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Most cases settle before trial, but Chris has received several hundred final judgments over the years, and continuing. A small selection of those judgments, with insights and comments from Chris, appear below. A recurring theme, sadly, is of lawyers and other professionals behaving appallingly.
Mrs F’s share in a superfund became the subject of a restraining order obtained ex parte by a receiver at the behest of the Legal Services Board during a long running solicitor's conduct dispute with Mr F, a sole practitioner, who was Mrs F's husband and had been her employer.
Mrs F applied to set aside the freezing of her share in the super fund.
Justice Keogh did not make findings critical of the receiver regarding whether he had made proper and adequate disclosure on his ex parte aplication or whether there was justification for the applcication being brought ex parte against Mrs F in the first place, but he did release most of Mrs F's share of the super fund and awarded her costs, to be taxed immediately.
Mrs F's application was not entirely successful as the court found that some of her contributions to the superfund arguably represented "tainted funds", notwithstanding her innocence. The order over those "tainted funds" was later discharged.
Chris acted for deed administrators in a case where a meeting of creditors was called at the request of a high value creditor (BH Apartments). The Magistrate held, correctly, that BH Apartments had to pay the "costs of convening the meeting" in Corporations Regulation 5.6.15(1)(b) and that that expression was not confined to the costs of calling the meeting but included the costs of holding the meeting. BH Apartments appealed unsucessfully to Justice Bell of the Supreme Court of Victoria and had to pay Chris' clients' costs of the appeal and of the court below. This was a case of incompetent drafting by the legislature.
Since the enactment of the Insolvency Law Reform Act 2016 Corporations Regulation 5.6.15 has been repealed and replaced by Insolvency Practice Rules (Corporations) but it would appear, notwithstanding, that the law stated in the BH Apartments case still applies in cases where the external administrator is not under an obligation under Insolvency Practice Schedule (Corporations) section 75-15 to convene the meeting but may do so.
In the course of the Callover to the appeal, BH Apartments’ solicitor, David Porter, disclosed the substance of Chris’ without prejudice communications in correspondence to the Court and did so misleadingly, in order to gain an advantage for his client. Chris’ displeasure at discovering this conduct increased when told the solicitor “had form” and Chris was referred to the judgment in Sitzler Savage Pty Ltd v Northern Mining Holdings Pty Ltd  VSC 104 where Associate Justice Zammit concluded “that Vincent Savage and Norton Rose (Mr Porter's firm) commenced this proceeding knowing that there was no authority to do so. This must amount to a wilful disregard by both parties of the law. If justice is to be done, the circumstances require that these costs be paid on an indemnity basis."
This was a successful application by Charles Fice for further and better discovery by Lloyd's of London in an action for breach of agreement to provide litigation funding for insolvency practitioners in Australia, in place of GIO Insurance Ltd. The case later settled at mediation with Lloyd's paying substantial damages for breach of contract and for misleading or deceptive conduct. Lloyd's had neglected to honour the funding agreement because (among other reasons) it was the insurer of the World Trade Centre at the time of the terrorist attacks on the US on 11 September 2001.
The AFP sought an examination order under section 180 of the Proceeds of Crime Act 2002 (Cth) against an overseas respondent being a buddist reverend for whom Chris acted. The AFP’s application was based on the AFP having previously obtained restraining orders against the respondent in respect of money in various bank accounts owned by her. The orders were obtained ex parte. The respondent wished to revoke the restraining orders on the basis that the AFP at the ex parte hearing failed to bring to the Court’s attention all material facts and failed to correct errors in the information that it placed before the court.
Justice Dixon declined to make examination orders against the respondent while an application for revocation of the ex parte restraining orders were still on foot. This was because Justice Dixon formed the view that there were serious questions to be tried on that application. If those questions were decided in favour of the respondent and the restraining orders were revoked, the basis for an examination order would fall away. Accordingly, the AFP failed to receive an examination order. In fact, the restraining orders were never challenged in court as the matter settled.
This is a leading case on director’s duty to prevent insolvent trading by the company. The director, Eise, was held liable to the CBA for $97 million. No defences were established; nor was there available power to grant relief under section 1318 of the Corporations Act.
The trial lasted more than 50 days. Mid trial the Victorian State Government caused the CBA to abandon the case against 11 honorary directors, a number of whom were on the State Government payroll. Those directors were therefore offered a walk away deal, mid trial, which all bar Eise accepted with alacrity. Eise wanted payment of his costs but this was a bridge too far for the CBA and the trial continued against him only to judgment.
Tape recordings existed of all board meetings at which the the directors had been duped by the Chief Executive, John Freidrich. Eise had instructed the company secretary to destroy the tapes after 3 months, but she forgot to do so. A receiver appointed over the National Safety Council’s assets delivered the tapes to Chris and they were played in Court to the detriment of Eise and (while they remained in the case) the other directors.
Eise appealed against the CBA's judgment. However, the Appeal Court ordered him to put up security for costs of $50,000, which he declined to do, resulting in the appeal being struck out. Eise (a former Mayor of Brighton) was reportedly wealthy and owned real property and a Rolls Royce motor vehicle, but to Chris' chagrin he was never required to pay any of the judgment debt and neither was the estate of Friedrich.
Prior to Tadgell J’s judgment, the CBA had obtained a default judgment against Friedrich for $97 million. On 27 July 1991 Friedrich was found dead in a muddy field on his farm near Sale with a single gunshot wound to the head. His death was alleged to be suicide.
The liquidator of Convector Grain sued Chris' client, Laureville, on an unfair preference claim. The liquidator's originating process seeking relief was amended prior to the return date but after expiry of the time for service. The court at first instance refused the liquidator's application to amend the return date to validate service, thereby stymieing the liquidator's proceeding.
The cause of the problem for the liquidator was a sub-par performance from his solicitors
The liquidator's appeal to Justice Robson was successful, allowing his claim to proceed. Usually a successful appellant is awarded his costs of the appeal and of the hearing in the court below. However, Justice Robson, perhaps as a mark of disapproval of the liquidator's lawyer's conduct, awarded the liquidator only his appeal costs, with Laureville being indemnified by the Appeals Costs Board for the payment of those costs. Unusually the Judge also ordered that Laureville be indemnified by the Appeal's Costs Board for its own costs of the appeal. Laureville had previously been paid its costs in the court below and Robson J allowed that costs order to stand. In all a shellacking for the liquidator and his solicitors.
The case was thereafter ripe for a settlement which is what occurred - on confidential terms, of course.
Mr Duckitt successfully wound up the defendant on the just and equitable ground consequent upon a management deadlock. There were two directors and equal shareholders, Mr Duckitt and Ralph Mackie. A clause in the company’s articles of association set out an arbitration mechanism following a deadlock at a meeting of directors and a deadlock at a meeting of members.
Associate Justice Randall stayed the winding up to allow the management deadlock to be resolved by arbitration.
Mr Duckitt appealed successfully to Justice Robson who found, on the facts, that the arbitration mechanism had not been enlivened. His Honour quoted with approval Mr Duckitt's written views on the merits (which Chris authored) and which his Honour reproduced in paragraphs 9 and 10 of the judgment.
Mr Mackie appealed against Justice Robson’s decision to the Court of Appeal but his appeal was dismissed with costs.
This was a David versus Goliath battle where in the Queensland Court of Appeal, Patrick Keane QC as he then was and now a judge of the High Court, sought to challenge my litigation funding arrangements involving a liquidator's sale of prospective recoveries. David won 3-0 in the Queensland Court of Appeal as well as in the court below (before Williams J) and subsequently in the High Court where Gauldron J refused special leave to appeal.
The reasons why Mr Keane's client, Fosters Brewing lost are best encapsulated in the judgment of Davies JA in paragraphs 148-258.
Justice Keane has since commented critically on litigation funding and funders in extra judicial opinions.
Chris acted for the plaintiff company in this English case. A director drew cheques on the company's account to settle personal debt incurred by a deceased director in circumstances where the creditor knew that the payment was in breach of trust. The creditor was found to be a constructive trustee for the company of money received and had to repay the money.
All lawyers on the case received generous praise from the Judge for their assistance. Chris' counsel, Mark Potter QC went on to have a stellar career as a judge in the Queen's Bench Division, as a Lord Justice of Appeal and President of the High Court Family Division. In 2006 he denied a lesbian couple married in Canada the title and status of marriage. How times have changed.
This was a multi-faceted landlord and tenant dispute concerning a luxurious Hong Kong apartment which the plaintiff, a senior partner in the international law firm, Baker & McKenzie, had rented. The judge was not particularly impressed with the conduct of tenant or landlord although the plaintiff ended up saving considerably more face in the litigation than the defendant.
Years later the plaintiff and at least seven of his Australian based partners lost an encounter with the financier of a horse racing syndicate: Davis v Mortgage Acceptance Nominees Ltd (Baker McKenzie/ Horse Leasing case) (unreported) NSWSC, Rolfe J, judgment delivered 20 April 1994. Chris had years earlier resisted the overtures of some senior B&M Partners to join one of their syndicates. A good decision.
This was an appeal by a trustee in bankruptcy, Wayne Lamb, against a Federal Magistrates’ decision to discharge a mandatory injunction obtained ex parte against Chris' client, Stephen Ariss. The injunction was discharged for non-disclosure. Mr Lamb appealed and the Federal Court dismissed the appeal, confirming that the trustee's solicitor had failed to act with the requisite candour when seeking an order ex parte. The solicitor's evidence was incomplete, inadequate and misleading as it failed to bring forward all material facts.
Not only did the trustee lose his injunction as a consequence, but he was also ordered to pay Mr Ariss’ costs.
Years later Chris attended a CPD seminar at which the trustee’s solicitor was a presenter on a legal ethics topic. Chris was very pleasantly surprised when he told the audience he had not done himself justice in the Ariss case and had deservedly been taught a lesson. What remarkable candour.
In this Federal Court Case the applicants, including one Maxwell Latimer, were represented by Peter Hayes QC.
This was a grudge match between Chris (representing the liquidator of Richmond Sales) and Mr Hayes and followed Chris' complaint against him for unprofessional conduct made to the Bar Council in 1996/7. Mr Hayes was found to have acted unprofessionally and fined. Mr Latimer, then a solicitor, assisted Mr Hayes in the conduct complained of but no complaint was levelled against him. However, in 2002 Mr Latimer was barred for 2 years by the Legal Profession Tribunal after he diverted $200,000 intended for a trust account to pay off his credit card, buy jewellery and repair a Rolls Royce.
The Richmond Sales case was also a grudge match between Chris and Mr Latimer because in February 2005, after Mr Latimer had failed to appear as an examinee at a public examination in Melbourne held by Mr Burness, Chris and Mr Burness caused the Federal police in Queensland to apprehend Mr Latimer pursuant to a warrant and bring him to Melbourne where he was examined before a registrar on 11 February 2005 (see Burness v Latimer  FCA 343). Mr Latimer was not a picture of sartorial elegance on the day.
In the Richmond Sales case the applicants sought to vary court orders made in favour of the liquidator, but Justice Kenny dismissed the application with costs, after hearing lacklustre arguments on the day from Mr Hayes. The application mainly turned on the Court finding the orders were final orders and Justice Kenny declared that they were.
About a year after Justice Kenny delivered her judgment Mr Hayes died in the Royal Adelaide Hospital room, apparently of a lethal drug overdose.
This is a judgment of Tracey J in the Federal Court. It concerned the making of a raft of costs orders in favour of bankruptcy trustees against the bankrupts and their solicitor, Trevor Hall. Some of the orders were payable on a standard basis and others on an indemnity basis. Various unsuccessful applications by the bankrupts and appeals therefrom had given rise to the costs orders. Those applications and appeals themselves stemmed from a somewhat unintelligible order made by Ryan J purporting to stay the bankruptcies on a condition which, literally, could not be fulfilled.
At the time Mr Hall sought the order from Justice Ryan, Chris was sitting in the back of the Court as an observer for the trustees. As soon as the Court adjourned, Chris asked Mr Hall to recall the judge to make the order meaningful. Mr Hall refused and things thereafter spiraled out of control. In particular, one of the applications made by the bankrupts, at the instance of Mr Hall, was to lay contempt charges against the trustees for not obeying the (deficient) stay order. Justice Tracey found that the application should never have been made as it was hopeless and made for an ulterior purpose, namely as a means of procuring the trustees’ resignations. Mr Hall thereby engaged in misconduct according to his Honour and was obliged to pay costs to the trustees on an indemnity basis. Costs orders against solicitors are rare and orders against a solicitor to pay adverse costs on an indemnity basis are rarer still.
On 23 May 2016 the Legal Service Commissioner (NSW) made a finding of unsatisfactory professional conduct against Mr Hall for "innapropriate communication".
On 16 May 2019 the Council of the Law Society of New South Wales found Mr Hall guilty of unsatisfactory professional conduct in that he made representations to other legal practitioners that he would hold the net proceeds of a sale in his trust account pending the establishment of a controlled monies account in both the names of the parties, and then without prior notice, acted contrary to those representations. He was reprimanded and was required to undertake further enducation in legal ethics.
The application by the Plaintiff company (Pivot) for approval of a scheme of arrangement to act as a defence against a takeover by Chris' client, Doug Shears, was dismissed by Justice Brooking. Pivot had earlier engaged Arthur Andersen & Co to provide an independent expert’s report as to whether the scheme was fair and reasonable to members. However, there were communications between the expert, on the one hand, and Pivot and its lawyers, on the other, that his Honour found undermined, or appeared to undermine, the independence of the expert, Keith Alfredson. The report was produced under the supervision of Pivot and its advisors and owed much to their exertions. It did not represent the genuine independent opinion of its authors. In short, the report was neither independent nor expert.
This is an important case on the duties of experts purporting to be independent, particularly in the context of schemes of arrangement. Conversely, if you are a lawyer, better not change the expert’s draft (at least not if the change can be traced back to you!)
Chris appeared as solicitor and counsel for Paul Pattison, the liquidator of Global SDR Technologies, on a successful ex parte application for a warrant to search for and seize company property relating to mobile phone techonology (with civil and military applications). The property was in the possession of former directors of Global SDR Technologies, Roger and Jason May, both of whom were bankrupts and, in 2007, were sentenced to one year imprisonment (suspended) for dishonestly using their positions as directors of another company.
As Justice Whelan observed, "such applications are a last resort to be made after all other reasonable steps have been taken." And they were.
Chris may have been underqualified to make the application and assist in the (successful) execution of the warrant as he has never had a mobile phone.
Chris also acted for Mr Pattison in the public examinations of the Mays and in other related cases before coming to an agreement with him in April 2006 about the balance of fees - in excess of $40,000 - he, as liquidator, owed Chris. Chris and Mr Pattison agreed that Mr Pattison would pay Chris "from 50% of any further funds he received". In fact, as Chris discovered in 2010, Mr Pattison did recover substantial further funds from the ATO but neglected to pay 50% to him, improperly paying the whole amount to his own benefit. He became a bankrupt in late 2012 and so Chris never did recover his fees from him.
Mr Pattison thereafter studied law and qualified to be admitted as a solicitor in 2016. At Chris' instance, Mr Pattison's application to be admitted to practice as a solicitor in Victoria was successfully opposed by the Legal Admissions Board.
An application to wind up Kornucopia Pty Ltd for failure to comply with statutory demands occupied five full days of court time. Chris acted for five supporting creditors. The company made four applications to Justice Sifris to recuse himself. All failed. The company’s lawyer, Raghavan, and its de facto director Kuksal engaged in almost unprecedented shenanigans, which resulted in Justice Sifris referring Raghavan to the Legal Services Commissioner and Kuksal to the Office of Public Prosecutions for perjury.
In fact, Raghavan and Kuksal had earlier – namely on 7 and 8 August 2019 – engaged in outrageous behaviour in another case involving Kornucopia Pty Ltd before Judicial Registrar Clayton and in which Chris acted for a number of respondent landlords. The transcript of the second day of the hearing before JR Clayton is instructive. Chris made a formal complaint to the Victorian Legal Services Commissioner about Raghavan’s conduct on 30 August 2019. After a slow start the Commissioner's investigation of that complaint is now proceeding apace.
Michael Humphris was appointed liquidator on the making of an order winding up the National Safety Council of Australia Victorian Division following the uncovering of fraud committed by its Chief Executive Officer, John Friedrich.
Chris acted for the State Bank of Victoria in having an appeal against the appointment heard before the full court of the Supreme Court of Victoria in record time, that is 8 days after the order appealed from was made. Six future Supreme and Federal Court judges appeared as barristers on the appeal. Mr Humphris was terminated as liquidator because of a perceived conflict of duty and interest arising from the relationship with Mr Humphris’ firm with the company which Mr Humphris would be bound to investigate.
The Court could have ordered the appointment of a second liquidator for the limited purpose of conducting the investigation, but it did not do so. A harsh decision, perhaps, but in keeping with times when judges more readily punished individuals who failed strictly to observe their fiduciary duties.
In 1987 Chris acted for Bap Romano in a Swiss Franc loan case against Australian Bank. Mr Romano had taken out a low interest loan, repayable in Australian dollars, with Australian Bank. With currency fluctuations his loan debt increased dramatically and the bank closed down the facility. He sued the bank for not properly advising him of the risks associated with such a loan in what was then a test case. After the commencement of the trial, but before judgment, Mr Romano and his Queensland solicitor, Greg Chapple instructed his Melbourne lawyers (being Chris and Peter Hayes of counsel) to accept a generous offer from Australian Bank.
In 1988 Mr Romano and companies controlled by him brought five actions against Chapple and his partners to recover his money lost as a consequence of Chapple's fraudulent misappropriation. The five actions were heard together by Justice Moynihan in the captioned case. Mr Romano's Queensland solicitors subpoenaed me to give evidence at the trial about Mr Romano's case against Australian Bank and its aftermath. Unbeknown to Chris before he received the subpoena, Mr Chapple had misappropriated around $1,500,000 of Mr Romano's money, including $73,000 from Australian Bank in Mr Chapple's trust account, held to the credit of Romano. Mr Chapple was later sentenced to a long term of imprisonment and struck off the roll of Queensland solicitors.
This was an appeal against an award of damages to Chris’ client Paul Schlesinger. This judgment was the first that Chris received in England. The case is only about rubbish, but the judgment is enhanced by the quality and manner of expression of the three Lord Justices of Appeal. Chris’ barrister, William Blackburne was also elevated to the Court of Appeal on which he still serves, part-time. The judgment looks like it was typed on a Remington Royal manual typewriter. Schlesinger was so pleased to beat McPhail that he sent Chris a framed sketch of his house drawn by his wife. Chris has it today.
This is a leading case on the limitation of the right of a company to set aside a statutory demand after the expiration of 21 days after service. Ordinarily parties who have failed to do any act required under the Corporations Act can apply to extend the period for doing such act and the court may come to their assistance – but not where the 21 days is up for applying to set aside a statutory demand.
The decision of Justice Hayne in Texel was confirmed in 1995 in the High Court case of David Grant & Co Pty Ltd v Westpac Banking Corp. (1995) 184 CLR 265.
Texel did not set aside the demand before the expiration of 21 days after service of the demand upon it because of the “oversight of its solicitor”. That oversight allowed the CBA to wind up Texel which in turn facilitated the recovery of monies owing to it by associated companies.
Chris acted for the CBA in Texel. His firm (then called Phillips Fox) later employed a young solicitor who claimed to have been the fall guy in the Texel statutory demand mishap. The entire fault, he said, was that of a partner seeking to deflect blame.
In this case Chris’ client, the defendant, successfully sought to further amend its defence and counterclaim. This was one of a suite of cases commenced by or against the liquidators of Traditional Values Management Limited (TVM), against or by the defendant or its associates.
Chris' clients were secured creditors (comprising nearly a third of all creditors) of TVM , which is the responsible entity of the Blue Diamond Deposits trust (BDT), a registered managed investment scheme. The only business of TVM was the operation of BDT which was a mortgage fund that raised money from investors to write loans to commercial and individual borrowers to fund interests in time share schemes. Chris' clients were also substantial unit holders in BDT, owning nearly a third of the units.
The liquidators pursued Chris' clients relentlessly in the courts, principally about the calculation of the value of the units and distributions made to unit holders. His clients counterclaimed.
In July 2014 Chris' clients called upon the liquidators to resign due to serious conflicts of interest described in Chris' letter of 4 July 2014 to the liquidator's solicitors, Mills Oakley. As a consequence the Court ordered the appointment of Andrew Hewitt as special purpose liquidator to investigate and respond to the matters Chris had raised.
The appointment of Mr Hewitt might be considered fortuitous as he was the liquidators' nominee and Matthew Jess of Worrells was the complainant's nominee. However, Justice Ferguson, after declaring that both were well known liquidators, appointed Mr Hewitt on the ground that "H" preceeded "J" in the alphabet. Perhaps if Mr Jess had known "alphabetical order" would be the basis for selection, he would have changed his name temporarily by deed poll to "Mr Aardvark" or similar.
Mr Hewitt published his report dated 20 November 2014. In paragraph 15.20 of his report Mr Hewitt observed: “in reviewing the conduct of the administrators/liquidators with respect to their conduct in managing the timeshare loan portfolio, there are many issues to consider in determining whether their conduct was negligent. Whilst I have identified a number of areas where the liquidators could/should have conducted further enquiries or activities, on balance I do not believe they acted negligently in their conduct.”
Regardless, should not legal conclusions of negligence or conflict, or the absence thereof, be matters for the court alone?
In the WHO case Justice Sifris allowed amendments to the defendant’s defence and counterclaim so as to broaden the ambit of the defendant’s defences and claims. This seemed to Chris to somewhat take the wind out of the liquidators’ sails such that the unit holder proceedings and counterclaim were withdrawn in May 2016 and the cases settled.
Chris’s clients were represented very ably in the litigation by Norman O’Bryan as senior counsel. Sadly, at that time events were unfolding in a class action case in which Mr O’Bryan was also acting, that would ultimately lead to his legal demise. What occurred as a consequence of Mr O’Bryan’s involvement in the litigation funding of that class action case is reported in a 2020 newspaper article. It appears a key difference between that funding arrangement and Chris’ “Liquidators’ Expense Insurance” was that before entering into any funding agreement, Chris made full disclosure to the court of all relevant matters, including potential conflicts and how they would be overcome.
According to accounts filed by the liquidators of TVM with ASIC they earned remuneration in the administration and winding up of TVM in excess of $5 million and paid fees to solicitors and counsel in excess of $7 million. Fees to the special purpose liquidator were $659,000. All remuneration and fees have been court approved.
As at mid-2021, the winding up continues and the unsecured creditors and unit holders are still waiting to receive their dividends.
Mr Wu was a Chinese high roller who gambled at Crown Casino and had a big winning streak. His winnings of around $800,000 were not paid to him but went instead to a high roller junket operator who then went on a $1 million plus gambling spree using Mr Wu's winnings.
Chris acted for Mr Wu in suing Crown Casino for damages for breach of contract, alternatively damages for negligence and/or breach of statutory duty, alternatively damages for misleading or deceptive conduct.
The case and the trial attracted considerable media attention which Mr Wu did not welcome. All ended well for him, however, when on the third day of the trial Crown Casino capitulated and paid him. Where did Mr Wu collect the settlement money? At Crown Casino, of course, so that he could continue gambling.
© 1998-2021 Charles Fice Solicitors. Created and supported by APMS.