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9 July, 2008  
Heffernan v Kirby - Round 37

Senator Wild Bill Heffernan is at it again – making whacko allegations in the senate about Justice Michael Kirby, although this time he carefully didn’t name the judge

Recycling is an important cornerstone of politics, journalism and the law.

imageIt entails the tireless repetition of ancient bits of half-baked information – either in an attempt to keep us all distracted or to propagate an exciting new policy initiative.

So it was that those two great forces of enlightenment, Senator Bill Hefferlump (pic) and The Australian newspaper, teamed up to have another swipe at a pet target.

The paper claimed that Heffernan, in a recent round of senate estimates, had accused a federal judge of presiding over a case after helping one of the parties draw up submissions.

“That judge should have been thrown off the bench,” the senator declared. He claimed that this judge …

“sat in judgment on his own advice.”

This interesting allegation was being used by Heffernan as leverage for the creation of a federal judicial commission. The sub-head on the newspaper’s story was:

“Heffernan’s latest charge of judicial misconduct puts the issue back on the agenda.”

It went on:

“He [Heffernan] did not name the judge but said the allegations concerned a member of ‘a very high court in this land in the federal jurisdiction’.”

Let me guess: Heffernan and a federal judge!

imageSurely it’s not Michael Kirby (pic) being dragged out for another bollicking?

Indeed it is. The trouble is that this is a very dog eared yarn.

It first emerged under the byline of The Australian’s paedophile affairs roundsman, the aptly named Ron Hicks, on Tuesday November 5, 2002.

His story said:

“High Court judge Michael Kirby failed to disqualify himself from an appeal relating to one of the nation’s largest fraud cases, despite previously helping a lawyer with a report instrumental in settling the original action.

“Respected Sydney lawyer Gordon Vivian Stewart told The Australian Justice Kirby helped him write a report in the $107 million fraud case involving the Sydney law firm Allen Allen & Hemsley and the Nauru Phosphates Royalties Trust.”

This was the Adrian Powles’ affair, in which Allens’ London partner had persuaded the Nauru Trust to invest in various instruments that turned out to be fictitious.

The Nauru Trust sued Allens in London for the remaining unrecovered amount, around $15.5 million.

imageIn the case Allens claimed that Powles (pic) was acting beyond his normal function as a lawyer and partner of the firm. Consequently, how lawyers were supposed to conduct their business in New South Wales became an important part of the litigation, and this was the information Stewart had been hired to provide to Nauru’s London solicitors.

The case settled and Hicks reported Stewart as telling him:

“I did discuss [the report] with him [Kirby], but I don’t know if I should admit that – whether Michael would like that – because if there had been any offshoots that would have come up before the High Court, it wouldn’t have been – well, he would have to excuse himself.”

Hicks went on to report that “a related matter” did come before the High Court and Kirby didn’t excuse himself. That was Allens’ action against its insurers, Switzerland Insurance.

The big law shop won in the Supreme Court, lost on appeal and lost on appeal again in the High Court.

The issue at stake was the interpretation of the clause in the indemnity policy that excluded coverage for dishonest or fraudulent conduct. Smiler, Bloody Mary, The Kirbster, and Kenny Boy found for the insurance company and dismissed the appeal. The Tub, alone, would have allowed it.

Quite how this translates into Kirby being conflicted is a mystery. According to Hicks’ original story Kirby allegedly advised Stewart about aspects of solicitors’ practice. The subsequent case the judge sat on related to the exclusion clause in a professional indemnity policy.

Yet Heffernan told the Senate Estimates that Kirby, “sat in judgment on his own advice”.

Never backward in coming forward to give Kirby a whack, Chris Merritt at The Oz, gave this recycled bilge front page treatment in the paper’s legal affairs section.

As American author and critic Mary McCarthy said: “I believe everything I read in the newspapers, because it makes life more interesting.”


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