Conflicts and problems with the law for Slater and Gordon as a result of Ms Gillard taking on the Kerr Street conveyance and mortgage
Wednesday, 11 November 2015
On 22 November 2012 former Slater and Gordon partner Nick Styant Browne was interviewed on the ABC 730 program. Here is an edited transcript, the original interview is here
Nick Styant Browne consolidated statement
In August of 2012 it became clear to me that after all these years this story was finally going to come out and Slater & Gordon made a public statement that Ms Gillard had been cleared of any wrongdoing, had taken a very long sabbatical, had resigned from the firm and a meeting room had been named after her. And that was on any view a stunningly incomplete account of the circumstances of her departure. And it was following that that I resolved it was in the public interest to release both non-privileged parts of the transcript of the interview of September 1995 together with Pete Gordon's statement concerning the circumstances of her departure.
There was an interview of Ms Gillard conducted on 11th September of 1995 where various matters were put to her concerning both her involvement in the incorporation of the association (AWU Workplace Reform Association) and her involvement in the acquisition of the Kerr Street property by Ralph Blewitt. And it was following upon that interview that Ms Gillard took her long sabbatical and resigned several months later in May of 1996.
So far as the association was concerned, Ms Gillard claimed that she thought it was a slush fund for the re-election of a union ticket headed by Bruce Wilson; that she had no involvement in the setting up of any bank accounts associated with the association and she had no involvement with the association otherwise following upon the work she did in relation to its incorporation. In respect of the property transaction involving Kerr Street, she stated that she understood Mr Blewitt was buying the property as an investment, that Mr Wilson would be a tenant and she believed that Mr Blewitt had the financial resources to fund the purchase together with a loan.
Ms Gillard stated in the interview that she did not open a file. This was not passing advice to a rank-and-file union member; this matter involved the incorporation of a legal entity and it was most unusual that a file was not opened. Fees were waived in relation to the work that was done on the file. Then there was the question of her involvement in the purchase of the Kerr Street property and the fact that she had understood that a tenant of the property was to be her then boyfriend Mr Wilson and that was a relationship which had never been disclosed to me. I did not find out about it until August of 1995. And so they were two of the principal matters that concerned me about her conduct.
There was a spectrum of views across the partnership and Peter Gordon has said that he was willing to give Julia Gillard the benefit of the doubt, so that was one end of the spectrum. I was towards the other end of the spectrum in that I was not readily prepared to give Ms Gillard the benefit of the doubt and I made that clear. There was never any real resolution of that debate in the partnership because as events transpired, Ms Gillard agreed to resign, and so it was never necessary for the partnership to resolve itself what actions should be taken.
As you can imagine from the circumstances that I've just explained regarding her work in the incorporation of the association and the acquisition of the Kerr Street property, those things taken together removed the trust as between the partners and Ms Gillard.
There was deep disquiet amongst the partnership about Ms Gillard's conduct and it was never necessary for the partnership to resolve that issue because Ms Gillard herself elected to resign.
Ms Gillard claimed at the interview in 1995 that the first she heard about the Slater & Gordon loan for the acquisition of the Kerr Street property was around August of that year. So, her claim is that the first she heard about the fact that the loan for the Kerr Street property was a Slater & Gordon mortgage was not until August of 1995, the transaction of course having taken place in March of 1993.
Those documents form part of a conveyancing file which are now matters of public record. So they are from the conveyancing file which Mr Blewitt consented be released and made publicly available. Now what those documents show is that there is no doubt Ms Gillard knew of the mortgage from Slater & Gordon in March of 1993. And just to give you some examples, she personally arranged for the mortgage insurance for the Kerr Street property through the Commonwealth Bank and a letter was faxed to her on March 22 of 1993 from the Commonwealth Bank marked for her attention noting that the insurance had been renewed and further advising that the Slater & Gordon mortgage interest was noted on the policy of insurance.
There is absolutely no doubt that Ms Gillard not only knew of the Slater & Gordon mortgage in March of 1993, but was specifically involved in taking steps to facilitate that mortgage. Now, that's a matter of documents; it's not a matter of assertion or hearsay. Now, you then have a situation where two and a half years later in September of 1995 Ms Gillard is asserting that the first she heard it was a Slater & Gordon mortgage was in August of 1995. Now, it's up to others to make the judgment about her credibility.
ENDS
In the 1990s Victoria's legal profession was regulated by two principal instruments:
The Legal Profession Practice Act 1958
The Solicitor's Professional Conduct and Practice Rules (dating from 1948), as amended below. It's very important that we are dead accurate on dates and versions of the Rules in this exercise - feel free to skip ahead if you're not interested in double-checking my research here.
There is one important amendment to add to the above. On 3 March 1993 the Rules were further amended.
Now to Gillard's conflicts. Forget about the Power of Attorney for a moment. Forget about her conflict over her duty to the AWU and its money for a moment. Forget about her duty of utmost good faith or her duty of complete disclosure to her partners. Let's just look at what the LAW said.
Conflict #1 - acting for tenant and landlord
Rule 10 (2) (c) - acting for lessor and lessee in the Kerr Street purchase should have worried Ms Gillard a little, i.e. acting for Bruce (living in Kerr Street under a supposed lease while also exercising a Power of Attorney to purchase the place and to borrow money secured on it) while also acting for Ralph (landlord). Clearly it worried Nick Styant Browne.
Conflict #2 - acting for purchaser and mortgage provider
Rule 10 (2) (e) is a lot more serious - in earlier versions of the Rules there was an absolute and strict prohibition on acting for the purchaser and the mortgage provider. This version of the Rules allowed a fully informed purchaser to agree to the lawyer acting for both parties - but only if the purchaser acknoweldged that if it went to shit he was on his own.
Gillard loaded Ralph up with the mortgage using a dodgy Power of Attorney way in excess of the authority granted on its face. Ralph waived his rights to legal representation without even knowing it - Bruce made the acknowledgement on Ralph's behalf.
This was not your run of the mill mortgage either. It was a contributory mortgage under which Johnathon Malcolm Rothfield set the rules. And the rules of the Mortgage included this doozy - if at any time Rothfield decided that he didn't like something Ralph said in his "Application" for the loan, Rothfield could immediately foreclose on the mortgage and call the money in with no notice. That would put Ralph and Rothfield in conflict and leave Ralph without a lawyer too. Nice.
So what exactly was the Application made by Ralph Blewitt. There is none that we've seen. But there is a Statutory Declaration, quite a lengthy one, with this very impressive front sheet.
Phew, everyone knows that you can't use a Power of Attorney to make someone else's Statutory Declaration. You didn't know? Here's an extract from the 2013 Victorian Parliamentary Review into Powers of Attorney setting out the law that applied in 1993
So back to the Ralph Blewitt Statutory Declaration for the Mortgage. Ralph is the Mortgagor - in this Stat Dec it's Ralph's state of knowledge that Bruce is swearing to. But Bruce has no liability here if he gets it wrong. Ralph sure does!
Thank God Ralph was the client. Thank God he had a good lawyer who always did things properly, like witnessing documents properly and understanding her duty to her client in the Power of Attorney and the property purchase, Ralph Blewitt.
So what did Ms Always Acted Properly do? Nothing at all proper or in Ralph's interests. She helped load Ralph up with all the bad shit, that's what she did.
Nice work Ms Gillard. Let's take a breather here - I haven't started on the really serious conflicts of interest yet under the Solicitors Rules. More soon and yes, it is very, very serious. Nick Styant Browne was right to be concerned.