A WIN win … Atanaskovic unsuccessful in fight over bill … Client charged for investigation into money filched by firm’s employee … Promise not to charge … Work infected by conflict … No informed consent … Goodbye $150,000 … Janek Drevikovsky reports
In a 3-0 drubbing, the appeal bench refused to force Birketu to cough up the fees, which AH charged to track down funds stolen from Gordon by the firm’s own junior lawyer.
That lawyer was Brodie Clarke, a young “hotshot” now serving three years’ porridge for raiding Gordon’s coffers to fund his gambling habit and exquisite lifestyle.
The now-convicted fraudster even duped the sharp beaks at Deutsche Bank into transferring over $7 million of Gordon’s money into Clarke’s own account.
Antagonistic & Heartless brought the appeal after going down in flames at first instance before David (The Hammer) Hammerschlag, who found the firm had been too conflicted to help Gordon recoup the $7 million Clarke had stolen.
According to The Hammer, Birketu and its boss never gave “informed consent” to this conflict, meaning AH’s subsequent work was “infected”. Plus, the Golden Serb himself had promised Bruce Gordon not to charge for chasing Clarke’s plunder.
AH asked the Court of Appeal to overrule Hammerschlag. The firm argued it had obtained informed consent from Gordon, a client of over 30 years; that its work was not “infected” by the conflict and actually benefited Birketu; and that AH should not have been held to John Atanaskovic’s undertaking.
Justice Fabian Gleeson rejected all of AH’s appeal grounds, with agreement from Justices Lucy McCallum and John Basten.
His Honour made short shrift of AH’s submissions on informed consent, finding the retainer letter did nowhere near enough to fully inform Gordon and Birketu of the “material facts”.
In particular, the retainer said nothing about the vicarious liability issue, nor did it tell Birketu that by investigating Clarke’s fraud, the firm might get access to documents it could use against Birketu in later litigation.
The bench was also unimpressed with the argument that AH’s efforts had in fact been for Birketu’s benefit. Some of the funds Birketu had spent on AH’s work had to be duplicated when, inevitably, new unconflicted lawyers were brought on to the case.
Nor, finally, was there any merit in AH’s submission that the firm shouldn’t be held to John Atanaskovic’s undertaking.
All grounds rejected and AH’s appeal was given the toss.
Atanaskovic Hartnell v Birketu
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