Justin Carroll sues Sydney defamation firm BlackBay Lawyers over alleged underpayment

A second legal action has been filed involving defamation firm BlackBay Lawyers, with a former salaried partner claiming the company mishandled a $25,000 advance.

A prominent Sydney defamation law firm is being sued by one of its former partners.

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A prominent Sydney defamation law firm is being sued by one of its former partners who claims he was unfairly cut out of work coming into the practice, and shortchanged on his final pay when leaving the company.

Justin Carroll lodged a fair work action against BlackBay defamation lawyers in the Federal Court last month after leaving the firm in January, also alleging he was not paid appropriately when on annual leave.

In what appears to be a bitter breakdown between Mr Carroll and the firm, the former salaried partner claims BlackBay attempted to have him fired for “alleged serious misconduct” despite him handing in his resignation a month prior.

BlackBay managing partner Victoria-Jane Otavski said the claims were “entirely meritless and fail to reflect the facts”.

The Federal Court action comes after BlackBay reportedly filed proceedings against Mr Carroll and another employee in the NSW Supreme Court, calling for the return of confidential information and delivery of computers, phones, and electronic devices for forensic analysis.

Mr Carroll’s claim against BlackBay - the firm currently representing Ben Roberts-Smith in his appeal against the Nine newspapers - centres on various incidents between 2023 and this year.

According to court documents filed by Mr Carroll in early March, he was granted a $25,000 advance by BlackBay in late 2023.

While Mr Carroll and the firm agreed to a repayment strategy, he claims that early last year BlackBay head of business development Henry Jungnitsch told him the firm would not require the money to be paid back.

Former Blackbay Lawyers partner Justin Carroll.

“Mr Jungnitsch told the applicant that the respondent had decided to waive repayment of the December 2023 Advance, a representation that the applicant relied on throughout the duration of the applicant’s employment with the respondent,” Mr Carroll’s amended statement of claim reads.

But when Mr Carroll left the firm earlier this year, he claims the advance was taken out of his final pay cheque “as if it was a fully repayable loan”.

“Although the applicant paid income tax on the December 2023 advance at the time that the December 2023 advance was made, the respondent did not reimburse the applicant for the tax that the applicant paid on the advance,” Mr Carroll claims.

Mr Carroll also alleges that he was not appropriately paid annual leave while working at the firm, but his total leave balance was paid as a lump sum after his departure which resulted in him “incurring a larger income tax liability”.

Mr Carroll claims he engaged the firm in an agreement early last year that would see any cases involving professional liability, insurance, and arbitration assigned to him. He would be paid half of the client fees.

But late last year he claims he learned the firm has assigned other employees matters that should have been passed to him, therefore depriving him of “the opportunity to earn fees of those matters at 50 per cent”.

Mr Carroll also claims that after he handed in his resignation in January this year, the firm attempted to withhold payments he claims he was entitled to under his employment agreement.

He also alleges the firm tried to have him fired for alleged “serious misconduct” after he had already resigned. The alleged misconduct is not outlined in the court documents.

The Daily Telegraph last month revealed BlackBay managing partner Victoria-Jane Otavski had launched action against Mr Carroll and lawyer Yianni van Gelder after they appeared to go into business together after both leaving the firm.

BlackBay has reportedly sought to have Mr Carroll restrained from “approaching any director, senior employee or contractor … with the purpose of enticing that person to leave their employment or engagement” with the firm.

BlackBay is defending the Federal Court claims, and Ms Otavski said Mr Carroll’s claims were meritless.

“Mr Carroll’s claims are not only baseless but seem to be a poor retaliatory response to the summary termination of Mr Carroll’s employment as a former salaried partner and to BlackBay’s Supreme Court proceedings against him,” she said.

Ms Otavski also said the firm was “fully committed” to pursuing the NSW Supreme Court matter to its conclusion.

Mr Carroll was contacted for comment.