Censured by the Law Society for professional misconduct in what was alleged to be sham billing designed to increase voting power at a client’s creditors meeting, solicitor Quentin Haines was subsequently in court for a ruling on how much was in fact owed by now bankrupt client, Harry Memelink.
When in 2017 Mr Haines struck out on his own as a young solicitor, he took on Mr Memelink as a client. It proved to become a very fraught relationship.
The High Court was told Mr Memelink faced bankruptcy in mid-2018. An Insolvency Act proposal was put to creditors, to avoid bankruptcy. Mr Haines voted, claiming he was owed one million dollars in unpaid fees. The proposal failed. Mr Memelink was bankrupted in August 2018. Insolvency Service is handling his bankruptcy.
In light of the Law Society ruling that the one million dollar invoice was a sham, Insolvency Service refused to accept Mr Haines’ claim to be a creditor in Mr Memelink’s bankruptcy. Mr Haines sought a High Court ruling to set a dollar figure on his claim.
Mr Memelink appeared in court, challenging Mr Haines entitlement to any payment at all. He alleged Mr Haines had failed to do his job properly and had not fully carried out client instructions. The court was told Mr Haines had acted for Mr Memelink on 38 separate legal matters. Mr Memelink further alleged their fee arrangement was to have Mr Haines collect payment only from any costs award made in his favour following successful court actions.
The Insolvency Act allows the High Court to make an assessment of the value of work done for a bankrupt prior to bankruptcy where their contract lacks an agreed rate of remuneration. Associate judge Johnston ruled the value of unpaid work done by Mr Haines amounted to $525,000. Insolvency Service was directed to accept this amount as an unsecured claim by Mr Haines in the Memelink bankruptcy.
Haines v. Official Assignee – High Court (24.05.23)
23.075