The Whitelocke "Parri Passu" defence back in business

The brouhaha over the Argentine sovereign debt litigation reminded me of some of my own finest work in front of the US 2nd Circuit Court of Appeals

Everyone at the Mosman Rower’s Club is talking about the Argentine Republic’s wildly entertaining court battle with its creditors. Argentina’s plucky attorney Jonathan Blackman Esq. delved into the T.B Whitelocke playbook and boldly submitted to the Court that his beloved Argentina would not voluntarily obey any order to pay the defaulted bondholders whenever it makes payments on restructured debt. Naturally the independently minded and flamboyantly passionate people of Argentina would consider this a violation of their sovereignty. To do otherwise would be to spit on the memory of Hugo Porta and the Libertador, José de San Martin.

In response to Mr Blackman’s argument (based largely on first principles of public international law and some obscure provisions of Andean Community of Nations’ Cartagena Agreement of 26 May 1969), U.S. Circuit Judge Reena Raggi asked:

“So the answer is you will not obey any order but the one you propose?”

Showing vision and nimble footwork worthy of any of the great Argentinean trequartistas, the ever-plucky Mr Blackman responded in emphatic terms “We would not voluntarily obey such an order.”

We all knew that was coming!

My dear friends Hernan Lorenzino, Argentina’s minister of economy, and Vice President Amado Boudou were, at the time, seated next to Blackman on the leather panelled counsel table as he addressed the bench and, knowing them as I do, they would have been rolling in the aisles.

I should mention that I have regularly enjoyed a Parilla, a glass or two of Malbec and an after dinner tango with Blackman, Lorenzino and Boudou as well as my other core Argentinean consigliore Sergio “Kun” Aguero, Gabriella Sabatini, Pope Francis I and firebrand former international rugby player Federico Mendez. Referring to ourselves as ‘Los Amigos para Siempre” we have been nigh on inseparable since an infamous and nationally televised celebrity capybara hunt organised by a charity sponsored by Sabatini in the early nineties.

Back to the hearing and Blackman went on to claim that a lower-court order obliging Argentina to pay the defaulted bonds whenever it makes payments on restructured debt would not only violate Argentina’s sovereignty but would threaten to trigger a new financial crisis and would quadruple the number of similar cases in New York federal court. It would, in short, clog up the entire US legal system with Argentinean Bond cases. Given the main purpose of the US court system is to create fodder for Law & Order episodes, Blackman submitted forcefully that this would make for fairly dry fare and could have dire ratings consequences for NBC.

Signing off in style, Blackman remarked “We’re representing a government and governments will not be told to do things that fundamentally violate their principles.”

Now we all know that this sovereignty mumbu jumbo is just a smokescreen to deflect the Court’s attention from the main issue. What is really at play is the uncertain meaning of the obscure ‘pari passu’ clause in the context of sovereign debt contracts.

The court has been alive to this problem since I pioneered both the use of the parri passu clause and then the strident criticism of its inherent ambiguities in an eerily similar dispute many years ago. That was, of course, when I was acting for the good people of the Chincha Islands (a humble archipelago close to the Peruvian town of Pisco – the home of the eponymous aphrodisiac) in their infamous Guano Bonds litigation.

It is a matter of public record that, in the earlier 1980s, the Chincha Islands issued millions of dollars worth of bearer bonds to retail investors in the South West United States backed only by its local guano deposits. When the first of the holders, a humble share cropper from New Mexico called Reynold if I recall, attempted to redeem his tranche of bonds (with a face value of no more than $1,000), the Chincha Islands promptly defaulted as the previously abundant supply of guano had, as it turned out, been thoroughly exhausted some forty years previous.

Instructed and summoned across the Pacific Ocean with all haste by the military junta that controlled the Chinchas at the time, I was able to resist against enforcement of an implied sovereign guarantee by arguing both limbs of the defence now in use by Blackman. In short, my argument was as follows:

1. the parri passu clause in any Chincha law document had to be read in light of the practice of skull binding that was widespread within the Paracas culture that thrived in the region around 300 BC; and
2. to require the Chincha government to pay the face value of the bonds would be the worst attack on Chincha sovereignty since Isabel II seized the islands in 1864.

Needless to say that the US 2nd Circuit Court of Appeals was wowed by my argument and though, ultimately unsuccessful, I received private congratulations from a slim majority of the Bench for my ingenuity and the quality craftsmanship of the paper mache skulls I tendered to demonstrate the long term implications of skull binding. My two-headed (though unbound) defence strategy is still taught in all law schools in South America (no doubt Blackman topped his class in this subject!).

We now wait to see whether the law has developed enough in the intervening years for the inherent rightness of this defence to be recognised by the Court. Mr Blackman will have my eternal thanks if he is able to put to bed the wrongs of the past. For the record the good people of the Chincha’s took the loss in the Guano Bonds matter in their stride and pressed on with appeal after appeal; the final outcome of which is still bogged down in the US legal system though it is said to be the subject of an upcoming episode of SVU.

Book Extract: From Chaloner Chute to Sir Loveban Lislebone Long: A History of 16th and 17th Century Lawmen with Riotous Names

Sir William Whorwood (c.1500-1545)

Sir William was not only fabulously named but he was one of the most significant lawmen of his time, acting as both Solicitor General (he replaced Richard Rich whom we have described earlier in this book) and then Attorney General under the reign of King Henry VIII.

Sir William’s father John, formerly John Percy, had been bestowed the name “Whorwood” by Richard III in 1484 in recognition of his family’s ownership of a popular “Whoring Forest” near Kinver. Under the Foliatus Laws in the 1400s, whoring in England was legal only in forests and other dense woodlands, due to the lingering druidic belief that one would be safe from contracting venereal disease or the sweating sickness if one did one’s business in and around native deciduous foliage, preferably that of the European Beech. After the introduction of these laws, intrepid entrepreneurs such as John Whorwood quickly snapped up most of England’s European Beech forests and charged merrymakers a hefty price for entry.

Wentwood Forest in South Wales, though technically a dense woodland, was a popular "forest of ill-repute" in 16th Century Britain.

Upon his father’s passing, the stable cash-flows provided to Sir William from his Whoring Forest allowed him the security to concentrate on his legal studies. Sir William took to the law with relish and his fantastic success as a lawman saw him become a man of great means. Sir William ultimately bought the manor of Kinver with Stourton as well as the rectory impropriate, quite a step up from the tree-house bordello his father had once occupied!

Sir William was survived by two (2) daughters:

a) Anne who married a man named Ambrose Dudley who was almost certainly a West Indian fast bowler; and

b) Margaret, who married Thomas Throckmorton, with whom we deal with in chapter 7.

Artist's impression of Ambrose Dudley

Bullstrode's Latin Phrasebook: Absens Haeres Non Erit

Absens Haeres Non Erit: Literally means that an absent person will not be an heir. In legal usage, the phrase refers to the principle that someone who is not present is unlikely to inherit a bounty.

As a firm believer in the veracity of this principle I spend a great deal of my time attending to the death-beds of ailing royals and wealthy but infirm socialites. In 1989 I famously travelled by air, land and sea for 3 days without sleep to be at the side of Hans-Adam II, Prince of Liechtenstein only to find the reports of the gravity of his illness had been grossly overstated and the good prince was in fact only suffering a mild cold.

While my commitment to not running afoul of the doctrine of absens haeres non erit has yet to result in me being bequeathed any real money or hereditary titles, I am determined not to miss out such an opportunity simply because I was not present at the relevant person’s passing. You can't catch a fish without your line in the water!

The Rent is Too Damn High

As a young man, like so many of my friends, I had an informal profit-à-prendre (in gross) over large tracts of land in Sydney, from which I took natural resources, wild game and briefs. After a time of this carefree existence I decided I needed to establish a more formal base for my burgeoning legal practice. It was this desire for a possessory interest in land that inspired me, in the late 1940s, to turn the first sod on the ground that later would become Albert Bathurst Piddington Chambers in Phillip Street. At the time, the standard rental arrangement with the James McGirr New South Wales State Government was that if you cleared any land south of Bridge Street you could rent it for 20 years for a literal peppercorn (being highly sought-after at the time for their laxative qualities).

As you can imagine, the gross margin my Practice ran at in those heady days of free rent and relentless lawsuits over Victoria’s controversial success in the 1947 Claxton Shield was the envy of legal practitioners the world over.

Unfortunately since that time, through a slow and pernicious creeping death of incremental hikes, the rent on my chambers has now reached astronomical proportions. These days I am literally living hand to mouth while my landlord grows fat off the fruits of my labour. This situation has become untenable and it is for that reason that I am pleased to announce I have engaged my dear friend and regular New York gubernatorial candidate James McMillan as the collective bargaining agent for the Barristers of Piddington Chambers to take up our noble cause against Barristers' Chambers Limited in our forthcoming rent review.

Bullstrode's Latin Phrase Book: Ab Ovo

Ab ovo usque ad mala: Literally means from the egg to the apples.

This phrase gained prominence after its usage in Horace’s Satire 1.3 and has come to mean "from beginning to end". Apparently this meaning derives from diet of Ancient Rome, where the main meal of the day began with an egg dish (Florentine or Benedict one would hope) and would end with some fruit. In legal phraseology, ab ovo has to connote thoroughness – i.e. to read a document from beginning to end.

As you will know from the section in On Lawmanship 3rd Edition on proper legal drafting, as a firm believer in “top and tailing”, I rarely, if ever, read a document from beginning to end. Life’s too short. When I say to clients I will review their documents “ab ovo”, I quite literally mean I will have a summer clerk review the document (lightly) while I recline nearby eating an egg followed by a red delicious, usually while wearing a toga.

Bullstrode's Legal French Phrasebook: Dépeçage

Dépeçage means dismemberment, which is in turn derived from the verb dépecer, which means to carve up or to analyse in extraordinary detail.

This term is principally used in two (2) ways in a legal context:

1) As a description for every single oral and written submission every put by T Bullstrode Whitelocke KC. For example ‘Mr Whitelocke, I am not sure that a fourth day of surrejoinder is necessary for this directions hearing. To be frank, your ferocious depecage of the defendant’s proposed timetable, whilst showing admirable stamina, has left me longing for my 7oth birthday.’; and

2) To described the common law concept whereby different provisions within a single contract are expressed to be governed by different laws. I have used Dépeçage in this way extensively in all my drafting and find it leads to greatly enhanced outcomes for my clients.

I pioneered this concept when I drafted the ISDA standard documentation, which now regularly sees the ISDA Master Agreement governed by New York State Law while the credit support annexe is governed by English law.

After the success of this innovation I now use Dépeçage in all contracts as follows:

i) I typically use Allgemeines bürgerliches Gesetzbuch to govern my recitals;

ii) I have been known to rely on Scots Law to govern the operative provisions, except, of course, for any clauses relating to the doctrine of marshalling, which I ensure are governed by the Napoleonic Civil Code, Delaware Law or Halakha;

iii) I will use non-legal laws, such as the law of diminishing returns or the Hicks-Marshall laws of derived demand, in sensitive or confidential contractual provisions (for example, in a particularly cheeky move I employed when negotiating Eddie Maguire’s employment contract with Channel Nine, I provided for various provisions to be governed by the laws of gravity); and

iv) for all boiler plate clauses (including governing law provisions), I will only apply Papuan Customary law.

I have also been known to hand annotate standard form contracts, including dry cleaning tickets and the large poster displaying the terms and conditions for entry to my local car parking station, to ensure that the consumer friendly laws of the Cayman Islands apply at all times.

As you can imagine, this is yet another of my legal innovations which has greatly enhanced and simplified contract law for businesses in Australia.

Bullstrode's Latin Phrase Book: Minima Maxima Sunt

Minima Maxima Sunt: More or less means “The smallest things are the most important", essentially that one must pay attention to detail.

For example, my bitter enemies Julia Gillard and Stephen Smith have dealt me a terrible blow this week and were able to do so because of their attention to the most microscopic details of my past. While their announcement of the regional refugee processing centre appeared confusing and bizarre to the average man on the Bondi Tram, I immediately recognised it as a direct attack, and an effective one at that. Gillard (as an immigrant herself) and Smith know all to well that acting against self-represented, non-English speaking refugee applicants in the Refugee Review Tribunal represents the financial cornerstone of my practice. Similarly, they know from personal experience that my past history with tropical diseases such as Lymphatic filariasis, river blindness and snail fever and my acrimonious relationship with Xanana Gusmão make it very difficult for me to travel to my beloved Timor-Leste. This is brilliantly demonstrative of the policy effectiveness of Minima Maxima Sunt.

While infinitus est numerus stultorum in the Labor Party, this episode was well played. Julia and Stephen have won this battle through attention to detail, but the war is just starting. And in a time of war, the law falls silent*.

*Inter arma enim silent leges.

Bullstrode's Latin Phrase Book: Res Ipsa Loquitur

Res Ipsa Loquitur: This glorious phrase means "the thing itself speaks". In fact, Res Ipsa Loquitur was the original working title for my screen play that ultimately became the moving picture comedy smash “Look Who’s Talking”.

The first reference to this phrase can be found in Cicero's wonderful speech “Pro Milone”, while its use in jurisprudence can be traced back to Baron Pollock’s wildly controversial 1863 judgement Byrne v Boadle.

Unfortunately, the phrase is generally bastardised these days to mean: "the thing speaks for itself." In both recognising and subtly drawing attention to the manifest wrongness of this colloquial usage, I brilliantly used Res Ipsa Loquitur in Whitelocke: On Lawmanship 3rd Edition (it was redacted in the first two editions) when describing a highly successful ruse I use with my good friend Geoffrey Rush to impress spinsters:

[Transcript from a conversation in club in Perth]

Rush: (Loudly) Excuse me, sir, aren’t you that famous barrister who once bested Sir Garfield Barwick in a university debate, not to mention being largely responsible for the extinction of the Eastern Spotted Quoll?

Whitelocke: “Well, sir, I am a wealthy, famous and unmarried barrister and, yes, if I could be so forthright, I did give both old Gary and those pesky quolls such a flogging that each thought themselves to be a prudish cabin boy on the First Fleet.

* * * * * *

The recognition that this ruse afforded me would have been res ipsa loquitur in Sydney or in London, but in the provinces it served me to good effect.

Bullstrode's Latin phrase book: Inter Alia

Inter Alia: Unfortunately, the precise meaning of the term “inter alia” has been lost in the sands of time. It is, nevertheless, used regularly today as valuable “filler” in a wide variety of legal documents. Market practice would suggest that the proper usage is one “inter alia” for every thirty (30) words in general correspondence and one “inter alia” in every four (four) words in written court submissions.

Bullstrode's Latin phrase book: habeas corpus

Literally meaning '[You shall] have the body', habeas corpus is a fundamental English common law writ, which protects a citizen against arbitrary or unlawful detention by requiring the authorities to bring detained persons before the court and establish the lawfulness of their detention. An example:

'Mr Whitelocke, I do not understand your submission. As I have previously indicated, Hawkeye is not a legal entity and it is not possible to serve a writ of habeas corpus on it.'

Unfortunately my brush with Hawkeye and the Woodies in the fateful summer of 1997 was not my only occasion to invoke the 'great writ'*.


Hawkeye, once again whistling its macabre siren call.

* For a full discussion about the frankly bizarre limits to the defences to a charge of hunting on private land under section 28J of the Summary Offences Act, see 'When is a dog wild? Semantics again triumph the spirit of the law' TB Whitelocke KC 24 AltCrimJ 7 - 125.

Bullstrode's Latin phrase book: Volenti non fit injuria

Volenti non fit injuria. Pronounced "Volenti [pause] non [pause] fit [pause] injuria"

This handy phrase means "to a willing person, no injury is done". It is a full defence in tort law, one that I have called upon on many, many occasions.

Example of usage: "Sir Garfield Barwick might not have challenged Bullstrode Whitelocke to so many debates if he was better acquainted with the maxim volenti non fit injuria"