How the government in 1986 paid Freehills $200,000 towards Justice Lionel Murphy’s costs of two criminal trials … Freehills had undertaken the work for Murphy on a no-charges basis, while leaving open the prospect of seeking a contribution from the government … Freehills advises Murphy not to change lawyers … Counsels’ fees and disbursements … Departmental heads sought to cap the payment … Cabinet agrees to a costs payment of $420,473 … From Stephen Murray at the National Archives
Adjusted for inflation, the costs would now equate to more than $2.5 million. With the firm undertaking its work for Murphy on a voluntary basis, there was no guarantee that any of these costs would ever be met.
The newly released papers from the Department of Prime Minister also reveal that senior bureaucrats in the Prime Minister’s and Attorney General’s departments were inclined to reimburse Murphy only for the actual costs paid by him towards his defence in the criminal trials.
Eventually Cabinet would sign off on a payment of $200,000 ($520,000 in 2018 terms) towards Freehills’ costs, in addition to a payment of $220,473 for disbursements and fees for counsel.
Documents in the files also challenge some of the account given of Freehills’ involvement in Murphy’s defence in the history of Freehills written by Suzanne Welborn and published by UNSW Books in 2011. For instance, Welborn writes that Freehills volunteered its services to Murphy in April 1985 after he was committed for trial, when in fact the arrangement was put together in December 1984.
From the beginning of 1984 to his untimely death in October 1986, Murphy was embroiled in controversy. The publication of transcripts of illegal police surveillance recordings in The Age newspaper in February set off a fuse that would see Murphy face two Senate committee inquiries, a series of criminal trials and, finally, an incomplete and inconclusive Parliamentary Commission of Inquiry.
The criminal trials centred on whether Murphy sought to exert influence in the conduct of criminal proceedings in the interests of his friend, Sydney solicitor, Morgan Ryan.
In December 1984, Commonwealth DPP Ian Temby announced that he would pursue charges of perverting the course of justice against Murphy. The charges were to be laid on an ex officio indictment in the Australian Capital Territory, thereby dispensing with a committal hearing.
According to a letter to Murphy from Freehills, dated April 30, 1986, the arrangement with Freehills was made when all concerned thought this trial would take place in the ACT, and likely take no more than two weeks.
Freehills had undertaken the work for Murphy on the basis that it would not charge him, but might seek any available contribution from the government. It was an unusual case for Freehills, renowned as a commercial law firm, as it had little experience in criminal law.
Leading Freehills’ effort was their Canberra based partner, Sir Clarrie Harders, who had been Secretary of the Attorney General’s Department from 1970 to 1979, and thus had worked closely with Murphy during his time as Attorney General.
Instead of a short trial in the ACT, the proceedings were moved to Sydney, with a committal hearing taking place. This alone took eight hearing days over March and April 1985. Murphy would be convicted on one count at the subsequent trial, but after several jurors publicly expressed disquiet about the verdict, and an unsuccessful appeal to the High Court and a partially successful appeal to the NSW Court of Appeal, a new trial in April 1986 saw Murphy acquitted on all counts.
Throughout these trials and appeals, Freehills acted for Murphy at no charge to him.
Notwithstanding the acquittal, Murphy subsequently faced a Parliamentary Commission of Inquiry (PCI) to examine a series of allegations against him that had not been put before the courts. The particulars of these matters were disclosed last year when a 30-year embargo was lifted.
Freehills did not act for Murphy before the PCI, having brought their arrangement to an end after his acquittal on April 28, 1986.
The April 30 letter from Freehills to Murphy indicates that after his successful appeal, Murphy offered to seek new representation for any re-trial to relieve Freehills obligation to him. The letter says:
“We said that this was not our wish because, firstly, we had undertaken a commitment to defend the charges, and secondly, we felt that a change in representation at that stage might adversely effect (sic) your defence of the remaining charge.”
Freehills wrote to the Attorney General, Lionel Bowen, on April 30, 1986, seeking indemnification for Murphy’s costs across the criminal trials. If any action was taken in response at this time, it is not apparent from the Prime Minister’s department files. Indeed, later events would establish there was little or no corporate memory of this approach until much later.
On August 1, 1986, upon confirmation of the news that Murphy was suffering from inoperable cancer, acting Attorney General Gareth Evans announced the government would bring the PCI to an end and make a “substantial” ex gratia payment to Murphy for his costs in the various criminal trials.
The government had already met his costs incurred for the various Senate inquiries in 1984 and the PCI.
Evans noted that it was unusual for an ex gratia payment to be made for a defendant in a criminal trial, but said that these were unique circumstances due to Temby’s apparent rationale for prosecuting Murphy, being in part because of special considerations arising from Murphy holding a public office.
With Evans’ announcement, Freehills moved quickly. A meeting with the Attorney General, Lionel Bowen, scheduled in mid-July, was held on August 6. For the meeting, Freehills prepared an aide memoire setting out the various costs incurred within the firm, as well as a schedule of the counsel fees and disbursements.
According to this aide memoire, within Freehills Sir Clarrie Harders clocked up 1,560 hours in Murphy’s cause (with a total charge of $288,600), while senior litigation partner Peter Perry clocked 1,082 hours ($189,350), Graham Kelly 1,548 hours ($255,420), Georgina Gray 1331 hours ($186,340) and P M Barlow 381 hours ($45,720). In total the costs came to $965,430.
The aide memoire records that counsel fees across the trials and appeals amounted to $186,650, of which Murphy had paid $148,900, with $37,750 outstanding. Disbursements totalled nearly $80,000, and were met by Murphy and money received from a defence fund set up to assist Murphy, as well as donations held on trust by Freehills. Just over $46,000 was received from the defence fund and donations.
The aide memoire also contains a schedule of counsels’ fees. As was widely recorded, Maurice Byers and Tom Hughes did not charge Murphy for their work in the High Court and on the sentencing hearing following the original conviction, though Hughes was due to receive a fee of $27,750 for his appearance in the NSW Court of Appeal.
Welborn’s history of Freehills records that Linton Morris, who acted as counsel for Murphy in the committal and the first trial, did not charge. The aide memoire, however, records that he was paid $40,000 for his work across these proceedings.
On August 8, the Secretary of the Attorney General’s Department, Pat Brazil, prepared a memorandum for Attorney General Bowen. In it he expressed disquiet about meeting Freehills’ costs:
“A complicating fact is the position and attitude of Freehills in relation to their very large account. In departmental experience, if legal work is done on a voluntary basis it would not be eligible for a grant of financial assistance.”
Brazil suggested making a contribution that met only the actual cost of counsel and the disbursements, which would be a sum of just over $220,000. Brazil noted that the total budget allocation for financial assistance from the department in that year’s budget was only $1.3 million and wanted reassurances that the Finance Department would meet the cost of any ex gratia payment to Murphy.
On August 11, Cabinet agreed to wind up the Parliamentary Commission of Inquiry, and to give further consideration to meeting Murphy’s legal costs.
The following night, the Prime Minister, Bob Hawke, was interviewed by Pru Goward on the 7.30 Report. During the interview, Goward asked Hawke a question that suggested Freehills had no intention of making a claim for costs until Evans announced the ex gratia payment on August 1.
This perceived slight on Freehills set Harders off. He called Michael Codd, the Secretary of the Prime Minister’s Department that night, saying the implication in Goward’s question was defamatory, considering the April 30 indemnification request, and that he would be writing to the ABC and to the Prime Minister to correct the record.
Harders was good to his word. The 7.30 Report would eventually issue a correction and apology.
The following morning Codd spoke with Pat Brazil. Brazil said that the Attorney General’s Department was only aware of the history of the April 30 request because of “some rather imprecise remarks” from Harders at the August 6 meeting with Bowen.
Codd’s file note records that he and Brazil were on the same page concerning a disinclination to meet Freehills’ costs:
“Mr Brazil indicated that their view is that the appropriate upper limit for a government contribution should be related to the amount actually billed to Mr Justice Murphy (ie $220,473). The government might perhaps want to pay a very high proportion of that. They did not see any grounds for the government offering to pay costs which had not and were not expected to be billed to Mr Justice Murphy personally. I said the line of our thinking was similar …”
Codd forwarded the file note, and Freehills’ aide memoire to Hawke, and in a cover note, emphasised the joint position of the two departments on what costs should be met, suggesting it would adequately meet the “substantial” criteria announced by Evans.
Nevertheless, on October 9, 1986, Cabinet agreed to a payment of $420,473 as payment for Murphy’s costs, including a payment of $200,000 towards Freehills costs. The decision was made without any formal submission.
The following day a briefing was prepared for the Prime Minister by his department to address questions that might be raised by the proposed payments. A revised version of the briefing, dated October 22, 1986, prepared after the payments were made and following Murphy’s death on 21 October, is on the file.
The revised briefing said that it was not proposed to make any formal announcement regarding the payment of costs. It said that if any comment were made, it should centre around the general principle of the fairness of meeting Murphy’s actual costs, and that it could be noted that Murphy was out of pocket because he had borrowed money at high interest rates to meet the cost of counsel and disbursements.
The briefing goes on to say:
“The most sensitive area of the payments was the payment to his solicitors … The original decision of the solicitors not to require Murphy to pay costs for which he was not reimbursed gave rise to the possibility that they would be significantly out of pocket, but the decision was made nonetheless. It may be argued that given this agreement between Murphy and his solicitors no contribution should have been made.
However, the fact that two long trials and an appeal were involved made the solicitors’ costs much greater than they probably anticipated and therefore a partial contribution was a reasonable course for the government to adopt. The solicitors also said that they expected, if Murphy was acquitted, that some contribution at least would be made towards their costs given the ‘public office holder’ element in the DPP’s decision. It could also be said that given the unique nature of the proceedings and the need to thoroughly test the issues involved it was fair and reasonable, notwithstanding the agreement not to require Murphy to pay costs for which he was not reimbursed, a partial contribution was made. While the payment was significant it involved less than 25% of the total costs incurred.”
News of the payment, including the contribution to Freehills, broke on October 29, a week after Murphy’s death. In response, the government emphasised the unique circumstances of Murphy’s situation. A spokesman for Attorney General Bowen was quoted in the Sydney Morning Herald of October 30 as justifying the payment with the claim that Murphy s status as a public figure had been a factor in the decision to prosecute him.
Being departmental records, these files cannot capture the politics of what happened between Codd and Brazil’s tacit agreement in mid-August to limit the ex gratia payment to actual costs and the Cabinet decision of early October.
Perhaps Murphy’s worsening condition, and a desire to resolve the matter before his imminent death, played as a factor. Incidentally, Gareth Evans’ own diaries (published by MUP in 2014) record that he would have been absent from the October 9 Cabinet meeting which decided the payment, being on official duties overseas.
Sir Clarrie Harders prowess at opening doors, long after his departure from the senior echelons of the public service, is well evident from the papers.
Anyone who can pick up the phone to the Secretary of the Prime Minister’s Department late in the evening, and set off the flurry of activity that occurred the following day, was still carrying heft in Canberra’s corridors of power.
Maybe the Cabinet Notebooks for 1986 (which record discussions), due for release on January 1, 2019, will tell more of the story.