
Williams v Central Bank of Nigeria [2014] AC 1189; [2014] UKSC 10
Wily v Terra [2008] NSWSC 805
Wily v Terra Cresta Business Solutions Pty Ltd [2006] NSWSC 1042
Wily v Terra Cresta Business Solutions Pty Ltd (No 2) [2006] NSWSC 1102
Zhong v Guan [2024] NSWCA 300

Category: Principal judgment

Parties: Owen Salmon (First Appellant)
TCBS Group Holdings Pty Ltd (Second Appellant)
Richard Albarran (First Respondent)
Geoffrey McDonald (Second Respondent)
Steven John Brown (Third Respondent)
Robert Elliott, Drew Townsend, David Kenney, Luigino Malacco and Paul Leroy (Fourth, Fifth, Sixth, Seventh and Eighth Respondents)

Representation: Counsel:
O Salmon (solicitor), (Appellants)
M Elliott SC and N Simone (First, Second, Fourth, Fifth, Sixth, Seventh and Eighth Respondents)
M Newton (Third Respondent)
Solicitors:
Hall & Wilcox (First, Second, Fourth, Fifth, Sixth, Seventh and Eighth Respondents)
Gilchrist O’Connell (Third Respondent)

File Number(s): 2023/356626

Publication restriction: Nil

HEADNOTE

[This headnote is not to be read as part of the judgment]

Terra Cresta Business Solutions Pty Ltd (TCBS) provided bookkeeping and other management and personnel services, as well as short term loans, to companies including Business Australia Capital Mortgage Pty Ltd (BACM) and Business Australia Capital Finance Pty Ltd (BACF). The appellant Mr Owen Salmon was a director of TCBS. TCBS had taken a registered charge over each company on 18 March 2005 securing indebtedness up to $1.5 million, and in August 2006, TCBS appointed Messrs Albarran and McDonald as receivers of the companies in the purported exercise of its rights pursuant to these charges. The liquidator of the companies, Mr Wily, shortly commenced proceedings in the Equity Division of the Supreme Court seeking a declaration that the charge against BACM was not binding against him and a declaration as to the amount secured by the charge granted by BACF.

Mr Brown of Etienne Lawyers was the solicitor for TCBS. On 13 September 2006, Mr Brown learned that Mr Wily was claiming that moneys received by Etienne Lawyers from the administration of Given Form Pty Ltd were recoverable by him as a preference, and that Mr Brown could not continue to act for TCBS. Mr Brown sent an email to persons including counsel and Mr Salmon informing them of this, and Mr Salmon responded on 14 September in terms instructing Mr Brown to respond aggressively.

The trial occurred before Young CJ in Eq on 18 and 19 September. On the evening of 18 September, Mr Brown prepared a draft settlement deed for $1.3 million which included a release in respect of the Given Form claim, and sent it to persons including counsel, Mr Nikolaidis (Mr Wily’s solicitor), Mr Albarran and Mr Salmon. On 19 September, Mr Nikolaidis said the release was unacceptable and a revised deed was supplied to him which did not include it. However, following the hearing, Mr Nikolaidis said that while the respondents were still willing to settle, it would not be at the $1.3 million figure. Settlement was not achieved and Young CJ in Eq delivered judgment substantially in favour of Mr Wily, finding that the BACM charge was not binding as it had been granted within the relation-back period while BACM was insolvent, and that the BACF charge could be treated as being security for no more than $177,902.66 unless the liquidator was convinced by material placed before him by the defendant that he should treat the charge as being for some higher amount. A costs order was made in Mr Wily’s favour, which TCBS did not pay, leading to the winding up and deregistration of TCBS.

In 2016, Mr Salmon and TCBS Group Holdings Pty Ltd, as assignees of TCBS’s claim, brought proceedings against the receivers and Mr Brown, claiming that each of the receivers and Mr Brown had dishonestly breached their fiduciary duties and had knowingly assist the other in the breach, and that the receivers had also breached their duties under their instrument of appointment. The primary judge dismissed these proceedings, and Mr Salmon and TCBS Group Holdings Pty Ltd appealed.

The Court held, dismissing the appeal:

Per Leeming JA (Ward ACJ and Ball JA agreeing):

1. The instruments of appointment were not deeds, and thus the claims at common law were statute-barred. There was no contextual reason to regard the documents as deeds, and the distinction between the instruments of appointment and the indemnity documents, the latter of which used the language of deeds, was marked. The instruments of appointment were not effective immediately after being executed by TCBS. The fact that the receivers had sworn affidavits referring to the documents as deeds did not detract from this reasoning: at [68]-[75].
2. Where there is merely a claim for equitable compensation for a non-dishonest breach of fiduciary duty, a six year limitation period will be applicable by analogy: at [88]. There was no error in the primary judge’s reasoning that even if Mr Albarran was in breach, that breach was not dishonest. Nor was Mr Brown’s breach, in pursuing a benefit through the insertion of the release into the draft deed, dishonest – the fact that he copied counsel into the email sending the deed tells against dishonesty: at [106]-[130].

Gerace v Auzhair Supplies Pty Ltd (in liq) (2014) 87 NSWLR 435; [2014] NSWCA 181, applied.

3. Although the respondents had not pleaded fully informed consent, the plaintiffs had wrongly pleaded its absence. This was a case where the parties had chosen to conduct the litigation on this issue aside from the issues identified in their pleadings. Informed consent was squarely raised because of the way Mr Salmon had pleaded his case: at [144]-[164].

Gould v The Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490; [1916] HCA 81; Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (1990) 169 CLR 279; [1990] HCA 11, applied.

4. This was a straightforward case of fully informed consent. The email sent by Mr Brown stated unambiguously that Mr Wily was contending that there was a conflict in Mr Brown continuing to act for TCBS in circumstances where Mr Wily had a personal claim against his firm, and TCBS was entitled to continue to instruct Mr Brown: at [169]-[179].
5. The fact that findings adverse to Mr Salmon were made does not mean that the process was procedurally unfair or that there was a denial of natural justice: at [187].

Feldman v Nationwide News Pty Ltd (2020) 103 NSWLR 307; [2020] NSWCA 260, applied.

Discussion of:

6. The limitation period applicable to claims for equitable compensation for breach of fiduciary duty, Lewis Securities Ltd (in liq) v Carter [2018] NSWCA 118; 355 ALR 703 and Twigg v Twigg [2022] NSWCA 68; 402 ALR 119: at [248]-[256].

JUDGMENT

1. WARD ACJ: I agree, for the reasons given by Leeming JA, that the appeal must be dismissed with costs. It is not necessary for me to comment on his Honour’s observations at [248] - [256], which can await consideration when the issue arises for determination in a case where it will be dispositive.

2. I share Leeming JA’s concern at the tendency of Mr Salmon to make repeated and unfounded allegations of fraud against legal practitioners, including Senior Counsel appearing for the respondents in this matter. As a solicitor, Mr Salmon should be (and accepted that he was) aware that fraud allegations are serious and should not lightly be made. To dismiss the Court’s concerns in this regard as being simply that this Court does not like the word “fraudulent”, as Mr Salmon did, was unacceptably to trivialise a serious ethical issue.

3. That said, I agree that the question whether to require Mr Salmon to show cause why he should not be referred to the Law Society in relation to his conduct was finely balanced (as Leeming JA has concluded at [259]) but that ultimately, for the reason given by Leeming JA, this should not occur on this instance.

4. LEEMING JA: The appellants, Mr Owen Salmon and TCBS Group Holdings Pty Ltd, appeal as of right from the dismissal of proceedings brought by them against the first and second respondents, Messrs Richard Albarran and Geoffrey McDonald (“Receivers”), and the third respondent, a solicitor, Mr Steven John Brown, following an eight day trial in the Equity Division: Salmon v Albarran [2023] NSWSC 1238; 414 ALR 36. The other respondents are partners of the Receivers’ firm Hall Chadwick, who were sued as such, but otherwise played no separate role in the litigation and in what follows will not save when dealing with ground 25 be mentioned again.

5. The appellants were represented at trial by senior and junior counsel. However, in this Court Mr Salmon has appeared for himself and the second appellant, a company of which he is a director, and which owned all the shares in Terra Cresta Business Solutions Pty Ltd (TCBS). The appellants took an assignment from the liquidator of TCBS of its claims against the Receivers and Mr Brown. Thus the appellants are suing the Receivers appointed by TCBS, and the solicitor retained by TCBS, in August 2006, based on conduct in September 2006, in slow-moving proceedings commenced in 2016.

6. Mr Salmon appeared for the second appellant without leave, doing so on the basis that he was a solicitor who held a current practising certificate. Certain aspects of this appeal are troubling, and have caused these reasons to adopt an unusual course. The troubling circumstances include the following:

7. Mr Salmon relies on an Amended Notice of Appeal which contains 42 grounds. Ground 23 contains 84 separate findings of fact which he challenges. Some are repetitive; others are peripheral and can have no bearing on the outcome. The notice of appeal does not comply with the requirement in UCPR r 51.18 to identify the grounds briefly and specifically.

Submissions raising any challenges to findings of fact must include a statement in narrative form (not exceeding two pages) at the end of the submission setting out only the following:

(a) the findings challenged and supporting references to the judgment of the court below,

(b) the findings contended for and supporting references to the transcript and other evidence in the court below.

3. In any event, the challenges to the findings of fact which are interpolated throughout Mr Salmon’s submissions do not comply with that rule, which is intended to identify the findings challenged, their location in the judgment, the evidence adduced at trial which supports them, and the findings sought to be made by this Court and the evidence which supports them. The rule requiring an annexure containing references for any challenged findings of fact is not a backdoor mechanism to permit evasion of the discipline imposed by the ordinary page limit.

4. It is far from clear that Mr Salmon’s submissions comply with the rules concerning typeface, at least in the form they appear in the Orange Book (the appearance is of a compressed Arial font printed on an A4 page which in turn has been shrunk when reproduced in the Orange Book). Whether or not that is so, the submissions comprise 510 dense paragraphs and 617 footnotes. Some of the footnotes are substantive (footnote 537 is reproduced below; another example is footnote 185 which extends over parts of two pages and is more than 1000 words long), and all are difficult to read with the unaided eye.

5. The foregoing is not a complaint about non-compliance with the rules and the Court’s directions merely for its own sake. The rules are tools by which substantive justice may be achieved. Flagrant departures from them, as have occurred in this appeal, are capable of producing unfairness to other parties, and of wasting the time of this Court. Hence Bell P’s observations in Mohareb v Saratoga Marine Pty Ltd [2020] NSWCA 235 at [35]-[38]:

Mr Mohareb filed 35 pages of single spaced submissions in what appears to be either 9 or 10 point font in support of his application for leave to appeal.

The requirements for the length, content and form of written submissions is clearly set out in the UCPR. With respect to applications for leave to appeal, r 51.12(3) specifies that the summary of argument must not exceed 10 pages. Rule 51.36 outlines that written submissions must be in typeface that is no smaller in appearance than an Arial font in 11 point size or a Times New Roman font in 12 point size, and the lines of typing must be set at least 1.5 lines spacing from each other.

The submissions filed by Mr Mohareb clearly did not comply with these rules. To point this out is not to be pedantic or to invoke a technicality. The imposition of a page limit is consistent with the need for judicial resources to be deployed efficiently, the issues to be identified crisply, and the costs of litigation (including the costs of other parties to litigation who must respond to submissions) to be proportionate: see Civil Procedure Act 2005 (NSW) s 60.

Quite apart from being a flagrant breach of the UCPR, the filing of submissions of the length of those filed by Mr Mohareb is oppressive and illegitimate.

8. Mr Mohareb was unrepresented and lacked legal qualifications. The position is a fortiori in the case of submissions filed by a solicitor.

9. What is more, it may also be that Mr Salmon’s non-compliance with the rules has disadvantaged the appellants. By not subjecting himself to the discipline of focussing on what is material, he has wasted an inordinate amount of effort in challenges that can make no difference to the outcome, and he has also diluted the impact of the minority of his submissions which are capable of affecting the outcome.

10. Mr Salmon’s submissions, both written and oral, included allegations of serious misconduct, directed to legal practitioners. Counsel appearing at trial were accused of adopting “a strategy to mislead the Court” (para 9) and going “so far to mislead the Court” (para 11). In part this related to a COPS entry on which Mr Salmon was cross-examined, of which Mr Salmon said “And I think it was misplaced and misleading to tell the Court it was a statement by me, when it’s clearly not” (tcpt, 10 March 2025, 14(13)); the same point was made in paras 211 and 248(ii) of his written submissions, although the document clearly reflected a police officer’s attempt to record a statement made by Mr Salmon. Senior counsel for the Receivers was accused of making “misleading submissions” that “created a new timeline” (para 299). There are numerous other examples which need not be repeated here. However, one goes to an important issue. It related to a document signed by Mr Lazar as a director of “Business Australia Corporate Mortgage Pty Limited”. There is no company of that name, although the company “Business Australia Capital Mortgage Pty Ltd” was central to the litigation, and it was and is important to determine the legal effect of this document. The primary judge treated it as a self-evident mistake, while Mr Salmon said it reflected fraud. Referring to this document, Mr Salmon went so far as to state, referring to counsel who appeared at trial, that “That both experienced counsel went so far to mislead the Court on the fundamental fact and impediment to either succeeding drags the profession into disrepute” (paragraph 11).

11. It is a serious breach of the ethical obligations of a legal practitioner to mislead, or attempt to mislead, a court, and it is also a serious thing to accuse a legal practitioner of misleading a court. Rule 32 of the Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 provides:

32 Unfounded allegations

32.1 A solicitor must not make an allegation against another Australian legal practitioner of unsatisfactory professional conduct or professional misconduct unless the allegation is made bona fide and the solicitor believes on reasonable grounds that available material by which the allegation could be supported provides a proper basis for it.

12. I shall return to those matters and their consequences at the conclusion of the judgment. But it is as well to observe at the outset that the allegations against counsel were unfounded and should not have been made. The nature of the case presented by the appellants explains the structure of these reasons.

Overview of the case

13. Notwithstanding the foregoing, the essence of this appeal is moderately straightforward. None of the following 27 paragraphs is controversial.

14. The events occurred 17 years before trial. The Receivers and Mr Brown owed contractual and fiduciary obligations to TCBS. However, the proceedings were commenced ten years after the events in question. It is entirely unsurprising that what matters in this appeal concerns limitation periods, and the circumstances when a limitation defence is unavailable because of a cause of action founded on a deed, or because of fraud.

TCBS provides services and loans to Mr Lazar’s companies

15. At relevant times, the Chief Executive Officer of TCBS was Mr John Myers, who was also Mr Salmon’s business partner. TCBS in around 2000 and the years thereafter provided bookkeeping and other management and personnel services to clients including various companies associated with Mr Ian David Lazar. Two of those companies were Business Australia Capital Mortgage Pty Ltd and Business Australia Capital Finance Pty Ltd, which were often abbreviated as BACM and BACF. At relevant times, Mr Lazar was the sole director of both companies.

16. In addition to providing professional services to Mr Lazar’s companies, Numsbar Investments Pty Ltd, a company associated with TCBS, lent funds at a high interest rate on short term to them. TCBS purported to take an assignment of the debts owed to Numsbar. In addition, TCBS itself advanced funds to Mr Lazar’s companies. Relatively shortly after the critical events of September 2006, TCBS was claiming that in addition to unpaid fees for services of some $204,000, it had also advanced some $460,000, and had been assigned debts owed to Numsbar of some $280,000. Those amounts appear in a report of Mr Blair Pleash dated 13 November 2006 commissioned by Mr Brown acting for TCBS, and upon which Mr Salmon relied in this appeal.

17. Mr Pleash’s report also records that TCBS claimed an entitlement to interest. TCBS said that the unpaid fees for bookkeeping services attracted interest of 1% per month, but the borrowings attracted much higher rates of interest. TCBS claimed that both in respect of the assigned debt and its own lending, interest accrued at a fixed rate of interest of 30% for 90 days (ie more than 120% per annum), thereafter with a default rate of interest of 8% per month (or at least 96% per annum). I say “at least” because the annexures to the report were not reproduced in the appeal books and the body of the report does not address whether and if so how TCBS claimed it could capitalise interest.

18. The upshot was that by November 2006, TCBS claimed that it was owed by BACM some $2.38m. Of that debt, only around $204,000 was for unpaid fees for services provided. Its own lending, and the loans it had acquired from Numsbar were much greater, and the interest claimed on those loans (some $975,000) was the largest component of all. In addition, TCBS claimed the costs of the receivership of some $459,000, which included solicitor’s fees of some $243,000 and barrister’s fees of some $33,000. Thus, at least in very large measure, TCBS was not an unpaid provider of bookkeeping services. TCBS was an unpaid provider of bookkeeping services which had chosen to lend far more than it was owed by its client, and to acquire the debts of other non-bank lenders to its client, at interest rates which reflected an extremely high level of risk. There is no reason to doubt that the position was much the same a few months earlier, in August and September 2006.

TCBS’s security

19. TCBS had taken security from each of BACF and BACM, in the form of a charge from each company on 18 March 2005 securing indebtedness up to a maximum of $1.5 million. Each charge was registered.

20. Mr Andrew Wily was appointed as liquidator of both BACM and BACF in 2005. His appointments came about in two different ways and at two different times. In the case of BACM, Mr Wily had been appointed administrator of a deed of company administration on 17 May 2005, and thereafter the creditors resolved that the company be wound up and he be appointed liquidator. The winding up is therefore taken to have commenced on 17 May 2005: Corporations Act 2001 (Cth), s 513B(b) read with s 513C(b).

21. In the case of BACF, on 18 May 2005, ASIC filed a winding up petition pursuant to s 461(1)(k) of the Corporations Act and on 9 November 2005, Mr Wily was appointed administrator. On 16 November 2005 he was appointed official liquidator by the Supreme Court on ASIC’s application in the winding up. The winding up is therefore taken to have commenced on 9 November 2005: Corporations Act, s 513A(b) read with s 513C(b).

22. Thus Mr Wily was the liquidator of BACM in a creditors’ voluntary liquidation, but a court-appointed liquidator of BACF. The winding up of BACM is taken to have commenced on 17 May 2005, but that of BACF is taken to have commenced on 9 November 2005. This is significant because the charges were granted within six months of 17 May 2005, but more than six months before 9 November 2005.

The litigation in August-October 2006

23. In early August 2006, TCBS in the purported exercise of the rights conferred by its charges, appointed Messrs Albarran and McDonald as receivers of BACM and BACF. Very promptly thereafter, Mr Wily commenced proceedings in the Expedition List of the Equity Division of this Court seeking a declaration that the charge granted by BACM was not binding against him, and a declaration as to the amount secured by the charge granted by BACF.

24. Mr Wily’s statement of claim came on for final hearing before Young CJ in Eq on 18 and 19 September 2006. The liquidator had retained Mr Leon Nikolaidis of M D Nikolaidis & Co, who had briefed senior and junior counsel. TCBS and Messrs Albarran and McDonald had retained Mr Brown of Etienne Lawyers, who had briefed junior counsel, Mr Julian O’Sullivan. Mr Salmon was primarily responsible for giving instructions on behalf of TCBS.

25. As will be seen in more detail below, on the 13th and 14th of September 2006 (the Wednesday and Thursday before the final hearing on the following Monday) Mr Brown learned in the context of ongoing settlement discussions that Mr Wily was claiming that moneys received by Mr Brown’s firm from the administration of a company, Given Form Pty Ltd (about which more is said below), were recoverable as a preference, and that as a consequence Mr Brown could not continue to act in the litigation. Nonetheless, he did so.

26. On the evening of 18 September 2006, with the first day of the hearing complete, the settlement discussions led to Mr Brown preparing a draft settlement deed which was said to reflect an in principle agreement by which Mr Wily (as liquidator of BACM and BACF) would pay out of funds to be received by him from the settlement of a claim that he had against the Nauru Phosphate Royalties Trust an amount of $1.3 million in respect of TCBS’s charges. The draft included a release in respect of the claim based on Given Form. The draft deed was sent by email to counsel, Mr Nikolaidis, to Mr Albarran and to Mr Salmon and Mr Myers. There was and is a dispute over whether Mr Salmon read it. The primary judge found that he probably did, and that finding is challenged by Mr Salmon. On the following day, Mr Nikolaidis said that the release was unacceptable, and later that day a revised deed was supplied to Mr Nikolaidis which did not include it. However, Mr Nikolaidis said that the hearing had gone well, and while there could still be a settlement, it would not occur at $1.3 million.

27. It will be necessary in what follows to provide considerably more detail than mentioned above in relation to the events of 13 and 14 September, and 18 and 19 September.

28. The hearing concluded on 19 September. Young CJ in Eq was told that there were prospects of settlement throughout the hearing and indeed after judgment was reserved. An email sent on the afternoon of 20 September instructing Mr O’Sullivan to advise the judge that settlement had not been achieved suggests that that is what occurred. Judgment was delivered on Thursday 21 September, with the judgment substantially upholding the liquidator’s claim: [2006] NSWSC 1042.

Aftermath of the litigation

31. A cross-claim had been filed in the litigation shortly before the hearing on 18 and 19 September, principally seeking the removal of Mr Wily as liquidator of BACF and BACM. It was not determined at that trial. The proceedings continued for another two years. The costs which TCBS was ordered to pay on 19 October 2006 were quantified at some $90,000, and a statutory demand was served. TCBS did not pay the amount. Mr Wily, with the support of Hall Chadwick, petitioned for TCBS to be wound up. A hearing took place before Macready AsJ, at which Mr Salmon gave evidence that “[TCBS] can’t pay the $90,000 until such time as Mr Wily releases the $177,000”: Wily v Terra [2008] NSWSC 805 at [44]. A winding up order was made on 31 July 2008.

32. The liquidator of TCBS subsequently agreed to settle TCBS’s claim against BACF for $177,902, inclusive of costs. TCBS was deregistered in 2012.

33. In the meantime, a sequestration order was made against Mr Salmon in July 2009, based on a judgment debt of $5,361,510.72 in favour of Bank of Western Australia Ltd. That indebtedness was not related (or at least, not directly related) to the events in this litigation. Mr Salmon’s attempts to set aside the order were unsuccessful: Salmon v Bank of Western Australia [2009] FCA 1473. Mr Salmon was found guilty by a jury on 15 December 2009 for larceny, assault, and robbery. The Court of Criminal Appeal dismissed an appeal against conviction, but reduced the sentence, doing so however at a time after Mr Salmon had served the entirety of the original non-parole period of 15 months: Salmon v R [2012] NSWCCA 119.

34. After Mr Salmon was discharged from bankruptcy and released from prison, TCBS was re-registered, and proceedings were commenced in 2016. The liquidator of TCBS granted the assignment mentioned above to the appellants, which was approved by the Court (In the matter of Terra Cresta Business Solutions Pty Ltd, Black J, 2 July 2020). The primary judge recorded that no issue concerning the validity of the assignment or the standing of the appellants was pressed at the hearing, and none was maintained in this Court. There were a number of other procedural disputes between commencement of proceedings and trial some seven years later, but they need not be summarised for present purposes.

Overview of the reasons of the primary judge

35. The pleading that went to trial in 2023 was the Fourth Further Amended Statement of Claim. It is a complex document, which need not for present purposes be summarised. The primary judge encapsulated at [20] the three claims which went to trial as follows:

In closing submissions, the Plaintiffs pressed three main claims, all of which related primarily to the conduct of Mr Albarran and Mr Brown in respect of the events of 13 to 19 September 2006, namely:

(a) First, that Mr Brown dishonestly breached his fiduciary duties to TCBS, by continuing to act when he was in a position of conflict and by pursuing a benefit for himself and the Receivers (the Given Form release), and that Mr Albarran knowingly assisted in that breach;

(b) Secondly, that Mr Albarran dishonestly breached his fiduciary duties to TCBS, by continuing to act when he was in a position of conflict and by pursuing a benefit for himself, Mr McDonald and Mr Brown (the Given Form release), and that Mr Brown knowingly assisted in that breach; and

(c) Thirdly, that the Receivers breached their duties under the instrument by which they were appointed, which was said to be a deed. The deed was said to be breached by Mr Albarran by reason of his conduct in respect of the Given Form release, with Mr McDonald being jointly liable for that breach.

36. Mr Salmon did not dispute the accuracy of the summary.

37. In relation to (a), the primary judge found that TCBS was Mr Brown’s client, to which he owed fiduciary duties. His Honour found that Mr Brown was in a position of conflict when confronted on 13 September 2006 with the claim that he had to repay the moneys sourced from Given Form, but that TCBS had given its fully informed consent on 14 September 2006 to continue to act. His Honour found that there was a further breach of Mr Brown when on 18 September 2006 he put forward a draft deed of settlement which contained the Given Form release, but that this breach was not dishonest, and therefore the claim was statute-barred.

38. In relation to (b), the primary judge found that there was no breach of duty by the Receivers, and if there had been a breach, it was not dishonest.

39. In relation to (c), his Honour found that it was not a deed, and thus the claim was statute-barred.

40. The primary judge went on to find that if there had been a breach, it was not causative of any loss.

The critical findings of the primary judge

41. Pausing there, and returning to the three ways in which the claims were advanced at trial encapsulated by the primary judge at [20] of his reasons, the appeal against the first two must be dismissed unless Mr Salmon can establish that the primary judge erred either (a) in proceeding on the basis that the claim was statute-barred in the absence of a finding of dishonesty, or (b) in failing to make findings of dishonesty. The appeal against the third way in which the claim was advanced must be dismissed unless Mr Salmon can establish that the primary judge erred in finding that the instruments appointing Messrs Albarran and McDonald were not deeds.

42. In addition, there are some grounds which were wholly undeveloped in oral address which are independent of the above. They include a claim of a denial of procedural fairness.

The structure of these reasons

43. In light of the above, a rational and efficient way of addressing this appeal would have been to focus upon the critical lines of reasoning which are necessary to establish material error which might lead to allowing the appeal and setting aside the judgment.

44. That was not the course chosen by Mr Salmon. His grounds of appeal and written submissions proceed to attack dozens of findings, including many which have no impact upon the judgment from which the appeal is brought. Mr Salmon’s oral and written submissions commenced with seven “Central peculiarities”, the first, third, fourth and seventh of which bear directly on the failure to find dishonesty. The second and sixth “peculiarity” went to informed consent, and the fifth went to damages. Mr Salmon evidently regarded these points as important, and I shall in due course address them, even those that make no difference to the outcome of the appeal.

45. It was made clear at the outset of the hearing that Mr Salmon would have the entirety of the first day of a two day appeal to develop his oral submissions in support of his appeal. In fact, he enjoyed an additional 30 minutes on the second day to respond to matters raised by the Court on the first day, as well as a reply of around 40 minutes. On both days, the Court sat slightly extended hours in order to provide more time. Even so, and despite repeated statements of concern by the Acting Chief Justice and me, Mr Salmon did not commence addressing any of his grounds of appeal until the afternoon of the first day. The result was that the submissions in support of the very large majority of his grounds of appeal were entirely undeveloped orally.

46. That is especially significant in relation to grounds 17 and 24. Ground 17 on one reading might be understood as challenging the finding by the primary judge that absent a finding of dishonesty, the claims based on breach of fiduciary duty were statute-barred. Ground 24 is the ground which challenges the finding that the instruments appointing Messrs Albarran and McDonald were not deeds. Unlike the large majority of grounds propounded by Mr Salmon, these grounds bear upon the critical line of reasoning that he needed to impugn in order for this Court to set aside the judgment.

47. These reasons address the issues in a different order from that chosen by Mr Salmon. They start with the issues that are dispositive of the main claims determined by the primary judge. They then deal with the challenges to the findings of fact which Mr Salmon evidently regarded as most important. They then deal with the grounds which were undeveloped orally but which in principle could alter the outcome of the appeal. They then deal relatively concisely with the mass of challenges which Mr Salmon chose not to develop in any way in oral submissions, and which cannot make any difference to the outcome of this appeal. That course reflects the fact that while the appellants enjoy an appeal as of right, there is no obligation upon this Court to determine each and every ground, especially where for multiple reasons the ground can make no difference to the outcome, where the only issues are factual and have no consequence to persons other than the parties, and where Mr Salmon did not seek to develop the ground at any point in some five hours of oral address. This accords with what was said in (2019) 268 CLR 593; [2019] HCA 49 at [8] that “intermediate courts of appeal should not feel compelled to treat determination of non-dispositive issues in appeals before them as the norm”.

The instruments appointing the Receivers (ground 24)

51. This ground was:

The trial judge erred in law in finding that the appointment instrument was not a deed (when the evidence) including that of the Respondents showed that it was intended to be a deed (judgment [358]-[376]) [sic].

52. To reiterate, the significance of this aspect of the primary judge’s reasoning is that insofar as there were claims against the Receivers based on breach of the terms of their appointment instruments, those claims were statute-barred prior to the commencement of proceedings in 2016, unless the appointment documents took effect as deeds rather than as contracts. (For completeness, an allegation of fraudulent concealment had at one stage been pleaded, but it was not part of the case that went to trial.)

The documents

53. The Receivers executed four documents dated 4 August 2006, as did TCBS. Two were in very similar terms. One was titled “APPOINTMENT OF RECEIVERS & MANAGERS TO BUSINESS AUSTRALIA CAPITAL MORTGAGE PTY LIMITED A.C.N. 090 781 187 (“The Mortgagor”)”; the other was identical save that “MORTGAGE” was replaced by “FINANCE” and there was a different ACN number.

54. Each document referred to the charge granted by the mortgagor on 18 March 2005, identified the number allocated to it by ASIC, stated that TCBS appointed the men pursuant to the powers conferred by that charge and that the men “hereby accept this appointment”. Each was expressed to be “signed, sealed and delivered”, and the signatures were witnessed.

55. The other two documents were expressed to be deeds made on that date, between TCBS (“the Guarantor”) on the one hand, and Messrs Albarran and McDonald (“the Receivers”) on the other hand. Each recited that on 4 August “the Secured Creditor” appointed the Receivers pursuant to a charge over the assets of BACF or BACM respectively, and provided that the “secured Creditor” [sic] indemnified the Receivers in broadly worded clauses. The documents were stated to be “signed for and on behalf of” TCBS, and “signed, sealed and delivered” by each of Messrs Albarran and McDonald.

Reasons of the primary judge

56. The primary judge addressed this issue in some detail at [358]-[376]. His Honour observed that the appointment instruments were described as “deeds” by each of Messrs Albarran and McDonald in affidavits sworn by them, and in relatively contemporaneous correspondence. Further, the documents were expressed to have been “signed, sealed and delivered”.

57. Notwithstanding the deeming brought about by s 38(1) and (3) of the Conveyancing Act 1919 (NSW), the primary judge observed at [363] that a document expressed to have been made under seal is nonetheless not properly to be regarded as a deed unless the seal has been affixed with the intention that the instrument should operate as a deed, relying on Comptroller of Stamps v Associated Broadcasting Services Ltd [1990] VR 335 at 341, appeal dismissed [1990] VR 345. Further his Honour observed at [364] that a deed would not be binding until delivered. His Honour referred to what this Court had said in Segboer v AJ Richardson Properties Pty Ltd [2012] NSWCA 253 at [58]:

Physical delivery is not required for a deed to be effective. The critical question is whether the party executing the deed has evinced an intention to be bound immediately.

58. That was affirmed in Pittmore Pty Ltd v Chan; Chan v Tan (2020) 104 NSWLR 62; [2020] NSWCA 344 at [67]-[68].

59. His Honour then stated by reference to Segboer and Taouk v Ho [2019] NSWCA 156 at [47] that the question of a party’s intention in respect of delivery “is to be determined on the basis of the words used by and the conduct of the promisor, taking into account the circumstances attending the execution of the deed”.

60. His Honour then applied those principles, and concluded that the references by Messrs Albarran and McDonald in their affidavits were beside the point. What they said 13 years later could not amount to an admission in respect of the legal effect of the documents signed by them. His Honour added that, even if contrary to his views subjective intention were relevant, Mr McDonald indicated in cross-examination that it had not been his intention that they take effect as a deed.

61. His Honour then turned to the deeds of indemnity which were executed at the same time as the deeds of appointment. His Honour observed at [370] that each of the deeds of indemnity was entitled “deed” contrary to the titles on the appointment instruments. Each deed of indemnity began with the words “now this deed witnesseth” which were absent from the appointment instruments. Clause 4 of each deed of indemnity described the document as a “deed” contrary to anything in the appointment instruments. The words “in witness whereof” above the attestations on each deed of indemnity were found in the deeds of indemnity, but not in the appointment instruments.

62. His Honour considered that all of those distinctions supported the conclusion that the deeds of indemnity were deeds but the appointment instruments were not.

63. His Honour then addressed whether the parties which had executed the documents were able to withdraw from the transaction before other parties had executed it, in [373]-[374]:

The essential difference between executing a document as a deed rather than as a mere contract is that the party which has executed a deed is unable to withdraw from the transaction while waiting for the other parties to execute it: 400 George Street v BG International at [9], Muir JA observed (Fraser JA and Mullins J agreeing); citing Vincent v Premo Enterprises (Voucher Sales) Ltd [1969] 2 QB 609 at 619 per Lord Denning MR. Even where the deed is executed and delivered in escrow, subject to some condition being satisfied, the party which has executed the instrument cannot withdraw pending the satisfaction of the condition: ibid at [10], citing Beesly v Hallwood Estates Ltd [1961] 1 All ER 90; [1961] Ch 105 at 118 per Harman LJ and at 120 per Lord Evershed MR; see also Pittmore v Chan at [72]–[73] per Leeming JA.

There is nothing about the Appointment documents to indicate that the parties intended each to operate such that TCBS or the Receivers would be immediately bound upon execution of the document, before the other party had done so. Instead, the Appointment documents record an agreement on the part of TCBS to appoint the Receivers to perform a specified function, namely, “to be Receivers and Managers of the property of the Mortgagor referred to in the Schedule”, investing them with “all the powers, authorities and discretions available to a Receiver and Manager or Receiver under the provisions of the Charge”; and an agreement on the part of the Receivers to “hereby accept this appointment”. The objective intention is that this instrument, and the appointment, would take effect once all parties had executed that document.

64. On that basis, his Honour concluded that the parties’ objective intention was that the appointment documents took effect as contracts and not as deeds.

The appellants’ submissions

65. Subject to one qualification, Mr Salmon chose to spend none of the approximately five hours for oral address in developing ground 24. The entirety of his written submissions in support of that ground were as follows:

At [368] Red 227, the trial judge stated that the parties’ objective intentions should be assessed from their words and actions. He cited Segboer v A J Richardson Properties at [59] (Red 226) and noted that 1R and 2R referred to the documents as Deeds in their 2019 affidavits (Red 360). However, at [367] Red 267, he dismissed the relevance of these references as “besides the point” and not reflective of 2006 intentions, contradicting the cited authorities, especially in light of other documents.

The parties’ contemporaneous objective intentions were also clear (2006-2009), completely omitted and should have carried more weight. The Court Book contained significant contemporaneous documents, including from the NSW Supreme Court, Federal Court, and OLSC, authored by 1R, 2R, 3R, and Mr Pleash. If these were not Deeds, these parties misled multiple courts and the OLSC, raising credibility concerns. Despite this, Hall Chadwick’s counsel rejected the Deed status, although three of their partners and a solicitor confirmed through 11 documents (8 affidavits) that they were Deeds.537 The trial judge, while accepting 1R’s evidence on frequent appointments and vast experience, inconsistently rejected 1R’s reference to them as Deeds and overlooked Mr Pleash’s testimony. It seems the trial judge disregarded his own direction on objective intentions. This should have been a key consideration in his analysis.

The Appellants gave evidence they understood these were Deeds of Appointment, supported by oral submissions (Black 482). The trial judge, concluded they were not Deeds, supporting Mr Elliott SC’s narrative contradicting his client’s own affidavits. This selective consideration of evidence undermines the finding. The documents only ceased to be considered Deeds after the Appellants raised a limitation argument under the Act. Given the clarity of intentions in the documents, the trial judge’s conclusion contradicts the evidence of those who should know best if they were Deeds.

66. Footnote 537 was as follows:

Blue 3170 V7 10 December 2007 letter 1R to 1A (advising he has enclosed the Deeds of indemnity); Blue 3901 V8 19 August 2008 3R’s letter to McLachlan Chilton Lawyers where he enclosed copies of the Appointment Deeds; Blue 4011 V9 1 September 2008 affidavit Mr Pleash paras 6 and 8 where he exhibits the Deeds of Appointment; Blue 4064 V9 9 October 2008 affidavit 3R sworn for Federal Court proceedings where he exhibits the Deeds of Appointment; Blue 4255 V9 26 May 2009 affidavit Mr Pleash para 2 (referring to and exhibiting the Deed of Appointment); Blue 4285 V9 17 July 2009 letter 3R to OLSC; Blue 333 4 October 2019 affidavit 1R para 30.; Blue 354 23 October 2019 affidavit 2R para 6; Blue 403 7 February 2023 affidavit 3R para 50 (*2); Blue 363/364 7 February 2023 affidavit 2R para 19 and 26 [sic]

67. The qualification was that towards the end of Mr Salmon’s reply, he began to reiterate (in language resembling the written submissions) parts of the submissions in support of ground 24 (tcpt, 11 March 2026, 145(33-40)). I was conscious that addressing this ground in purported reply could occasion unfairness when it had not hitherto been developed over the preceding two days, and so I pointed out that neither respondent had addressed that ground and his submission could not properly be in reply.

Consideration

68. The instruments of appointment do not operate as deeds, substantially for the reasons given by the primary judge, which may be summarised as follows.

69. A chargee with a power to appoint a receiver may do so in accordance with the charge. There is no obligation to use a deed, and thus no contextual reason to strain the language used in the instrument of appointment to regard it as a deed.

70. The documents are not models of drafting, and in particular it is quite unclear why in the execution clause in the documents indemnifying the receivers, the receivers are expressed to have “SIGNED SEALED AND DELIVERED” the document, while TCBS is expressed to be bound by the document having been “SIGNED FOR AND ON [its] BEHALF”. There is also a mismatch between the defined term “Guarantor” which is not used in the document, and the undefined term “Secured Creditor” (sometimes “secured Creditor”) which is used in the operative clauses. But nothing turns on those peculiarities for present purposes.

71. The distinctions between the documents, notably that the indemnities commence with “This DEED made …” while the instruments of appointment are documents headed “Appointment of Receivers & Managers …” are marked.

72. Further, and critically, the primary judge was with respect correct to conclude that TCBS was not bound immediately upon Mr Salmon signing the instrument of appointment. To the contrary, as the primary judge observed, everything points to the parties being bound when everyone had executed it.

73. Finally, both documents are evidently taken from a precedents database, as is clear from the footer. The instruments of appointment are described in the footer as “Appointment of Receiver & Manager.doc” while the latter documents are described in the footer as “Deed of Indemnity Secured Creditor Appointment – BUSICF.doc”.

74. None of Mr Salmon’s submissions addressed the “critical question” whether the documents were effective immediately after being executed by TCBS. None of those submissions addressed the textual differences between the documents of appointment and the deeds of indemnity. Mr Salmon’s reliance upon “the evidence of those who should know best if they were Deeds” may seem persuasive, but in fact is contrary to the objective theory of contract. Far from disregarding what the primary judge had said as to objective intention, the primary judge drew upon what was to be understood from the text of the instruments, read in context (notably, with the indemnities executed at about the same time). The fact that Mr Salmon has identified eight affidavits referring to the instruments of appointment as deeds does not detract from the reasoning of the primary judge.

75. This ground is not made out.

A further obstacle to the Receivers being liable pursuant to the instruments appointing them

76. There is a separate, independent basis for rejecting this aspect of the way the case was presented.

77. The primary judge proceeded at [377]-[384] to address whether there was a breach of any term of the instruments of appointment. In those paragraphs, the primary judge analysed the case advanced at trial, noting that some breaches had not been pleaded, and other breaches had not been established, and otherwise rejecting the claim for the same reasons already determined, namely, that there was no breach by Mr Albarran of his fiduciary obligations.

78. Significantly, in a Notice of Appeal prolix as that put forward by Mr Salmon, and in written submissions of 140 pages, not to mention the entirety of the first day’s hearing, at no stage did Mr Salmon contend that any aspect of that reasoning was incorrect.

79. Enough has been said to uphold the dismissal of the entirety of the claim against the Receivers insofar as it was based at common law.

Was the primary judge wrong to proceed on the basis that there was no liability in equity in the absence of a finding of dishonesty?

80. The absence of a finding of dishonesty was significant for the first two of the three ways in which the case was advanced at trial, which turned on breach of fiduciary duty, in two quite different ways, bearing in mind the unchallenged finding of breach of fiduciary duty by Mr Brown on 18 September 2006.

81. The first was that if the Receivers were to be liable for knowing and assisting Mr Brown’s breach of fiduciary duty, that could only occur if the breach amounted to a “dishonest and fraudulent design”: Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22.

82. The second is that a different limitation period might apply depending on whether dishonesty was made out. It was contended at trial that a six year limitation period for breach of contract would not be applied by analogy for a breach of fiduciary duty which amounted to a dishonest and fraudulent design, relying on what had been said in Lewis Securities Ltd (in liq) v Carter [2018] NSWCA 118; 355 ALR 703.

83. In closing address before the primary judge, and in this Court, the focus was on the availability of limitation defences to claims for breach of fiduciary duty which amounted to a dishonest and fraudulent design. In this Court, that was in part because of submissions advanced on behalf of Messrs Albarran and McDonald. If they were not liable under the instrument appointing them as receivers, then they would only be liable if the finding that they had not breached the fiduciary duty they themselves owed were overturned, or alternatively if it were found that they had knowingly assisted the (conceded) breach of fiduciary duty by Mr Brown and that breach amounted to a dishonest and fraudulent design. Even if either of those pathways to liability were available, in the absence of a finding of dishonesty they relied on a limitation defence.

84. However, Mr Brown’s position was and is different. He did not seek to disturb the findings that he owed a fiduciary duty to TCBS which was breached when he put forward a deed containing a release to his personal benefit. Subject to other defences, he would be liable to account for loss caused by that breach. But if that breach fell short of amounting to a dishonest and fraudulent design, then not only would Messrs Albarran and McDonald not be liable for knowing assistance, but also he would have the benefit of a 6 year limitation period applied by analogy, it not being suggested in this Court that there was anything unconscionable in relying on that limitation period: Gerace v Auzhair Supplies Pty Ltd (in liq) (2014) 87 NSWLR 435; [2014] NSWCA 181 at [70].

85. That somewhat complex position was the context for the concessions made by the plaintiffs’ senior counsel in closing address on 14 September 2023, the last day of the trial. At the commencement of his address, there was the following exchange between Mr Insall and the primary judge:

HIS HONOUR: … is there a claim for breach of fiduciary duty against Mr McDonald or not?

INSALL: There’s a pleaded claim but we would have to concede that unless it can be said to be a dishonest breach of fiduciary duty, which we don’t plead, it would be statute barred, so we’re not pressing that claim. In essence, what we say is that Mr Brown’s breach of fiduciary duty was a dishonest breach for the purposes of the second limb of Barnes v Addy and the same applies to Mr Albarran.

86. Later in the address, in the course of speaking to limitation by analogy and Lewis Securities Ltd (in liq), the point was returned to:

HIS HONOUR: Just going back to something you said right at the start of your address today, just to be clear, your argument that says no analogy requires the finding that there has been a dishonest and fraudulent breach?

INSALL: Yes.

HIS HONOUR: Otherwise, the analogy would apply?

INSALL: Yes.

87. The primary judge was entitled to rely upon that concession. It is trite that litigants are generally bound by their counsel when conducting litigation: R v Birks (1990) 19 NSWLR 677 at 685; de Robillard v Council of the New South Wales Bar Association; Council of the New South Wales Bar Association v de Robillard (No 2) [2024] NSWCA 299 at [134] and see the authorities collected in Dibb v Transport for New South Wales [2024] NSWCA 157 at [38]-[49]. What is more, it would have been quite unfair for the primary judge to proceed on any basis other than that stated by senior counsel for the plaintiffs, without first fairly warning the litigants of the possibility that he might do so: Pantorno v The Queen (1989) 166 CLR 466 at 473; [1989] HCA 18, and see Litigation Fund WCX Pty Ltd v Homebuilding Pty Ltd [2025] NSWCA 16 at [77]-[78].

88. Moreover, the concession was properly given. The position may be different in the case of a dishonest breach of fiduciary obligation, for the reasons considered in Lewis Securities Ltd (in liq), and also where it is said that a fiduciary or an accessory to the fiduciary retained the plaintiff’s property which is held on constructive trust: see Twigg v Twigg [2022] NSWCA 68; 402 ALR 119. But where there is merely a claim for equitable compensation for loss caused by a breach of fiduciary duty which falls short of a “dishonest and fraudulent design”, then it may be expected that a six year limitation will be applicable by analogy, as held in Gerace v Auzhair Supplies Pty Ltd (in liq).

89. Stepping back from the somewhat technical law governing the application by analogy of limitation periods to equitable claims, it is easy to see that on the one hand Mr Salmon has good reason to be disaffected with the events of 2006. He has in his favour a finding that Mr Brown breached a fiduciary duty owed to TCBS by putting forward in a deed which might settle TCBS’s claim to recover money a release which benefited himself. In many cases, that would be a promising start to obtaining a judgment in favour of TCBS. However, in the present circumstances it must be borne in mind that the proceedings were commenced more than a decade after the events of which complaint is made. It is entirely unsurprising that there should be a limitation defence in the absence of a finding of dishonesty, or for counsel to tell the primary judge that that was the basis upon which the case was being advanced.

The failure to make findings of dishonesty

90. To reiterate, the primary judge found that (a) the Receivers and Mr Brown owed fiduciary obligations, (b) the Receivers did not breach any fiduciary obligation, (c) Mr Brown was in a position of conflict on 13 September, but sought and obtained the informed consent of TCBS to continue to act on the morning of 14 September, and (d) Mr Brown was in breach of his fiduciary obligation when he put forward a proposal that he and his firm be released in respect of money obtained from Given Form, but the primary judge found that that breach was not a dishonest one.

91. No finding of dishonesty was sought against Mr McDonald, and in what follows I shall refer simply to Mr Albarran.

92. It is convenient to commence with some general propositions.

93. First, this aspect of the appeal is not a matter merely of the primary judge failing to make a finding which may have been open to him, and giving no reasons for not doing so. This is a case where the primary judge gave reasons for why he was not making the finding of dishonesty which was urged upon him. It is necessary in this Court not merely to point to a factual basis for the findings sought, but also to establish error in the reasons given by the primary judge for not making those findings.

94. Secondly, the primary judge saw each of Messrs Albarran and Brown give evidence. In particular, he saw each man respond to being confronted with the proposition that their conduct some 17 years earlier had been dishonest.

95. True it is that the primary judge very properly recognised the limitations of human recollection over such a time period, and gave appropriate weight to contemporaneous documents. The reasons for judgment very much reflect the documentary record, rather than the testimonial evidence of witnesses’ recollection of conversations 17 years earlier. Notwithstanding Mr Salmon’s complaints, the approach is familiar and orthodox. But in one important respect the primary judge’s reasoning must have been informed by the testimonial evidence. Whether or not Mr Albarran or Mr Brown was dishonest on 13-14 September, or 18-19 September, was an inquiry which was likely to have been informed by the impressions derived from their cross-examination. Thus the constraints in Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 and Lee v Lee (2019) 266 CLR 129; [2019] HCA 28 below are applicable:

Appellate restraint with respect to interference with a trial judge’s findings unless they are “glaringly improbable” or “contrary to compelling inferences” is as to factual findings which are likely to have been affected by impressions about the credibility and reliability of witnesses formed by the trial judge as a result of seeing and hearing them give their evidence. It includes findings of secondary facts which are based on a combination of these impressions and other inferences from primary facts.

See for example O’Brien v Australian Broadcasting Corporation (2017) 97 NSWLR 1; [2017] NSWCA 338 at [212]-[220].

96. Another way of making this point, divorced from legal jargon, is simply this. It is no small thing for an appellate court, which has only the imperfect record of the transcript of a hearing and has not seen the persons involved when confronted with the proposition that they were dishonest, to conclude that they were dishonest, in circumstances where the trial judge concluded that they were not and gave reasons for doing so. Even if the reasons disclosed error, it by no means follows that the appellate court would be in a position to make a finding of dishonesty.

97. I shall deal with each of Messrs Albarran and Brown in turn.

Mr Albarran

98. The question of dishonesty was less acute for Mr Albarran than for Mr Brown, because his Honour found that there was no breach by him of the fiduciary duty which he owed. Nonetheless, the primary judge attended to the plaintiffs’ submission, and explained why even if there had been a breach, his Honour would not have found dishonesty. His Honour said at [349]:

Even if I had found that Mr Albarran did breach his fiduciary duties by agreeing to the insertion of the Given Form release, I would not have found any such breach to be dishonest, particularly having regard to the following matters:

(a) Mr Albarran had been advised by his solicitor, Mr Brown, that the inclusion of the clause was in TCBS’s interests, and it was not suggested to Mr Albarran that he ought to have rejected that advice or that he knew or ought to have known that it was not soundly based; and

(b) Mr Albarran was informed, by Mr Brown’s email of 18 September 2006, that the draft deed was being sent to each of Mr Salmon and Mr Myers of TCBS for their review and instructions, as well as to counsel for TCBS. In those circumstances, it is likely that Mr Albarran expected that each of those persons would review the draft deed, including the proposed Given Form release; and that the deed, including that release, would not be put forward as capable of acceptance by the Liquidator unless and until TCBS confirmed their instructions, and counsel confirmed that there was no issue with the draft.

99. Paragraph (a) was not challenged. Paragraph (b) was challenged, in paragraphs 383-385 within the 75th sub-ground of ground 23 of the appeal. Paragraph (b) turns upon the email from Mr Brown dated 7.48pm on 18 September 2006 attaching a draft deed which included, in cl 3.5, a release of the Given Form claim. It was sent to Mr Nikolaidis, Mr Albarran, Mr Myers and Mr Salmon as direct recipients, with Mr O’Sullivan being copied in. The email stated:

Please review the attached document.

The document has been sent to you at the same time as it is being sent to our clients for their instructions.

We understand that this document has to be signed this evening. We are waiting in our office. If that is not correct please advise us so we can go home.

100. Mr Salmon’s challenge to the reasoning in [349(b)] was as follows:

383 The finding at [349b] Red 223 is contrary to the evidence. The Respondents argue the 1R’s agreement to release Given Form was not dishonest, but this rests on a factual error. This error similar to those raised in appeal grounds 23 (42), 23 (58), 23 (68), and 37(b), where the Appellants contend counsel was never asked to review the Deed, and the 1R could not have expected counsel to confirm the draft was issue-free. The original judgment on 19 October 2023 referenced “Senior Counsel”, implying possible intervention, though this was inaccurate. The revised judgment omits SC. The conclusion that counsel reviewed the Deed is unsupported. Mr O’Sullivan, a carbon-copied recipient, had no involvement in the Deed or settlement discussions, nor was this suggested by any witness. The claim in Mr Elliott SC’s submission that “counsel confirmed there was no issue with the draft” is convenient narrative unsupported by evidence

384 Furthermore, a central issue is that the 3R consistently denied acting for TCBS, contradicting the 1R’s claim that they were awaiting instructions from TCBS. The 1R pleaded contrary to this. The Deed sent to the 1A and Mr Myers of TCBS allegedly for review, but they were laypeople relying on their solicitor and 1R & 2R to prepare it. The 1A testified he arrived the next morning to sign the Deed without having had opportunity to review it. Mr Myers was not a signatory for TCBS.

385 This finding repeatedly references counsel reviewing the Deed, despite no request or requirement to do so. The conclusion lacks evidence and sound reasoning and seems to exonerate the 1R from responsibility for instructing the 3R to insert unrelated personal matters into the TCBS settlement deed.

Mr Salmon’s cross-referenced submissions

101. Paragraph 383 reproduced above refers to appeal grounds 23(42), 23(58), 23(68) and 37(b). Ground 37(b) deals with quantum and has nothing to do with dishonesty. Subground 42 is as follows:

The trial judge found at judgment [192]: “counsel for TCBS would have reviewed the draft deed carefully, and if that he had expressed any disagreement, the deed would have been withdrawn in this form. It follows that counsel likely did not raise any issue with the Given Form release being included in this draft”. This goes against the weight of evidence.

102. That mis-states what the primary judge said, by omitting the beginning of the first sentence and the end of the second. In fact the primary judge said at [192]:

Similarly, it is likely that counsel for TCBS would have reviewed the draft deed carefully, and that if he had expressed any disagreement, the deed would have been withdrawn in this form. It follows that counsel likely did not raise any issue with the Given Form release being included in this draft, in circumstances where he was aware that the Liquidator and Mr Nikolaidis had sought to deploy the Given Form release against TCBS in the 2006 Proceedings. (emphasis added).

103. Subground 68 challenges as not supported by any evidence a finding at [327(e)], which is on its face no more than a restatement of earlier findings (the paragraph commences “I have found that”) concerning seeking advice from counsel in relation to the Given Form issue.

104. Subground 58 challenges findings by the primary judge at [232] and [233] concerning the agreement of the parties only on dollars, as opposed to all terms, and that the agreement as to dollars was short-lived.

105. To be fair, paragraph 383 of Mr Salmon’s submissions merely contends that the alleged error is “similar” to those subgrounds. The gravamen of Mr Salmon’s submission on this ground is not in the cross-referenced subgrounds, but in paragraphs 383-385 themselves.

Why the reasons of the primary judge do not disclose error

106. Paragraph 349 of the reasons of the primary judge contains two sentences. The first sentence is plainly correct; it is an accurate description of the email. The second sentence is a finding of what was likely. It is to be borne steadily in mind that the purpose of this section of the judgment is to explain why, even if contrary to his Honour’s view he had found that Mr Albarran was in breach, that breach was not dishonest in the sense of transgressing the ordinary standards of honest behaviour. This is the principal reason why Mr Salmon’s submissions (and reliance on subgrounds 42 and 68 of ground 23) are not to the point. It is clear from the email that Mr Brown was making no attempt to conceal from anyone, including Mr Nikolaidis, that (a) the draft was subject to instructions from his own clients, which would necessarily include Mr Salmon, and (b) that Mr O’Sullivan, who had no personal interest one way or the other concerning the Given Form release, was being included. I see no error in the inference that it was likely that Mr Albarran expected Mr O’Sullivan to review the deed. After all, the trial had started, the first day had been occupied with objections and calls for documents, but everyone must have appreciated that there was at least a chance that the case would be completed the following day and hence the deed, if it were to settle the litigation and relieve Mr O’Sullivan from the burden of a cross-examination on whether BACF was insolvent in March 2005 which occupied most of Tuesday, might need to be finalised before 10am the following morning. Everyone knew they were in the Expedition List, in a matter that had been given a very prompt hearing, by a judge who might very well give an oral judgment immediately after the trial concluded.

107. Another way of putting this is that it is quite unlikely, when a small firm of solicitors has briefed junior counsel in a two day hearing and there is a prospect of it settling on the evening of the first day, for junior counsel not to be expected to familiarise himself with a draft deed which on its face was being sent simultaneously to the clients and to the solicitor on the other side. This assessment of what probably occurred does not turn on evidence, as opposed to the experience of anyone involved in litigation.

108. Nor is there any reason to doubt his Honour’s conclusion that it was likely that Mr Salmon would review the deed before court resumed the following morning. The email stated in terms that Mr Brown understood it needed to be settled that night, that he was remaining in the office for that purpose, and that it needed instructions from his clients.

109. But ultimately, and contrary to the gravamen of Mr Salmon’s submissions, what matters is not so much whether what the judge contemplated was likely to have occurred did in fact occur, but whether the considerations upon which the judge relied justified his conclusion that Mr Albarran was not acting dishonestly in the event that his conduct were a breach of duty. The matters on which the primary judge relied all support the conclusion that there was no dishonesty.

Why Mr Salmon’s submissions must be rejected

110. I turn to the points raised in paragraphs 383-385 of Mr Salmon’s submissions.

111. First, it is true that there was an error in the reasons for judgment as originally delivered, in that throughout Mr O’Sullivan was referred to, incorrectly, as “Senior Counsel”. That error was corrected on the same day, and an addendum to the judgment transparently records:

19 October 2023 - Amended the text in the Decision where Julian O’Sullivan is mentioned - removed SC from after his name.

19 October 2023 - Removed ‘Senior’ from references to Mr O’Sullivan as Senior Counsel

112. Mr Salmon complained that he did not learn of the change until much later. There was no evidence of the primary judge not having sent a revised copy, or alternatively advising the legal practitioners retained by the parties, of the amendment. But even taking Mr Salmon at his word and assuming in his favour that his lawyers were not notified of the change either, nothing turns on this. Anyone familiar with the publication of judgments on Caselaw will know that they are regularly amended, and that a very common reason for amending them is that the name of a practitioner or a litigant or witness is misspelt, or that a junior counsel is wrongly attributed as senior counsel or vice versa. (Looking at recent judgments, Moussa v Camden Council (No 8) [2025] NSWSC 186 was delivered on 7 March 2025, but was amended on 11 March 2025 to correct the name of the firm of solicitors, and Leverton v Predny [2024] NSWSC 1638 was delivered on 19 December 2024 but was amended on 10 February 2025 with the note “Correction to representation details”.) Contrary to Mr Salmon’s submission, nothing turns on this. The error is understandable; after all, the liquidator had briefed senior counsel. But the reasoning did not turn upon the seniority or otherwise of counsel. Instead, it turned on the fact that counsel, who had no interest in whether the deed contained or did not contain a Given Form release, was copied into it.

113. Secondly, Mr Salmon reiterated his points about Mr Brown denying he acted for TCBS. This email is a powerful indication that Mr Brown’s stance in this litigation as to his retainer was wrong, as the primary judge found. But otherwise this point goes nowhere. It is to be borne in mind that the point of the paragraph is to explain the finding that Mr Albarran was not dishonest.

114. Thirdly, Mr Salmon then referred to his own evidence that he had no opportunity to read the deed. But once again, what matters is that the fact that the email was addressed to Mr Salmon, and was drafted in terms which expressed Mr Brown’s view that Mr Salmon would review it very promptly, supports the conclusion that Mr Albarran was not acting dishonestly. Whether or not Mr Salmon in fact reviewed it is neither here nor there for present purposes.

115. Fourthly, Mr Salmon reiterated his complaint to the effect that counsel was not asked to review the draft deed. As noted above, Mr Salmon’s submission focusses upon what did or did not happen, and misses the point that the reasoning of the primary judge was to support a conclusion not about whether something happened, but whether Mr Albarran was dishonest.

116. For completeness, I note that ground 40, which was supported by paragraphs 492-494 of Mr Salmon’s written submissions, arguably extends to a challenge to the failure to find dishonesty. The gravamen of those paragraphs is to complain about matters not mentioned in the chronological account of events given by the primary judge at [177]. While it is true that his Honour makes findings about Mr Albarran not seeking a benefit for himself, the first reason given by his Honour is that no allegations were made of moneys paid to Hall Chadwick, as opposed to the Etienne Lawyers, and Mr Salmon does not dispute that proposition. The primary judge also accepted Mr Albarran’s evidence that he was satisfied he had acted in accordance with the irrevocable assignments, and that if there turned out to be a preference “it was not my problem”. Mr Salmon’s submissions do not provide a sound basis to attack that finding; it was not necessary for the primary judge to address the totality of the evidence which bore upon that issue. Ultimately the most important reason for this ground not being dispositive is that it does not impugn the critical reasoning as to Mr Albarran’s absence of dishonesty, which occurs later in the reasons of the primary judge.

Mr Brown

117. It is plain that the primary judge was acutely aware that it was wrong for a solicitor retained to run a case for a client to introduce into a proposed settlement a release for his own benefit. The primary judge dealt with this elaborately at [341]-[347], the entirety of which warrants reproduction:

Given Form release – Mr Brown

341 I have found that Mr Brown was, at least in part, acting to pursue a benefit for himself in inserting the Given Form release into the draft settlement deed. He cannot rely on Mr Salmon’s consent to his continuing to act in the 2006 Proceedings, as consent to his pursuing this benefit. Mr Brown did not seek the prior consent of TCBS before proffering the draft deed, with this release, to the Liquidator. In those circumstances, I find that he was in breach of his fiduciary duties by putting forward that proposal to the Liquidator.

342 The issue then arises whether such breach was dishonest. The requisite element of dishonesty and fraud on the part of the fiduciary is met “where the conduct which constitutes the breach transgresses ordinary standards of honest behaviour”: Ancient Order of Foresters in Victoria Friendly Society Ltd v Lifeplan Australia Friendly Society Ltd (2018) 265 CLR 1, [2018] HCA 43 at [71] per Gageler J, citing Hasler v Singtel Optus Pty Ltd (2014) 87 NSWLR 609; [2014] NSWCA 266 at [124]. It is not necessary to demonstrate that the person thought about what those standards were: Hasler v Singtel Optus at [124] per Leeming JA (Barrett and Gleeson JJA agreeing).

343 Although Mr Brown did not seek prior consent from TCBS before inserting the Given Form release into the draft deed, he did seek prior consent from Mr Albarran. That is, he sought specific instructions in advance of including the release from a receiver appointed by TCBS, who was conducting the litigation on TCBS’s behalf, and was required to act in TCBS’s best interests. Mr Brown explained to Mr Albarran why he considered the clause to be in TCBS’s interests, referring to the potential for the issues raised by the Liquidator in relation to Given Form to delay the distribution of moneys in the liquidation of the BA companies.

344 I have found that Mr Brown was, at least in part, motivated by that concern in proposing the Given Form release, and that he believed the inclusion of the release to be in TCBS’s interests (though it was also in his own interests). The Plaintiffs disputed that this concern formed any part of the thinking behind the inclusion of the Given Form release, contending that Mr Brown and Mr Albarran had “already dealt with the issue of potential delay in clause 3.1.2 and 3.1.3, whereby Mr Wily was bound to assign $1.3m from the proceeds of the Federal Court litigation, was required to agree to no set-off, and was required to agree to secure the payment by means of a charge on the chose in action in the Federal Court proceedings”. However, the Liquidator was not “bound” to any of those matters. These were proposals in a draft deed on the evening of 18 September 2006. There is no evidence that any of those particular proposals had been discussed with the Liquidator before the draft was sent, let alone that they were likely to be acceptable to him. Further, given the changes made by the 19 September draft deed, it is likely that the proposal for an assignment by the Liquidator was rejected and, from Mr Nikolaidis’ rejection of the 19 September draft deed, it may be that the other proposed arrangements were likewise unacceptable as far as the Liquidator was concerned. In circumstances where there was no agreement on how the settlement would be implemented, or when the moneys would be paid to TCBS, or on priority of payment, and where the Given Form issue had been raised by the Liquidator and his representatives as a means of putting pressure on TCBS in the 2006 Proceedings, there was a rational reason to conclude that a release in respect of the Given Form issue might assist in reducing the risk of any further dispute and delay in the payment of the settlement moneys to TCBS. That is, there was reason for Mr Brown to adopt what he described as a “belts and braces approach” in the negotiations seeking to “put the best possible deed we could to protect everyone’s interests and ensure that the money could be released as soon as possible”.

345 As well as seeking Mr Albarran’s agreement to the inclusion of the Given Form release in the draft deed, Mr Brown sought instructions on the draft deed that included the release. On the evening of 18 September, Mr Brown sent the draft deed to each of Mr Salmon, Mr Myers, Mr Albarran and Mr O’Sullivan, specifically asking them to “review the attached document”, and indicating that he was seeking “their instructions”. The deed was a short document and Mr Brown would have expected, particularly given the terms of his email, that each of his clients, as well as counsel for his clients, would review the document carefully. As indicated by Mr Brown’s covering email of 18 September, he was aware that the deed could not be put forward as a document capable of being accepted by the Liquidator unless and until his clients, following their review (and any advice from their counsel), gave instructions approving the deed in that form.

346 In addition, those instructions were sought in circumstances where, just a few days earlier, Mr Brown had informed his clients and counsel of the issues that had been raised in respect of the Given Form payment to Etienne Lawyers, and that the Liquidator was using those issues in an attempt to gain a forensic advantage against TCBS in the 2006 Proceedings. Mr Brown would have expected that his clients and counsel would understand that the Given Form release was being proposed in response to those issues having been raised on 13 September.

347 Given those matters, I am not satisfied that the Plaintiffs have established that Mr Brown dishonestly breached his fiduciary duties by inserting the Given Form release into the draft deed that was provided, by his 18 September email, to both the Liquidator’s solicitor for review and to his own clients for instructions. It follows that any claim in respect of this breach is statute-barred.

118. The ground of appeal concerning whether Mr Brown was dishonest overlaps with the “first peculiarity” of which Mr Salmon complained, which was the failure to make any adverse finding on the credibility of any of the respondents based on their denial that Mr Brown had acted as solicitor for TCBS. The primary judge made the contrary finding, favourably to Mr Salmon. Mr Salmon’s point was that the primary judge should go further, so as to rely upon that error in assessing the credibility of all of the respondents.

119. I shall first deal with the “first peculiarity”, and the submissions made in support of it, and then turn to the grounds of appeal and the written submissions made in support of them.

120. It is true that Mr Insall SC had squarely put to Mr Brown that his evidence on this issue was untruthful, in a manner that would have permitted a finding of conscious dishonesty to be made.

121. I would also accept that Mr Salmon is firmly of the opinion that the primary judge’s failure to make an adverse finding is inexplicable. In his words:

I don’t get how can a solicitor of 40-odd years deny the conversation, deny that he ever acted for TCBS with 21 documents in front of him that he has signed, and then not have any adverse credit [finding].

122. But Mr Salmon shoulders a very heavy burden in submitting that there was appellable error in the primary judge not making such a finding. It is to be borne steadily in mind that the trial took place some 17 years after the event. The only formal fee disclosure and retainer in existence was a retainer by the receivers of Mr Brown’s firm. Mr Salmon did not point to any invoices or payments in evidence whereby TCBS, as opposed to the receivers, had paid for Mr Brown’s firm. His case was that there was an oral retainer by Mr Brown’s firm of TCBS, for work to be done on a speculative basis. That case was accepted by the primary judge. But dishonesty is not the inevitable consequence of rejecting Mr Brown’s case on that issue. It is plain that it was open to the primary judge to accept that Mr Brown was honestly mistaken in his recollection to the contrary.

123. The 71st and 72nd subgrounds of ground 23 challenge aspects of [345] and [346] above, and were developed in paragraphs 375-379 of Mr Salmon’s submissions. Mr Salmon did not seek to develop those submissions orally in terms, although he elaborated some of the issues referred to in those paragraphs, especially whether there was informed consent to Mr Brown’s continuing to act.

124. The submissions are as follows:

Ground 23 (71st)

375 The trial judge erred in this finding [345], which relates to [192] Red 185, [225] Red 195, [345] Red 222, and [349b] Red 223, and appeal grounds 23(42nd), 23(75th), 35. The Appellants refer to submissions at 23(42nd). This key finding on informed consent contradicts the evidence and the case’s main issue. The 3R denied representing TCBS, yet claimed to seek instructions from 1A and Mr Myers, creating a contradiction. The 3R’s defence repeatedly stated TCBS was not his client. The issue was argued with counterfactual submissions, and the trial judge required to explain why one version was preferred. The phrase “each of Mr Salmon, Mr Myers, Mr Albarran, and Mr O’Sullivan, specifically asking them” misrepresents the document. The Court should consider the amended judgment removing “Senior Counsel”. The findings at [345] Red 222 contradict the evidence, especially the 18 September email and Deed referenced. The inference that the Deed was not approved due to missing instructions or advice is unsupported.

376 The 1A and Mr Myers (TCBS), neither legally trained, relied on the 3R’s advice about the Deed. They had agreed to the settlement terms. Suggesting they should have “reviewed the document carefully” and approved the Deed without explanation contradicts prior agreement and expectations of laypersons, especially considering the 1A’s trust in the solicitor for personal and company matters. The trial judge erred in undermining the 1A’s credibility, introducing bias that cannot be overlooked.

UCPR 51.36 (2) Statement as to Challenge to Finding of Fact

377 The email relied upon in this finding is carbon copied to counsel. Carbon copy is an established global term for keeping someone in the loop who has no requirement to act. Counsel was not required to respond. He did not respond nor charge time on this. This error has significant inference positive to the Respondent’s and negative to the Appellant’s as the trial judge used it to find that counsel was ok with the inclusion of Given Form because he hadn’t objected. Counsel was not “specifically” asked to review the attached document in the email, not requested to provide any instruction (“their instructions”) and not expected to “review the document carefully”. The finding is erroneous and must be set aside with a proper finding that neither the 1A or Mr Myers read the Deed or were informed. Nor was counsel despite the implausible contention that somehow as a non party he could give such informed consent.

Ground 23 (72nd)

378 The finding at [346] Red 223 that the raising of conflict/Given Form by the opposing solicitor and liquidator was for forensic advantage and using that as support for the Respondents’ defence is contrary to the standards expected of practitioners by the Law Society of New South Wales. The Liquidator and Mr Nikolaidis raising the issue was and still is the recommended course. At [156] Red 175 the trial judge misstates the 1A’s evidence. The 1A did not ask the 3R to put pressure back on the Liquidator’s team. He asked for a strong letter telling them to stop interfering with client contractual relations. He did not raise forensic advantage. Having not raised those matters it is erroneous to have decided what wasn’t the 1A’s mindset. The findings ought be set aside.

UCPR 51.36 (2) Statement as to Challenge to Finding of Fact

379 There is no evidence that Given Form was for “forensic advantage”. It stems from Mr Elliott SC’s narrative. Failing to raise it could breach professional ethics. The guideline seems to have been followed. Mr Nikolaidis raised the conflict with the 1R but should have raised it with the 3R, a task Mr Wily took on. Findings at [156] Red 175 are repeated in [346] Red 223 but misstate the evidence. The 1A’s affidavit contradicts the [156] comments, which the trial judge ignored, constituting a significant error. The 13 September 2006 email contains no suggestion of a forensic advantage against TCBS. These findings should be set aside.

Mr Salmon’s cross-referenced submissions

125. Once again, within his submissions Mr Salmon cross-references other submissions, namely, subgrounds 42 and 75 of ground 23, and ground 35. As noted above, subground 42 of ground 23 is directed to whether Mr O’Sullivan reviewed the draft deed. Ground 35 is also directed to the findings that Mr Myers and Mr O’Sullivan reviewed the draft deed. Subground 75 challenges the findings that it was likely that Mr Albarran expected that each of those persons would review the draft deed, including the proposed Given Form release, and that he would not execute it until that review had occurred. Once again, this is best deferred until ground 8. It is convenient to deal with all other aspects of this ground here.

126. First, it may be accepted that the reasons for judgment as originally delivered referred in [345] to “Senior Counsel”, and were amended later that day. For the reasons already given, nothing turns on that. Whether or not the plaintiffs had established that Mr Brown was dishonest in proffering the draft deed with the Given Form release is affected by whether the draft was copied into the counsel who was running the case which would be settled if the deed were executed, and does not turn on whether counsel running the case was a silk.

127. Secondly, I agree with Mr Salmon that the primary judge was in error when he wrote that all recipients including Mr O’Sullivan were “specifically requested” to review the draft deed. There was a specific request in the email, but that request would not without more be understood as extending to counsel to whom the email was cc’d. But I do not agree that anything turns on that minor error.

128. Thirdly, the email is unusual, in that it was sent simultaneously to client, solicitor on the other side and merely copied to counsel retained, on the evening of the first day of a two day trial. One possibility is that counsel had already reviewed the document; this would explain why he was merely cc’d. If he had not, it seems most unlikely that he would have understood it as something he could and should ignore. It is almost certain that there would have been other communications between counsel and instructing solicitor after court that day. Obviously if those communications extended to a request that counsel review the deed, it would be expected that that would occur. Even if they did not, it seems inherently plausible that the reason for including counsel was to obtain the benefit of his review.

129. Fourthly, it is to be borne steadily in mind that the point of the analysis was to determine whether the plaintiffs had established that Mr Brown’s conduct was dishonest. The fact that he had copied the email to Mr O’Sullivan tells against that conclusion.

130. Finally, Mr Salmon’s submissions concerning informed consent will be addressed immediately below. It will be seen that I agree with the primary judge that informed consent had been given by TCBS to Mr Brown’s continuing to act, in circumstances where that consent had been given on the basis that the complaint was intended to obtain a forensic advantage by denying TCBS its chosen solicitor shortly before the expedited hearing. There is no error in the reasoning of the primary judge that those matters support the conclusion that the plaintiffs had failed to establish that Mr Brown’s conduct the following Monday was dishonest.

The finding of fully informed consent

131. It will be recalled that although it was a large issue at trial, it was not in issue on appeal that Mr Brown owed a fiduciary obligation to his client TCBS, and was in a position of conflict between interest and duty when, on around 13 September 2006 the fact that he had been paid money sourced from Given Form which might be recovered as a preference was raised in order to prevent Mr Brown’s continuing to act for TCBS.

132. Grounds 7 and 8 concern the findings that TCBS gave fully informed consent to permit Mr Brown to continue to act after Mr Wily had claimed on Wednesday 13 September 2006 that an amount paid to his firm was recoverable as a preference and for that reason he should cease to act for the receivers and TCBS in the expedited trial to be heard on 18 and 19 September 2006.

133. Ground 7 complained that the primary judge had erred in permitting the respondents to mount a case of informed consent which had not been pleaded, “wherein the Appellants were prejudiced by not knowing the case they had to answer before trial and would have put on specific evidence if that had been pleaded properly”. This ground overlaps with the “second peculiarity” identified by Mr Salmon at the commencement of his written and oral submissions, namely, the absence of a pleading of informed consent in Mr Brown’s defence. It does not turn on any evidence, but instead the pleadings and the course of the trial.

134. Ground 8 challenged his Honour’s conclusion that Mr Salmon and Mr Myers had given fully informed consent to permit Mr Brown to continue to act for TCBS.

135. These grounds turn principally on two emails sent on the evening of 13 September 2006 and the morning of 14 September 2006.

The email exchange of 13 and 14 September 2006

136. The email of 13 September was sent by Mr Brown to Mr O’Sullivan, and copied to Messrs Albarran, Salmon and Myers. It was sent at 9.41pm. It had four attachments which were not in evidence (or perhaps more precisely, were not in evidence as attachments to that email). Its text is as follows:

Julian,

Can you please look at the above four letters from Leon and advise how you suggest we respond.

Concerning the issue I raised with you regarding Jim Byrnes, there have been further developments. Before going into the developments which may need to be responded to or dealt with some background.

While acting for BACF and BACM, a company which Lazar was interested in (read into this controlled) was placed into administration. Hall Chadwick were the Administrators. The company, Given Form was owed money. I was owed money. I obtained from BACF, BACM and Given Form a direction that money I was owed be paid from funds received by Given Form and payable to these companies. Given Form received funds I got paid. (As advised while I received the funds but prior to disbursing the funds, Given Form was placed into liquidation and Andrew Wily was appointed Liquidator. Hall Chadwick received a letter alleging payments to BACF/BACM may be recoverable. Hall Chadwick dispute this and since that time no more has been heard: until today.)

Brynes [sic] said John Meluiss (a partner with Ferrier Hodgson) had in an interview with ASIC said that he had told me that the money might belong to investors and could not be taken. I have no recollection of any such discussion. How Andrew Wily knows this to tell Jim Brynes [sic] is another matter.

Leon Nikolaidis telephoned Richard Albarran to raise the same issue. He said that he should get another firm or settle as the Given Form issue would be raised. Richard told him one he had not done anything wrong only used Etienne Lawyers and paid us and paid an amount pursuant to a written direction to pay. If he had done anything wrong then he was willing to answer for it just as he and Wily should be prepared to do if they at any time have done anything wrong. Leon apparently did not like that. Conversation ends.

(This afternoon after my conversation with Brynes [sic] I informed John of the issue along the lines [I] did with you.) Later Andrew Wily telephoned John Myers advising him to get a new firm of lawyers as the Given Form issue when it comes to light would not be in his interests. John Myers said he did not know what any of this was about or how it affected him.

Should we write letters requiring Leon and Andrew to undertake not to again seek to intentionally interfere with our contractual relations with two clients, setting out the issue in detail so that there is a proper record of the issue and of their inappropriate behaviour.

In considering this note, that in the material produced by TCBS under the Notice to Produce is a table of matters in which the Given Form issue is noted and the fact that HC were Administrators is expressly stated along with the fact that from money to be received Etienne was to be paid. Nothing was hidden.

Your views please.

137. Mr Salmon’s response to Messrs Brown and O’Sullivan, copied to Messrs Albarran and Myers, was as follows:

forget julians response (no offence julian!)

go fuck them steve!!!!!!!

can we also give them a notice to produce all their bank statements/trust account statements? can we please play them at their own game now? I would like to see a payment come in from michael sanchez

138. The only complete print-out of Mr Salmon’s response in evidence was timed 8.19am. At one point in oral submissions, Mr Salmon suggested that there might be some difficulties in relying on that time. This suggestion was undeveloped. More importantly, there was a factual challenge developed to what the primary judge said at [155], which included that it was sent at 8.19am, in the 28th subground of ground 23 of the appeal, but as articulated in the submissions (at paragraphs 230-231 of Mr Salmon’s written submissions) no issue was taken with the timing. Finally, even if for some technical reason the 8.19am print-out is unreliable as the time the email was sent and in fact Mr Salmon sent it a little later, nothing turns on it.

139. It is convenient to address each ground in turn.

Ground 7: Was fully informed consent available having regard to the pleadings?

The reasoning of the primary judge on the pleading of informed consent

140. Ground 7 challenged the reasoning of the primary judge in [323]-[324] which was as follows:

The Plaintiffs contended that any defence of fully informed consent needed to be, and was not, pleaded by the Defendants. However, in raising this point, the Plaintiffs ignored that they themselves had pleaded that Mr Albarran and Mr Brown failed to obtain informed consent, and thereby put this matter in issue. In particular, in respect of Mr Brown continuing to act after the Given Form issue was raised, the Plaintiffs pleaded that at no time did Mr Brown disclose his conflict to TCBS, “or explain the nature and basis of the conflict and/or seek to obtain TCBS’s fully informed consent to him continuing to act [in the 2006 Proceedings], but continued to act in the matter knowing of the conflict and knowing that he had not done so” (FFASC, paragraph 45M(ak)). A similar pleading was made in respect of Mr Albarran (FFASC, paragraph 45OC(ak)). Further, as regards the inclusion of the Given Form release in the draft deed (discussed below), the Plaintiffs pleaded that: “Neither the first defendant nor the third defendant obtained the informed consent of TCBS for the inclusion of the Given Form release in the proposed Deed of Settlement” (FFASC, paragraph 52). Each of those allegations was denied by the Defendants.

The Defendants made clear in their opening submissions that they were raising an issue of informed consent, in respect of both their continuing to act after the Given Form issue was raised and the inclusion of the Given Form release in the settlement deed. Further, the Defendants’ contention that informed consent was provided was based on documentary material (in particular, the emails of 13, 14 and 18 September 2006), which has always been a focus of these proceedings, and has been addressed by Mr Salmon in his affidavit evidence. The hearing was conducted on the basis that the issue of fully informed consent had been raised, with cross-examination of Mr Salmon proceeding, without objection, on the issues concerning the extent of his knowledge of the Given Form issue and whether, with that knowledge, he consented to the Defendants continuing to act. In those circumstances, I do not consider there is any substance to the pleading point.

141. Mr Salmon addressed this ground in paragraphs 7 and 45-51 of his written submissions. Paragraph 7 elaborated the “second peculiarity” and claimed that the respondents failed to provide the necessary particulars, with the result that “[t]he trial proceeded by ambush”. Paragraphs 45-51 developed ground 7. A complaint was made about [314], but that paragraph merely set out the parties’ submissions. A complaint was also made about [323] which in essence amounted to the proposition that “the Appellants’ pleading a failure to obtain fully informed consent does not lessen the Respondents’ obligation to clarify their case”. Mr Salmon also submitted that the first sentence of [324] was incorrect, noting that the third respondent made no oral submissions relating to the point, and his defence did not mention informed consent. Those submissions are sound, and when they were raised with Mr Newton he did not submit to the contrary. Otherwise, Mr Salmon’s written submissions did not criticise those two paragraphs.

142. In oral submissions, Mr Salmon invoked what had been said in Baulderstone Hornibrook Engineering Pty L**td v Gordian Runoff Ltd [2008] NSWCA 243 at [160]-[161] about the requirements of identifying the issues before and during the trial and the need to avoid ambush. In answer to the proposition that informed consent was in issue by reason of the defendants’ denial of the plaintiffs’ claim that there had been no informed consent, Mr Salmon pointed to the obligations of particularising the defence:

LEEMING JA: But how are you taken by surprise when they then come back and say, “We did give fully informed consent”?

APPELLANT: Because they would have to particularise it. It has to be a positive obligation, not a reverse onus on us for having us say they didn’t plead it. It’s a positive obligation on them to plead it. That’s what the authorities read as I understand them. They didn’t plead it. I would have put on specific evidence as in the aide-memoire documents this morning. I would have picked it apart. [The “aide-memoire documents” were documents already in evidence to which Mr Salmon spoke at length in his address.]

143. Mr Salmon ultimately claimed that “I would have put affidavit material on, exhibited those documents in a different perspective” which “would have been very, very specific”. However, paragraph 131-132 of Mr Salmon’s first affidavit of 7 October 2022 deals extensively with the 13 September email from Mr Brown, and his reply affidavit of 31 March 2023 deals with his response at paragraph 102. It is unclear how Mr Salmon’s affidavits would have been different in the scenario hypothesised by Mr Salmon’s submissions. Certainly, there was no evidence of what would have occurred, or that it would have been different from the evidence adduced at trial.

144. The position then was that the plaintiffs had (wrongly) pleaded an absence of informed consent as part of their claims of breach of duty, which Mr Brown had denied. (The error is not uncommon, and indeed it was made by senior counsel addressing the High Court on this point until corrected by McHugh J in Maguire v Makaronis (1997) 188 CLR 449 at 453; [1997] HCA 23.) All defendants denied the plaintiffs’ allegation that there had been no fully informed consent. The Receivers’ pleading went slightly further than Mr Brown’s, and said in addition that “further and in any event TCBS was informed of the assertions that Mr Wily had raised on 13 September 2006 through an email of that date from Mr Brown to Mr Salmon of TCBS, and TCBS instructed Mr Brown and the receivers to continue to act and deal with Mr Wily aggressively in relation to those matters” – evidently a reference to Mr Salmon’s email (paragraph 45OB of the defence). Mr Brown made the point that although informed consent was not pleaded in his defence or opened on by his counsel, nonetheless because it was an issue between the plaintiffs and the Receivers (who were said to have been knowingly concerned in Mr Brown’s breach of fiduciary duty), it was therefore necessarily in issue between the parties.

145. Mr Salmon is correct to say that the result of the way the issue was joined was that there was no particularisation at all from Mr Brown, and limited particularisation from the Receivers. He is also correct to say that, strictly, informed consent should have been positively alleged by all defendants.

146. However, Mr Salmon’s submissions are wrong insofar as they proceed, at least implicitly and often explicitly, on the basis that the operation of the rules of pleading is mechanical and formulaic. Ultimately the question is one of substance; hence the questions asked of Mr Salmon by all members of the Court concerning prejudice.

147. Of course ordinarily the pleadings will determine the issues at trial. However, the parties may depart from the issues identified in the pleadings, and it is plain that this is a case where that occurred. This is so basic that it went without saying by all counsel involved, as well as by the primary judge, although aspects of Mr Salmon’s submissions suggest a lack of familiarity with this. The following passages from the opening and closing of the case which bear upon informed consent make this plain.

How informed consent was addressed throughout the trial

148. When the case was opened by the plaintiff, senior counsel addressed fully informed consent as follows:

INSALL … we would emphasise the authorities about fully informed consent. The standard is high, as it is required to be, and there was nothing approaching fully informed consent here and, in fact, there was no pleading of fully informed consent.

149. Shortly afterwards, senior counsel for the Receivers said, in indicating that he was not proposing to open orally, that “[w]e do take issue with what my learned friend says about our limitations defence and about our position on informed consent”.

150. The oral openings reflected the fact that there had been an exchange of written openings. In those documents, the plaintiffs had addressed fully informed consent at paragraphs [48]-[50]. Those submissions correctly said that a defence was available to a fiduciary of establishing fully informed consent and correctly observed that there was no pleading of fully informed consent in the defence, but neglected what had been asserted by way of a negative in the plaintiff’s own statement of claim.

151. The Receivers’ opening submissions had stated “[a]lthough the payments were legitimate and no conflict existed, Mr Salmon was nevertheless informed of the issue and Mr Brown raised the issue with his counsel (Mr O’Sullivan). Mr Salmon’s instructions to Mr Brown were to continue and to deal with the matter aggressively. Mr Brown and the Receivers continued to act without complaint or further criticism from Mr Salmon or Mr Wily…”. This was self-evidently a reference to the emails of 13 and 14 September 2006.

152. By the time closing submissions were served, Mr Brown squarely submitted that “the Court should conclude that Mr Brown was not in a position of conflict, and, in any event, there was no breach of fiduciary duty due to the fully informed consent provided by Mr Salmon on behalf of TCBS”.

153. Revealingly, the closing submissions of the plaintiffs had 11 paragraphs directed to fully informed consent. They are paragraphs 115-125. It is true that that section commences with “[t]here is no pleading of fully informed consent. It is a matter which needs to be pleaded”. But thereafter the submissions addressed the merits of the effect of the email of 13 September 2006, in detail, over slightly more than two pages.

154. Equally revealingly, in oral submissions Mr Insall SC addressed fully informed consent over the course of a page (Tcpt, 14 September 2023, p 473) and at no stage referred to it being outside the pleaded defence.

155. The approach taken by senior counsel in written and oral submissions is revealing, insofar as while not abandoning the point that Mr Brown ought not to be permitted to run a defence of informed consent, it demonstrates that counsel appreciated that this point would in all likelihood be won or lost on the merits.

Consideration

156. As the primary judge observed at [324], the emails of 13 and 14 September 2006 had been a focus of the proceedings, which had been refined so that the conflict exposed on 13 September was a critical aspect of the case which ran at trial.

157. It was not submitted that the primary judge was in any way incorrect in stating that informed consent was in issue because of the way Mr Salmon had pleaded his case: at [323], or that “[t]he Defendants made clear in their opening submissions that they were raising an issue of informed consent”: at [324]. The bases of the defence were the emails of 13, 14 and 18 September 2006 which as the primary judge said at [324] have “always been a focus of these proceedings” and had “been addressed by Mr Salmon in his affidavit evidence”. The primary judge continued to say that the hearing was conducted on the basis that “the issue of fully informed consent had been raised, with cross-examination of Mr Salmon proceeding, without objection, on the issues concerning the extent of his knowledge of the Given Form issue and whether, with that knowledge, he consented to the Defendants continuing to act”: at [324]. It is to be borne in mind that Mr Salmon was represented by Senior Counsel.

158. Isaacs and Rich JJ said in Gould v The Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490 at 517; [1916] HCA 81 that:

Undoubtedly, as a general rule of fair play, and one resting on the fundamental principle that no man ought to be put to loss without having a proper opportunity of meeting the case against him, pleadings should state with sufficient clearness the case of the party whose averments they are. That is their function. Their function is discharged when the case is presented with reasonable clearness. Any want of clearness can be cured by amendment or particulars.

But pleadings are only a means to an end, and if the parties in fighting their legal battles choose to restrict them, or to enlarge them, or to disregard them and meet each other on issues fairly fought out, it is impossible for either of them to hark back to the pleadings and treat them as governing the area of contest.

159. As Mason CJ and Gaudron J said in Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (1990) 169 CLR 279; [1990] HCA 11 at 287:

Ordinarily, the question whether the parties have chosen some issue different from that disclosed in the pleadings as the basis for the determination of their respective rights and liabilities is to be answered by inference from the way in which the trial was conducted.

160. A recent application of the principles may be seen in Jeffreys v Sheer [2025] NSWCA 31 at [65]-[67].

161. Mr Salmon offered no submission to displace the inference – which in the circumstances of this case was close to inevitable – that this was a case where the parties had chosen to conduct the litigation, on this issue at least, aside from the issues identified in their pleadings.

162. Mr Salmon complained that the denial of informed consent by the Receivers fell short of providing the necessary particulars which were required in order to prevent surprise. Mr Salmon asserted that “the trial proceeded by ambush violating UCPR Reg 15.1”. But that does not address the fact that the defence of informed consent concerned the email to him of 13 September and his response of 14 September which he had already addressed in evidence.

163. The primary judge was in a relatively privileged position compared to this Court in determining whether this was one of those cases where the parties must be taken to have departed from the pleadings. It is tolerably plain, for the reasons given by the primary judge, that the departure was a relatively minor one. The issue of fully informed consent was squarely raised (albeit erroneously by the plaintiff) and the documents which were relied upon to sustain that defence were centrally important to the case, as all parties well understood. Notwithstanding the terms of ground 7, Mr Salmon advanced no submission as to the specific evidence that would have been supplied had the case been pleaded properly.

164. Ground 7 is not made out.

Ground 8: Did TCBS give informed consent to Mr Brown continuing to act?

Reasons of the primary judge

165. The primary judge addressed whether there was in fact fully informed consent at [325]-[329]. At [325]-[326], the primary judge addressed the applicable principles in a manner which was not the subject of any complaint from Mr Salmon. His Honour’s summary was to the following effect:

166. The onus rested upon the fiduciary to prove informed consent.

167. Whether consent was “fully informed” is a question of fact in all the circumstances of the case.

168. Consent can be established “at different times and in different ways”: Farah Constructions Pty Ltd v Say-Dee Pty Ltd at [107].

169. What is required will depend on the sophistication and intelligence of the persons to whom disclosure is made.

170. Fully informed consent would require at least that the client has been provided with full disclosure of the facts and “all material circumstances, including the character of the transactions and the nature of the relevant conflict”.

171. The primary judge applied those principles at [327]-[329] as follows:

In terms of the disclosure provided by Mr Brown to TCBS of the Given Form issue, I have found that:

(a) Mr Brown disclosed in his 13 September 2006 email the background facts concerning the payment made to Etienne Lawyers by the Deed Administrators of Given Form. In any case, Mr Salmon was likely already aware of those matters as he was General Manager of the BA Group at the time that the relevant BA Companies had entered into the DOCA with Given Form and had executed the assignments in favour of Etienne Lawyers, and Mr Salmon was sent by Mr Lazar an email which explained the arrangement that had been made;

(b) Mr Brown disclosed the matters which had been raised with him by Mr Byrnes, not only in the email of 13 September 2006, but also in conversations which he had earlier that day with each of Mr O’Sullivan and Mr Myers (as referred to in Mr Brown’s email);

(c) Mr Brown disclosed the content of the conversation between Mr Nikolaidis and Mr Albarran concerning the implications for the position of Etienne Lawyers, including Mr Nikolaidis’ suggestion that it was not in the Receivers’ interests for Mr Brown to continue to act in the 2006 Proceedings;

(d) Mr Brown disclosed the content of the conversation between Mr Wily and Mr Myers, including the Liquidator’s suggestion that it would not be in TCBS’s interests for Mr Brown to continue to act for TCBS; and

(e) Mr Brown disclosed all of those matters to each of his clients in the 2006 Proceedings (namely, Mr Albarran, and Mr Myers and Mr Salmon of TCBS), as well as to counsel acting for his clients, and specifically sought the advice of counsel on the matters he had raised.

In circumstances where those matters were disclosed to TCBS, I have found that Mr Salmon, by his email of 14 September 2006 in response to Mr Brown, gave his consent to Mr Brown continuing to act for TCBS in the 2006 Proceedings. In addition, I have found it likely that:

(a) Mr Myers (who sent a number of emails to Mr Brown the following day, which have been lost) also gave his consent to Mr Brown continuing to act, or at least did not express any view contrary to that of Mr Salmon on this issue; and

(b) Mr O’Sullivan either formed the view that there was no problem with Mr Brown continuing to act in the 2006 Proceedings, or that informed consent had been given for Mr Brown continuing to act, since he proceeded to appear for TCBS in the 2006 Proceedings, instructed by Mr Brown.

By reason of those matters, TCBS gave its fully informed consent to Mr Brown continuing to act in the 2006 Proceedings after the Given Form issue was raised.

Mr Salmon’s submissions

167. Mr Salmon disputed what was said concerning the emails between Mr Brown and Mr Myers which have been lost, and by his application to adduce fresh evidence, sought to tender one of the three. Mr Salmon challenged the finding that there were three, based as it was upon what he said was a misreading of the time records. Mr Salmon devoted considerable time in written and, especially, oral submissions, to pointing out that there were errors (he identified ten, although there was a measure of double-counting) in the email of 13 September 2006. Illustrative of the written submissions advanced by Mr Salmon are paragraphs 58 and 59:

TCBS cannot have been given “a conscientious disclosure of all material circumstances” by the 13 September 2006 email from the 3R. The email a) misled Mr Myers, the 1A and counsel representing an authority from BACF and BACM. b)The email stated that under a Notice to Produce, a table of matters which the trial judge assumed was the 6 December 2004 email said “the fact that HC were Administrators is expressly stated”. That table does not state who the administrators are let alone that it is Hall Chadwick or the 1R and 2R.c) It falsely stated Mr Wily was liquidator of Given Form; d) No assignment from any company existed (1R’s evidence in cross); e)The alleged assignment was not from a creditor (1R’s evidence in cross); f) It relies on central peculiarity no3.

It failed to disclose that i. the 3R voted for the DOCA for BACF Investments; ii. the 3R attended as solicitor for the Administrators; iii. that the pro rata terms of the DOCA were ignored and other creditors left short; iv. that Mr Melluish raised with him funds likely belonged to investors Mr & Mrs Nicholson; v. the BACM he refers was a fictitious entity. It is unreasonable to suggest matters were disclosed to TCBS or that the 1A’s 14 September 2006 email was consent. It was a response to a direct question. No consent exists to the 1R and 3R to insert this in the TCBS settlement deed risking all they had worked for. (judgment [328] Red 218.)

168. Reflective of the oral submissions on this point was the following portion of Mr Salmon’s address:

So I write a response on 14 September. Mr Myers wasn’t involved then at all. His informed consent is the mystery emails of 14 September that we discussed this morning, where I said there weren’t three, there were two, and one of those is in my additional evidence; that’s why that becomes important. So Mr Myers hasn’t given any consent. He actually said, and it’s quoted in the 13 September email, Mr Brown says - Mr Myers says he doesn’t know how any of this affects him.

So Mr Myers didn’t know. I didn’t know because they didn’t tell me anything. They sent an email with ten misleading components, not even naming the correct companies. So it’s impossible that myself, Mr Myers, or TCBS as an entity in the Spellson v George sense was, you know, agreeing that we fully understood anything, because if just - if they didn’t - if they agree they didn’t get the consent; I don’t know how they can claim it. In Blackmagic Design fully informed consent requires both disclosure and consent. In other words, it is not enough that there be disclosure; there must be consent. Disclosure is part of the defence. It goes on to say, “The disclosure must be a full and frank disclosure of all material facts”.

Well, if we look on the one document that they rely on, the 13th September email, I say it is impossible that that email - that names the wrong companies, puts Mr Lazar as the controller of one company that he’s not, Mr Wiley as liquidator of one, names - suggests BACF and BACM have - have given authorities to pay money when they hadn’t, there were three other companies as I took you through - that is not a full and frank disclosure of - of all material facts. It just can’t be. It’s - it’s the opposite. It’s a deliberate and knowing misinformation campaign. And it was dishonest. It was a dishonest campaign.

You’ll see I’ve quoted other stuff. Just one more. “It is necessary for a fiduciary to fully disclose all material circumstances including the character of the transactions and the nature of the relevant conflict”. In none of those documents do they discuss the nature of it, how the transactions occurred. They refer to an email that I took you to, the 6 December email, which doesn’t mention that Hall Chadwick are administrators. It doesn’t have Mr Albarran’s and Mr McDonald’s name on it. I had no idea at that point about Given Form.

Consideration

169. First, I do not agree with Mr Salmon’s submissions insofar as they are based on challenges to the findings in relation to Mr Myers. The essence of his Honour’s reasoning was that Mr Salmon gave his informed consent (see [327]), it was likely that Mr Myers gave consent (see [328(a)]), it was also likely that Mr O’Sullivan formed the view there was no problem with Mr Brown’s continuing to act (see [328(b)]), by reason of which TCBS gave its fully informed consent (see [329]).

170. TCBS could only act through its officers and agents. Mr Salmon was a director, who was closely involved in giving instructions in the litigation. What was told to Mr Salmon by way of disclosure by Mr Brown was the knowledge of TCBS, and Mr Salmon was authorised to bind TCBS. The findings of the primary judge in relation to what Mr Myers knew and did are corroborative of the conclusion that there was fully informed consent, but are not necessary to that conclusion. The position taken by Mr O’Sullivan falls into the same category.

171. Secondly, the email of 13 September 2006 has been reproduced above. It states, unambiguously, that Mr Brown’s firm had actually been paid funds by Hall Chadwick as administrator. It clearly stated that Mr Wily had threatened to seek to recover that payment as a preference. It clearly stated that Mr Wily was contending that there was a conflict in Mr Brown continuing to act for TCBS in circumstances where Mr Wily had a personal claim against his firm. The primary judge found that this was an attempt to place pressure upon TCBS by Mr Wily (after all, Mr Nikolaidis was recorded as having said “get another firm or settle”).

172. Sometimes a great deal of information would need to be given in order for there to be fully informed consent. But this was a very straightforward case. This was not a case of a solicitor entering into a transaction with a client. The only question was whether the solicitor would continue to act for the client in litigation circumstances where the other side had a claim against the solicitor personally.

173. In the facts of this case, it was not necessary to describe in any great detail the way in which Mr Brown had come to receive a payment of outstanding fees from the administrator of a company which was now being wound up by Mr Wily. All that mattered on 13 September 2006 was the fact that there was a claim by Mr Wily against Mr Brown. TCBS was entitled if it so chose to have a solicitor acting for it who did not have personal interest in the proceedings brought by Mr Wily. But TCBS was also entitled to continue to instruct Mr Brown if it gave its fully informed consent to do so.

174. Notwithstanding all of the complaints about inaccuracies in the email made by Mr Salmon, the foregoing is sufficient, in the facts of this case, to address the very narrow issue whether TCBS had consented in a fully informed way to Mr Brown’s continuing to act for it. It is unnecessary to address the factual issues concerning the errors in Mr Brown’s email to which Mr Salmon points, because none detracts from the substance of the position, which was that Mr Wily was claiming an entitlement to be repaid by Mr Brown’s firm, and that placed Mr Brown in a position of conflict. It is also unnecessary to address the submissions based on what Mr Myers and Mr O’Sullivan did, because none undermines the conclusion that TCBS through Mr Salmon gave its informed consent to authorise Mr Brown to continue to act for it notwithstanding that Mr Wily had a claim against Mr Brown’s firm. That said, the fact that over the next four days nothing was said or done by Mr Myers or Mr O’Sullivan contrary to Mr Brown’s continuing to act is, as the primary judge observed, corroborative of there being fully informed consent by TCBS.

The balance of this appeal

180. The foregoing is sufficient to resolve the appeal in respect of what was advanced orally by Mr Salmon. The position may be summarised as follows.

181. In relation to the claims at common law against the Receivers, these depended on the instruments of appointment being deeds, and for the reasons already given, ground 24 must be dismissed. In addition, Mr Salmon did not challenge the fallback reasoning of the primary judge at [377]-[384] to the effect that even if the instruments were deeds, there was no breach made out.

182. In relation to the claims in equity, there was no error in the primary judge accepting the concession of Mr Salmon’s counsel at trial that the claims must fail unless dishonesty was established, which concession was correctly given, and there was no error in finding that the plaintiffs had not established that the Receivers or Mr Brown was dishonest.

183. Moreover, even if the primary judge were wrong about informed consent, it did not affect the conclusion that Mr Brown was not dishonest when he proposed the deed with the Given Form release.

184. That leaves many grounds of appeal unaddressed. Mr Salmon chose not to speak to the large majority of them. One might affect the outcome of this appeal, and for that reason it is necessary to say something of it.

Ground 26 – natural justice

185. Ground 26 was a complaint that the primary judge had “fail[ed] to afford natural justice and procedural fairness to the Appellant[s] by … misstating the Appellant’s actual evidence throughout the judgment”, by dismissing parts of Mr Salmon’s evidence, by “impugning Mr Byrnes for his nefarious past deeds but excusing Mr Albarran for his nefarious past deeds”, “by failing to consider credit issues against Mr Brown despite problems with his credibility”, and by “ignoring credit issues against the First and Third Defendants but especially the Third Defendant but using credit issues against the Appellant’s witnesses”. In his written submissions (which are confined to paragraph 440), Mr Salmon refers to “an apparent bias in favour of the Respondents” from the trial judge’s findings and a “pattern of favouritism towards the Respondents”.

186. Ordinarily such a ground would be addressed at the outset, because the result is a retrial: see for example Royal Guardian Mortgage Management Pty Ltd v Nguyen [2016] NSWCA 88; (2016) 332 ALR 128 at [9]. However, that was not the course adopted by Mr Salmon. Moreover, the notice of appeal did not seek a retrial.

187. In any event, the submissions in support of this ground are based not on the conduct of the trial, but on the reasoning process used in the reasons for judgment. But the fact that findings adverse to Mr Salmon were made does not mean that the process was procedurally unfair. That the trial judge ultimately rejected Mr Salmon’s case for a variety of reasons does not and cannot demonstrate actual or apprehended bias. In Feldman v Nationwide News Pty Ltd (2020) 103 NSWLR 307; [2020] NSWCA 260 at [43] it was said:

Further, the fact that the primary judge ultimately rejected the appellant’s case for a variety of reasons does not and cannot demonstrate actual or apprehended bias. In Mohareb v Kelso (No 2) [2018] NSWCA 246 at [15], this court said that:

“[15] … Disagreement with the reasoning, or the outcome, provides no basis for an assertion of actual bias.”

188. Those principles were applied more recently in State of New South Wales v JR; State of New South Wales v Dickens; State of New South Wales v Jensen [2024] NSWCA 308 at [282] and Crackin*’* Snack Pty Ltd v Gameking Australia Pty Ltd [2024] NSWCA 182 at [81].

189. However, something more should be added by way of further response to what Mr Salmon has said about the “nefarious” character of some of the parties and witnesses.

190. At a trial where challenges to the credit of parties and witnesses loomed large, both sides cross-examined by reference to character. Mr Salmon was a discharged bankrupt who had been convicted of serious crimes for which he had served a prison sentence. Mr Salmon called Mr Jim Byrnes in his case. As the primary judge noted at [45], in addition to his convictions for serious criminal offences, he was banned from managing corporations for a period of five years, which ban was imposed in September 2006, the critical month for this litigation. Mr Byrnes said in paragraph 61 of his own affidavit that “I am the same person who unfortunately and regrettably took a baseball bat to [a solicitor’s] office during the course of dealings with him”.

191. Mr Nikolaidis was convicted of a fraud offence, and sentenced to a term of imprisonment. An appeal against conviction and sentence was dismissed: Nikolaidis v R [2008] NSWCCA 323; 191 A Crim R 556, and his name was removed from the roll in 2010: Prothonotary of the Supreme Court of New South Wales v Nikolaidis [2010] NSWCA 73. Mr Brown’s conduct was the subject of a complaint to the Legal Services Commissioner, resulting in a caution on the basis that it was reasonably likely that the tribunal would make a finding of unsatisfactory professional conduct. Mr Albarran’s registration as a liquidator was suspended, on ASIC’s application, for nine months with effect from 3 May 2006, and his constitutional challenge was unsuccessful: Albarran v Members of the Companies Auditors and Liquidators Disciplinary Board (2007) 231 CLR 350; [2007] HCA 23.

192. The majority of litigants and witnesses of fact were far from being people of unblemished character. But that does not mean that the judge erred in failing to find dishonesty. To the contrary, the foregoing tends to confirm the appropriateness of the primary judge placing weight upon the contemporaneous document of some 17 years ago, rather than upon testimonial evidence.

The seven “peculiarities”

193. As noted above, Mr Salmon’s submissions, both written and oral, commenced with identifying seven “peculiarities” with the reasons of the primary judge. Although they were distinct from the numerous grounds of appeal, Mr Salmon said they were “critical”, and he devoted a deal of his oral submissions to developing them. The first and second have been addressed above. It is convenient to address the balance below.

Third peculiarity – the “BA company switch”

194. The third peculiarity was the “BA company switch”. This turns on the document executed by Mr Lazar in the name of a non-existent company, “Business Australia Corporate Mortgage Pty Ltd”, and the statement in the 13 September email regarding BACF and BACM assigning payments due to them from the administrator of Given Form.

195. Business Australia Capital Mortgage Pty Ltd was registered in 1999. Like the other companies, Mr Wily was the administrator under a deed of company arrangement appointed on 17 May 2005 and he was appointed liquidator on 14 June 2005. Originally the company was known as Auscorp 2000 Pty Ltd but it changed its name to Business Australia Capital Mortgage Pty Ltd with effect from 18 November 2002. After 12 May 2005 its sole director was Mr Ian David Lazar. It is not entirely clear whether its sole shareholder was Mr Lazar or “106913688 ACN 106913688 Pty Ltd” or “Business Australia Capital Finance Pty Ltd”.

196. Business Australia Capital Finance Pty Ltd was incorporated in 1982 and was originally known as Ladrop Pty Ltd. Its name changed on 15 October 2002. It was deregistered on 20 December 2015. After 2003, its sole director was Mr Lazar, and it appears not to have had a secretary after 11 December 2003. Mr Wily was appointed administrator pursuant to a deed of company administration on 9 November 2005, and appointed liquidator on 16 November 2005. Mr Lazar was its sole shareholder.

197. Insofar as the company named on the irrevocable direction signed by Mr Lazar (“Business Australia Corporate Mortgage Pty Limited”) did not exist, the primary judge addressed it at [79]:

There was also a third irrevocable assignment, in the name of “Business Australia Corporate Mortgage Pty Limited”, which was signed on the same day by Mr Lazar. There is no such entity. I find it likely that this was a typographical error for “Business Australia Capital Mortgage Pty Limited” (that is, BACM), of which Mr Lazar was director. In any case, nothing turns on this error, as each of the other two irrevocable assignments was for the sum of $125,000, and the amount ultimately paid to Etienne Lawyers was less than their combined total. Further, there is no pleaded issue that there was any defect in any of the assignments; and the Liquidator did not, when raising issues in relation to Given Form in 2006, raise any allegation of any such defect.

198. Mr Salmon’s submissions proceed on the basis that the misnaming of the company amounted to fraud. This was illustrated in the following exchange:

BALL J: What’s the difficulty with the way his Honour dealt with it?

APPELLANT: Two things. What his Honour is saying, said that, “I accept that was a typographical error,” so what he’s saying, I’d say, is implausible. He’s saying that Mr Lazar, the owner of and controller of the BA companies who knows his companies very well has made an error. Secondly, it says Mr Brown, the solicitor for the same BA companies, who, on one email alone has a list of 35 legal matters he’s doing for those companies, who has to know the distinction between the companies, it’s saying that they both got this wrong.

BALL J: But you accept that there was an error because you accept the company doesn’t exist, so they must have made some error.

APPELLANT: I don’t accept that. I have a different philosophy on that completely which I’m not sure you want to hear, but I say it was completely fraudulent, which is what we put in the below proceedings as I understand it. We say it just didn’t exist. It was part of a fraud, a failed fraud in that sense. It wasn’t pleaded. It was just put in evidence that we don’t believe it was accidental. Thirdly, your Honour--

WARD P: You would have had to have pleaded it if you were going to be alleging fraud.

APPELLANT: Yes, it doesn’t change what we do. We didn’t plead it. We definitely plead it, but we put to Mr Brown at some point that he knew that there was an error with the company.

BALL J: Well, in the absence of that pleading, why wasn’t the inference that his Honour drew a reasonable inference to draw?

APPELLANT: That it was a typographical error?

WARD P: That it was an error.

BALL J: That it was an error.

APPELLANT: Well, the two people that know the companies, how would they possibly make the error?

WARD P: Well, I don’t think we’d get much from asking rhetorical questions, but you accept that you did not plead fraud.

APPELLANT: No.

WARD P: Which you know is something that would have to have been pleaded and specifically pleaded.

APPELLANT: Yes. Okay, but these are going also to credit issues not just pleading the fraud.

BALL J: But that’s not the question. In the absence of a pleading of fraud, his Honour had to make something of the fact that this company didn’t exist.

APPELLANT: Yes. But how does he come to that fact?

BALL J: Well, he explains it in the judgment and what is wrong with the reasoning process his Honour used.

APPELLANT: Because how could two people who have to know the names of the companies that they’re acting on have made the same error? It just doesn’t seem plausible, your Honour, with respect.

BALL J: All right.

APPELLANT: But anyway, I can move on.

199. Contrary to Mr Salmon’s submission that Mr Lazar could not have mistaken the name of his own company save through an attempt at fraud, ordinary experience is that mistaking the names of companies is frequent. Such a mistake concerning performance bonds gave rise to S**imic v NSW Land and Housing Corporation (2016) 260 CLR 85; [2016] HCA 47. A similar mistake, concerning “Hospital Corporation Australia Pty Ltd”, gave rise to Baulkham Hills Private Hospital Pty Ltd v G R Securities Pty Ltd (1986) 40 NSWLR 622 (McLelland J); G R Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631 (CA). Where persons bring into existence numerous companies with similar names, such mistakes may very readily occur. BH Australia Constructions Pty Ltd v Kapeller (2019) 100 NSWLR 367; [2019] NSWSC 1086 concerned confusion between “Blissful Constructions Pty Ltd” and “Blissful Developments Pty Ltd” in the same document. Indeed, the frequency of errors of this kind is one reason that there are “established principles of construction” (see Tatham v Huxtable (1950) 81 CLR 639 at 645; [1950] HCA 56) and why common law and equity have developed principles applicable to documents in which such mistakes occur: see Zhong v Guan [2024] NSWCA 300 at [23]-[26].

200. In short Mr Salmon properly accepted that a case of fraud based on the document had not been pleaded and could not be advanced. Mr Salmon was wrong to conclude that the execution of a document with an incorrect company name necessarily amounted to fraudulent intent, thereby impacting credit. At no stage did his submissions exclude innocent error.

201. It is not necessary to decide this point. But it is plainly at least reasonably arguable that when Mr Lazar signed a document as director of a non-existent company “Business Australia Corporate Mortgage Pty Limited”, that document should be taken as a matter of construction to be a document binding “Business Australia Capital Mortgage Pty Limited”. If so, then there was no “strategy to mislead the court” by senior counsel for the Receivers, nor any making of a “fraudulent switch” by counsel who appeared for Mr Brown at trial, contrary to Mr Salmon’s written submissions, when they referred to an assignment by the BA companies.

202. The foregoing is not a comprehensive response to what was said by Mr Salmon in relation to the irrevocable direction. But it is sufficient to sustain the conclusion that the claims of attempting to deceive the court attributed by him to the barristers who appeared for the respondents are unfounded.

Fourth peculiarity – no benefit to TCBS

203. This peculiarity was whether there was any benefit to TCBS in the release. Mr Salmon says there was none, and that Mr Albarran had accepted as much in earlier litigation before Rein J. It will be clear from the above that in the critical aspect of the reasoning, which was whether there was dishonesty, the primary judge did not find that there was no benefit, but merely whether Mr Albarran may have considered that there was a benefit to TCBS.

Fifth peculiarity – “ignoring our previous evidence”

204. The fifth peculiarity concerned discrepancies between the case advanced in 2023, and that in the earlier proceedings, and was focussed upon the quantum of TCBS’s claim and the timing of the liquidator’s rejection of the amended deed. None of this goes to the dispositive failure to find dishonesty.

The sixth peculiarity - Mr Salmon’s conversation with Mr Brown

205. The sixth peculiarity was “that conversation never ever occurred”. This is a reference to a conversation between Messrs Salmon and Brown said to have taken place after receiving the 13 September email sometime after 9.41pm but before Mr Salmon’s response which was seemingly sent at 8.19am the following morning.

206. Mr Salmon spent a deal of time developing a submission that he had a conversation with Mr Brown on the morning of 14 September 2006 before sending the 8.19am email. In his words:

The next day, 14 September, I phoned Mr Brown as I took you to the affidavit before. I phoned Mr Brown I said “What’s this about, have you done something, Steve?” And he said to me, “No, Owen, don’t listen to anything they’re saying, don’t believe any, they’re all crooks,” the same spiel that I’d been getting for, you know, a month or so by that point, “Don’t - don’t trust Mr - Mr Byrnes. Don’t trust Mr Wily. Don’t trust Mr Nikolaidis”. So he explained - well, basically, he didn’t explain anything, except that “Don’t believe it. It’s stuff that happens in litigation”. And he used - as far as I’m concerned, he used the relationship I had with him to convince me of that. He then - I then send an email which is what the respondents rely on as my consenting to them continuing to act.

207. The point of the submission was to undermine the finding of informed consent, as is clear from the conclusion of the submission reproduced above, and from what was said shortly thereafter:

LEEMING JA: So you had a conversation before sending the 8.19 email.

APPELLANT: Correct, I did. That conversation doesn’t appear in any analysis of those events, simply that my response was informed consent to continue acting in a conflict, despite no mention of a conflict or asking me for consent. There’s a question in there directed to counsel. That’s the question I responded to after the conversation. I say it can’t possibly be an informed consent.

LEEMING JA: Do any of your affidavits say the conversation with Mr Brown preceded your email of 8.19am?

APPELLANT: Yes …

208. Subsequently, Mr Salmon corrected that statement. None of his affidavits stated that there was a conversation which preceded the email, although it is true that Mr Salmon gave evidence to that effect.

209. The primary judge saw Mr Salmon give evidence in a lengthy cross-examination. It was open to his Honour to regard that Mr Salmon’s uncorroborated recollection of conversations 17 years earlier was unreliable.

210. There was no email from Mr O’Sullivan responding to Mr Brown’s request in evidence. It is inherently plausible that Mr Salmon would rapidly seek to interpose his own contrary wishes, so as to forestall the barrister doing the work proposed by the solicitor, as quickly as possible, before the barrister started that work.

211. Insofar as Mr Salmon complains that there was no recitation of his evidence that there was a conversation between himself and Mr Brown before 8.19am on 14 September 2006, it proceeds on a false premise. The point of reasons for judgment is not to address every piece of evidence. Instead it is, speaking generally, to make necessary findings so as to justify the outcome of the trial.

212. Insofar as Mr Salmon claims that there was a conversation between himself and Mr Brown which detracted from the ability of his email response to amount to fully informed consent, that would have been an important matter warranting inclusion in his affidavits. But that did not occur.

213. I conclude that this complaint lacks substance. In any event, as earlier noted, nothing turns on it.

Seventh peculiarity – no benefit to Mr Albarran

214. This complaint addressed [189] of the reasons of the primary judge:

There is no evidence that Mr Albarran had reviewed the terms of the 18 September draft deed before it was sent to him by Mr Brown on the evening of 18 September 2006. The email attaching the draft deed (discussed below) asked Mr Albarran to review it and provide his instructions. As the person providing instructions to Mr Brown, it is likely that Mr Albarran would have reviewed it. He is an experienced insolvency practitioner who must have reviewed many documents containing releases, and considered the terms of such releases, in exercising his functions. It would have been apparent to him, on the review of the deed, that the Given Form release is not a release in favour of the Deed Administrators of Given Form, but a release only of the BA Companies. Further, whereas Mr Wily and Mr Hurst are proposed to be parties to the deed in their capacity as liquidators of various companies, Mr Albarran and Mr McDonald are proposed to be parties to the deed only in their capacity as Receivers of BACM and BACF, and not in their capacity as Deed Administrators of Given Form. If Mr Albarran had been seeking a benefit for himself and Mr McDonald, in their capacity as Deed Administrators of Given Form, he would likely have realised that the document did not provide any release to himself or Mr McDonald in that capacity, and would have required further amendments. There is no evidence that any such amendments were requested or made to the form of the release. Those matters further support the conclusion that Mr Albarran was not, in accepting Mr Brown’s recommendation that the Given Form release be included in the draft deed seeking a benefit for himself and Mr McDonald, or a benefit for Mr Brown, but was instead acting on Mr Brown’s advice that such a release was in the interests of TCBS.

215. Mr Salmon’s submissions in relation to this peculiarity were confined to a single paragraph. He stated that the absence of benefit to Mr Albarran contradicted Mr Brown’s defence and Mr Albarran’s evidence. He stated that cll 3.3 and 3.5 “clearly intend to protect 1R and 3R from any claims, despite poor drafting” and that “[i]t also seemed contrary to his confused release finding at [143] Red 173”. (The “confused release finding” is a reference to [143] where the primary judge posits an explanation for the poor drafting of the release.)

216. Those submissions do not undermine the reasoning of the primary judge, which is to the effect that the lack of clarity and poor drafting of the releases, coupled with the failure by Mr Albarran to seek amendments, tends to favour the conclusion that he was not seeking a benefit for himself.

Remaining grounds of appeal

217. None of the grounds of appeal can affect the outcome. Even so, I shall address grounds 6, 11 and 13, principally because they were addressed in Mr Salmon’s oral submissions, as well as his written submissions. I shall also address ground 25 because it was the only ground which bears on the liability of the fourth – eighth respondents.

218. Of the other grounds, grounds 1 and 42 are in general form. Grounds 2, 9, 12, 15, 21 and 22 concern the process of fact finding concerning conversations many years after the event. Ground 3 concerns the finding whether Mr Salmon reviewed the draft deed and is in substance addressed by the foregoing. Grounds 4 and 5 concern particular factual matters concerning the disclosure of the Given Form claim, which are sufficiently addressed by the above. Grounds 18, 19, 20 and 39 concern the failure to find dishonesty and are addressed above. Grounds 10, 14 and 37 concern quantum and do not arise.

219. Ground 27 is a complaint about inadequacy of reasons, which in the written submissions is developed as a complaint about the finding of informed consent. Ground 28 challenges the conclusion of the primary judge that the “Business Australia Corporate Mortgage Pty Limited” document reflects as error, as opposed to fraud, and has been addressed above. Grounds 16, 29, 32, 33, 34, 36 and 41 and most of the subgrounds within ground 23 (which occupy more than 15 pages of the notice of appeal, and 75 pages of submissions) address particular findings of fact which are not essential to the outcome of the appeal. Ground 30 addresses a similar ground to Mr Salmon’s claim that he was promised a judgment in TCBS’s favour of in excess of $3 million. Ground 31 is another complaint about whether the 13 September email amounted to full disclosure. Ground 38 was not pressed.

Ground 6: the advice on prospects

220. Mr Salmon maintained that Mr Brown had assured him that the result of the litigation would be success in an amount of at least $3 million, and said that the primary judge’s finding to the contrary should be overturned.

221. The primary judge said at [94]:

On 4 August 2006, Mr Salmon, Mr Albarran, Mr McDonald and Mr Brown met at Mr Brown’s offices. The fact of the meeting is uncontroversial, but there is substantial disagreement as to what was said. Mr Salmon’s evidence of the conversation extended over some three pages of his affidavit. In particular, he gave evidence that Mr Brown advised at this meeting that TCBS would receive $3m from the BA companies. I do not accept this evidence, which is unsupported by any contemporaneous documents, and is improbable, since Mr Brown had at this stage been given no documents beyond the charges, and therefore could not express any view on quantum. Significantly, it was not put to Mr Brown in cross-examination that he expressed any such view. Further, as noted above, neither of his written advices expressed any such view.

222. Eventually, Mr Salmon accepted that the primary judge was correct in stating, in the penultimate sentence of that paragraph, that the proposition had not been put to Mr Brown in cross-examination. Mr Salmon also accepted that there were no written advices from Mr Brown expressing that view.

223. Mr Salmon said that the primary judge was wrong to say that there were no contemporaneous documents. He relied on the verified defence, which was certified by Mr Brown, and which alleged that a debt in excess of $3,000,000 was owed. There is a world of difference between a solicitor stating for the purposes of s 347 of the Legal Profession Act 2004 (NSW) that a claim could properly be advanced, and a promise that TCBS would obtain that amount.

224. As the primary judge observed at [95], inconsistently with that advice, TCBS and the Receivers made a series of offers to compromise the litigation, at amounts considerably less than $3 million, in advance of the Given Form issue being raised. They include an offer to be paid $2.2 million in cleared funds made by Mr Brown on 15 August 2006, an offer to be paid $2.3 million from Nauru Settlement monies made on 31 August 2006, which offer was stated to be “a reduction of $400,000”. There is nothing to suggest that TCBS did not instruct those offers to be made. Nor is there anything in the contemporaneous documents expressing surprise or alarm at the significant reductions in what, according to Mr Salmon, was an assured judgment in the full amount.

225. Further, it is quite plain from no later than an early point in the litigation that the liquidator was contending that BACF and BACM were insolvent as at 18 March 2006. That contention was made explicit no later than when it was advanced in paragraph 19 of the amended statement of claim dated 16 August 2006. It was stated by Young CJ in Eq in his judgment, and it is plain from reviewing page 2 of the transcript, that much of the cross-examination was directed to the liquidator’s contention that the company was insolvent. That cross-examination needed to be prepared, and thus the possibility that BACM was insolvent in March was something of which TCBS’s lawyers were aware. If BACM were insolvent, the charge would be void. It is close to inconceivable that advice would be given that TCBS was assured of complete victory in light of a known dispute about BACM’s solvency when it granted the charge to TCBS upon which such victory depended.

226. It is much more likely that now, many years after the event, Mr Salmon has come to believe that such advice was given, but has forgotten to remember the qualifications in which such oral advice was hedged. That would be an ordinary aspect of the way memory works as explained by McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 319 that:

human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.

227. Nothing turns on it, but I would reject this ground of appeal.

Ground 11

228. Ground 11 was:

The trial judge misstated at judgment [255] and [426] the findings of his Honour Young CJ in Equity from the 2006 proceedings judgment of 21 September 2006 paragraph 78 (CB2753) and full judgment of 19 October 2006 paragraph 12 in stating “This sum was in line with the amount which Young CJ in Eq concluded was the maximum payable in respect of the BACF charge” and “and had expressed the view that no more than around $177,000 would be covered by the remaining charge.” This is at odds with the judgment of Young CJ in Eq in Equity and in doing so the trial judge fell into error.

229. This ground drew upon the fact that Young CJ in Eq gave two judgments: one when finding substantially in favour of Mr Wily, the second when dealing with costs. In the former ([2006] NSWSC 1042), his Honour said at [78]:

Now, it seems to me that it would be wrong for me to make a conclusive declaration as to how much was owing under the charge, partly because the parties really gave secondary consideration to this matter being principally concerned with the main aspect, namely the validity of the charge. I will stand the matter over for a couple of weeks so that short minutes can be brought in, but, in my view, I should make a declaration that the BACM charge is void against the plaintiff, and as to the BACF charge I would advise the liquidator under the Corporations Act (the section would have to be different because for one company he is a court liquidator and the other a voluntary liquidator) that he would be justified in treating the charge in favour of BACF as being security for no more than $177,902.66, unless he is convinced by material placed before him by the defendant that he should treat the charge as being for some higher amount. (emphasis added).

230. In the latter, by way of summarising the substantial success of the liquidator, his Honour said at [12]:

The liquidator asked for a declaration that no more than $300,000 was owing. I was uncomfortable in making such a declaration because it seemed to me that I just did not have the material to be confident in so certifying. The making of a declaration is a discretionary matter and I did not consider in justice it would be appropriate to make the declaration. What I did was advise the liquidator that he could assume that the debt was $177,000 unless further evidence was presented to him. What I was intending was that the defendants would take the hint, and if it were possible, they would present the liquidator with material to show that there was a proper assignment or there was a repayment of the Numsbar debt and the creation of a new debt in favour of the first defendant. In fact neither of these things have happened. The excuse proffered by the defendants is that they do not have access to the books and records. The liquidator denies this, but I did not determine the matter, merely making sure that for the future the books and records would be inspected if the receivers wanted to look at them. (emphasis added).

231. Ground 11 criticised a reference in [255] to an aspect of the reasoning concerning a conversation on 21 September 2006. The primary judge stated:

However, Mr McDonald had no involvement in the events of 18 and 19 September 2006. There is no evidence he was aware that the Given Form release had been inserted into the deed, and therefore it is unlikely he raised this conduct as a cause of concern. It is more likely that the concern being discussed was that, on the day of this entry, Young CJ in Eq had found that the BACM charge should be set aside, and had expressed the view that no more than around $177,000 would be covered by the remaining charge, in circumstances where the Receivers had incurred some $300,000 of fees and costs to date.

232. Mr Salmon seized on the absence of the qualification unless further evidence were presented. But the qualification appears in [254] when his Honour said:

His Honour also indicated (at [78]) that he was minded to advise the Liquidator that he would be justified in treating the BACF charge as being security for no more than $177,902.66, unless the Liquidator was convinced by material placed before him by the defendants that he should treat the charge for a higher amount.

233. When [255] is read with [254] it is clear that his Honour appreciated that the finding was more nuanced than might appear if [255] were read in context. Moreover, absolutely nothing turns on this.

234. The complaint about [426] is also misplaced. That paragraph stated:

The liquidator of TCBS reviewed all of the evidence available regarding the quantum of TCBS’s claim in respect of BACF, and invited Mr Salmon to identify any material relevant to that issue. Having reviewed the material available, and in reliance on advice of Counsel, the liquidator made an independent assessment that the value of the claim against BACF was no more than around $177,902. He subsequently reached a settlement with Mr Wily for this amount. This sum was in line with the amount which Young CJ in Eq concluded was the maximum payable in respect of the BACF charge, based on the evidence available before him at the hearing on 18 and 19 September 2006. (emphasis added)

235. The complaint in this ground insofar as it is based upon [426] turns on not reading the words in bold above. And once again, even if there were some error, it could not possibly contribute to any basis for calling into question the dismissal of the plaintiffs’ case.

236. But Mr Salmon said of this ground in writing:

The trial judge misquoted Young CJ’s judgment at [255] Red 202 A and [426] Red 237, aligning it with an his own implausible version of the 2R’s time sheet. This allowed the 1R and 2R to avoid a critical issue and caused the Court to misinterpret 1A’s evidence. By misstating the payable amount under the BACF charge it significantly affected the judgment. This error impacted the causation and loss claims, contributing to their dismissal. The judge also failed to independently assess the misstatement and overlooked contrary evidence that weakened the Hall Chadwick Respondents’ case.

237. I am unable to accept any part of the reasoning. The submissions under this ground contain extra paragraphs, which do not appear to relate to any claimed error in [255] or [426].

Ground 13

238. Ground 13 was:

The trial judge erred in an inconsistent approach to a document tendered by the Hall Chadwick Respondents as Exhibit 3 accepting it as a statement of Mr Salmon when it fact it was not a statement and then erroneously failed to evaluate parts of the “statement” which supported the case of the Appellants.

239. This ground refers to a COPS record following Mr Salmon making a complaint to the police. The document is self-evidently a record written by a police officer, and it also on its face purports to contain information provided by Mr Salmon.

240. Mr Salmon said of it:

92 The trial judge erred in his inconsistent treatment of Exhibit 3. The document, alleged to be a statement of the 1A was prejudicial to the Appellant. At various points (e.g., [135] Red 170, [170] Red 179), he refers to the document as a police statement, implying it is a signed statement, which it is not. It lacks the characteristics of a statement and is not a police statement. This error mirrors the issue in ground 23 (32nd), where a 2015 statement was also claimed to exist but did not. The issue arose when Mr. Elliott SC questioned the 1A about alleged fraud against Mr. Wily, but did not show 1A the document, possibly to avoid revealing the misrepresentation of its origin. The trial judge used this document to challenge the 1A’s credibility, referring to it inconsistently: as a “statement” in some contexts (e.g., [37] Red 150, [46] Red 152, [207] Red 188) and as a “complaint” or “account” in others. The trial judge’s inconsistent reliance on this document undermines fair fact-finding, it was used to discredit the 1A while ignoring details that supported the Appellant’s case.

93 If a trial judge accepts a document supporting defence narrative, he ought accept points contradicting his key findings, especially since this document was eight years before the proceedings. This creates an inconsistency when the judge reviewed it to reject the Appellant’s case. The trial judge did not ensure documents met criteria to be considered statements. Certain passages in Exhibit 3 supported the Appellant’s case but were overlooked, failing to fully assess all relevant evidence and prejudicing the Appellant. This constitutes an appellable error.

241. There is nothing in this complaint. At [135] the primary judge refers both to the COPS report and to a signed statement Mr Salmon gave to police, while at [170] his Honour refers to a statement to police. Read with the balance of the reasons, there is no scope for confusion. The complaint about cross-examination was in terms of making an allegation to police that Mr Wily was fraudulently billing for work not done. The record in the COPS document stated “this is the version obtained from SALMON on 02/04/2015” and included:

An example of the documented overcharging or fraud Andrew WILY billed 20 hours (attendance on 18th and 19th September 2006 in Supreme Court hearing) at $479.00 per hour - $9580 +GST). Wily was not in fact in attendance on both days and only made a brief appearance on the 19th September to agree on a settlement.

242. There was plainly a proper basis to put to Mr Salmon that he had made an allegation of fraud to police against Mr Wily.

243. The fact that the primary judge referred to the COPS document sometimes as a containing a “complaint” and on other occasions an “account” by Mr Salmon is a distinction on which nothing turns.

244. Finally the fact that parts of the document support Mr Salmon’s case is also neither here nor there. Other consistent statements sourced from a party or witness tend to have slight probative value. Much more significant are documents which record different versions of events, which tend to suggest, as the primary judge found in the case of Mr Salmon, that his recollection of events and conversations many years earlier was imperfect.

Ground 25 – claim against partnership

245. Ground 25 was that “The trial judge erred in refusing leave to the Appellants to (a) plead liability of the partnership (judgment [400]) and/or (b) find the partners to have had joint and several liability when such pleadings referring to the partnership agreement were made at paragraph 6 & 8 of the 5 FASOC”.

246. Nothing turns on this because it turns on Messrs Albarran or McDonald being held liable. But in any event, it will be seen that the ground is confined to an attack on [400]. But [400] was a contingent rejection of an application to amend had there been one. This relates to a submission made by the plaintiffs after judgment was reserved. The primary judge summarised the submission at [395], and rejected the submission that there was extant a pleaded claim against the partners of Hall Chadwick. It is best to reproduce [398]-[402]:

398 For the reasons given above, I reject the contention that any basis for a liability of the Partnership Defendants under s 10 of the Partnership Act has been pleaded.

399 I consider it would be necessary for the pleading to be amended in order for such a claim to be advanced. No such application has been made. I do not consider it sufficient merely to indicate that such an application could be made if required.

400 If any such application had been made, I would have refused leave to amend, on the basis of the prejudice caused by the Plaintiffs’ unexplained delay in raising the issue only after the conclusion of the evidence and hearing. In this regard, I accept the submissions of the Partnership Defendants in their written response to the supplementary submission:

“Such a claim would have not only needed to be identified in the pleading and prayers for relief, but would have required a pleading of material facts, including as why it was claimed that the Receivers’ conduct, said by the plaintiffs to be positively dishonest and outside the scope of their function as receivers, could nevertheless be said to have been undertaken ‘in the ordinary course of the business’ of the partnership or ‘with the authority of’ any (let alone all) of the four individual defendants in question (as s 10 requires). No such pleadings exist. These are all intensely factual questions, which have never had to be addressed in the defendants’ evidence for trial given the limited nature of the claims against them, and which were not addressed in evidence.”

401 Finally, I would have dismissed any such amendment application as futile, because any such claim against the Partnership Defendants would necessarily have failed, given that I have found that Mr Albarran did not breach his fiduciary duties or any duty arising under the Appointment instrument.

402 For those reasons, no claim has been established against the Partnership Defendants.

247. It will be seen that contrary to the way this ground is formulated, no application to amend was in fact made (perhaps in part because leave was not granted to make such application after judgment was reserved). Further, while Mr Salmon’s written submissions assert there was no prejudice, it is quite plain that there are factual questions of knowledge and authorisation attendant upon any claim that the other partners are liable via s 10 for the dishonest conduct of Mr Albarran.

Limitation periods in equity

248. The Receivers’ submissions raised a question of law concerning the operation of limitation periods by analogy for claims in equity, and in particular drew attention to the existence of tension between Lewis Securities and Twigg v Twigg.

249. Lewis Securities concerned s 47 of the Limitation Act 1969 (NSW), which provides:

47 Fraud and conversion; trust property

(1) An action on a cause of action--

(a) in respect of fraud or a fraudulent breach of trust, against a person who is, while a trustee, a party or privy to the fraud or the breach of trust or against the person’s successor,

(b) for a remedy of the conversion to a person’s own use of trust property received by the person while a trustee, against that person or against the person’s successor,

(c) to recover trust property, or property into which trust property can be traced, against a trustee or against any other person, or

(d) to recover money on account of a wrongful distribution of trust property, against the person to whom the property is distributed or against the person’s successor,

is not maintainable by a trustee of the trust or by a beneficiary under the trust or by a person claiming through a beneficiary under the trust if brought after the expiration of the only or later to expire of such of the following limitation periods as are applicable--

(e) a limitation period of twelve years running from the date on which the plaintiff or a person through whom the plaintiff claims first discovers or may with reasonable diligence discover the facts giving rise to the cause of action and that the cause of action has accrued, and

(f) the limitation period for the cause of action fixed by or under any provision of this Act other than this section.

(2) Except in the case of fraud or a fraudulent breach of trust, and except so far as concerns income converted by a trustee to his or her own use or income retained and still held by the trustee or his or her successor at the time when the action is brought, this section does not apply to an action on a cause of action to recover arrears of income.

250. This Court held in Lewis Securities that where a third party to a breach of fiduciary duty was sued as a constructive trustee for knowing assistance in that breach, s 47 of the Limitation Act 1969 (NSW) would apply directly: at [69]. This conclusion followed from the expanded definition of “trust” in s 11 of the Act, which in turn reflected the recommendations of a Law Reform Commission report which consciously and explicitly departed from the position in the United Kingdom and which had the consequence that the position in New South Wales differed from that of the United Kingdom: see at [52]-[58] and [62]. On the facts of Lewis Securities, it was unnecessary to decide whether s 47 would apply to a knowing assistant who was sued for equitable compensation, although “there [was] much to be said in favour of that conclusion, especially if “equitable compensation” is regarded as a shorthand for … being required to account as a trustee”: at [70].

251. Twigg v Twigg did not refer to Lewis Securities, and Mr Elliott SC (who had appeared in the case) said that the Court had not been taken to it. Nor did Twigg v Twigg concern s 47. Significantly, the claims in Twigg v Twigg were governed by the law of Victoria. Reliance was placed on s 21(1) of the Limitation of Actions Act 1958 (Vic) that there was no limitation period for actions by beneficiaries “in respect of any fraud or fraudulent breach of trust to which the trustee was a party or privy” or “to recover from the trustee trust property or the proceeds thereof in the possession of the trustee, or previously received by the trustee and converted to his use”. However, s 21(2) made provision for a six year limitation period for “an action by a beneficiary to recover trust property or in respect of any breach of trust”. There was no counterpart to s 47 in the Victorian Act.

252. Brereton JA, with whom Bell CJ and Payne JA agreed on this point, agreed with Ball J at first instance that the limitation in s 21(2) had no application where a remedial constructive trust was imposed as a result of a particular impugned transaction. Relying on the reasoning of Lord Sumption in Williams v Central Bank of Nigeria [2014] AC 1189; [2014] UKSC 10, his Honour considered that both ss 21(1) and (2) only applied to “institutional” rather than “remedial” constructive trustees, noting that the latter had historically not faced the same “disability” in pleading limitations as the former: at [140]. His Honour further considered that s 5(2), which stipulated a six year limitation period for “action[s] for an account”, would apply by analogy, although not directly, to remedial constructive trustees, and that the “analogous application of s 5 (and its equivalents) is an important element of explaining why s 21(2) (of the Victorian Act) does not apply to remedial trusts”: at [188].

253. No doubt if had been cited to the court in , the latter court would have explained the relationship between its reasoning and that in the earlier decision. Because the issue may recur, it may assist to make the following points.

Conclusion and orders

257. For those reasons, the appeal must be dismissed. Mr Salmon’s application to adduce further evidence must also be dismissed. None of the documents now sought to be adduced has any material bearing upon the outcome of the appeal.

258. There is no reason, based on what is presently known to the Court, for costs not to follow the event. I am conscious that security for costs was sought and ordered: Salmon v Albarran (No 2) [2024] NSWCA 99; if some further order is sought, application may be made within the time specified in UCPR r 36.16.

259. I return to the point mentioned at the outset of the reasons that Mr Salmon repeatedly made allegations of serious misconduct by counsel retained for the respondents. Those allegations were unfounded and should not have been made. The fact that Mr Salmon is a solicitor, who appeared not merely for himself but also for the second appellant, has caused me to consider carefully whether he should be given an opportunity to show cause why the matter should not be referred to the Legal Services Commissioner in light of the primary facie breach of r 32 of the Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015. However, while the position is finely balanced, I have concluded that it is not necessary to take that step, because this Court’s judgment will make the unacceptableness of the conduct clear, and because in substance Mr Salmon should be treated as a litigant in person, acting for himself, with the consequential loss of objectivity regularly seen in such cases.

260. Accordingly I propose the following orders:

1. Appeal dismissed.

2. Notice of motion dated 14 August 2024 dismissed.

3. Appellants to pay the respondents’ costs in this Court.

261. BALL JA: I agree with Leeming JA, save that it is unnecessary for me to express any view on the issues raised by paragraphs [248] to [256] of his Honour’s judgment.

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