IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE	
CIV-2018-485-363
[2023] NZHC 1203	

UNDER	the Insolvency Act 2006	
IN THE MATTER	of the bankruptcy of Harry Memelink	
BETWEEN	QUENTIN STOBART HAINES
Applicant	
AND	THE OFFICIAL ASSIGNEE
Respondent

HARRY MEMELINK
Bankrupt	

Hearing:	22 March 2023	
Appearances:	C R Carruthers KC for Applicant
P W R Chisnall for Official Assignee H Memelink in Person	
Judgment:	24 May 2023	

JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

Introduction and background

[1]	Mr Harry Memelink was adjudicated bankrupt in August 2018. The bankruptcy has been anything but straightforward. It has given rise to an unusual amount of litigation, of which this is merely the most recent example.

[2]	In or about October 2016 Mr Memelink engaged the applicant, Mr Quentin Haines, initially in Mr Haines’ capacity as an employed solicitor with Simpson & Co,

HAINES v THE OFFICIAL ASSIGNEE [2023] NZHC 1203 [24 May 2023]

and then as a solicitor practising on his own account, to act for him in relation to a number of contentious matters.

[3]	By mid-2018, Mr Memelink was facing bankruptcy proceedings commenced by a firm of solicitors, Collins & May, the firm having secured a costs judgment against him. The firm’s application was supported by a large number of other parties who or which claimed to be creditors. Shortly before the fixture, Mr Memelink filed a proposal pursuant to pt 5 of the Insolvency Act 2006.

[4]	Mr Haines was plainly the driving force behind this application.

[5]	Immediately prior to the application being filed, Mr Haines rendered a fee note to Mr Memelink in respect of services provided to him from the time that he was originally engaged — improbably, Mr Haines had not previously rendered an invoice.

[6]	The  invoice  was  not  a  lengthy   document.   It   was   addressed   to  “Harry Memelink & the Trustees of the Link No. 1 Trust”. It was headed “RE: Agreed Legal Fees”. The narration was in these terms:

TO:	our fee for professional services rendered and disbursements incurred, including but not limited to:

•	All legal fees bought [sic] over from Simpson & Co and Simco Lawyers pursuant to agreement with James Clifford Simpson

•	All legal fees from 1 April 2017 for ALL cases and ALL matters and attendances

•	This fee has been agreed because the actual time spent on these files is more than 4000 hours. To settle all fees this fee has been agreed

[7]	Mr Haines’ fee was $1m plus GST, a total of $1,150,000.

[8]	Mr Memelink’s proposal identified Mr Haines as an unsecured creditor for the amount of his fee note, and he swore a supporting affidavit that included Mr Haines’ fee amongst his unsecured debts.

[9]	Mr Memelink’s application pursuant to pt 5 of the Insolvency Act came before the Court on 23 August 2018, and was declined.

[10]	Mr Memelink was adjudicated bankrupt at the hearing of Collins & May’s application on 28 August 2018. On the basis of his rejected proposal, he had unsecured debts of close to $3m (including Mr Haines’ fee).

[11]	Following Mr Memelink’s bankruptcy, Mr Haines lodged a proof of debt with the Official Assignee for the amount of his fee note.

[12]	Two further developments followed in short order.

[13]	First, in circumstances which it is unnecessary to relate, the Police laid unrelated criminal charges against Mr Haines. To these he pleaded guilty. He then voluntarily relinquished his practising certificate and ceased practising as a solicitor.

[14]	The second development was that the Law Society laid professional disciplinary charges against Mr Haines, including in relation to the fee note he had rendered to Mr Memelink.

[15]	Understandably, the Official Assignee determined that the proper course was to await the outcome of the Law Society’s professional disciplinary process before making any determination as to Mr Haines’ proof of debt.

[16]	On 8 April 2022 the Disciplinary Tribunal delivered its decision. For present purposes, it is only necessary to say that the Tribunal concluded that Mr Haines had, in rendering the invoice, breached his professional obligations.

[17]	On 28 April 2022 the Official Assignee wrote to Mr Haines, having obviously received and considered the Disciplinary Tribunal’s decision, rejecting his claim in its entirety. The accompanying Notice of Rejection pursuant to s 235 of the Insolvency Act was in these terms:

The Official Assignee has rejected your claim of $1,115,000.00 [sic] against this estate on the following grounds:

•	The Official Assignee is an officer of the High Court (Insolvency Act 2006, s 399(2)).

•	As such, the Assignee has an obligation to uphold the rule of law in New Zealand. In National Standards Committee (No 1) v Haines

[2022] NZLCDT 10, the NZ Lawyers and Conveyancers Disciplinary Tribunal held that the rendering of the invoice that is the subject of this claim represented misconduct.

•	The rendering of the invoice breached your professional obligations (as have been found).

•	The invoice cannot form the basis of an enforceable debt and the Assignee cannot accept it as the basis of a claim in the bankruptcy.

[18]	It is unnecessary for the Court to reach any view as to the legitimacy of those grounds.

[19]	The notice went on to refer Mr Haines to s 239 of the Insolvency Act pursuant to which he had an entitlement to apply to this Court for an order modifying or reversing the Official Assignee’s decision within 15 days after receipt of the same.

[20]	That is what Mr Haines did, filing and serving an application dated 24 May 2022 seeking “… an order to accept and or modify the creditor claim for legal fees of the Applicant in the bankruptcy of Harry Memelink.”

[21]	By then it was apparent that at some point it would be necessary for an assessment to be made of the legitimate amount of Mr Haines’ claim.

[22]	When the matter was called in the commercial list on 26 July 2022, Mr Haines proposed that his files relating to the work completed by him should be made available to interested parties and that, once that had been done, he should lodge a second proof of debt. The  Official  Assignee  accepted  that  that  was  the  appropriate  course. Mr Memelink objected. The  Court  made  the  proposed  orders  notwithstanding  Mr Memelink’s objection.

[23]	By 15 August 2022 those steps had been taken.

[24]	In response to Mr Haines’ amended proof of debt, the Official Assignee filed and served a cross application pursuant to s 252 of the Insolvency Act, effectively asking the Court to determine the legitimate quantum of Mr Haines claim.

[25]	Mr Memelink continues to oppose this. He says the Official Assignee was correct to reject Mr Haines’ claim in the first place. He invites the Court to do the same.

[26]	In support of his original application pursuant to s 239 of the Insolvency Act, Mr Haines swore an affidavit dated 24 May 2022.

[27]	By memorandum dated 5 July 2022 the Official Assignee advised that his office would be taking a neutral position and abiding the outcome. This memorandum was accompanied by an affidavit sworn by Mr Robert MacDonald, the official with responsibility for Mr Memelink’s bankruptcy, also dated 5 July 2022.

[28]	Subsequently, Mr Haines filed and served an affidavit sworn by Mr Andrew Davie dated 15 August 2022.   Mr Davie is  a solicitor who has been engaged by   Mr Haines to provide opinion evidence as to his costs.

[29]	Mr Memelink’s notice of opposition to Mr Haines’ first application was accompanied by an affidavit sworn by him dated 9 September 2022.1

[30]	Mr Haines filed and served a second affidavit dated 11 October 2022.

[31]	On 25 October 2022, the Official Assignee filed and served his cross application pursuant to s 252 of the Act seeking a determination of Mr Haines’ claim.

[32]	Mr Memelink responded to the Official Assignee’s application in a further affidavit sworn by him dated 29 January 2023 and an affidavit sworn on 27 January 2023 by Mr Digby Livingston, a solicitor who had on earlier occasions been engaged by Mr Memelink.

[33]	Mr Haines responded to that evidence in an affidavit dated 24 February 2023.

[34]	Without seeking leave, Mr Memelink has sworn and filed a further affidavit dated 20 March 2023 two working days prior to the hearing. Neither Mr Haines nor

1	Mr Memelink has filed two notices of opposition, the first dated 9 September 2022 and the second dated 27 January 2023.

the Official Assignee opposed the Court receiving that affidavit, no doubt because it contained nothing new.

The statutory regime

[35]	In his submissions on behalf of the Official Assignee, Mr Chisnall helpfully summarised the law governing applications under s 239 of the Insolvency Act when the Court is dealing effectively with appeals from determinations of claims by the Official Assignee:

20	 Section 239 applications are determined on a de novo basis.

21	In Murray v Official Assignee (High Court, Hamilton, 9 September 1992) the Court was considering an application under s86 of the Insolvency Act 1967. This section allowed a person (including a creditor) aggrieved by a decision of the Assignee, to apply to Court, with the Court to confirm, reverse or modify the decision, and make such order as it thinks fit. This section is similar to s239 of the Insolvency Act 2006.

22	In that case, the Court held that a hearing de novo is appropriate. The Court's function is to consider what is the correct order to make on the material before the Court as measured by reasonableness. The Court must always pay regard to the decision of the Assignee noting that the Assignee is charged by statute to administer the bankrupt estate in terms of the Act, and given that the Assignee must ensure that the policy of the Act is being given effect to.

23	In Edmonds Judd v Official Assignee [2000] 2 NZLR 135 (another decision under s86 the Insolvency Act 1967), the Court of Appeal said that in applications such as this, the Court must "consider what in its view is the correct order to make on the material before the Court as measured by the standard of reasonableness" paying "due regard" to the decisions of the Official Assignee (at 144). This statement was referred to in the matter of Memelink and ors v the Official Assignee [2019] NZHC 2639 which was an application by Mr Memelink to reverse decisions of the Assignee under s239 (and in the two further such cases referred to below).

24	The onus is on the creditor to prove their claim on the balance of probabilities.

[Footnotes omitted.]

[36]	Mr Chisnall then focussed on s 252 which is of course the provision which applies here:

25	 Section 252 – uncertain creditor's claims

26	There is little or no relevant commentary on this section. It is submitted that the de novo approach should be applied to the Court's determination of the quantum of such claims.

27	In Re Harman, ex parte Official Assignee [2019] NZHC 101, Associate Judge Smith proceeded to hear and determine an application (relating to a claim for losses due to breaches of directors' duties) as if the case was an application under s301 of the Companies Act 1993.

28	In Official Assignee v McKenzie [2022] NZHC 781 Mr MacKenzie was adjudicated bankrupt following an unsuccessful claim by him against his father's estate. A substantial costs award was entered against him in favour of the sibling defendants. His Cousin, an accountant, provided significant forensic accountancy services and support the litigation and sought fees of $316,353 for unpaid services. The bankrupt said that they agreed to a “success fee” arrangement only. Because the estate litigation was unsuccessful, the bankrupt said his cousin was not entitled to any fee.

29	Associate Judge Andrew (treating this as an appeal under section 226) noted:

29.1	The onus was on the creditor to prove his claim;

29.2	It was appropriate to proceed on a de novo basis.

30	The Court rejected the "success fee" argument and considered quantum on the following basis:

30.1	In the absence of clear evidence of an agreed rate of payment, the quantum of the claim was to be assessed on a quantum meruit basis.

30.2	"the Court should look to do justice between the parties. It is undoubtedly fair that Brian should be reasonably compensated for the significant work he performed for Malcolm over many years. Information about the market price of Brian's services will be relevant to assessing the extent to which he should be remunerated." (paragraph 45)

30.3	In reaching a decision about an appropriate fee the Associate Judge took into account (relevantly):

(a)	The accountant cousin went to considerable lengths to assist the bankrupt in legal and financial issues;

(b)	There was a high degree of trust between the parties;

(c)	The accountant's assistance would have reduced the amount payable to lawyers and expert accountants;

(d)	The accountant should bear some responsibility for the lack of time records and the failure to record fee

arrangements as they evolved; CRV-333605-37-324- 1 Page 6

(e)	It was acknowledged that the cousin's assistance was very helpful.

[Footnotes omitted.]

[37]	That analysis is not inconsistent with Mr Carruthers’ submissions.

[38]	I could not improve on it, and gratefully adopt it.

Issue

[39]	The central question for determination by the Court is whether Mr Haines’ proof of debt should be allowed, and if so in what amount.

[40]	In order to focus on that it is necessary first to address certain preliminary matters.

The Tribunal’s decision

[41]	Without burdening this judgment with a lengthy analysis of the law concerning res judicata, the decision of a properly constituted Court or other decision making body
— including professional disciplinary bodies — acting in all respects intra vires and making a determination as to the status of a practitioner is a judgment in rem which, subject of course to appeal, is binding not only on the parties to the dispute but on the world at large.

[42]	The point is that it would be wrong in principle for the Court to revisit the essential conclusions reached by the Tribunal in the context of this proceeding.

[43]	The Tribunal’s decision is apparently the subject of appeal. That appeal will take its course. But that does not affect the current status or validity of the decision.

[44]	What, then, did the Tribunal decide that is relevant to the matters in issue here, and should its decision affect the approach to be taken in dealing with Mr Haines’ proof of debt?

[45]	The decision is long and complex. It needed to be because the Tribunal was dealing with a number of interrelated complaints. Materially, though, the decision as to Mr Haines’ alleged professional misconduct in connection with the $1,150,000 fee note can be summarised briefly.

[46]	The most relevant charge is charge 2 in which the Society alleged:

The Practitioner charged a fee which exceeded a fair and reasonable amount, having regard (but not limited) to:

(a)	the terms of the Retainer (including its conditional nature);

(b)	the estimate of $500,000 provided by the Practitioner on 23 June 2018;

(c)	the known financial difficulties the client was facing during the period the services were provided;

(d)	the nature of the services being provided (assistance with disputed debts and solvency issues);

(e)	the skill, specialised knowledge and responsibility required to perform the service properly;

(f)	the experience, reputation or ability of the Practitioner; and/or

(g)	the fee customarily charged in the market and locality for similar legal services.

[47]	Having  reviewed  the  available  evidence,  the  Tribunal   concluded   that Mr Haines’ $1,150,000 invoice was a sham. Essentially, the Tribunal took the view that it had been generated in order to ensure that Mr Memelink’s proposal pursuant to pt 5 of the Insolvency Act appeared compelling, and that if the Court accepted the proposal Mr Memelink would have available to him sufficient creditors’ votes to secure any outcome. In reaching that conclusion, the Tribunal addressed Mr Haines’ fee note, concluding that he had rendered it in breach of r 9 of the Rules of Conduct and Client Care. The precise grounds upon which the Tribunal reached that conclusion are not of the first importance here. However, the Tribunal regarded Mr Haines’ hourly rate of $1,000 as unjustifiable and was obviously sceptical of his assertions as to the amount of work he had carried out and the hours he had committed to Mr Memelink’s affairs. Ultimately, the Tribunal concluded that in rendering the invoice Mr Haines had been guilty of professional misconduct. Beyond that it was unnecessary for the

Tribunal to go. Importantly, for present purposes, the Tribunal did not need to, and did not, rule on what fee if any would have been justified.

[48]	The evidence that the Law Society had put before the Tribunal included a report from a very senior and experienced practitioner, Mr Peter McMenamin, who had reviewed Mr Haines’ files and made an assessment of a reasonable fee. It will be necessary to return to Mr McMenamin’s analysis.

[49]	As mentioned earlier, it was following the release of the Tribunal’s decision that the Official Assignee rejected Mr Haines’ proof of debt. Given that the Tribunal concluded that Mr Haines’ invoice was rendered in breach of his professional obligations, it follows that the invoice itself cannot provide a proper evidential foundation for a determination of a proper fee.  However, that does not mean that  Mr Haines is not entitled to reasonable remuneration for his services,  as  the  Official Assignee has recognised.

[50]	That takes me full circle back to the question of identifying an appropriate fee and therefore claim.

Assessment of quantum

[51]	Mr Memelink filed a total of three affidavits in connection with this application. He, and a relative or friend, Mr Roy Bassett-Burr, were present at the hearing, presumably with a view to making submissions. In the end they were unable to take matters beyond Mr Memelink’s affidavit evidence. Following the hearing,  Mr Memelink filed (and presumably served) a memorandum in which he expressed his anxiety that the Court give consideration to the fact that he was “unable to engage counsel to act for him at the hearing”, that he has “severe learning difficulties” and that in earlier proceedings he had been unable to pursue a claim against a body corporate that is another creditor.2

[52]	Mr Memelink contends that the Court should reject Mr Haines’ proof of debt altogether. As far as can be ascertained from his affidavit evidence, and what he said

2	Mr Memelink’s claim in this regard was struck out for want of prosecution in a judgment dated 20 April 2021; Memelink v Body Corporate 68792 [2021] NZHC 835.

to the Court during the course of the hearing, there are three broad bases for this contention.

[53]	First, Mr Memelink says that Mr Haines has already had his opportunity to advance his claim, that the Official Assignee has rejected it once and that it is unfair for the Court to entertain it again.

[54]	There is nothing in this.

[55]	It is true that the Official Assignee rejected Mr Haines’ first proof of debt on the grounds already described.   However, following a direction  from this Court,   Mr Haines filed a new proof of debt which the Official Assignee has referred to the Court pursuant to s 252 of the Insolvency Act, on the basis that he — the Official Assignee — accepts liability, but is unable to assess quantum. The Court must deal with the matter.

[56]	Mr Memelink’s second argument is that the  agreement  that  he had  with  Mr Haines from the outset when Mr Haines assumed responsibility for his contentious work was that he would not pay any fees directly and that Mr Haines would pursue all matters on the basis that if Mr Memelink were successful and secured costs awards, Mr Haines would receive the same.

[57]	Precisely this argument was rejected by the Tribunal.

[58]	The Tribunal’s conclusion was that it was an altogether incredible proposition
- for which there was no independent evidential support - that Mr Haines would have assumed responsibility for acting in number of substantial contentious matters over years on such a basis.

[59]	I agree.

[60]	The third and final basis upon which Mr Memelink asserts that Mr Haines’ proof of debt should be rejected outright amounts to an assertion that Mr Haines acted fraudulently, negligently or incompetently in relation to his affairs.   This limb of   Mr Memelink’s argument is articulated most clearly in his first affidavit dated

9 September 2022. In the first paragraph he accepts that he engaged Mr Haines and makes the assertion that has already been addressed that that was on the basis that he would be paid out of any costs awards in his — Mr Memelink’s — favour. Then in the second paragraph he says:

During the time Haines acted for me, my family trust and my companies, he had severely underperformed and failed to prosecute many cases as instructed. I submit that this was a deliberate ploy by Haines to keep me under severe financial pressure and dependant on him. I did not have the funds to obtain alternate counsel and the arrangement I had with Haines was that he would be remunerated from costs awards. Haines had me tied in with him and he always had plausible excuses for his actions and inactions. Unfortunately I am someone who always wants to think the best of people and give them the benefit of the doubt, so I accepted his explanations at face value.

[61]	He goes on to make a number of criticisms of Mr Haines. It is conceivable that some of these criticisms may be justified to one extent or another. However, the Court is not in a position to  make  an  assessment  of  these  assertions  on  the  basis  of Mr Memelink’s evidence which consists of generalised accusations without any supporting narrative or reference to contemporaneous material. Some of the assertions have the appearance of conspiracy theories. So for example, without any apparent foundation, Mr Memelink accuses Mr Haines of conspiring with those acting for Collins & May in relation to Mr Memelink’s claim against that firm.

[62]	These observations are not intended to be critical Mr Memelink; they are made simply in order to explain that the Court is not in a position to make any assessment of the merits of allegations made in such terms.

[63]	I reject Mr Memelink’s contention that the Court should, for any of the reasons articulated by him, reject Mr Haines’ proof of debt outright.

[64]	On the contrary, as already said, my view is that the Court is bound to make the assessment called for by s 252 of the Insolvency Act.

[65]	The assessment of the value of Mr Haines’ proof of debt must be determined in accordance with the principles outlined at paras [35]-[38] above, the Court, standing as it does in the shoes of the Official Assignee in assessing the value of Mr Haines’ proof of debt.

[66]	As it happens, there is more evidence available to the Court than might be expected in such  a  case.  As  well  as  Mr  Haines’  own  evidence,  this  includes Mr Memelink’s evidence,  Mr  McMenamin’s  report,  the  analysis  provided  by  Mr Davie and Mr Livingston’s affidavit.

[67]	Mr Haines’ principal affidavit of 24 May 2022 is brief.  He describes how  Mr Memelink originally instructed him when he — Mr Haines — was an employed solicitor with Simpson & Co. How he commenced practising on his own account in April 2017. He says he acted for Mr Memelink and entities which Mr Memelink controlled until August 2018 when he ceased practising. On the evidence, that is a period of approximately two years.

[68]	Mr Haines’ says that both when Mr Memelink instructed Simpson & Co, and then later in April 2017 when he commenced practising of his own account, he provided Mr Memelink with letters of engagement. He is unable to produce a copy of the Simpson & Co letter of engagement, and does not describe its contents. He does, however, produce a copy of  the  letter  of  engagement  he  says  he  provided  to  Mr Memelink on his own letterhead in April 2017. There is an issue as to whether Mr Memelink received that letter. He denies receiving the same. The Tribunal concluded that, on the balance of probabilities, he did receive it. On the evidence before the Court, I am unable to reach a conclusion on this point. I proceed on the basis that he did not.

[69]	Mr Haines’ uncontradicted evidence is that when Mr Simpson and he parted company in April 2017, Mr Haines  purchased  the  work-in-progress  relating  to  Mr Memelink’s affairs for $20,000.

[70]	Exactly what work Mr Haines carried out for Mr Memelink over this period of time is not especially clear from Mr Haines’ evidence, which is of a very general nature. He says that Mr Memelink engaged him on work which related in large measure to avoiding bankruptcy. He says that Mr Memelink was a demanding client and that it was necessary for him to work “all hours of the day and night.”

[71]	Mr Haines says that by August 2018 he had recorded over 4,000 hours on work for him.

[72]	He says little else in this affidavit as to the nature and scope of the work involved.

[73]	I pause to observe at this point that, on the strength of that evidence, had     Mr Haines charged on a strict time and attendance basis in accordance with the terms set out in his letter of engagement, his total fee would amount to more than $4,000,000 (although that figure ignores the fact that, whilst he was still with Simpson & Co he may have been charging at less than $1,000 per hour).

[74]	On Mr Haines’ behalf, Mr Carruthers advanced his claim on three bases:

(a)	that the parties — Mr Memelink and Mr Haines — had agreed on the
$1 m plus GST as a fee;

(b)	that Mr Haines’ claim could be advanced as a claim for damages for breach of contract on Mr Memelink’s behalf; and

(c)	that Mr Haines was entitled to maintain his claim to a $1m plus GST fee on a quantum meruit basis.

[75]	In my judgement, neither of the first two bases can succeed.

[76]	Mr Haines’ evidence is that in the process of the preparation of Mr Memelink’s proposal pursuant to pt 5 of the Insolvency Act, they agreed on a fee of $1 m plus GST. He points out that in  the  course  of  putting  forward  his  proposal  for  approval, Mr Memelink swore that the fee had been agreed.

[77]	However, as the Tribunal concluded in its decision, there is evidence suggesting that, to the extent that there was any agreement between the parties, the agreement was that a fee note would be rendered at a certain level in order to ensure that Mr Memelink, through Mr Haines, was able to retain a measure of control.

[78]	On the strength of that evidence, the Tribunal found, in effect, that Mr Haines’ fee note was a sham — an eristic device designed to enable Mr Memelink to avoid or mitigate the consequences of bankruptcy.

[79]	In the course of reaching that conclusion the Tribunal said that there was no real agreement between Mr Memelink and Mr Haines as to the fee. I agree. That puts this limb of the argument to bed.

[80]	The second argument is that:

Mr Haines had entered into a contract with the provision of legal services with Mr Memelink and the trustees of the Link Trust No. 1. The terms of the contact [sic] were recorded in the letter of engagement. The key term being an hourly rate of $1,000 + GST per hour.

It is trite law that the courts do not interfere with the terms of a contract between parties. The position allows parties to contract to whatever terms they think appropriate.

Mr Haines performed not less than 2000 hours of work under the contract according to the evidence of both Mr Davie and Mr McMenamin once the transcription error is rectified.

Mr Haines undisputed timesheets record time spent of 4,372.4 hours. If travel time is removed Mr Haines still records time of 3,939.4 hours.

Mr Haines claim for contractual damages is between $2,000,000 + GST and
$3,939,400 + GST depending on which time recording the Court prefers.

[81]	I do not accept that submission.

[82]	First and foremost, this Court is not sitting to determine a contractual dispute between the parties. Were it doing so different principles would apply. For a start, the burden of proof would be different.

[83]	In any event, the argument ignores that lawyers’ contracts with their clients are subject to the obligations set out in the Lawyers and Conveyers Act 2008 and the Rules of Conduct and Client Care. And of course, in this case, we have a determination of the New Zealand Law Society’s Professional Disciplinary Tribunal to the effect that Mr Haines had not complied with those obligations in rendering his fee note.

[84]	Finally, whilst the argument proceeds on the basis that there are timesheets available, in fact, the evidence is that those time records are, for the most part,        ex post-facto reconstructions and thus inherently unreliable.

[85]	The evidence that is before the Court consists, essentially, of:

(a)	What Mr Haines says is his narrative evidence;

(b)	Mr Memelink’s evidence in response;

(c)	Mr McMenamin’s analysis;

(d)	Mr Davie’s analysis; and

(e)	The observations offered by Mr Livingston.

[86]	What is not before the Court is the source material upon which much of that evidence is based, that is to say Mr Haines’ files. These apparently involve 38 matters, and a vast amount of material. No issue was raised by any party in relation to the fact that this material is not before the Court.

[87]	In the end, the Court must reach a view on the basis of the material before it.

[88]	Mr Haines’ narrative evidence is too general to be very helpful.

[89]	Mr Memelink’s evidence does not take matters very much further.

[90]	The Tribunal concluded that Mr Haines did provide Mr Memelink with the second client care letter. I am inclined to the opposite view. My view is based on their being no direct evidence on the point other than Mr Memelink’s.

[91]	Both Mr McMenamin in his report and Mr Davie in his affidavit focussed on the issue of an appropriate fee on a time and attendance basis. Provided that time recording (as one factor in arriving at an appropriate professional fee) is not confused with time costing, that is a sensible approach.

[92]	Mr McMenamin and Mr Davie, each approaching the matter independently, have made assessments about the amount of  time that Mr  Haines  had  spent  on  Mr Memelink’s matters. Mr McMenamin concluded that Mr Haines could justify 1,400 hours. Mr Davie arrived at 2,000 hours. Given the access that Mr McMenamin and Mr Davie had to the files, and the extensive experience that both were able to bring  to  bear  on  the  matter,  I  regard  their  assessments  as  very  persuasive.   Mr McMenamin’s report is the more comprehensive. On balance I am included to accept his assessment.

[93]	I have found the issue of an appropriate hourly rate to be more troublesome. Both Mr McMenamin and Mr Davie considered that $500 would be a suitable rate to apply. I am not persuaded of that. Certainly $1,000 per hour is a rate that one might expect to be charged by a small number of leading members of the bar. At the time he was originally engaged by Mr Memelink, Mr Haines was a relatively young and inexperienced practitioner employed by a small rural firm. My own assessment is that
$375 would be a more realistic hourly rate to apply to this case. I treat that as a blended rate that would apply for the entire two-year period.

[94]	On those bases, the arithmetic suggests a fee of $525,000.

[95]	As already said, that is a very blunt way of making an assessment, and perhaps places too much emphasis on time.

[96]	In order to test that assessment, I have reviewed Mr McMenamin’s analysis of the nature of the work carried out, Mr Davie’s somewhat less involved assessment of the same thing, and Mr Livingston’s observations about the way that Mr Memelink tends to use lawyers.

[97]	Mr Livingston is in a position to speak authoritatively on this as he acted for Mr Memelink in relation to a number of matters following Mr Haines’ withdrawal. His evidence is that Mr Memelink is particularly careful when it comes to expenditure on lawyers, and, to that end, tends to carry out as much of the work himself as he can to save money. That may well be so. However, it has been the observation of the Court in relation to matters in which Mr Memelink has been involved, that that does

not  necessarily  result  in  costs  savings.   On  the  contrary,  the  approach  that    Mr Memelink has taken has often prolonged relatively straightforward matters, thereby adding to the cost of the litigation.

[98]	There is no doubt that Mr Memelink engaged Mr Haines in relation to a considerable amount of litigation, and that this involved Mr Haines in a good deal of work. However, doing the best I can with the material before the Court, I am satisfied that on a quantum meruit basis, bearing in mind the considerations set out in Chapter 9 of the Rules of Conduct and Client Care, Mr Haines would be able to justify a total fee of $525,000.

Conclusion

[99]	For those reasons, pursuant to s 252 of the Insolvency Act, I direct the Official Assignee to accept Mr Haines’ proof of debt for an amount of $525,000 plus GST totalling $603,750. To this should be added any disbursements in respect of which Mr Haines can produce GST invoices.

[100]	Costs are not easy in this case. Both Mr Haines and Mr Memelink have had a measure of success. I am not inclined to make any award in favour of either. The Official Assignee too will have incurred costs and disbursements, but has a statutory entitlement to recover these. However, as the Court has not heard argument as to costs, I reserve these in the expectation that counsel will be able to resolve any issues. If costs issues cannot be resolved counsel may file and serve memoranda in the usual way.

Associate Judge Johnston