When Barsdell later discovered that this employee had sexually assaulted some of his female patients there whilst they were under anaesthesia, Barsdell procured the victims silence through making payments of compensation to the victims husbands totaling $20,000.

In return, Barker had given Barsdell a promissory note to reimburse him for these payments, stating "For valuable consideration received, I agree to pay the sum of twenty thousand dollars($20,000)to my very old friend and employer GLH Barsdell", and had used Mr Kerr, a solicitor, who was a visiting client, to witness the deed of gift.

Barker at the same time changed his will, adding the provision to leave Barsdell $20,000 from his estate.

Kerr refused to honour the note, as by now he had discovered the true nature of the transaction, claiming as it was contrary to public policy, thus legally unenforceable.

Quilliam J said "I am satisfied, however, that this is not the kind of situation which the [Illegal Contracts] Act was intended to cover...