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Court in the Act
2 June, 2004  
BIAS BEAT - Not his brother's keeperů

Bias beat. Justice Peter McClellan should have disqualified himself from litigation over fees because his brother is a partner of Freehills, which caused all the trouble in the first place, or so runs the argument of champertous law firm… Taswegian Law Society applies for judge to disqualify himself on grounds of “actual bias” against the hapless professional body… And, Brisbane rhino still snortling as fight over carve-up of solicitors’ super fund gathers pace


When are two brothers too close for legal comfort?

According to champertous solicitors Leo Smits and John Leslie it’s when one is NSW Supreme Court Justice Peter McClellan and the other is Freehills (Sydney) litigation partner Geoffrey McClellan.

Smits Leslie say that as a result of Justice McClellan’s failure to disqualify himself from hearing a costs dispute with their former client Ted Roach (who had engaged the firm to sue Freehills) their trial was a rotten miscarriage of justice.

Smits and Leslie claim the whole exercise has cost them in the order of $675,000. This comprises fees and disbursements they say Roach owes them under a retainer agreement.

The agreement was interesting to say the least. It gave the sweaty-palmed solicitors 10 percent of an estimated $971 million. This was the figure they sought to reap from Freehills over allegedly negligent legal advice given to Roach, an engineer and resources developer.

Roach and his companies had sunk $2.5 million into the Swan Marsh black sedge peat deposit in Victoria. The stuff is gold to mushroom farmers, horticulturalists and others with a penchant for the soil.

In 1988 Roach asked Freehills to advise whether peat was a mineral. Extraordinarily the firm thought it was a stone, mysteriously overlooking the fact that it had been gazetted as a mineral in October 1982.

Consequently, Roach lost the mine because someone else nipped in and secured a licence.

Roach’s action against Freehills ultimately was heard by Justice Hal Sperling for five months last year and his reasons are still in contemplation.

The proceedings were like watching moss grow. See Theodora’s report at the time.

In his judgment of June 2002, Justice McClellan found that the retainer agreement between Smits Leslie and Roach was champertous and so “illegal, void and unenforceable”.

Smits Leslie not only had its foot on 10 percent of the outcome, but had shopped the litigation to Rene Rivkin’s Justice Corporation, thereby creating a situation, as Justice McClellan found, which would significantly advance its own interests and diminish the client’s potential gain from the litigation.

The fact that Justice McClellan, who since has moved on to be CJ of the Parks & Gardens Court, was unimpressed by Smits’ lack of integrity and candour seems to have upset the tiny, hirsute solicitor no end.

Now he and Leslie (a former registrar of the NSW Supreme Court) want a new trial on the ground of McClellan’s apprehended bias.

Robert Ireland, for Smits Leslie, told the Court of Appeal (Sheller, Ipp and Bryson J) in late May that a substantial wrong occurred, despite the fact that no objection was made to Justice McClellan’s lack of disclosure by Smits Leslie’s then counsel, Geoff Lindsay.

An affidavit provided by Lindsay indicated he knew the McClellans were brothers, but that he didn’t regard it as “remarkable”.

As Justice Ipp quipped. “What do we make of that?”

With any luck it won’t be too long before we find out.

Map of Tasmania

“If your Honour is suggesting I’m paranoid “

David “Clockface” Gunson SC (president of and appearing for the Tassie Law Society) has been spectacularly unsuccessful in having Supreme Court Justice Pierre Slicer disqualify himself from sitting on any case where the Law Society is being sued for damages.

In an extraordinary 44 page judgment from The Slicer the reader is treated to great chunks of mind-numbing court transcript.

The application arose by way of a preliminary round in a hearing seeking further and better particulars from Jean-Paul Mentyn about his case against the Taswegian Law Society.

It was made on the ground of “perception of bias” although The Slicer thought the real ground was “actual bias” against the greatly misunderstood professional body.

To put the society’s application to rest, the judge said he had to wade through 397 pages of transcript from 14 judgments published between 1999 and 2004. These cases share the dubious honour of involving three very dissatisfied self-represented litigants; Messrs Mentyn, Jovanovic and Trustrum.

To make matters worse, Gunson is currently being sued (separately) by Mentyn and Jovanovic.

Clockface suggested 17 instances of bias against the Law Society on Slicer’s part and they all get equally long shrift from the judge. Mostly he seems astounded at the examples cited by Clockers:

“There is an irony in the making of this disqualification for bias application by the society, especially so since I was the judicial officer who found Mr Trustrum to be in contempt, subsequently imposed a suspended sentence of imprisonment, and who refused to disallow the appearance of counsel on the ground of conflict of interest and bias in the matter involving Mr Jovanovic.”

[Trustrum, among other things, was an unsuccessful defendant in defamation proceedings against him brought by the former executive officer of the Law Society, Jan Martin. See report on the case from our sister organ, Gazette of Law & Journalism.]

Slicer also dealt with an earlier reference he made to the so-called “Gunson Problem”:

“The term was used as a shorthand reference to the non-appearance of Mr Gunson because of the failure of the plaintiff to serve his process on his opponent within time.”

However, the actual encounter between Slicer and Gunson is even more thrilling. Here’s a dollop of what the judge himself described as the “unedifying exchanges between bench and bar”:

HIS HONOUR JUSTICE SLICER: “All right. Now what’s your complaint about that?

GUNSON: I don’t know what ‘the problem with Gunson’ is.

SLICER: You weren’t there. Can’t we at least – you may erect conspiracy theories till the cows come home. Can’t you read that? ‘Of course you can’t read your affidavit into evidence now, because we’ve still got the Gunson problem – you haven’t served him. You haven’t – you’ve sent a fax on a Sunday afternoon to him – this matter is not going to go on in that way. You can’t read your affidavits in here.’ It’s turned into

GUNSON: But it’s not the Gunson problem. It’s a problem

SLICER: Oh, all right. All right.

GUNSON: Your Honour that Mr Menthyn [sic] has not served the solicitors

SLICER: Because we have still got the problem of the rule in that you have failed to serve the solicitors – this is in the real world Mr Gunson.

GUNSON: I don’t know what that reference is.

SLICER: Well then I’m telling you what the reference is.

GUNSON: Thank you, your Honour. I understand that. Now

SLICER: We’ve still got the Gunson problem. It makes sense to anybody apart from a paranoid.

GUNSON: Well, if your

SLICER: Look

GUNSON: If your Honour’s suggesting I’m paranoid

SLICER: No, I’m not suggesting that you’re a paranoid and we can play games – I can play games in equity as well. I’m trying to get back into the real world. Of course, we had the Gunson problem. The Gunson problem was that he hadn’t been served, and this man was not going to get his hearing on, and I was not going to deal with a myriad of complaints which wandered – in Wordsworth’s words – all over the place. You file your affidavits, the case starts. You stand up and say, ‘I seek to read it’. You do all that before the judge hearing the case – ‘I formally read it into it’. Then your opponent might say, ‘objection because it is hearsay and it’s a bit irrelevant’. The judge might say, ‘well, this bit, this bit, this bit’. I’m taking him through why he can’t read in his affidavit because he’s not doing in accordance with the form – why – because there is no opponent, this is not a hearing and you are not there. And you are not there for a very good reason – we know that because he hasn’t served you.

GUNSON: But this, with respect, is what my real complaint is about. For whatever reason, it doesn’t matter for what, but your Honour embarked on this one on one occasion where you addressed so many issues with Mr Menthyn [sic] that it is the beginning, we say, of the conduct which would lead the impartial informed bystander to the conclusion that we say he could conclude.

SLICER: All I was doing was pointing out the meaning to that sentence.

GUNSON: All right. I’m grateful to your Honour having done that. I am not suffering from paranoia. I just take the view that it was inappropriate for your Honour to address it that way and that’s my submission.”

On it goes. This is The Slicer explaining his use of “non-judicial language”:

“The term ‘kicking heads’, whilst not judicial, is a term not infrequently used within this discipline. It connotes robust intervention by a judicial officer who perceives obstruction, dilatoriness or unreasonable response. The use of the term ‘heads’ in the plural denotes evenness, not bias.”


Slicer also rejected Gunson’s contention that by his use of the vernacular he favoured the self-represented litigants:

“The term ‘re-join planet earth’ could better be expressed as ‘pardon me but I would be grateful if we could return to the matter at hand’, but in some instances it is more effective and contains much more information.”

And he has a final go at Clockface’s conduct vis—vis self-represented litigants. Concerning “the impugned exchange with counsel,” Slicer could barely contain himself:

“The exchange was pre-emptory and brusque. But confusion and mayhem from one side ought not be made more incendiary by experienced counsel. An accelerant was not necessary to maintain the heat of battle… Time and expense to the [law] society and the public purse has been disproportionate to the question raised.”

Dismissing the application on all fronts, Slicer added:

“During the course of these proceedings, I perceived the concern of the society to be that in some way I sought to stay engaged in these proceedings as a commitment to ensuring the ‘rights of the underdog’ or as a champion of the oppressed. In many bias cases there is a perception that the judicial officer obtains satisfaction from remaining ‘engaged’ in the proceedings. For my part, nothing could be further from reality. It would have been far easier and personally rewarding to have granted the disqualification application ex tempore.”

So there.

Hello Sunshine

Old rhino still charging away

imageMichael Baker, that well known Brisbane pachyderm, is at it again.

This time the champion of the desperate and downtrodden is suing several of his former employees for allegedly conspiring to defraud him of a big wad of super.

Fifteen years after Baker first took action about this matter, the Queensland Supreme Court has granted him leave to proceed against solicitors Mark Hallett and John Pattison – but not against secretary Sharyn Janes.

All three, he says, conspired with his former partner James Loel, to wrongfully distribute money held in trust in a super fund.

Baker is a partner of Baker Johnson, whose mascot is a charging rhinoceros and whose motto is “Get with the heavyweights”. In 2002 the firm starred in a devastating expose in The Bowen Hills Bugle about its charming methods of recovering costs from its clients in “successful” no win-no fee cases.

Later, Baker achieved another sort of celebrity after he sued his wife’s psychologist who apparently applied to the long-suffering woman some special therapeutic techniques.

Does anyone know what happened to that case?

But back to superannuation case. In 1989, nearly eight years after Baker and Loel’s partnership broke up in 1981, the super fund paid Loel $85,318.24, Baker $140,270.50, Baker’s wife $34,795.78, Hallet $59,080.34, Pattison $32,258.86 and Janes $40,232.62.

imageNot nearly enough thought the Brizzie beefcake (pictured). Yet, it wasn’t until 1994 that he set about suing Loel for a larger share.

The matter was finally settled in November 2002 but it was hardly worth the trouble.

A judgment for $114,500 plus interest was given in January 2003 swiftly followed by a bankruptcy notice. In May that year, the trustee of Loel’s estate advised Baker he would receive a measly $7,629.44 in respect of his claim for debt, interest and costs.

That must have hurt the old rhino. He charged ahead with a conspiracy suit against Hallet, Pattison and Janes.

Baker now claims that a 1981 agreement with Loel, entitled him to 65 per cent of the super fund and Loel 35 per cent. Given this, Hallet, Pattison and Janes should have pocketed a miserable $459.38, nothing and $223.21 respectively.

Baker produced a number of letters which he claimed showed the three defendants knew they weren’t entitled to the money they received but had agreed to some tricky tax manoeuvres with Loel in order to deprive him of his huge entitlement.

Baker alleged Hallett, Pattison and Janes repaid Loel the amount distributed to them after income tax was paid and that Pattison also entered a loan agreement and indemnity with Loel in order to disguise the return of the money.

In his judgment last month, Justice Holmes observed:

“It seems to me that the correspondence and the alleged actions of Mr Hallett and Mr Pattison in repaying the money are capable of being construed as reflecting an understanding among the three that the funds always were to be returned to Mr Loel, and that it was necessary to conceal that fact.”

Holmes found that the conspiracy claim against Janes did not hold because she was not “privy” to the correspondence and had never repaid the monies. He granted Baker leave to pursue recovery of those funds.

Some 23 years after the Loel/Baker partnership dissolved, Baker is still on the rampage.

A rhino never forgets.