The Age had a fascinating front page story
on 28 June about law firm Slater & Gordon suing Rose Porteous for a
whopping $14 million in unpaid legal fees. Rival law firms were
incredulous that Slaters would put so much on credit with such an
unpredictable client. Has there ever been a larger unpaid bill in
Australian history?

Rose has disputed the bill and issued a
counter-claim, but Slaters does have the protection of a mortgage over
her $30 million Perth mansion Prix d’Amour, which she is now attempting
to have voided in court.

One interesting line in The Age’s
story was the quote from Slaters managing director Andrew Grech:”This
is a step to enforce a commercial arrangement which was suggested,
agreed and signed by Rose Porteous to provide for our costs and
millions of dollars in fees for counsel and disbursements in a string
of court cases over the past eight years. The agreement was signed
after she took independent legal advice at our suggestion.”

Oh
dear, are some of Melbourne’s more well-heeled barristers also out of
pocket? The four big names who acted for Rose are Julian Burnside QC,
David Collins SC, Con Heliotis QC and Geoff Chettle, who is now Judge
Chettle of the County Court.

However, Slaters ultimately carried
the cost of all disbursements including counsel’s fees; some were paid
immediately, others apparently waited until settlement. How on earth
did a savvy firm like Slaters lock itself into such a situation where
it is now fighting its own wealthy client to get paid for eight years
of work? The barristers have been looked after and Slaters now finds
itself with a huge account receivable which could well be bargained
down in a commercial settlement.

The lesson for everyone here is that even the wealthy should be on pay-as-you-go deals.

Peter Fray

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