Old Chadwickian off the hook after 17 years

A judge of the NSW Supreme Court yesterday delivered the coup de grace to long standing allegations of dishonesty and breaches of duty by a lawyers and a liquidator, thus bringing to an end a saga that’s hung over the heads of certain Hall Chadwick Sydney members past and present since 2006.

“Mr Salmon is plainly aggrieved by the course of events which lie at the heart of these proceedings. It is common ground that, within the space of a day, a settlement in principle for $1.3m which had been the subject of a handshake ‘deal’ was off the table. As matters transpired, TCBS’s charge over BACM’s assets was set aside soon afterwards, with costs; TCBS could not meet that adverse costs order and went into liquidation; and its claim regarding its charge in respect of BACF was settled some two years later for some $177,000. Subsequently, Mr Salmon was declared bankrupt, and was imprisoned.” NSW Supreme Court judge Scott Nixon.

The occasion was the delivery of judgment by NSW Supreme Court judge Scott Nixon in the Matter of Salmon v Albarran [2023] NSWSC 1238.

The judge, a professional negligence specialist during his almost two decades practising at the NSW Bar, found that the plaintiffs, company director Owen Salmon and Terra Cresta business Services (TCBS), failed to prove to the court’s satisfaction allegations that in 2006 solicitor Steven Brown of Etienne Lawyers and Hall Chadwick Sydney partner Richard Albarran acted dishonestly and in breach of their duties in terms of a proposed settlement that would have seen Salmon and TCBS receive payment of $1.3 million.

He also remarked that the treatment of the evidence of the plaintiffs’ witnesses would need to take into account the 17 years that have passed since the events relevant to the proceedings took place and the significance of this was heightened by the nature of the allegations being made.

“The Plaintiffs are making serious allegations that a solicitor and an insolvency practitioner breached their duties to their client and did so dishonestly,” the judge said.

“Any finding that those matters have been established could have serious consequences for their ability to practice in their respective professions.”

The judge also neatly summarised the course of events in respect of the relevant parties, which also included former liquidator Andrew Wily, colourful insolvency identity Jim Byrnes and distressed asset lender Ian Lazar and his companies Business Australia Capital Finance (BACF) and Business Australia Capital Mortgage (BACM).

“Mr Salmon is plainly aggrieved by the course of events which lie at the heart of these proceedings. It is common ground that, within the space of a day, a settlement in principle for $1.3m which had been the subject of a handshake ‘deal’ was off the table. As matters transpired, TCBS’s charge over BACM’s assets was set aside soon afterwards, with costs; TCBS could not meet that adverse costs order and went into liquidation; and its claim regarding its charge in respect of BACF was settled some two years later for some $177,000. Subsequently, Mr Salmon was declared bankrupt, and was imprisoned.” NSW Supreme Court judge Scott Nixon.

In what may be a salutary lesson to all solicitors and liquidators, outcomes that lead to a severe reversal of fortune for an individual, can generate many years of costs and frustration for all involved.

The judge said that in the intervening period Salmon “has blamed the loss of the settlement on Mr Wily and Mr Byrnes, accusing them in a complaint to NSW Police of having engaged in “blackmail” and “stand over tactics” by their conduct in the 2006 Proceedings. 

“In a letter to the Chairman of ASIC in March 2008, Mr Salmon alleged that Mr Wily’s conduct in this period included “perjuring himself many times over in affidavits and testimony (can find 20-30 separate items)”, “Vote rigging in creditors meetings”, “Lying to creditors (can list many of these)”, and “acknowledging debts only to later lie about them in court”.

“Mr Salmon has also blamed the loss of the settlement on the Receivers (Albarran and former Hall Chadwick partner Geoff McDonald) and Mr Brown, including making a complaint to the Office of the Legal Services Commissioner in respect of Mr Brown, and making a complaint to ASIC seeking to have Mr Albarran and Mr McDonald removed as registered liquidators,” the judge said.

The other lesson to take from this judgment relates to the court’s views on contested testimony concerning events many years in the past and the effect that can have on the credit of any of parties subjected to cross-examination.

“As the attribution of blame, and the focus of his attack has shifted, Mr Salmon’s account of events has also changed,” the judge said.

“There are multiple earlier statements in evidence concerning the events that lie at the heart of these proceedings and, as identified below when dealing with those events, Mr Salmon’s various accounts conflict in multiple ways and are often irreconcilable. 

“Mr Salmon’s own counsel recognised that there are “legitimate criticisms that can be made of Mr Salmon’s credit in some respects”; that he has “clearly been traumatized by and become obsessed by the events in the years 2006 to 2009”, leading to his “subsequent lashing out and attack on professionals”; and that his “desire to exact a remedy for TCBS for the wrongs done to it may have caused him to overstate matters in his affidavits and to avoid including matters negative to his case in limited respects.”

After more than 500 paragraphs outlining the history, background and his reasoning the judge dismissed the plaintiffs’ case and ordered that they pay the defendants’ costs.