Albarran cries foul as barrister invokes old ghosts

Richard Albarran has denounced as
 "scandalous, unsubstantiated and unsourced"
allegations raised in the NSW Supreme Court
involving Terra Cresta Business Solutions
Photo: Hall Chadwick 

IT was during a recent hearing in the NSW Supreme Court that the ghosts of Terra Cresta were invoked.

The hearing - held in August - tested allegations that Hall Chadwick partners Richard Albarran and Blair Pleash had managed the affairs of building firm Joe & Joe Developments Pty Ltd in a manner prejudicial to the company's creditors.

One of Joe & Joe's shareholders - the Elias Family - alleges that Albarran and Pleash have as deed administrators of Joe & Joe, allowed Etienne Lawyers to grossly overcharge for work on the Joe & Joe administration, now in its fifth year.

Etienne chairman Steven Brown - who is not a party to the proceedings - has handled much of the legal work involved with Joe & Joe's complex deed of company arrangement (DoCA) since its execution in March 2009. He told SiN it would be inappropriate to comment for this story.

Following the hearing, Presiding judge Justice Ashley Black reserved his judgement on the matter. In the interim Brown continues to act for Pleash and Albarran, who remain deed administrators of Joe & Joe's DoCA pending judgement. For their part, Pleash and Albarran utterly deny the plaintiff's allegations.

They argue that Etienne's legal fees are consistent with a job of such complexity, duration and disputation; that animosity between Joe & Joe's two shareholder families has fatally delayed the DoCA's effectuation and that contrary to the claims of the plaintiff, pressing tax debts warranted their appointment as voluntary administrators. Also in dispute is the much-criticised share-buyback mechanism included in the DoCA with each side saying it was first proposed by the other.

As Albarran did not submit an affidavit in the Joe & Joe proceedings and did not take to the witness box to rebut the allegations made by the Elias family, he wasn't present to counter the allegations about Terra Cresta.

However in a letter from his lawyers he described the allegations that his decision to appoint Etienne Lawyers to handle the legal work on Joe & Joe was influenced by losses Etienne sustained years before on the Terra Cresta job as: "scandalous, unsubstantiated and unsourced".

The Terra Cresta allegations came on the second last day of the hearing when barrister Roger Marshall for the plaintiffs - and ironically one who helped lay the apparition to rest - unexpectedly invoked the ghost, discomfiting Blair Pleash who occupied the witness box at the time.

Marshall: "Etienne Lawyers were first engaged for the company (Joe & Joe) by Mr Albarran, is that correct?

Pleash: "That's right.

Marshall: Mr Albarran had a former partner Mr McDonald, isn't that right?

Pleash: He was a former partner of mine too.

Marshall: And yours as well. McDonald and Albarran were appointed as receivers of two companies by Terra Cresta Business Solutions, do you remember that?

Pleash: Not specifically. If you have a bit more detail there.

Marshall: All right, there were two companies, Business Australia Capital Mortgage (BACM) and Business Australia Capital Finance (BACF). Do you remember those companies?

Pleash: Yes.

Marshall: McDonald and Albarran were appointed the receivers of those companies. Do you remember that?

Pleash: Yes.

Marshall: And Etienne Lawyers were the lawyers they hired for that job, do you remember?

Pleash: Yes.

Marshall: The receiverships did not go well. Would you concede that?

Pleash: Yes.

Marshall knew his territory. Years earlier he had acted for insolvency practitioner Andrew Wily in a matter that pitted Wily, as liquidator of BACM and BACF, against Albarran and McDonald, who had been appointed receivers and managers of BACF and BACM on the basis of charges held by Terra Cresta.

In that matter, multiple points of dispute were contested and the stakes were high. Sitting in a court trust account was a sum sufficient to provide a dividend for creditors whilst covering appointee remuneration and disbursements.

In one case in that matter, Wily sought to have Terra Cresta wound up. As receivers of BACF and BACM, Albarran and McDonald resisted, arguing Wily’s application was an abuse of process. They said that if successful, it would force separate proceedings then afoot to be aborted, denying their appointor Terra Cresta the opportunity to exercise its rights in its cross-claim. And the hearing of that cross-claim was imminent.

Wily was largely successful, with since retired Associate Judge Richard Macready ordering on July 31, 2008 that Terrra Cresta be wound up. There were further hearings, the main relating to which party had the rights to an equitable lien that would unlock the funds held by the court. And in questioning Pleash, Marshall knew all about that too.

Marshall: In essence the court case was lost by the receivers, McDonald and Albarran, do you agree?

Pleash: I don’t actually recall.

Marshall: Do you remember that Etienne Lawyers ended up not being paid a substantial amount of their fees on that job?

Pleash: Once again, it’s a long time ago, I don’t remember.

Marshall: Did Etienne Lawyers lose about an amount of a quarter of a million dollars on that job?

Pleash: I don’t recall precisely.

Marshall: Did Mr Albarran tell you he was appointing Etienne Lawyers as the lawyers for Joe and Joe because they missed out on the Terra Cresta job?

Pleash: No.

Marshall: Is that the reason why Mr Albarran appointed Etienne Lawyers to the Joe and Joe job because they missed out on the Terra Cresta job?

Pleash: No.

Marshall: Not that you know, is that right?

Pleash: Well, no, I wouldn’t know."

At this point Marshall asked Pleash if he thought that Albarran would be able to explain the reasons for Etienne's engagement on the Joe & Joe job.

Pleash: "I am assuming but I can't speak for him but I assume he would say he would have engaged Etienne Lawyers because they were suitable for the job.

Marshall: Because he wanted to do them a favour, isn't that right"

Pleash: "No". 

All parties are now waiting to see how Justice Black deals with the allegations raised in the Joe & Joe proceedings in his judgement.

Confidential sources have told SiN that Terra Cresta's ghost haunts others but the identities of the equally accursed will be revealed in a separate SiN exclusive, to be published in due course.

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