Michael Kroger holds court in Cormack Foundation clash
There were 50 shades of Michael Kroger at day one of the Victorian Liberal president’s Federal Court showdown against the Charles Goode-chaired Cormack Foundation.
As the up-to-five-day trial began, there was energetic Kroger, vigorously nodding in the front row, next to former Liberal federal president Alan Stockdale, as the Liberals’ best-in-practice (and remuneration) barrister Bret Walker SC — visiting Melbourne from his chambers in Sydney — outlined in his silky opening address why Cormack’s $70 million belonged to Kroger’s Liberal Party.
There was solemn Kroger, swearing, like an earnest schoolboy, on a bible before giving evidence as the hearing’s first witness.
There was feisty Kroger, who couldn’t help but rise to Myers’ questioning about Cormack’s origin.
“Yes, I said yes!” he snapped, as Myers probed Kroger, 60, over the creation of the Cormack company shell back in 1988, when Kroger was 30 and the Victorian Liberal president the first time around.
There was fallible Kroger, who admitted under cross-examination by Cormack’s formidable barrister Allan Myers QC that, yes, Cormack’s $70m share portfolio had never been counted on the Victorian Liberal Party’s accounts. That included the most recent set, which Kroger had signed off in June last year.
There was glamorous Kroger, smiling for the cameras in a slim dark suit of a tailoring commensurate to his considerable means.
There was witty Kroger, who — while discussing evidence provided by Goode, the Melburnian establishment figure and former ANZ chairman — noted that the 79-year-old had misplaced a CBD tower.
“(Goode) says the meeting took place in the Colonial Mutual building at the corner of Collins Street and Swanston Street.
“But that building isn’t on that corner,” said Kroger, to much snickering from his supporters.
There was powerful Kroger, a Napoleonic figure to some of the Liberals in the room, including Stockdale’s fellow Victorian Liberal trustee Russell Hannan (the third trustee Richard Alston was absent yesterday but should be along as early as today) and Kroger’s ambitious vice-president Karina Okotel, who left with Kroger’s ex-wife Helen Kroger, the former senator.
And, of course, there was crazy brave Kroger, the one who took this dispute between the Liberal Party and its biggest donor into the public glare of the Federal Court.
Bless him.
Fading memories
Next on the witness box was the forgetful Alan Cornell, who was the Victorian Liberal Party’s lawyer in 1988 when Cormack was established.
Thirty years on Cornell is still the Victorian Liberal Party’s head lawyer. In fact, remarkably, he’s the Liberals lead solicitor on the current case. The former Blake Dawson partner was there for the drafting of much of the legal documents, and later legal advice given to the Liberals, integral to the tussle.
If only Cormack’s lead barrister Allan Myers — Melbourne University’s chancellor, chair of the National Gallery of Australia, possessor of a fortune approaching $700m and — most important — a member of the Melbourne Club — could rouse Cornell’s recollection.
“I have no memory … I cannot remember … I honestly can’t remember … I can’t remember,” Cornell responded, in his dull, dusty voice, to Myers’s questions about advice Cornell signed in 1996 that argued, for the purposes of the Electoral Act, Cormack was not an associated entity of the Liberal Party.
Their barrister’s probing of the limitless black holes of Cornell’s memory cheered the Cormack directors in attendance: Newcrest chairman Peter Hay, Fawkner Capital’s Fred Grimwade, investment banker Richard Balderstone, David Williamson, who last year joined Goode’s boutique investment bank Flagstaff Partners from law firm Ashurst, and former Allens partner Stephen Spargo, along with their adviser Tim Duncan.
Justice Jonathan Beach himself attempted to rouse some memory of the pertinent legal advice given to the Liberal Party in 1996. “I honestly can’t remember, your honour,” Cornell answered.
At the end of the day, Justice Beach reminded Cornell that because he was still under cross-examination, it would be “difficult” to talk freely with his Liberal Party team overnight.
Will Cornell remember?
Absence noted
Two of the dispute’s key players, Charles Goode and Hugh Morgan (one of Cormack’s founding directors) were absent from the courtroom yesterday.
But they weren’t far away.
Margin Call bumped into them in Court 6K’s antechamber, where they were close to the action — but not too close to get in the way of their reading (Morgan of his witness statement, Goode, good man, of The Australian).
Once Cornell has this morning said he can’t remember a few more times and vacated the stand, they should be up.
And what of Morgan’s fellow Cormack founding director and Liberal Party grandee John Calvert-Jones?
Kroger’s Liberals put the beloved octogenarian Calvert-Jones’s name on their legal attack; however, Margin Call gathers — unless there is a late change of mind — he will not be asked by the Liberals to take the stand.
O’Dwyer aims higher
Well played by Minister for Financial Services Kelly O’Dwyer, who at her address to James Shipton’s first ASIC annual forum yesterday formalised the buffing up of the corporate watchdog.
As revealed in Margin Call a fortnight ago, the Victorian O’Dwyer (not Michael Kroger’s favourite member of Turnbull’s cabinet) extended the terms of both ASIC deputy chairman Peter Kell and commissioner John Price, and announced the imminent recruitment of another commissioner (who the Minister revealed would be a second deputy chairman).
Those decisions will well equip ASIC to get through Kenneth Hayne’sroyal commission into the financial services, which yesterday was grilling ANZ and CBA in an adjacent Federal Court to the Cormack-Kroger showdown in Melbourne.
It’s a good time to be a lawyer in our southern capital. Or a barrister on William Street and La Trobe.
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