KEY POINTS:
The strange payment practices of Winston Peters' lawyer Brian Henry may warrant further inquiry by the Law Society and Parliament's privileges committee, say MPs and lawyers.
Greens co-leader Russel Norman says the situation is "incredibly murky" and the committee should pursue it.
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.
An unorthodox relationship between Peters, the New Zealand First leader, and Mr Henry, an Auckland barrister, emerged at Parliament's privileges committee on Monday night.
Mr Peters has never been billed for work Mr Henry has done for him, though Mr Henry sought and received $100,000 from Owen Glenn for his work on Mr Peters' Tauranga electoral petition.
Mr Peters occasionally makes payments to Mr Henry but no bill is ever sent by the instructing solicitor, Dennis Gates, and no debt created.
It was also revealed under questioning that Mr Henry had paid with a personal cheque for the $40,000 Mr Peters owed Tauranga MP Bob Clarkson, the costs awarded by the court against Mr Peters in his unsuccessful electoral petition.
The revelations came during the committee's inquiry into the $100,000 donation billionaire Owen Glenn made towards Mr Peters' legal costs for the electoral petition and whether Mr Peters should have declared it.
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.
Barristers are not allowed to handle funds in that way - that is the preserve of solicitors and their trust funds.
But while it might be unheard of, there is nothing stopping Mr Henry making a personal payment for Mr Clarkson's costs.
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.
"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."
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."
