It can’t be easy for lawyers making their bones in the insolvency space. You need worthwhile referrers and clarity about whether you’re going to implicitly trust your clients or proceed on the basis that such a course would constitute an intolerable risk.
Whichever path is chosen there’s always the potential for uncertainties around retainers and trust accounts, and it was this potential for uncertainty that piqued iNO’s attention yesterday during day four of liquidator Darren Vardy’s public examination into the affairs of a swathe of business consultancies, construction services firms and payroll entities linked to the late Samuel Henderson.
The court heard yesterday that what Vardy is uncovering is no small thing.
His counsel, Ralped Notely told National Judicial Registrar Susan O’Connor that what his client is seeking to expose via the public examinations are the workings of a “long running” scheme, the alleged aim of which was to defraud the Australian Tax Office (ATO). The companies at the heart of Vardy’s investigations Notley added are only “the latest iteration”.
Nor is Vardy alone. Over at Grant Thornton Phil Campbell-Wilson and John McInerney have been investigating the affairs of a range of similarly structured corporate entities linked to Henderson and the construction sector, including an outfit called Robust Construction Services (Robust).
Robust’s liquidators conducted public examinations of Henderson and accountant Paul Simeoni back in June, 2022 in relation to a settlement deed entered into in mid-2019 between Robust Construction Services and Titan Cranes & Rigging Pty Ltd (Titan).
A portion of Vardy’s examinations this week involved questioning of individuals linked to Titan and the settlement, which involved an $8 million debt Titan purportedly owed to Robust.
Henderson, who died in April this year, told the court in June 2022 that Robust’s claim against Titan – which came about after the ATO had flagged a multi-million claim against Robust – had been resolved via the deed of settlement allowing for a payment by Titan to Robust of $3 million.
But Vardy’s investigations have thrown fresh light on the machinations preceding the settlement and have highlighted how difficult it is for insolvency lawyers if they choose to trust their instructors.
Supported by emails obtained by Vardy, it appears Henderson was jerking the strings of two prominent Sydney insolvency lawyers simultaneously.
The statutory demand for payment was issued on Robust’s behalf by Piper Alderman insolvency division partner Thomas Russell acting on instructions provided by Henderson, not that Henderson was a director of Robust.
Simultaneously, Titan was being represented by Hegarty Legal’s Peter Hegarty, who the court heard this week was also being instructed by Henderson, who wasn’t a director of Titan either.
Emails revealed how $5,000 was to be paid into the Piper Alderman trust account and $10,000 into Hegarty Legal’s trust account in relation to the statutory demand and subsequent deed of settlement and release.
What wasn’t explored in the examination yesterday was how either Russell or Hegarty came to be accepting instructions from Henderson?
In response to inquiries by iNO Russell, who was present throughout the examination yesterday, seemed to imply that he either did not agree with how the stat demand and deed of settlement matter was characterised during questioning by Notley, or that iNO had misunderstood what had been said.
Saying he would not comment on “the factual matters set out in (or assumed by) your email”, Russell added that his refusal should not be taken “to signify that I agree they are correct, or that I have not identified any apparent misapprehension or misunderstanding as to the facts, or other factual error”.
Queries sent to Hegarty were not responded to prior to publication but there is no suggestion that either Russell or Hegarty was aware of the ATO debt claims that were motivating Henderson in respect of the outcome he sought to engineer through them.
What is known is that Henderson had availed himself of each lawyers’ services in the past so it is certainly possible that there had been a degree of trust in the respective relationships, and potentially a diminished sense of risk.
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