Sydney solicitor Timothy Somerville's advice to eight clients "aided and abetted" them in breaking the law, the NSW Supreme Court found on Monday.
Somerville instructed clients to transfer assets from 15 near-insolvent companies to new ventures, with the result that the debts of creditors who continued association with the new company, such as employees and suppliers, were paid.
However, other creditors, including insurers and tax authorities were not paid what was owed.
Acting Justice William Windeyer told the court that Somerville, a partner of Somerville and Co, had in each instance "aided, abetted, counselled and, by carrying out the necessary work, procured the carrying out of transactions".
There was a direct causal connection between Somerville's involvement and breaches of the Corporations Act 2001by the advice he gave to company directors, the court found.
Bernie Coles, QC, barrister, for Somerville had argued that a liability under the Corporations Act could not fall to a lawyer for "just giving advice", reported the Sydney Morning Herald.
But Windeyer said that while that might be the position in a normal case, it depended on the advice given.
"If advice is given ... by a solicitor to carry out an improper activity and the solicitor does all the work involved in carrying it out, apart from signing documents, it seems to me that there can be no question as to liability," he said.
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