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Queensland Mushrooms Pty Ltd v Hawthorn Cuppaidge and Badgery

 

[2002] QSC 76

SUPREME COURT OF QUEENSLAND

CIVIL JURISDICTION

WHITE J

No 1984 of 2002

QUEENSLAND MUSHROOMS PTY LTD (ACN 010 093 320)

First Applicant

and

 

WILLEMSE FAMILY COMPANY PTY LTD (ACN 010 949 292)

Second Applicant

and

 

QUEENSLAND MUSHROOM MARKETING PTY LTD (ACN 008 067 909)

Third Applicant

and

 

QUEENSLAND MUSHROOM GROWERS PTY LTD (ACN 069 432 417)

Fourth Applicant

and

 

QUEENSLAND MUSHROOM SUBSTRATE PTY LTD (ACN 010 109 207)

Fifth Applicant

and

 

ANJARA PTY LTD (ACN 054 351 174)

Sixth Applicant

and

 

WILLEMSE GROUP PTY LTD(ACN 097 332 708)

Seventh Applicant

and

 

PETER WILLEMSE FAMILY COMPANY PTY LTD (ACN 074 332 184)

Eighth Applicant

and

 

JOHN WILLEMSE FAMILY COMPANY PTY LTD (074 332 086)

Ninth Applicant

and

 

MARIA CLARK FAMILY COMPANY PTY LTD (ACN 074 332 148)

Tenth Applicant

and

 

MORUMA PTY LTD (ACN 067 859 650)

Eleventh Applicant

and

 

DEBANO PTY LTD (ACN 067 520 423)

Twelfth Applicant

and

 

BELARIO PTY LTD (ACN 069 022 706)

Thirteenth Applicant

and

 

HARBERG PTY LTD (ACN 069 022 779)

Fourteenth Applicant

and

 

QUEENSLAND MUSHROOMS PTY LTD (ACN 010 093 320)

Fifteenth Applicant

AS TRUSTEE FOR THE WILLEMSE FAMILY TRUST

 

and

 

QUEENSLAND MUSHROOM MARKETING PTY LTD (ACN 008 067 909)

Sixteenth Applicant

AS TRUSTEE FOR THE R D MOORE FAMILY TRUST

 

and

 

QUEENSLAND MUSHROOM GROWERS PTY LTD (ACN 069 432 417)

Seventeenth Applicant

AS TRUSTEE FOR SUNPRO BURLEIGH HEADS AND DUNES TRUST

 

and

 

QUEENSLAND MUSHROOM SUBSTRATE PTY LTD (ACN 010 109 207)

Eighteenth Applicant

AS TRUSTEE FOR THE NEUTRAL BAY UNIT TRUST

 

and

 

QUEENSLAND MUSHROOM SUBSTRATE PTY LTD (ACN 010 109 207)

Nineteenth Applicant

AS TRUSTEE FOR THE ANNESLEY NO 2 TRUST

 

and

 

WILLEMSE GROUP PTY LTD (ACN 097 332 708)

Twentieth Applicant

AS TRUSTEE FOR THE WILLEMSE GROUP TRUST

 

and

 

PETER WILLEMSE FAMILY COMPANY PTY LTD (ACN 074 332 184)

Twenty-First Applicant

AS TRUSTEE FOR THE PETER WILLEMSE FAMILY TRUST

 

and

 

JOHN WILLEMSE FAMILY COMPANY PTY LTD (ACN 074 332 086)

Twenty-Second Applicant

AS TRUSTEE FOR THE JOHN WILLEMSE FAMILY TRUST

 

and

 

MARIA CLARK FAMILY COMPANY PTY LTD (ACN 074 332 148)

Twenty-Third Applicant

AS TRUSTEE FOR THE MARIA CLARK FAMILY TRUST

 

and

 

MORUMA PTY LTD (ACN 067 859 650) AS TRUSTEE FOR THE COSMOS CENTRE TRUST

Twenty-Fourth Applicant

and

 

DEBANO PTY LTD (ACN 067 520 423) AS TRUSTEE FOR THE ROSEWATER CENTRE TRUST

Twenty-Fifth Applicant

and

 

HAWTHORN CUPPAIDGE AND BADGERY

Respondent

BRISBANE

DATE 07/03/2002

JUDGMENT

HER HONOUR: This is an application for the return of the applicants' files. There are some 25 applicants which are connected companies and they wish to obtain these files from their former solicitors who are the respondents to the application.

The application is brought in the inherent jurisdiction of the Court to control solicitors as officers of the Court, notwithstanding that the business the subject of this application is non-contentious business. However, the jurisdiction of the Court to make the orders sought has not been disputed by the respondent and I do not propose to examine it any further.

The applicants, as some of the names suggest, are involved in the production and packaging of mushrooms. Some of these companies would appear to advance loans of money. Overall, large sums of money are generated by these companies and their various affairs appear complex and to call for the advice of tax experts, accountants and solicitors.

On the 21st of September 2001, the applicants terminated the retainer of the respondent and retained their present solicitors, Kenny and Co. They sought the return of their numerous files including a loan agreement file relating to a loan by one of the applicants to Harts Australia Limited secured over the assets of what appears to be another company in the Harts Group of companies, Cardinal Financial Securities Limited.

The respondent was requested, should it be asserting outstanding fees, by Kenny and Co to remit “copies of any unpaid invoices and a comprehensive general and trust account statement with respect to” the respondent's representation of the applicant companies.

Further requests were made for the return of the files in October on several occasions. The letter of 11 October 2001 stated in respect of some urgently needed files, “Accordingly, might it be possible to render bills and arrange for the transfer of these…” On the 12th of October 2001, Kenny and Co wrote:

“There are other important matters on the files and we are anxious to take delivery of the files as soon as possible. Would you please take whatever steps are necessary to make the files ready. Should that involve the delivery of accounts, could you please contact John Kenny when these accounts are available, and we will arrange for them to be picked up from your office by one of our clerks.”

On the 26th of October 2001, Kenny and Co wrote:

“Herewith is a file list for your assistance. Would it be possible for you to make copies of all the bills delivered:

from your office;

which remain unpaid.

We are anxious to resolve matters as soon as possible.”

From the 18th of October 2001, the respondent sent lump sum tax invoices to the applicants. It is readily conceded that they were not bills of costs within the meaning of that expression in the Queensland Law Society Act 1952. There was only one costs agreement entered into with respect to one of the applicant companies and the costs associated with the final invoice have been paid and the file returned.

The respondent asserts a right to a lien over the files for non-payment of fees. Mr Redmond, who appears for the applicants, submits on several bases that the respondent may not do so. The applicants, through Kenny and Co, asserted breaches of the retainer by the respondent set out in detail in a schedule to a letter delivered to the respondent on the 21st of December 2001.

Those allegations include inter alia: negligent handling of the work particularly in respect of the loan of $1.4 million to Harts Australia Limited and a conflict of interest in so far as the respondent also allegedly acted as solicitor for all or some of the Harts Group of companies.

Mr Challen for the respondent challenges those allegations in some detail in his affidavit filed today. He had given advice about a number of those matters in an e-mail communicated to the principals of the applicants on the 20th of July last year at the time of the loan negotiations. Clearly, those matters can go no further today.

The authorities conclude that a lien may not be maintained if the client has discharged the solicitor for misconduct or for reasonable cause. See Mackenzie v. the Director General of Conservation and Natural Resources [2001] VSC 220, an unreported decision of Gillard J of 2 July 2001.

It should however be noted that there is provision in the Victorian Supreme Court Act for the Court to order the handing over of documents, such provision not being present in Queensland legislation. See also Re Elfis & Somers, an unreported decision of the Queensland Supreme Court Number 270 of 1982, a decision of McPherson J.

The basis of the entitlement to a lien is the failure to pay fees. If the work done was worthless to the client because it was negligently done, then there is no entitlement to fees and, if paid, are refundable. See Dibb v. Hopgood and Ganim, a decision of McGill DCJ of the 9th of March 2001.

No proceedings have commenced against the respondent and, even less, no findings have been made of breach of the retainer. The next submission is that the respondent's entitlement to fees rests on section 48I of the Queensland Law Society Act, an amount assessed by a Tribunal costs assessor.

The final submission, which Mr Redmond contends is determinative of the application, is found in rule 84 of the Queensland Law Society Rules made as subordinate legislation under the Queensland Law Society Act section 5A(1) and (2). It provides:

Duty to render costs

84.(1)A practitioner shall within a reasonable time after being so requested in writing by a client render to the client a bill of costs covering all work for that client to which such request relates or for which he has not already rendered a bill of costs or been paid.

  1. If such practitioner fails or neglects to render such bill of costs within one month after receiving such request or within such further period as the client in writing allows or as may in the circumstances be reasonable he shall if requested by the client forthwith pay to the client all moneys and if so requested shall deliver to the client all documents which he is holding on behalf of that client, notwithstanding that he might otherwise be entitled to a lien upon those moneys or documents for payment of his bill of costs.

Ms Brewer, on behalf of the respondent, submits that there was no request to the respondent to render to the applicants a bill of costs within the meaning of that expression in the Queensland Law Society Act or the rule in any of the correspondence relied upon by the applicants to which I have earlier made reference.

That seems to be so and even more so against Mr Challen's uncontradicted assertion that all previous matters were billed in the same lump-sum way as those sent in October 2001 and that they were paid in the past without objection or requirement for a bill of costs in assessable form.

It was reasonable to infer, when there was no unambiguous request for a bill of costs of the kind to which rule 84 refers, that invoices of a similar kind to those rendered previously were sought.

There is said to be a degree of urgency about the files in order that proceedings might be commenced against Harts professional indemnity insurer because the applicants have complaints against the financial advice which Mr Steven Hart provided to them.

The facsimile exhibited to Mr Challen's affidavit might suggest that notification of the claim is sufficient to satisfy any requirements before the expiration of those professional indemnity insurance policies, and the files clearly would not be required for that, but the question of urgency cannot be determinative of this application.

Mr Challen has deposed that the respondent will return all the files providing its bills are paid and offered in a letter of 4 March 2002,

“Such payment could be made without prejudice to your client's rights to have the bills assessed further for the purposes of attaining a resolution. We would agree to hold the money in our trust account pending either agreement between this firm and yours or order of the Court.”

The files in fact have been with cost assessors for some days and the assessment was due to be completed by 14 March although no doubt this application may have interfered with that progress.

In the absence of a clear request for bills of costs in assessable form and the necessary lapse of one month provided for in rule 84 and the contentious nature of the allegations against the respondent, there is no basis for making the orders sought and I would dismiss the application.

Do you want to seek costs, Ms Brewer?

MS BREWER: I'd be seeking costs, your Honour, and rely on the matters that I raised this morning about the notice that they had at least as early as when the file was returned in the loan account in October - sorry, in the loan file, that they knew then that those matters were in contest so any late service of this affidavit is not relevant to the question of whether - Mr Challen's affidavit is not relevant to the question of costs I would submit and, further, they still proceeded with the application on the grounds of rule 84 after receiving that affidavit in any event. So I'd seek the costs of the application.

HIS HONOUR: Yes, thank you. Mr Redmond?

MR REDMOND: Nothing I can say, your Honour.

HIS HONOUR: All right then. Thank you.

The order then is that the applicant pay the respondent's costs of and incidental to this application to be assessed.

Close

Editorial Notes

  • Published Case Name:

    Queensland Mushrooms Pty Ltd v Hawthorn Cuppaidge and Badgery

  • Shortened Case Name:

    Queensland Mushrooms Pty Ltd v Hawthorn Cuppaidge and Badgery

  • MNC:

    [2002] QSC 76

  • Court:

    QSC

  • Judge(s):

    White J

  • Date:

    07 Mar 2002

Litigation History

No Litigation History

Appeal Status

No Status