The NZ Herald reports:
The immediate past president of the Bar Association, Jim Farmer, QC, says the Law Society could be interested in the way Mr Henry is paid. …
Mr Henry told the committee that none of Mr Glenn’s $100,000 was used to pay for the $40,000 paid to Mr Clarkson’s solicitor for the costs settlement in March 2006.
How can he know this? If $100,000 from Glenn went into Henry’s bank account and he paid $40,000 to Clarkson from the same account, then it is all mixed in together. Possibly the $100,000 went into his business account and he paid the $40,000 from his personal account – in which case that conclusion would be more warranted. This would be the correct way of doing it, as the $40,000 Henry paid is not a tax deductible expense. It was not a debt he owed, so he should have paid it out of his after tax income, not his pre-tax income.
And while they are not issues for the Privileges Committee, I have received expert advice that the $40,000 payment was a gift to Peters and should have had gift duty paid on it by Henry. If Henry failed to pay gift duty on it, then Peters is liable for the gift duty.
Dr Norman raised the question of the $40,000 costs and said yesterday he had received a tip-off that it could be an interesting line of questioning. He said the $40,000 payment was more clear-cut than the Owen Glenn donation. “It’s absolutely black and white.”
Mr Peters had a personal debt and Mr Henry paid for it, he said.
“If you have got a debt and someone pays it for you then you should declare that someone had paid it, even if you don’t know who did.
Russel Norman is quite correct that the $40,000 is black and white compared to the other issues.
“There is just some pool in which debits and credits seems to float. It’s incredible – in the order of hundreds of thousands of dollars both ways – and it is very hard to prove anything.”
One question is why is it done in this way? Why not set up a legal trust with some trustees to fundraise for the legal bills? Have WInston declare his beneficial interest in the trust. That is how Nick Smith did it, and would seem to be a far more appropriate way to do it.
Dr Farmer described the relationship as “extremely unorthodox”.
Being paid by some third party [Owen Glenn] and the client not knowing was unheard of, he said.
So was the personal payment of $40,000 by Mr Henry.
“I think it might be of concern to the Law Society,” Mr Farmer said.
“Is it right for a barrister to receive $100,000 from a third party where there has never been a fee note rendered to the solicitor instructing him? I would have thought the Law Society would have real concerns about that.”
The president of the Auckland District Law Society, Keith Berman, said it was also very unusual.
“The issue which is uncertain is whether Brian is handling money on behalf of a client or just receiving money in payment of a bill. But as I understand it, he doesn’t issue a bill.”
Interesting issues indeed.
Tracy Watkins writes in the Dom Post:
But Mr Henry’s disclosure that he personally paid the $40,000 in court-ordered legal costs against Mr Peters means it could be considered a gift.
Mr Peters and Mr Henry were at odds over who made the payment, with Mr Peters suggesting he had paid it himself.
How can you not know whether or not you paid $40,000 to Bob Clarkson? If it was $400 maybe, but $40,000?