Action against Clayton Utz over dismissal of a partner ... Another procedural victory for plaintiff Chris Dale ... Now onto the main game ... Kate Lilly reports
Smoke arising from the McCabe case has yet to settle
FORMER Clayton Utz partner and Law Institute president Chris Dale has won another round in his litigation against the national law shop.
Justice Clyde Croft in the Vic Supremes has acceded to Dale's submissions about the way the forthcoming trial over his dismissal from the partnership should be conducted.
In 2007 Clutz sacked Dale alleging that he'd leaked confidential details of an internal inquiry into the conduct of the Rolah McCabe tobacco litigation.
The investigation led to the departure of two litigation partners who ran the defence for British American Tobacco in the McCabe case - Glenn Eggleton and Richard Travers.
See: Spinning Clutz's internal memos
The behaviour of Eggleton and Travers was examined by a Clutz committee that included Doug Jones, Nancy Milne and Chris Dale.
The damaging findings ended-up with McCabe's solicitor Slater & Gordon and from there found their way into The Age newspaper.
Dale was accused of being the leaker and sacked. The firm alleges:
- Breaches of the Partnership Acts of Victoria, NSW and the ACT;
- Breaches of the relevant Legal Practice Acts of Victoria, NSW and the ACT and breaches of the Professional Conduct and Practice Rules of Victoria, NSW and the ACT;
- Breaches of the paramount duty of candour to the court;
- Dishonesty;
- Intimidation;
- The making of false statements;
- Acting without instructions; and
- Borrowing monies from clients.
The plaintiff says that this amounts to a roving commission into his conduct from as early as 1998 (which is two years prior to the establishment of the partnership from which he was expelled and seven years prior to the expulsion decision itself).
Dale argued that Clayton Utz should bear the onus of proof in relation to his alleged professional and criminal misconduct - despite the fact that he is the one bringing the action.
Dale's lawyers wrote to Clayton Utz and requested a "Protean Holdings" split. The firm refused, arguing:
"The matters in our client's amended defence which you suggest could be 'split' are not clearly distinguishable from the matters pleaded by the plaintiff. The matters ... largely occurred during the same period of time as, and are factually intertwined with, those matters which were before the board of our client at the time of its decision in respect of your client ... To do so would add to the complexity and length of the trial and, in our view, would be unworkable."
Justice Croft disagreed with Clayton Utz's assessment of the situation and granted Dale's application:
"There is no 'bifurcation' and likelihood of wasted time and duplicated evidence. In any event, the authorities to which reference has been made indicate that where a Protean Holdings 'split' is appropriate, considerations of fairness are of very significant importance ... fairness requires that each party, the plaintiff and the defendant, be required to lead in chief the evidence which they seek to rely upon to prove their cases which are, in my opinion, relevantly separate."
In addition to splitting the case, Dale sought to invoke privileges against self-incrimination, to the extent that compliance with certain procedural rules may expose him a civil penalty or criminal proceedings.
Opposing the application, Clayton Utz argued the privilege, "is purely a defensive mechanism and does not apply to a plaintiff who voluntarily chooses to commence a civil action in respect to the subject matter of the claim for privilege".
Alternatively, it was contended that Dale waived his privilege by bringing proceedings that inherently raised his conduct for determination and by submitting to a two-day police interview.
Once again, Croft disagreed and granted Dale's application.
"The plaintiff is with respect to the defendant's case - in substance - a defendant. He is not a 'volunteer' to this case as a plaintiff might be seen with respect to his, her or its own case. Consequently, even if I were of the opinion that the privileges could only be invoked by a defendant, it would truly be a triumph of form over 'a fundamental ... bulwark of liberty' if a plaintiff in the position of Mr Dale could not invoke the privileges in response to the defendant's case against him. Moreover, having regard to the manner in which the plaintiff's case is put and the defendants' pleading of a discrete and positive case against him, no unfairness or injustice arises for the defendant in the conduct of the firm's case as a result of the plaintiff invoking the privileges.
For the preceding reasons, I am of the opinion that the plaintiff's application should be acceded to."
This is the latest success for Dale in the preliminary rounds of his damages action.
In April last year he was successful in having Clayton Utz abandon its intention to retain Allan Myers to defend the action.
See: Clutz appeals injunction against Allan Myers
See: Clutz blinks