iscoverA Ballarat-based accountant has been ordered to pay his former client over $20 million for breaching fiduciary duties and taking advantage of confidential knowledge.
Ballarat accountant ordered to pay former client $20m for fiduciary breaches
31 October 2025
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8 minute read
On Wednesday (29 October), the Supreme Court of Victoria partially granted the appeal of James Mulcahy, a Ballarat-based accountant who had been ordered to pay his former clients $26 million in damages for breaching his fiduciary duties and acting dishonestly.
Mulcahy’s former clients, Timothy Porter and Christopher Conheady, had engaged him to assist them in purchasing controlling shares in truck body manufacturing company Chris’s Body Builders (CBB).
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They launched legal action against Mulcahy after he used confidential information to purchase the controlling shares of CBB himself, sidelining Porter and Conheady’s business interests. The primary judge ordered Mulcahy to pay Porter and Conheady over $26 million in damages.
However, the appeals court overturned Mulcahy’s obligation to repay the $6 million to Porter, finding that Mulcahy did not breach his fiduciary duties to Porter as the facts indicated they did not have a close, trusted relationship. Mulcahy was still on the hook to pay $20 million to Conheady.
During the relevant period, Porter and Conheady worked together at plant hire and civil construction business Porter Excavations, Porter being the founder and Conheady the accountant and CFO.
The pair developed an interest in obtaining controlling shares in a company that manufactured tipping truck bodies and trailers, known as Chris’s Body Builders (CBB).
In 2017, they engaged Mulcahy to act for them in relation to obtaining that interest. Conheady informed Mulcahy that they each intended to acquire a 40 per cent interest in CBB, which they planned to pay for partially with cash and partially with vendor finance.
However, towards the end of 2017, Mulcahy entered in negotiations to purchase the controlling stake in CBB for himself. Debono had conveyed frustrations with Porter and Conheady, but the judge noted this hadn’t changed the fact that they had been the only potential purchasers before Mulcahy sought to purchase the shares himself.
The primary judge considered the fact that Chris Debono, the owner of CBB, was willing to sell a controlling interest in his business to be confidential information, as was the fact that Conheady and Porter were planning to use vendor finance to purchase a controlling interest.
It found that Mulcahy had taken advantage of this confidential knowledge to launch his own successful bid to purchase a controlling stake in CBB, with a full cash offer.
The appeals court determined that Mulcahy was not on the hook to pay Porter for damages, finding they did not have a close enough relationship to justify a breach in fiduciary duty.
“Although Mr Porter’s interests were exposed because of the confidential information about the opportunity shared with the Mulcahy parties, and because of that he was vulnerable, the relationship between him and those parties was not a fiduciary relationship,” court documents noted.
This differed from Conheady, who had a much more direct relationship with Mulcahy, the court found. They ordered Mulcahy and his trustee company, BFMM Investments, to pay Conheady over $20 million in damages.
“I find that Mr Mulcahy, who owed a fiduciary duty to Mr Conheady, engaged in a dishonest and fraudulent design and that BFMM knowingly assisted in that design,” court documents read.
“BFMM having knowingly assisted Mr Mulcahy to usurp the opportunity to acquire a controlling interest in the Business is liable accordingly.”
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