Whilst employment law matters are not iNO’s bread and butter the following tale acknowledges two incontrovertible truths.
One is that many lawyers read iNO. The other is that they exhibit a forensic glee in misfortune, when it befalls others of their kind.
“There are several things I can do. One is refer the practitioners on your side to the Bar Association and Law Society to consider whether they breached their obligations to the court; another possibility is to give the practitioners an opportunity to put on any additional material they choose to put on and then give Mr Pesman the opportunity to cross examine them on their affidavits.” NSW Supreme Court judge Michael Meek.
At this stage the specific misfortune – being referred by a judge to The Law Society and to The Bar Association – is contingent and depends on how the relevant lawyers respond to orders made by NSW Supreme Court judge Michael Meek yesterday morning.
His honour heard that the defendants in Larocca v Alvarez & Marsal Australia and New Zealand Pty Ltd had told the plaintiff that complying with an order for preliminary discovery would cost the plaintiff $513,000.
The plaintiff is David Larocca, EY Oceania’s ceo & regional managing partner.
The first defendant is EY’s arch rival Alvarez & Marsal (A&M). The second to sixth defendants are Sean Keegan, Andrew Sharp, Jagmohan Singh, Adam Woodward and Edward Consett, who defected to A&M along with 12 others in late 2023.
EY commenced the action against A&M and the unfaithful five in August last year and is seeking to determine if any breached their partnership restrictions around client solicitation and confidentiality.
“The expression outrageous is overused in this court but this is outrageous,” Larocca’s counsel Marcus Pesman SC told the judge at the commencement of the hearing, adding that his honour should order the defendant’s solicitors to go on affidavit explaining why preliminary discovery should cost more than half a million dollars. Pesman said he would seek to cross examine the deponent on the contents.
Unwilling perhaps to use an expression allegedly overused the judge turned to the defendant’s counsel Dilan Mahendra.
“Frankly I regard the costs as extraordinary”, the judge told the Quay Chambers employment specialist.
“I just don’t know how it is that people who hold themselves out as being competent in a field can incur costs of that order in complying with an order for preliminary discovery.”
The judge’s comments followed Pesman telling the court that the the first defendant – A&M – had flown in a team of IT specialists from Hong Kong and that the bulk of the work had been undertaken by a director charging $1200 per hour.
Whilst Mahendra took pains to point out that the costs weren’t legal fees Justice Meek was not mollified.
Referring to an earlier appearance by the adversaries he reminded Mahendra that the first defendant had previously disabused the court of any view that A&M regarded the request (for preliminary discovery) as onerous.
Therefore his honour pondered, there must be some other explanation.
“One possibility is sheer incompetence,” he said. “The other possibility is somewhat more sinister and I’m not saying that exhausts the possibilities but when people are ordered to undertake preliminary discovery by this court they are expected to do so in a just, quick and cheap manner.
“The financial and intellectual firepower that must be on your side of the record has one, failed to produce a list and two, incurred costs of at least a hundred thousand with the prospect its going very very far north of that,” he said.
“The expectation is that the practitioners recognise something is not working and they notify the other side that something is not working and they can come back to the court to work out how the orders can effectively and cheaply be complied with,” the judge said.
When that expectation was unfulfilled, he had to consider his options.
“There are several things I can do,” he said.
“One is refer the practitioners on your side to the Bar Association and Law Society to consider whether they breached the obligation to the court; another possibility is to give the practitioners an opportunity to put on any additional material they choose to put on and then give Mr Pesman the opportunity to cross examine them on their affidavits,” the judge said.
After standing down the parties for a period the judge appeared to downplay the import of his earlier comments when they returned before him, saying he did not mean for his comments to apply to any specific solicitor, which was prudent given Cowell Clarke Director and employment specialist Joe Murphy is the solicitor on record for A&M.
We asked Murphy for comment and he said in an email: “His Honour’s comments were not directed at any individual practitioner and were not directed at the 2nd to 6th defendants or their solicitors.
“The costs referred to are not the legal costs. As stated in Court, they are the costs of A&M’s Forensic IT experts to search the relevant devices for documents and are not costs incurred through the legal practitioners.
“Any implication that any of the practitioners have engaged in conduct in breach of their obligations is incorrect,” Murphy said.
Well, iNO is pretty sure the judge wasn’t talking about the A&M IT team when he discussed the possibility of referring practitioners to The Law Society and the Bar Association and it would be of course up to those two disciplinary bodies to determine whether or not breaches have occurred.
As it stands the unspecified lawyers will now have to consider what if any supporting material they choose to put on to explain how compliance costs could escalate to the extent they have and then await possible cross examination by Pesman SC.
The matter is due to return to court on October 2. For background see: Larocca v Alvarez & Marsal Australia and New Zealand Pty Ltd [2025] NSWSC 687.
these types of demands in relation to expenses of compliance are not uncommon.
Justice Meek is not a judge who would react as is reported, unless there was some very real concern. The comments attributed to the Judge raise issues for all practitioners in their dealings with the court and the responsibilities of the “solicitor on the record”, counsel appearing before the court, and particular solicitors instructing counsel in relation to appearances in court and responses to court directions.