Salmon v Albarran

[2025] NSWCA 42

Court of Appeal

Supreme Court

New South Wales

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

 Decision under appeal 

Court or tribunal:

Supreme Court of New South Wales

Jurisdiction:

Equity

Citation:

[2023] NSWSC 1238

Date of Decision:

19 October 2023

Before:

Nixon J

File Number(s):

2016/373218

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:

1. 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.

2. Despite being granted the indulgence of written submissions of 50 pages (rather than the 20 pages authorised by UCPR r 51.36(1)(f)), Mr Salmon’s submissions in chief were 140 pages. Mr Salmon advised the Court that he had been told by two (unnamed) barristers that his document complied, because in addition to the 50 pages directed by the Registrar, he was entitled to devote a further two pages to challenges to findings of fact, and on the construction adopted by him, that was two pages for each finding of fact. That is not how the rules operate. It is, with respect to Mr Salmon, difficult to see how r 51.36(2) could be construed in that way. The rule is clear:

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.

7. 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).

8. 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 13^th and 14^th 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: Wily v Terra Cresta Business Solutions Pty Ltd [2006] NSWSC 1042.

29. The Court held that the charge granted by BACM was not binding, it having been granted within six months of the commencement of the winding up, at a time when BACM (which could not even pay its own staff without borrowing) was insolvent. The Court also held that there had not been a valid legal assignment of the debts owed by BACF from Numsbar to TCBS, and that there were other difficulties in establishing the loans claimed by TCBS. The evidentiary uncertainties, and the fact that the parties gave primary attention to the validity of the charge, rather than the amount secured by it, led to his Honour declining to determine BACF’s indebtedness, but instead advising the 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 the liquidator was convinced by material placed before him by the defendant that he should treat the charge as being for some higher amount.

30. TCBS’s substantial failure before Young CJ in Eq was reflected in a costs order on 19 October 2006 that it pay 80% of the liquidator’s costs: Wily v Terra Cresta Business Solutions Pty Ltd (No 2) [2006] NSWSC 1102.

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 Boensch v Pascoe (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”.

48. It also accords with what was said in Massoud v Nationwide News Pty Ltd; Massoud v Fox Sports Australia Pty Ltd (2022) 109 NSWLR 468; [2022] NSWCA 150 at [278] that “[t]his Court should resist any temptation to be drawn into this unnecessary multiplication of arid issues”, in circumstances where for multiple reasons the determination of those issues could have no impact upon the outcome of the appeal.

43. Adopting that course, and in light of the overview of events summarised above, it will be possible and efficient to deal in detail with the evidence on 13, 14 and 18 September 2016 when dealing with the submissions bearing upon that evidence.

44. The finding that the instruments appointing Messrs Albarran and McDonald were not deeds depends on little evidence, and disposes of the entirety of the claims at common law. It is convenient to address it first.

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).

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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Decision last updated: 21 March 2025