Salmon v Albarran & Ors

1. [1]

   Mr Owen Salmon and TCBS Group Holdings Pty Limited (“TCBS”) commenced these proceedings in November 2016 and filed their present pleading, the Amended Statement of Claim (“the pleading”), on 21 February 2017. The pleading joined eight defendants. Seven of these defendants (excluding the third defendant) now seek by Motion, filed on 12 October 2017, to strike out the pleading pursuant to Uniform Civil Procedure Rules 2005 (“UCPR”), r 14.28(1) on the bases that: (1) the causes of action it pleads are not maintainable by virtue of the operation of Limitations Act 1969, or Corporations Act 2001, s 1317K; or (2) the pleading does not disclose a reasonable cause of action or has the tendency to cause prejudice, embarrassment or delay in the proceedings.

2. [2]

   The pleading makes allegations of some complexity. The pleaded allegations and the facts surrounding them will be elaborated below. But the essential point at issue, which the defendants raise in their Motion, may be shortly stated. The defendants contend that the causes of action in the pleading are statute barred. In answer, the plaintiffs seek to circumvent the defendants’ Limitations Act defence by relying on Limitation Act, s 55, which permits the extension of an otherwise applicable limitation period if a defendant conceals the plaintiffs’ cause of action from the plaintiff. The plaintiffs contend that the defendants concealed their cause of action from them and they did not discover this concealed cause of action until November 2016, shortly before they commenced these proceedings.

3. [3]

   But the defendants’ have a counter argument on the Motion. They contend that it is demonstrable beyond argument (and principally from the plaintiffs’ own documents) that the plaintiffs were well aware of the cause of action they now plead, long before the plaintiffs say that they first “discovered” it. Moreover, the defendants contend that the plaintiffs had been propounding the existence of this very cause of action to various third parties, long before November 2016. It is not in contest that if the plaintiffs’ Limitation Act, s 55 allegations of concealment are not made out, then the plaintiffs’ primary cause of action against the defendants is barred under the Limitation Act.

4. [4]

   Determination of this Motion will require the Court to examine an extensive range of pleaded allegations and evidentiary materials. The Court will examine the essential pleaded allegations, the parties’ dealings relating to those allegations, the applicable limitation periods, the plaintiffs’ Limitation Act s 55 case, and the detailed evidence that the defendants rely upon to say that the plaintiffs have long been aware of the causes of action that they now say were concealed from them. This case involves more detailed analysis of evidence than is commonly found in applications to strike out proceedings. But that is the nature of this case. The defendants say that, notwithstanding the need to examine that detail, the pleading should be struck out in the application of conventional legal principles.

5. [5]

   The seven defendants who bring this Motion comprise all the remaining defendants in the proceedings. The third defendant takes no part in this Motion. If the defendants’ Motion is successful the proceedings can be wholly dismissed. If the defendants’ Motion fails, directions should be made for the matter to proceed to trial.

6. [6]

   Mr Salmon appeared for himself. And the Court gave him leave to appear on behalf of the other plaintiff on the motion, TCBS. Mr R. Elliott SC, of counsel, appeared for the seven defendants, who propound the Motion as applicants. The proceedings were heard over some four days: 28 November 2017, 13 December 2017, 21 February 2018 and 13 March 2018. Although, they occupied the equivalent of about two full days of hearing.

7. [7]

   Before proceeding to examine the factual background, the applicable legal principles may be stated.

8. [8]

   The law in relation to summary dismissal and the striking out of pleadings is frequently restated and applied. The principles have, for example, been recently restated by the Court of Appeal in this State in New South Wales v Williams (2014) 242 A Crim R 22 (at [71]); [2014] NSWCA 177, although in the context of applying to strike out a defence. But nevertheless, the Court of Appeal’s statement has wider application to summary dismissal of a plaintiff’s claim:

9. [9]

   The classic statement of the principles that govern the Court’s power of summary dismissal is the following passage from General Steels Industries v Commissioner of Railways (1964) 112 CLR 125; [1964] HCA 69 (“General Steels”) at pp 128-130, which, together with passages from Dey v Victorian Railways Commissioners (1949) 78 CLR 62; [1949] HCA 1 at pp 90-91, is often quoted in whole or in part:

10. [10]

    Here the facts are complex. The defendants particularly rely upon a statement of the House of Lords (Lord Hope) in Three Rivers District Council v Governor & Company of the Bank of England (No. 3) [2001] UKHL16, (at [95]) (“Three Rivers District Council”), as to the relevant scope of the inquiry upon a summary dismissal application, where the underlying facts are complex:

11. [11]

    The High Court of Australia cited this whole statement with approval in Spencer v Commonwealth (2010) 241 CLR 118, at p 130; [2010] HCA 28, (at [21]) (“Spencer”). But in Spencer, the High Court went on to discuss the application of the principle in a further passage (at [22] to [26]), dealing with the summary dismissal power of the Federal Court of Australia (Federal Court of Australia Act 1986, s 31A). But it should be noted that the test for summary dismissal in s 31A is less demanding than that in UCPR, r 14.28 which is under consideration here.

12. [12]

    The discussion in Spencer, though speaking to the differently worded s 31A, bears upon the issues that arise in this case, in part, because it speaks to a situation like the present, where, on the application for summary dismissal, the Court was invited to consider apparently complex questions of fact and, therefore, Lord Hope’s caution in Three Rivers District Council is particularly relevant.

13. [13]

    The High Court said the following in Spencer, (at [22] to [26]):

14. [14]

    These principles have often been applied. The Courts have recognized that the mere presence of a factual controversy does not bar the Court from exercising its power of summary dismissal: George (a Bankrupt) v Fletcher (Trustee) [2010] FCAFC 53, (at [75]). The applicants/defendants have cited in submissions a certain statement in the Full Court of the Federal Court that, in order to decide whether a controversy is “implausible” or “tenuous”, the Court must look with a “critical eye” at the evidence and decide whether the “weight and quality” of the evidence going to the alleged disputed fact is such that a trial is warranted: Jefferson Ford Pty Ltd v Ford Motor Co of Australia (2008) 167 FCR 372; [2008] FCAFC 60 (at [23]). But such statements are grounded in the terms of s 31A and may be too broad for present purposes, and, in any event, some of them have been disapproved by later Full Court Federal Court authority: cf Kowalski v MMAL Staff Superannuation Fund Pty Ltd (2009) 259 ALR 319; [2009] FCAFC 117.

15. [15]

    The relevant statements of principle from General Steels, and the cases that apply exactly the same test, reflect the idea that summary dismissal is not appropriate if there is a “real question to be tried”. To succeed an applicant for summary dismissal does not have to show that there is no question to be decided: rather the applicant must satisfy the Court that there is not a “real question” for trial. Summary dismissal is appropriate where the materials available clearly demonstrate that the assertion of fact or law being made cannot possibly succeed. And as Barwick CJ said in General Steels, in the passage cited above (at p 130), to demonstrate that, if a claim cannot succeed, “argument, perhaps even of an extensive kind, may be necessary”.

16. [16]

    The expression “real question” that has long been part of the General Steels test is now reinforced by the modern command of Civil Procedure Act, s 56 to the Court - to facilitate the “just, quick and cheap” resolution of the “real” issues in the proceedings.

17. [17]

    Whether or not an issue is a “real” one, must be assessed by a “practical judgment” (see Spencer (at [25])) in the context of the particular case, rather than by abstract, logical possibilities. The pleading of an issue does not itself make the question raised “real”. Notwithstanding the existence of a dispute on the pleadings, a disputed fact does not amount to a real question to be tried if the evidence before the Court demonstrates that there is “only one result which can be said to be reasonable”: Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd (2006) 236 ALR 720; [2006] FCA 1352 (at [38]).

18. [18]

    In making its judgment about summary dismissal the Court will often look forward to what may happen at the possible trial of the factual issue in question. It should be remembered that a successful summary dismissal application will deny the unsuccessful respondent the fundamental procedural right of contesting the issue at a trial. It would be a grave error for a Court to deprive a respondent of the trial of an issue, on which the respondent could possibly succeed. But the Court can look behind the controversy of fact and consider whether in the light of the documents before it, what is now being asserted can be judged to be, or not to be, a “real” issue for trial. If there is not a realistic prospect of the respondent succeeding, there is not a “real” issue for trial.

19. [19]

    There can be cases where the factual assertion in question is simply incapable of acceptance because it cannot, by any rational hypothesis or by any case that may be advanced at a later trial, be reconciled with an overwhelming body of documentary evidence which demonstrates the contrary.

20. [20]

    Whether a particular factual contest is susceptible to the application of this principle will depend upon the nature and width of the factual controversy being asserted. As imply, narrower, more readily isolated disputes of fact may be more amenable to the application of this principle of summary dismissal.

21. [21]

    Here, the defendants say that the relevant asserted fact is really a narrow one and can be disposed of according to this principle. The relevant asserted fact is that the plaintiffs say they were not able to make certain claims in these proceedings until after the expiry of the relevant limitation period, because they had not discovered the facts underlying those claims until after that expiry. But in response, the defendants say that the plaintiffs must have discovered the facts underlying the claim well before the expiry of the applicable limitation period. The defendants say that the documents available clearly and indisputably record the plaintiffs not only having knowledge of the underlying facts, but actually making those very claims against various other parties well prior to the expiry of the limitation period. A question to be considered is whether the plaintiffs can ever maintain, at trial, the controversy they say exists on the pleadings, in the face of the documents now deployed against them. The plaintiffs say that the controversy is wider than the plaintiffs’ characterization of it.

22. [22]

    The Courts have granted summary dismissal where the unreality of one party’s case means that the parties and the Court should not have inflicted upon them the costs and delay associated with the trial: Queensland Pork Pty Ltd v Lott [2003] QCA 271. The principle has been applied in many kinds of cases, including where the expiry of a limitation period is in question, as it is here: see Bradman v Allens Arthur Robinson (2009) 103 SASR 438; [2009] SASC 80.

23. [23]

    The defendants state that the summary dismissal claim here is a discrete one. They contend that the plaintiffs’ claim is that by virtue of Limitation Act 1969, s 55, the relevant limitation period in respect of the claims pleaded only began to run on 8 November 2016: pleading [101] and following. If that claim cannot be maintained, then the defendants say that all the plaintiffs’ causes of action are time barred and the proceedings can be dismissed.

24. [24]

    The Limitation Act, s 55 issue is this. The plaintiffs must show at a trial of the issue that they did not discover, or could not with reasonable diligence have discovered, the deceit or the concealment of the subject of the cause of action until after a particular date. Here the plaintiffs claim that this date was not until December 2016.

25. [25]

    But an essential assumption to the plaintiffs’ Limitation Act, s 55 claim is that they did not discover the deceit until 8 November 2016. This was the date when Mr Salmon claims that he received a copy of a letter of demand, dated 12 October 2005, from Mr Wily to Given Form Pty Limited (“Given Form”). He says that the receipt of this letter alerted him to the availability of the cause of action. The defendants maintain that this contention is fanciful and cannot realistically be regarded as having any prospect of success.

26. [26]

    Finally, the issue of the possible amendment of the pleading can arise in this context. Defects in pleadings that would otherwise be struck out can sometimes be cured by amendment. It has often been said that, where a pleading can be cured by amendment, the Court ought to grant leave to amend rather than exercise the power to strike out: Wentworth v Rogers (No. 5) (1986) 6 NSWLR 534, at pp 536-7. But as was emphasized in In the matter of Galtari Pty Ltd (in liq) [2018] NSWSC 917, (at [77]) by Gleeson JA, when the Court is deciding whether to grant leave to re-plead, the Court must seek to act in accordance with the dictates of justice: Civil Procedure Act 2005, s 58(1). And for that purpose, the Court must have regard to the provisions of Civil Procedure Act, ss 56 and 57, and importantly to the facilitation of the just, quick and cheap resolution of the real issues in the proceedings (s 56(1)) and should also have regard to the matters set out in s 58(2)(b), to the extent to which the Court considers them relevant for the management of the proceedings.

Mr Salmon, Hall Chadwick and Given Form – 2003 to 2017

1. [27]

   Analysis must start with the plaintiffs’ pleading, which is thorough, reasonably clear and well pleaded. Although the first plaintiff represented himself and the second plaintiff at this hearing, the pleading shows every sign of having been closely prepared with the benefit of legal advice.

2. [28]

   But the pleading is lengthy. Setting its provisions out at length would not serve the objective of coming to grips with the real issues on this application. So these reasons take the approach of summarising the pleading’s relevant allegations, with references to the paragraphs of the pleading from which the summary is drawn.

3. [29]

   Mr Salmon is a director of the second plaintiff, TCBS, a company that provided management, accountancy and consulting services in Australia between 2003 and 2006: [4] and [5].

4. [30]

   Mr Richard Albarran and Mr Geoffrey McDonald, the first and second defendants, were professionally qualified to be appointed receivers and managers, duly authorised to act under the Corporations Act in that capacity as external administrators to companies, where such appointments were required: [6]. Messrs Albarran and McDonald are also two of the equity partners of the accountancy firm practising under the name “Hall Chadwick”.

5. [31]

   The fourth, fifth and sixth defendants, Mr Robert Brassil, Mr Robert Elliott and Mr Drew Townsend were also equity partners in the firm Hall Chadwick. All equity partners of Hall Chadwick agreed, under the Hall Chadwick Partnership Agreement (clause 7.2), to indemnify one another for the liabilities of the partnership: [8].

6. [32]

   The third defendant, Mr Steven Brown, is a solicitor of the Supreme Court of New South Wales and a specialist insolvency practitioner: [7].

7. [33]

   In February 2005, Business Australia Capital Finance Pty Limited (“Capital Finance”) and Business Australia Capital Mortgage Pty Limited (“Capital Mortgage”) retained TCBS to provide management and accounting services to them: [10]. Mr Ian Lazar was, at the time, a principal and director of both of these companies: [9].

8. [34]

   On 24 February 2005, Mr Lazar on behalf of Capital Mortgage and Capital Finance engaged, in writing, TCBS to provide accounting and consultancy services to them. The agreement included that fees due to TCBS, or monies advanced by TCBS to Capital Mortgage and Capital Finance, would be secured by a fixed and floating charge to be issued by Capital Mortgage and Capital Finance: [12].

9. [35]

   In 2004 and 2005, TCBS advanced funds to Capital Finance and Capital Mortgage: [11].

10. [36]

    On 18 March 2005, each of Capital Finance and Capital Mortgage granted a fixed and floating charge in favour TCBS in the sum of $1,500,000, which were registered on 12 April 2005, in favour of TCBS: [13] – [15].

11. [37]

    Liquidation of Capital Mortgage and Capital Finance. On 8 June 2005, the Australian Securities and Investments Commission (“ASIC”) appointed Mr Andrew Wily as the liquidator of a number of companies in which Mr Lazar was the principal. Capital Finance and Capital Mortgage were among these companies. At the time of Mr Wily’s appointment, Capital Finance and Capital Mortgage remained indebted to TCBS under the advances made to them: [16]

12. [38]

    At the time Mr Wily was appointed as the liquidator of Capital Finance and Capital Mortgage, each of those companies (and several others associated with Mr Lazar) were engaged in litigation in the Federal Court of Australia to recover monies that they had advanced to a number of other companies incorporated in Nauru: [17].

13. [39]

    The Federal Court of Australia proceedings settled. As a result, on 7 October 2005, the sum of $6,500,000 was paid into the Federal Court of Australia, on account of the claims brought by Mr Lazar’s companies, including Capital Finance and Capital Mortgage: [18].

14. [40]

    Almost a year later, in August 2006, both Mr Salmon and TCBS sought advice from the third defendant, Mr Brown, as to whether or not TCBS’s charges were valid and enforceable and were advised that they were: [19] and [20].

15. [41]

    On 9 August 2006, a further part of the Federal Court proceedings settled, enabling an additional amount of $4,500,000 to be paid to Mr Lazar’s companies, including Capital Mortgage and Capital Finance, of which Mr Wily was liquidator: [21].

16. [42]

    On 4 August 2006, TCBS appointed Mr Albarran and Mr McDonald as receivers and managers to Capital Finance, and as receivers and managers to Capital Mortgage: [22] and [23]. The same day, a deed was executed between TCBS and Mr Albarran and Mr McDonald, which recorded the terms and conditions of their appointment as receivers and managers to each company: [24].

17. [43]

    The terms and conditions of each of Mr Albarran’s and Mr McDonald’s appointments as receivers and managers included a term (clause 4) that the indemnities provided to them in that role would not extend to any act of wilful default or neglect of them as receivers and managers, or to that of any person for whom they were responsible as receivers and managers: [25] – [27].

18. [44]

    On 10 August 2006, Mr Wily as the liquidator of Capital Mortgage and Capital Finance, commenced proceedings in this Court (Proceedings 4200/06 – “the 2006 Supreme Court proceedings) seeking: (1) a declaration that TCBS was not entitled to appoint Mr Albarran and Mr McDonald as receivers and managers to each of Capital Mortgage and Capital Finance; (2) a declaration that the deeds of charge in favour of TCBS were invalid as being contrary to Corporations Act, s 588FF, to the extent that any amount was owing to TCBS prior to 18 March 2005 (the date of execution of the charges); and (3) seeking orders removing Mr Albarran and Mr McDonald as receivers and managers: [28] and [31].

19. [45]

    Mr Wily also sought an interlocutory injunction in the Supreme Court proceedings, restraining TCBS from instructing Mr Albarran and Mr McDonald from taking any further steps in the Federal Court proceedings, such as, for example, accessing the funds paid into Court on settlement: [29]. TCBS was also joined as a defendant to the 2006 Supreme Court proceedings and the pleadings were amended to seek this relief: [30] and [33].

20. [46]

    On 30 August 2006 in this Court, Palmer J declined the interlocutory relief sought: [34].

21. [47]

    It is necessary for completeness to mention a little of the pleading against Mr Brown in relation to these events, even though he is not a party to the present application. To defend the 2006 Supreme Court proceedings brought by Mr Wily, Mr Albarran and Mr McDonald retained Mr Brown as their solicitor. It was said to be a term of that retainer that Mr Brown would not act “in a manner that involved” a conflict of interest between Mr Brown’s own interests and those of TCBS, Mr Salmon and another company related to them: [36].

22. [48]

    On instructions from Mr Albarran, Mr McDonald, Mr Salmon and TCBS, Mr Brown filed an Amended Cross-Claim against Mr Wily in the 2006 Supreme Court proceedings, seeking declarations that Mr Albarran’s and Mr McDonald’s appointments as receivers and managers to Capital Mortgage and Capital Finance were valid, as were the charges that those companies had given in favour of TCBS. The Amended Cross-Claim also sought relief avoiding Mr Wily’s decision to seek litigation funding to intervene in the Federal Court proceedings, and it sought the removal of Mr Wily as liquidator of Capital Mortgage and Capital Finance: [37].

23. [49]

    The Given Form Allegations. At this point, the pleading introduces allegations in relation to Given Form, a company that is unrelated in shareholding or control to the parties in either the Federal Court or the 2006 Supreme Court proceedings. It assists the later discussion of the issues for determination to set out, at times from this point in these reasons, some of the correspondence and other documents that are referred to in the pleadings concerning Given Form.

24. [50]

    On 12 October 2005, Mr Wily in his capacity as liquidator of Capital Mortgage and Capital Finance issued a demand in writing to the directors of Given Form, demanding that a loan purportedly advanced to Given Form by Capital Mortgage and Capital Finance in the sum of $640,000 be repaid immediately: [37].

25. [51]

    This is the critical letter that the plaintiffs say did not come to their attention until 8 November 2016. The plaintiffs say this letter gave them the knowledge that Mr Albarran and Mr McDonald had concealed from them a cause of action against Mr Albarran and Mr McDonald, founding their right to an extended limitation period under Limitation Act, s 55. The plaintiffs’ allegations extend to allegations of concealment against the third defendant, Mr Brown, but these allegations are put to one side merely because Mr Brown is not a party to this Motion.

26. [52]

    The 12 October 2005 letter is set out in full below:

27. [53]

    On 13 September 2006, Mr Brown, acting for the defendants/cross claimants (Mr Albarran, Mr McDonald and TCBM) in the 2006 Supreme Court proceedings, wrote to a barrister (Mr Julian O’Sullivan), who then represented those parties, and copied to Mr Salmon, seeking counsel’s advice about Given Form: [39]. In customary fashion, the advice sought was requested on the basis of facts that were advanced by Mr Brown to counsel. The facts advanced are repeated in extensive particulars in the pleading. But it is convenient instead to set out the letter of instruction itself in these reasons, then the particulars:

28. [54]

    The particulars to the pleading set out the facts that are said to found a conflict of interest that was allegedly concealed from Mr Salmon: [40]. The exact particulars, which are somewhat discursive, are not set out here but may be restated concisely in 10 points as follows: (1) Mr Brown was a creditor of Capital Finance and Capital Mortgage; (2) Capital Finance and Capital Mortgage were creditors of Given Form, to which in turn money was due to pay Capital Finance and Capital Mortgage; (3) in a three-way arrangement (allegedly made when Mr Albarran and Mr McDonald were administrators of Capital Finance and Capital Mortgage), Given Form and Capital Finance and Capital Mortgage agreed that Capital Finance’s and Capital Mortgage’s obligations to Mr Brown could be satisfied by Given Form paying some of the money owed directly to Mr Brown; (4) Given Form received the funds and paid Mr Brown, but was then placed in liquidation and Mr Wily was appointed its liquidator; (5) Hall Chadwick (presumably Albarran and Mr McDonald) received a letter alleging that certain payments made to Capital Finance and Capital Mortgage may be recoverable (presumably by the liquidator of Given Form) and they disputed the allegations; (6) in September 2006, Mr Wily’s lawyers suggested to Mr Albarran that he should (i) retain a different lawyer other than Mr Brown; (ii) settle Given Form’s claim against Capital Finance and Capital Mortgage, or (iii) face the prospect of the “Given Form issue” (meaning presumably Mr Albarran’s authorisation of, and Mr Brown’s alleged receipt of, money allegedly due from Given Form to Capital Finance and Capital Mortgage); (7) Mr Albarran disputed any wrongdoing in acting as a receiver and manager of Capital Finance and Capital Mortgage and in complying with the agreed direction to pay Mr Brown; (8) Mr Wily communicated with Mr Salmon’s business partner (Mr John Myers), suggesting that a legal firm other than Mr Brown’s firm should be retained, as the Given Form issue “when it comes to light would not be in [his] interests”; (9) Mr Brown sought advice about whether to write to Mr Wily to seek an undertaking that he not interfere with Mr Brown’s contractual relations with its two clients, Capital Finance and Capital Mortgage and to record Mr Wily’s “inappropriate behaviour; and (10) noting that documents produced by TCBS in the 2006 Supreme Court proceedings note the “given form issue”, the fact that Hall Chadwick were administrators and that money to be received would be used to pay Mr Brown’s firm.

29. [55]

    The heart of this allegation in the particulars to the pleading is in item (6) above, that when he was administrator of Capital Finance and Capital Mortgage, Mr Albarran had diverted to Mr Brown money that was due from Given Form to Capital Finance and Capital Mortgage. It was an allegation of impropriety against Mr Albarran, Mr McDonald and Mr Brown.

30. [56]

    Mr Salmon and TCBS did not have any dealings with Given Form: [41]. The plaintiffs were unaware of any evidence in the 2006 Supreme Court proceedings relating to Given Form, or of the contents of Mr Brown’s email, or of any aspect of the Given Form issue: [42].

31. [57]

    The plaintiffs allege that Mr Albarran and Mr McDonald were administrators of Given Form between 3 November 2004 and 6 January 2005 and were reappointed as administrators for another period ceasing on 23 June 2005: [43] and [43]. They retained Mr Brown in relation to this administration.

32. [58]

    The Settlement. Young CJ in Eq (as his Honour then was) heard the 2006 Supreme Court proceedings on 17 and 18 September 2006, during which period a settlement was reached in principle between the parties to those proceedings: [46]. The settlement in principle included that TCBS would be paid within six months of 18 September 2006 the sum of $1,300,000 out of the monies ($6,500,000) that had been paid into the Federal Court of Australia. The proceedings were adjourned to 19 September 2006, to allow the deeds of settlement to be finalised and a series of drafts was prepared: [47] and [48].

33. [59]

    The final draft deed settling the 2006 Supreme Court proceedings included a clause identifying a number of releases and indemnities, including a release and indemnity in respect of Given Form: [49]. The clause in question (clause 3.5) provided that: “The Liquidator [Mr Wiley] releases the BA Companies [being Capital Finance and Capital Mortgage (both with Receivers and Managers Appointed and In Liquidation)] in respect of the money paid to them jointly and severally by the Deed Administrator of Given Form [Mr Albarran]”.

34. [60]

    Mr Salmon and TCBS say that the release and indemnity, in relation to Given Form, had nothing to do with the 2006 Supreme Court proceedings, or with the controversy in relation to the TCBS charges, Mr Salmon, Capital Finance or Capital Mortgage: [49].

35. [61]

    Mr Salmon and TCBS plead that the purpose of inserting the Given Form clause in the 19 September 2006 settlement was, as the pleading says, “as a mechanism of ensuring that the demand dated 12 October 2005 by Mr Wily against Given Form for $640,000 would not proceed, and if it did, to provide Given Form and the defendants [Mr Albarran and Mr McDonald] a mechanism to advance a complete defence against any proceedings brought by Mr Wily to recover those monies back in the liquidation of Capital Mortgage and Capital Finance”: [50].

36. [62]

    Mr Salmon, Mr Myers, Mr Wily and Mr Brown celebrated the resolution of the proceedings together: [51].

37. [63]

    The balance of the factual part of the pleading, ([52] to [60]), is closely connected with the plaintiffs’ allegations: (1) about the negotiations for the final deed of settlement, in which it is alleged Mr Wily and his associate Mr David Hurst contended that the proposed Given Form indemnity in the deed of settlement was unacceptable, but Mr Albarran and Mr Brown stipulated that they would not settle the proceedings without the deed dealing with Given Form; and (2) Mr Salmon’s and TCBS’s allegations of lack of knowledge of these negotiations or anything to do with Given Form. The precise terms on which these matters are alleged are potentially of importance, so they are set out here in full:

38. [64]

    (1) The Tort of Deceit. Mr Salmon and TCBS allege that Mr Albarran, Mr McDonald and Mr Brown represented (orally and by email) to them that it was Mr Wily who refused to execute the deed of settlement and was the sole cause of the settlement not proceeding: [61]. This representation was false, as it was not Mr Wily but Mr Albarran and the other defendants who had caused the settlement not to proceed: [62].

39. [65]

    The plaintiffs also allege that Mr Albarran, Mr McDonald and Mr Brown failed to disclose to them that they were insisting that the benefit of a full release and indemnity, in respect of Given Form, was being stipulated for in the deed of settlement and that this stipulation was contrary to a demand which Mr Albarran, Mr McDonald and Mr Brown had concealed from the plaintiffs, namely the demand of 12 October 2005 for $640,000: [63]. The plaintiffs further plead that each of Mr Albarran, Mr McDonald and Mr Brown continuously maintained the representation that the sole cause of the settlement of the 2006 Supreme Court proceedings was the conduct of Mr Wily, a representation which they knew to be false: [64]. The representations were fraudulent, as they were false to the knowledge of Mr Albarran, Mr McDonald and Mr Brown: [65].

40. [66]

    The plaintiffs plead that Mr Albarran, Mr McDonald, Mr Brown intended the plaintiffs to rely upon these representations, and the plaintiffs did rely upon the representations, by accepting that the 2006 Supreme Court proceedings had not settled and by instructing these three defendants to maintain the proceedings before Young CJ in Eq (as his Honour then was), who held that only one of the charges in favour of TCBS was valid: [66] and [67]. As a result of Mr Albarran, Mr McDonald and Mr Brown’s conduct, the plaintiffs did not resolve the 2006 Supreme Court proceedings, but maintained them to the point that they were partially unsuccessful and suffered an order for costs that was ultimately enforced against them, whereby they sustained such substantial loss and damage, and they could not pursue the remaining valid charge: [68].

41. [67]

    Mr Salmon and TCBS plead that had they known that the representations were false they would have: terminated Mr Brown’s retainer; revoked the appointment of Mr Albarran and Mr McDonald as receivers and managers; and settled the 2006 Supreme Court proceedings independently of these persons with Mr Wily, pursuant to the settlement deed, Mr Wily had proffered on 18 September 2006 excising the clause indemnifying Given Form. But because they did not have an opportunity to do this, they have suffered loss and damage and will continue to do so: [69] and [70].

42. [68]

    (2) Conspiracy to Injure by Unlawful Means. The plaintiffs allege that between the oral agreement to settle, the 2006 Supreme Court proceedings reached in principle on 18 September 2006, on terms excluding any reference to Given Form in the presence of Mr Salmon, and the later presentation of the proposed deed of settlement to Mr Wily, Mr Albarran, Mr McDonald and Mr Brown are alleged to have agreed and conspired to include in the deed of settlement a release and indemnity in respect of Given Form, notwithstanding that Given Form had no connection with Mr Salmon, Capital Finance or Capital Mortgage and was not a party to the 2006 Supreme Court proceedings: [79].

43. [69]

    The alleged conspiracy included an agreement to conceal from Mr Salmon, the attempt to include the release and indemnity in respect of Given Form: [80]. And the agreement to conceal the stipulation for the release and indemnity in respect of Given Form was both unlawful and contained the use of unlawful means to attain the desired ends in that it was dishonest, gained a secret and ulterior benefit, was an abuse of process of the Supreme Court, and was in breach of the receivers and managers duties under Corporations Act, s 420, as it diverted the funds away from other creditors: [81].

44. [70]

    Following the collapse of the settlement of the 2006 Supreme Court proceedings Mr Albarran, Mr McDonald and Mr Brown are alleged to have further conspired to deceive the plaintiffs by falsely and fraudulently representing to them that the reason the settlement had failed was because Mr Wily had refused to execute the deed, and, in so doing, they falsely represented to Mr Salmon that "the Deed Mr Wily had refused to execute contained no more than the terms apparently agreed to on the afternoon of 18 September 2006": [83].

45. [71]

    The plaintiffs further allege that following the failure of the settlement of the 2006 Supreme Court proceedings, the three principal defendants agreed and conspired to injure the plaintiffs by taking steps to ensure that TCBS was driven into liquidation and Mr Salmon was made bankrupt, so they could never pursue the three principal defendants for their conduct in aborting the settlement of the 2006 Supreme Court proceedings for their own ends: [84]. This separate alleged conspiracy was pursued by the three principal defendants by their effectively "running dead" in the balance of the 2006 Supreme Court proceedings, by their not presenting a proper case to the Court, and by their not prosecuting subsequent proceedings for the assessment of the quantum of TCBS’ losses (in respect of the charge Young CJ in Eq found to be valid) with appropriate dispatch: [85]. This meant that no funds were ever produced from the receivership of Capital Finance and Capital Mortgage for the benefit of the plaintiffs: [86]. This further conduct also involved the use of unlawful means in furtherance of the conspiracy to injure; namely dishonesty, the breach of Corporations Act, s 420 duties and the abuse of the processes of this Court: [87].

46. [72]

    Ultimately, Mr Wily's administration of the liquidation of Capital Finance and Capital Mortgage continued, resulting in funds being available to pay Mr Wily’s fees, and those of Mr Albarran and Mr McDonald, but nothing was left to pay the debts of TCBS or its related company: [88].

47. [73]

    (3) Wilful Default or Wilful Neglect of Their Duties as Receivers. The plaintiffs further allege that the facts already pleaded also amount to the three principal defendants stating to the plaintiffs that Mr Wily was the sole cause of the 2006 Supreme Court proceedings not resolving, whereas, in truth, the proceedings did not resolve because Mr Albarran and Mr McDonald, as deed administrators, were involved in the payment relating to Given Form and they received the subsequent demand of 12 October 2005, whereby they engaged in conduct constituting wilful default under their Deed of Appointment dated 4 August 2006, and they are therefore not entitled to any indemnity or release under that Deed of Appointment: [89].

48. [74]

    (4) Breach of Duty as a Receiver, Including Breach of Fiduciary Duty. The plaintiffs plead that Mr Albarran and Mr McDonald owed a fiduciary duty to the plaintiffs not to permit their personal interests to conflict with their duties to carry out the receivership of Capital Finance and Capital Mortgage in good faith, and they owed a duty to exercise their powers as receivers in good faith in the interests of the secured creditor who appointed them and otherwise in the interests of creditors and shareholders generally: [90].

49. [75]

    Mr Albarran and Mr McDonald breached those duties by the conduct previously pleaded, including stipulating in the negotiations for the settlement of the 2006 Supreme Court proceedings for the Given Form release and indemnity, insisting upon the Given Form release and indemnity even though Mr Wily had refused to entertain it, misleading the plaintiffs about the cause of the settlement not proceeding, subsequently "running dead" in the 2006 Supreme Court proceedings and failing to prosecute consequential assessment of quantum proceedings for the valid charge and then charging fees in excess of $800,000 for their conduct of their receivership: [91].

50. [76]

    The plaintiffs’ plea of fraudulent concealment of these causes of action is set out in paragraphs [96] to [100] of the pleading. Those paragraphs of the pleading are reproduced here in full:

51. [77]

    In consequence of these causes of action, the plaintiffs plead that their successful management, accounting and consulting business, being conducted in 2006, lost the benefit of recovering the settlement monies, suffered significant losses such that TCBS went into liquidation and Mr Salmon was declared bankrupt: [101]. The plaintiffs claim aggravated and exemplary damages: [103] and [104].

52. [78]

    (5) Knowing Participation in Breach of Fiduciary Duty. This allegation solely relates to Mr Brown's conduct, and pleads against him actual, or constructive, knowledge of the alleged actions of Mr Albarran and Mr McDonald in the alleged breach of their fiduciary duty: [93] – [95]. Because the allegation is solely directed to Mr Brown, it can be put to one side on the present contest.

53. [79]

    Mr Albarran, Mr McDonald and Mr Brown have made it clear that they strongly contest the plaintiffs allegations in these proceedings. The allegations set out at length in this judgment represent the plaintiffs’ contentions in the proceedings. The Court’s recounting of them is merely for the purposes of setting out in appropriate detail all of the plaintiffs’ contentions. The Court is not adjudicating in this judgment upon the factual correctness or otherwise of those contentions, many of which amount to allegations of what would constitute serious professional misconduct either by an accountant or a solicitor. The evidence on the Motion shows that the allegations are strongly contested by all defendants.

54. [80]

    It would only be at final hearing that the principal defendants would have the opportunity to contest the plaintiffs’ allegations. The Court is not making any findings of fact in this judgment. But the Court is prepared to assume in the plaintiffs’ favour the allegations they make at face value, to see whether they can possibly be made out. This approach is in accordance with legal principles governing summary judgment applications. It does not constitute a finding on the part of the Court that the allegations are in fact correct. This cautionary note should be borne in mind throughout this judgment.

55. [81]

    The applicants/defendants seek to distil the plaintiffs’ various claims in these pleadings into three factual propositions. Upon doing so, they then contend on the Motion that each of those core propositions has been advanced, often vigorously, by the plaintiffs since at least 2007 and well prior to the relevant limitation date of December 2010 (namely six years prior to the commencement of these proceedings). It is necessary to first identify each of the three propositions, and then examine significant samples of the evidence which the applicants/defendants claim shows that Mr Salmon and TCBS were well aware of each of those propositions prior to their relevant limitation date of December 2010. The thrust of the applicants/defendants’ case is that the plaintiffs have been asserting each of these three propositions since at least 2007.

56. [82]

    The three propositions upon which the applicants/defendants say that the plaintiffs/respondents rely are the following:

57. [83]

    The applicants/defendants relied upon an extensive range of evidence to show the plaintiffs had advanced each of these propositions well prior to December 2010. These reasons do not attempt to set all of this evidence out. These reasons nevertheless collect and review in a mostly chronological order what may be said to be some of the most compelling pieces of such evidence in the defendants’ case, avoiding unnecessary repetition where possible. The conclusion of the review is that there certainly is strong evidence that contradicts all three of the propositions on which the plaintiffs are said to rely.

58. [84]

    The Review Evidence Commences in 2007. Within about 12 months of the abortive settlement discussions of the September 2006 proceedings, the evidence on the Motion shows that Mr Salmon was corresponding with Mr Albarran and Mr Brown in particular, about the issue of the failed settlement. His correspondence shows considerable knowledge of the substance of what had occurred in the failed negotiations. His correspondence initially produced few responses but the provision of information to him increased later. The best course is to examine this correspondence. He did not dispute that the emails were his or that he had received emails in reply. Rather, he took the position that the replies were uninformative or that the applicants had not taken the Court to all of the relevant materials. The parties took the Court to a considerable number of documents and one cannot do justice to what has been put on each side of this case without referring to many of these documents. This section of these reasons examines many of those documents in the form of a mostly chronological narrative covering the years 2007 to 2010.

59. [85]

    On 13 November 2007, Mr Salmon wrote to Mr Albarran complaining about the lack of response to previous emails and saying the following [Exhibit A]:

60. [86]

    This email certainly shows a consciousness on Mr Salmon’s part of the introduction of “unrelated indemnification matters” being put forward in the settlement then, and that these are related to “Given Form” but not “Terra Cresta”. The reference to “Terra Cresta” is a reference to Mr Salmon’s company, Terra Cresta Business Solutions Pty Limited (another name for TCBS), which had the benefit of the charges over Capital Finance and Capital Mortgage.

61. [87]

    This email produced a general reply from Mr Albarran the same day, “I am happy to have a chat about this. As far as I am aware the only thing that stopped settlement was wily reluctance to settle. My firm has continued to find [fund] this matter with no assistance from you. Please explain what it is that you want or think I can do to speed up the process?”

62. [88]

    The following day Mr Salmon wrote again to Mr Albarran. The 14 November 2007 email refers to Wiley’s associate rejecting the settlement, due to Given Form. The email [Exhibit B] said as follows:

63. [89]

    This provoked a similar reply to the last email. Mr Albarran responded very generally, “I still fail to understand your position. I am happy to talk to you further. If you think that you need to proceed another way than [then] that is your decision. I continue to advise the matter has not settled because of Willy (sic) reluctance. In conclusion the only person that is funded this matter is my firm.” This shows all signs of Mr Albarran managing the correspondence diplomatically, but as giving little away.

64. [90]

    Mr Salmon decided to bring a complaint against Mr Brown to the Office of the Legal Services Commissioner (“OLSC”). Although this was a complaint against Mr Brown, rather than Mr Albarran and Mr MacDonald, it nevertheless shows Mr Salmon’s state of knowledge about the stipulation for the Given Form release and indemnity during the negotiations.

65. [91]

    Mr Salmon completed in his own handwriting an OLSC complaint form on 20 November 2007, which in paragraphs 9(a) to (c) said, in answer to an OLSC question, “Please list the main issue you are complaining about” that it was, “(a) a negligent act preventing settlement” and “(b) professional misconduct” and “(c) unrelated matters used by solicitor to protect himself”.

66. [92]

    Then in answer to the OLSC’s question 10 (which asked “Please tell us about the events that led to your complaint”), in his own handwriting Mr Salmon said:

67. [93]

    Mr Salmon wrote two more letters to the OLSC in the course of the next seven months. On 5 December 2007, he wrote in response to a letter from a mediation and investigation officer at the OLSC asking questions about the 20 November form he had addressed to the OLSC. Those questions were the following:

68. [94]

    He then responded to those seven questions as follows:

69. [95]

    The applicants/defendants say that they told Mr Salmon and TCBS as early as 2008 that they had proposed the Given Form release and indemnity and that Mr Wily had refused to settle. This appears from Mr Brown’s response to a complaint made to the OLSC dated 10 June 2008, and provided to Mr Salmon on 18 June 2008. In response to what has been called “Allegation 1” Mr Richard Gulley, the solicitor who was acting for Mr Brown, said the following to the OLSC:

70. [96]

    Mr Salmon’s correspondence with OLSC continued over a number of years. He wrote again to OLSC on 11 July 2008, in which he said:

71. [97]

    Mr Salmon provided an affidavit, he swore on 21 July 2008, to the OLSC of his account of what he understood about the negotiations that he was criticising. It also shows fairly well-developed knowledge of the claim he now makes:

72. [98]

    Importantly, in paragraph 51 of this affidavit, Mr Salmon describes the misconduct he alleges is partly a mystery to him “for more than a year I have requested an explanation from Steven Brown, Richard Barron and Wily as to why Given Form an unrelated company was being used in the compromise of the indebtedness of [Capital Finance] to the defendant pursuant to a charge the court held was valid.” It seems that Mr Salmon did not know what he came to know later of the redirected payment from Given Form.

73. [99]

    Mr Salmon’s correspondence with the OLSC continued later in 2008. On 30 September 2008, TCBS wrote to an investigator at the OLSC (the letter was actually written by Mr John Myers on behalf of TCBS), and in that letter the following was said:

74. [100]

    And then on 18 November 2009, Mr Salmon swore an affidavit in proceedings commenced in 2008 by Mr Wily, in the Equity division of this Court. The affidavit was sworn in the context of Mr Salmon seeking pro bono assistance through the Court’s Pro Bono Assistance Program administered by the Registrar. In that affidavit, Mr Salmon swore the following:

75. [101]

    This affidavit, like many of Mr Salmon's letters, seemed as much concerned with Mr Wily's alleged conduct in conjunction with Mr Jim Byrnes, as it was with Mr Albarran’s and Mr McDonald’s alleged response to it. Once again, it is to be noted that neither Mr Wily nor Mr Byrnes has had any opportunity to answer any of these allegations. And that is all they are for present purposes, mere allegations. No doubt they would be contested at a hearing. But they provide part of the context for the case Mr Salmon is advancing.

76. [102]

    But when it comes to the Given Form allegation, it is fairly clear from this 18 September 2009 affidavit that Mr Salmon then had some uncertainty as to why this indemnity was being sought:

77. [103]

    This affidavit is at least some evidence in itself that Mr Salmon could infer that the Given Form indemnity was some kind of response to the allegation that Mr Wily was attempting to blackmail Mr Albarran and others. But the substance of the alleged blackmail, and the underlying reason for indemnity, are not particularly clear in the way that Mr Salmon is himself advancing his understanding in this affidavit.

78. [104]

    Mr Salmon also lodged a formal complaint with ASIC against Mr Albarran and Mr McDonald in November 2007. That complaint continued to be dealt with by ASIC’s Office of National Assessment and Action. In the course of his correspondence with ASIC, Mr Salmon makes the following assertions that go further than the previous matters covered and venture the hypothesis that it can be inferred from Mr Brown’s correspondence that “he and Hall Chadwick shall knowingly be paying themselves monies for other matters out of funds owed to the creditors of Given Form”. The text of the relevant parts of this email is as follows:

79. [105]

    But these allegations to ASIC do not quantify the amount Hall Chadwick allegedly paid themselves and what were the monies owed to Given Form.

80. [106]

    Mr Salmon lodged the 2007 complaint to ASIC electronically. A portion of the complaint is a response to a standard form ASIC document, in which Mr Salmon as the complainant is invited to “tell us what happened”. He responded by setting out the events about which he is complaining, and about which he seeks an ASIC investigation, in the following words:

81. [107]

    The applicants/defendants rely in submissions upon statements made by Mr Salmon in this complaint, such as “I was made fully aware of what had gone on” as evidence that he was fully aware of everything that mattered in relation to the Given Form transaction. But even without testing, it is difficult to treat such statements other than cautiously made as they are without obvious legal advice and without full disclosure of documents. And Mr Salmon now says there is material he did not know, such as the letter of demand of 12 October 2005.

82. [108]

    On 24 February 2009, Mr Brown responded to Mr Salmon’s complaint to the OLSC through solicitors, Eakin McCaffery Cox. The response he gave to the complaint was full and was provided under the hand of Rosemary MacDougal, a consultant to that firm. Mr Brown’s response took the complaint head on, explaining that there were legitimate commercial reasons for the stipulation for the Given Form release and indemnity during the negotiations. This is what Mr Brown’s response said on that subject:

83. [109]

    Mr Brown’s response through Eakin McCaffery Cox takes issue with many of the factual contentions that would be necessary for Mr Salmon’s claim ultimately to succeed. In particular, it takes issue with the cause of the basal assumption in Mr Salmon’s case that Mr Wily was only refusing to settle because of the Given Form clause. Mr Brown, through this letter, contends that Mr Wily was not prepared to settle at all for reasons of his own that he, Mr Wily, never disclosed. The Eakin McCaffery Cox letter then methodically goes through much of the other correspondence that Mr Salmon had advanced as part of the complaint to the OLSC. It is not necessary to reproduce that analysis in these reasons.

84. [110]

    Eakin McCaffery Cox make clear in this letter they also contest Mr Salmon’s contentions that Mr Brown’s firm was acting for him personally and owed him fiduciary duties. The only concession made was that Mr Brown acted for the receivers and managers. But they make no concession on Mr Brown’s behalf that he was acting either for TCBS or Mr Salmon.

85. [111]

    Subsequent parts of this correspondence allege that Mr Wily did not fail to settle, because of the request to include the Given Form clause in the draft deed. Eakin McCaffery Cox say that the reality was the draft deed was only put forward with that clause included for: “no more than a day” but the negotiations for settlement; “continued over many months”. Mr Brown’s, and no doubt Mr Albarran and Mr McDonald’s characterisation of the matter, seems to be that Mr Wily only discussed the Given Form issue for a day; it was one of many issues; by early 2011 it had long since been dropped from consideration but settlement still stalled. This response gives a fairly clear indication of how the case would be defended, should it go to trial.

86. [112]

    In subsequent litigation before Rein J in this Court on 16 December 2009, both Mr Brown and Mr Albarran gave evidence about the negotiations in which the Given Form release and indemnity was sought. It is not in contest that through the processes of the OLSC that this evidence, along with all the other documents given by other parties to the OLSC were provided by the OLSC to Mr Salmon.

87. [113]

    Mr Albarran’s December 2009 evidence was that Mr Brown suggested to Mr Albarran that a release in relation to Given Form be included in the settlement documentation being negotiated with Mr Wily (Rein J transcript 16 December 2009, T 39, line 45), but Mr Albarran regarded the Given Form issue being related to the 2006 Supreme Court proceedings in relation to Capital Finance and Capital Mortgage, because Mr Wily was suggesting “that Given Form may be sued for a preference in relation to [Capital Finance or Capital Mortgage]” (T 40, lines 6-9). Mr Albarran agreed that there was a dispute between Mr Wily and Mr Brown in relation to some fees Mr Brown had been paid concerning Given Form, and this was the subject of Mr Wily’s allegation that it was Mr Brown who had received an alleged preference (T 40, lines 15-18). Mr Albarran asserted that he regarded Given Form as related to Capital Finance and Capital Mortgage “because Mr Wily had indicated he might make a claim at some stage for recovery of money against Mr Brown…[and Hall Chadwick]”. But Mr Albarran agreed that the additional clause in relation to Given Form did not itself improve TCBS’ position in the negotiations (T 41, lines 21-24).

88. [114]

    But Mr Albarran was quite emphatic about the fact that the stipulation for the Given Form release and indemnity was withdrawn and that the negotiations collapsed anyway (T 41, lines 21 – T 42, line 32). This is what he said:

89. [115]

    This makes clear that Mr Albarran’s view of the 18-19 September 2006 negotiations was that the request for the Given Form release and indemnity led to no long term disadvantage for the plaintiffs.

90. [116]

    In summary, the material reviewed shows ample support for a case contradicting the three propositions on which the plaintiffs are said to rely.

The Parties’ Contentions and the Court’s Analysis

1. [117]

   The applicants/defendants’ contentions based upon this material may be shortly stated. The applicants/defendants’ contend that it is ridiculous for the plaintiffs now to contend that they were unaware until November 2016 of the alleged underlying facts in respect of their claims in the pleading. The applicants say that it was quite clear Mr Salmon was threatening to sue Mr Albarran and Mr McDonald for damages for their conduct over the loss of the September 2006 settlement as long ago as 2007. The applicants say that this is an overwhelming body of evidence, much of which Mr Salmon created himself. That being so, the applicants contend that it is not possible to imagine any realistic scenario in which the assertion that the plaintiffs were not aware of the underlying facts of their various causes of action until November 2016 could ever be accepted by a Court. They say that Mr Salmon has not identified such a realistic scenario and that none can be identified. For that reason, the applicants contend that the plaintiffs’ contention in the allegation in the pleading that they were “not aware of the fraud” until November 2016 does not give rise to a real issue that requires determination at a trial.

2. [118]

   The applicants further contend that the sole document to which the plaintiffs point as having discovered by them in November 2016, the 12 October 2005 letter of demand from Mr Wily to Given Form, is not a discovery which enabled them to understand the true position for the first time, because it is obvious that they already fully understood the nature of the allegations they were proposing to make, as they were already making them and had been for some time.

3. [119]

   Moreover, the applicants/defendants say that it is obvious from a review of the 12 October 2005 letter that it adds little or nothing to the plaintiffs’ case and a trial is not needed to reach the conclusion that their awareness of this alleged fraud was in any way enhanced by the receipt of this letter. The applicants/defendants say that any assertion to the contrary is not seriously arguable, so there is no ‘real’ issue for trial. For these reasons, the applicants/defendants say that the fraudulent concealment claim that the plaintiffs make under Limitation Act, s 55 is not maintainable and should now be summarily dismissed. That being so, the claim should also otherwise be dismissed in its entirety as it is time barred.

4. [120]

   The applicants also point out that, for a ten year period, Mr Salmon has been pursuing this issue and that they have been defending his claims and that in various proceedings, it is submitted no adverse findings have ever been made against the applicants, who are now being forced to continually defend themselves through the Courts and in other forums. The applicants/defendants submit that defending these allegations over a ten year period has been burdensome and taken a considerable toll upon them and that it is rational for this matter now to be summarily dismissed. The applicants say that this serves the overriding purpose of the Civil Procedure Act and the rules of Court to facilitate the ‘just, quick and cheap’ resolution of the real issues in the proceedings: Civil Procedure Act, s 56.

5. [121]

   The applicants submit that this discrete issue of limitation of action can be determined summarily and in the applicants’ favour, will bring this matter to a close and will avoid the unnecessary wastage of time and costs as a result.

6. [122]

   The plaintiffs/respondents’ contentions covered many matters not all of which the Court found to be useful or relevant. But some of those contentions were adopted in the Court’s analysis. So these reasons take the approach of referring to the plaintiffs/respondents’ submissions in the course of its analysis.

7. [123]

   Despite Mr Elliott’s careful analysis of the facts and the law in relation to summary dismissal, the applicant’s analysis does not really address the implications for the applicant’s argument of one central aspect of the relief upon which the plaintiff is relying: alleged breach of fiduciary duty by Mr Albarran, Mr McDonald and (though not relevant for present purposes) Mr Brown.

8. [124]

   The case advanced by Mr Salmon and TCBS expressly pleads breach of fiduciary duty arising out of a conflict of interest. The alleged conflict is that Messrs Albarran and McDonald and (though not relevant for present purposes) Mr Brown were in a position conflict of interest and duty with their “clients” TCBS and Mr Salmon in pursuing their own financial interests by stipulating for the Given Form release and indemnity to benefit themselves (by freeing themselves from a contingent liability), whilst at the same time putting at risk the fulfilment of their duty to their client, which was to secure a settlement of the 2006 Supreme Court proceedings on the best terms available to the client.

9. [125]

   Even behind these contentions of breach of fiduciary duty there are many highly contestable assumptions, most of which are not presently in issue. They are not being deployed by the applicants at present because they are clearly matters for a contest a final hearing and could not assist in disposing of these proceedings under the principles of summary dismissal: it could never be said that there was no “real issue” about them such that summary dismissal was now apt because the players could never make them out.

10. [126]

    Matters falling into this category are issues such as the following: whether indeed Messrs Albarran and McDonald were acting for and in a fiduciary relationship with Mr Salmon and TCBS; whether Messrs Albarran and McDonald’s pursuit of the Given Form release and indemnity was in their own self-interest at all, or whether it was being pursued in their client’s interests; whether the Given Form release and indemnity was pursued for any appreciable period of time at all; whether the pursuit of the Given Form release and indemnity had any adverse effect on the discharge of Messrs Albarran and McDonald’s alleged fiduciary duties to the plaintiff; and whether the plaintiff suffered any loss at all from this alleged conflict. There may well be many other such issues. None of these matters is in present contest. By their nature, involving as they do complex issues of fact and law, they are only resolvable at a trial.

11. [127]

    But the applicants’ argument suggests that the plaintiffs’ case of fraudulent concealment is in a different category and can be dealt with by summary dismissal because the evidence is overwhelming that the plaintiffs were well aware of any cause of action available to them at least six years before commencing this proceeding in November 2016.

12. [128]

    But it is not in contest that the plaintiffs’ allegations of fiduciary duty and conflict of interest and duty being made are understandable. And in my view they are sufficiently well pleaded clearly to raise these issues. But the nature of these allegations has important implications for the applicant’s argument.

13. [129]

    First, Mr Salmon argues that he has equitable causes of action available to him that are not subject to the Limitation Act and in substance stand outside ss 14 and 55. In my view, this argument is correct and is an important answer to the applicants/defendants’ case.

14. [130]

    The provisions of Limitation Act, s 14 which provide a limitation period of six years from the date on which the cause of action first accrues to the plaintiffs for a cause of action in contract, in tort, to enforce a recognizance, or to recover money by virtue of an enactment (including of the Commonwealth) is subject to a number of exceptions. One of them is Limitation Act, s 23 which provides as follows:

15. [131]

    Mr Salmon and TCBS’ pleading a breach of duty as a receiver, including breach of fiduciary duty, are pleaded sufficiently clearly to raise a purely equitable claim for breach of fiduciary duty. The pleading also makes it quite clear that this purely equitable claim seeks restitution by way of equitable compensation for the losses allegedly suffered by the plaintiffs: the pleading [92].

16. [132]

    Whilst there will no doubt be a contest in the proceedings whether the fiduciary duty exists (a matter not to be contested for present purposes for the sake of argument on the Motion), if a fiduciary duty is established it is arguable that it is not subject to the Limitation Act, s 14 and does not need to come within Limitation Act, s 55 in order to extend the limitation period using the statutory doctrine of concealed fraud.

17. [133]

    This result follows from equity’s longstanding treatment of persons who occupy fiduciary position that they are treated for the purposes of limitation as trustees and time does not run in their favour: see Burdick v Garrick (1870) LR5ChApp. 233, North American Land and Timber Co Ltd v Watkins [1904] 1 Ch 242. Historically, actions by beneficiaries against trustees (and by analogy fiduciaries), for example, for the misappropriation of trust property, have been excluded from the position of the arbitrary time limits imposed by Limitation Acts and instead the Courts and the legislature (subject to Limitation Act, ss 47 and 48) have treated trustees as bearing a special responsibility which should persist indefinitely unless in all the circumstances it would be inequitable to allow the beneficiary to enforce his rights: Nelson v Rye [1996] 2 All ER 186 ; [1996] 1 WLR 1378 at 1389C-E. This general principle was cited with approval in the judgment of the plurality of the High Court in Maguire & Tansey v Makaronis (1997) 188 CLR 449 (“Makaronis”) at 463.

18. [134]

    It is strongly arguable, in my view, that to the extent the plaintiffs rely upon an alleged breach of fiduciary duty in the execution of Mr Albarran’s and Mr McDonald’s powers under Corporations Act, s 420 that claim of breach is not subject to the limitation periods set by Limitation Act, s 14. Nor does it matter that the claim for a breach of fiduciary duty arises out of circumstances that also give rise to a claim in tort. A plaintiff is entitled to plead alternative causes of action in tort and contract and breach of trust or breach of fiduciary duty. The injured party cannot use the alternatives to receive duplicate relief but a plaintiff is entitled to field the alternative claims for relief to the plaintiff’s best advantage, even if that means the avoidance of limitation periods: Nelson v Rye [1996] 2 All ER 186; [1996] 1 WLR 1378 at 1389A-C.

19. [135]

    These principles are often invoked in circumstances where trustees are alleged to have misappropriated property. But the principle is arguably not so limited. Moreover, the relief in this very case may be able to be framed on the facts pleaded as a dealing with a property to which TCBS was entitled, although the facts are not sufficiently well known for that to be clear as yet. And there is no injustice in this result because the defences of laches and acquiescence are well available to the defendants.

20. [136]

    Of course, the Limitation Act does impose a 12 year limitation period in respect of fraudulent breaches of trust: Limitation Act, s 47. But on any view of this case, even if that limitation period is applied, the plaintiffs’ action has been commenced well within that time.

21. [137]

    Of course Equity acts by analogy to the Common Law and will apply limitation statutes by analogy: JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow & Lehane’s Equity: Doctrines & Remedies (5th ed, 2014, LexisNexis Butterworths) para [36-075]. And Limitation Act, s 23 recognises this as well. But whether there is an analogy or not between a breach of fiduciary duty relied upon in this case and any common law action seems to me to be a highly arguable matter suitable for final hearing rather than for summary dismissal. The plaintiffs’ equitable claim for relief is so interconnected with the other claims that they should also not be struck out.

22. [138]

    Secondly, a helpful but odd feature of this Amended Statement of Claim is that it actually pleads fraudulent concealment. The conventional manner in which a Limitation Act, s 55 issue is raised is by way of reply in response to a plea by a defendant of the statute of limitations. Ordinarily, what would happen in a case such as this is that the defendants would put on a Defence pleading the statute of limitations and by way of reply the plaintiffs would plead circumstances that would raise Limitation Act, s 55. The plaintiffs here have taken the not unhelpful course of anticipating the defendants’ Limitation Act defence and pleading fraudulent concealment. But the fact they have done this should not obscure the reality that in a more conventionally pleaded case that it is the defendants, not the plaintiffs, who bear the onus of establishing that the limitation period has expired. This is not something which the plaintiffs have to disprove. It is something which the defendants have to establish.

23. [139]

    In the course of argument the plaintiffs referred the Court to a recent decision of Parker J in Kovarfi v BMT& Associates Pty Ltd (No. 3) [2017] NSWSC 710 (“Kovarfi”). Like the present proceedings, Kovarfi was an application for summary dismissal. A similar argument was put, that the plaintiffs were well out of time. But the defendant’s summary judgment application was met by the plaintiff’s argument that any applicable limitation periods for actions in tort had ceased to run under Limitation Act, s 55, which provide as follows:

24. [140]

    In dealing with this argument, Parker J made some observations (at [26] – [28]) which, in my view, are very apt for the present case:

25. [141]

    In Kovarfi the plaintiff had done a somewhat similar thing to what has occurred here in anticipating the defence by pleading in the Statement of Claim circumstances that might bring the case within Limitation Act, s 55. His Honour then made an observation (at [30]) about that situation which in my view is also very apt for the present case:

26. [142]

    In my view here, particularly because the Limitation Act, s 55 pleading has been fielded not in response to a pleaded Defence, but rather in anticipation of a defence, I too should not, at this point of the proceedings, regard it as an exhaustive statement of a case that these plaintiffs might potentially make under Limitation Act, s 55. Because of the strange inversion of the pleadings in this case, the Court should be very cautious about summary dismissal before these plaintiffs have had an opportunity to consider a properly and fully pleaded Defence by these defendants.

27. [143]

    There is another reason to wait for the pleadings to be allowed take their conventional course in this case. An allegation of breach of fiduciary duty due to a conflict of interest, such as that alleged here, if made out to the prima facie level, throws upon the defendant the obligation to show by way of defence that the plaintiff had informed consent to the defendant acting with divided loyalty: Birtchnell v Equity Trustees Executors and Agency Co Ltd (1929) 42 CLR 384 at 398 (“Birtchnell”) and Makaronis at 446.

28. [144]

    What is required for a fully informed consent is a question of fact in all the circumstances of each case and there is no precise formula which will determine in all cases are fully informed consent has been given: Spellson v George (1992) 26 NSWLR 666, at 669-60, 673-675, and 680 (“Spellson”); and Makaronis at 466. The circumstances of the case will often include the importance of obtaining independent and skilled advice from a third party: Commonwealth Bank of Australia v Smith (1991) 42 FCR 390, at 393 (“Smith”).

29. [145]

    A breach fiduciary case should not be framed as one in which it must be established that the fiduciary has an obligation to obtain informed consent from the client. Rather the correct position is that the existence of an informed consent will go to negate what otherwise is a breach of duty: Makaronis at 467. The fiduciary bears the onus of showing the informed consent. Their claim should not be dismissed now.

30. [146]

    In this case it appears that informed consent may well be in contest. If it is, then in fairness the plaintiffs should be entitled to see what is pleaded by the defendants as to informed consent before putting on their reply about fraudulent concealment and Limitation Act s55. It may be that the matters to which they are said to have given informed consent the plaintiffs will alleged were also not fully known to them and were concealed from them.

31. [147]

    Thirdly, the way this application for summary dismissal has been argued, somewhat obscures an important issue addressed by the High Court in Wardley Australia Limited v State of Western Australia (1992) 175 CLR 514; [1992] HCA 55 at 533 that it is undesirable for limitation questions to be decided in interlocutory proceedings in advance of a hearing “except in the clearest of cases”. The summary dismissal application in this matter has largely been centred around the arguability of the Limitation Act, s 55 contention by the plaintiff. But exactly when and how the plaintiffs are alleged to have suffered loss by reason of the alleged tortious conduct of fraudulent misrepresentation has not been so fully explored in argument that the Court could say that this was “the clearest of cases”.

32. [148]

    Indeed, the circumstances are far from it. When exactly the plaintiffs actually lost the opportunity they alleged to settle the proceedings on favourable terms by reason of the propounding of the Given Form release and indemnity is a highly contestable question. The date in question may be some time well after September 2006. This Court could not be confident to dismiss these proceedings on the basis that the primary limitation period commenced to run at that time.

33. [149]

    An added complication in this case, as the plaintiffs point out, is that TCBS was deregistered for a period. The plaintiffs say that they wish to argue at final hearing that the limitation period does not run against TCBS during that period. In my view, such an argument could not be disposed of by way of summary dismissal.

34. [150]

    Finally, as Parker J said in Kovarfi, fraudulent concealment may apply not just where fraud is an ingredient of the cause of action but where the cause of action is “based on fraud”. The plaintiffs’ action may involve concealed facts of which the plaintiffs are as yet unaware. Given the circumstances of this case, involving the alleged exclusion of the plaintiffs from the negotiations, there may be concealment implicit in the technique adopted in committing the tort: Beaman v Arts Ltd [1949] 1 All ER 465; [1949] 1 KB 550 at 560 per Lord Green MR.

35. [151]

    The plaintiffs say they were not present at the critical moment when Messrs Albarran and McDonald allegedly stipulated for the Given Form release and indemnity. They say that they were not warned in advance that Messrs Albarran and McDonald were allegedly going to take this course. But until discovery takes place in this case the plaintiffs may not have a chance of relying upon that alleged concealment. It is all very well for the defendants to now say that the plaintiffs cannot point to any realistic scenario which would allow the limitation period to be extended. The plaintiffs may legitimately answer that by saying they do not yet have all the facts.

36. [152]

    Finally, the pleading is clear and not embarrassing and there is no basis to strike it out pursuant to prayer 2 of the Motion.

37. [153]

    The plaintiffs have been successful in resisting the relief sought in the Notice of Motion of 12 October 2017. The Motion should be dismissed. This means that the proceedings will need to continue to be prepared for trial. The first step in this direction will be for the defendants to file Defences. The Court will order the first, second and fourth to eighth defendants to file their Defences by 29 March 2019 and the proceedings will be listed before the Registrar for directions on 3 April 2019.

38. [154]

    Mr Salmon has represented himself and TCBS in the proceedings. So far as the Court is aware, they have not incurred any legal costs associated with the Motion. But there may be some minor disbursements. And lawyers may have been engaged for limited purposes on aspects of the Motion. It would therefore still be appropriate to make an order for costs of the Motion. The appropriate order is that the costs of the Motion will be the plaintiffs’ costs of the proceedings. If it ever comes to a contested assessment of costs of the Motion it can be noted that Mr Salmon appeared without legal representation for all the hearing dates of the Motion.

39. [155]

    For these reasons, the Court makes the following orders and directions:

    1. (1)

       The Notice of Motion of the first, second and the fourth to the eighth defendants dated 12 October 2017 for summary dismissal and striking out of the plaintiffs’ Amended Statement of Claim in these proceedings is dismissed.

    2. (2)

       Order that the plaintiffs’ costs of the Motion, if any, will be the plaintiffs’ costs in the proceedings.

    3. (3)

       Order the first, second, fourth, sixth, seventh and eighth defendants to file their Defences to the Amended Statement of Claim by 4pm on Friday, 29 March 2019.

    4. (4)

       Direct that the proceedings be listed before the Registrar in Equity for further directions at 9.00am on 3 April 2019.