A long-running and painful court case involving an attempt to divert millions of dollars from a settlement paid to the debenture holders of collapsed financial securities firm Banksia has drawn significantly closer to an end with a scathing and swift summation delivered in the Supreme Court on Monday.
Justice John Dixon did not spare any of the defendants in the 10-minute summary of his judgement, quoting from the 1837 remarks of law reformer and Master of the Rolls Lord Langdale that "I am far from thinking any counsel who attends here will knowingly violate, or silently permit to be violated, any established rule of the Court to promote the purposes of any client or refuse to afford me the assistance which I ask in these cases."
That is exactly what the defendants in the case of Bolitho v Banksia Securities Ltd have done, Justice Dixon opined; their actions were 'fraudulent and appalling'.
In the summary of judgement, Justice Dixon found that 'a litigation funder and five lawyers ('contraveners') engaged in egregious conduct in connection with a fraudulent scheme, intending to claim more than $19 million in purported legal costs and funding commission from the settlement sum in a group proceeding.'
'Justice John Dixon noted that the contravener's conduct had shattered confidence in, and expectations of, lawyers as an honourable profession, and corrupted the proper administration of justice.'
For Keith Pitman, a tireless advocate of the debenture holders in trying to obtain a just settlement, the decision is a relief tempered by the knowledge appeals are likely. Justice Dixon ordered the defendants to pay almost $12 million in damages, plus costs, to 16,000 Banksia creditors, parties to the case.
"I'm a bit shocked, but it's not over yet; I'll believe it when I see the cheque in the mail," Mr Pitman said, referring to the defendants' likely declaration of bankruptcy.
Mr Pitman, who admitted to having 'put in a few hours' on the case, was praised by Justice Dixon, who said he wished to acknowledge the "courage, tenacity and insight" of the 84-year-old.
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