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Queensland Judgments
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Williamson & Williamson v Pay

 

[2020] QSC 324

SUPREME COURT OF QUEENSLAND

CITATION:

Williamson & Williamson v Pay [2020] QSC 324

PARTIES:

KARA WILLIAMSON

(first applicant)

LEAH WILLIAMSON

(second applicant)

v

RONALD RAYMOND PAY

(respondent)

FILE NO/S:

BS No 14093 of 2018

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court of Queensland at Brisbane

DELIVERED ON:

27 October 2020

DELIVERED AT:

Brisbane

HEARING DATE:

8 September 2020

JUDGE:

Williams J

ORDER:

  1. The application is dismissed.

CATCHWORDS:

PROFESSIONS AND TRADES – LAWYERS – LIENS – LIENS ON FUNDS RECOVERED – PARTICULAR CASES – where, in substantive proceedings, the applicant’s costs were awarded on an indemnity basis to be paid out by the estate (‘September Costs Order’) – where counsel and the solicitor for the applicants fell into dispute regarding payment of fees owed to counsel – where counsel obtained default judgment against the solicitor in the amount of $120,474.32 – where counsel applied for a declaration by the Court that counsel had a lien over the funds the subject of the September Costs Order in the amount of $206,606.94, to be paid by the estate – where the amount included the costs of pursuing the application for such a declaration – whether the Court recognises a “barrister’s lien” – whether it is appropriate in the circumstances to do so

Legal Profession Act 2007 (Qld), s 308

Trusts Act 1973, s 96

Uniform Civil Procedure Rules 1999, r 687

Estate of Fuld (deceased) (No 4) [1968] P 727, cited

Firth v Centrelink (2002) 55 NSWLR 451; [2002] NSWSC 564, cited

Glasgow v ELS Law Ltd & Others [2018] 1 WLR 1564; [2017] EWHC 3004 (Ch), considered

Hewett v Court (1983) 149 CLR 639; [1983] HCA 7, considered 

Hudson v Sigalla (No. 3) [2016] FCCA 2140, considered

Mercer v Graves (1872) LR 7 QB 499, cited

Simpson v Rowe [2011] VSC 149, considered

Trukulja v Efron [2014] VSCA 76, considered

COUNSEL:

NH Ferrett QC for the applicant (Mr Laws)

CA Brewer for Australian Unity Trustees Limited as the Administrator of the Estate

SOLICITORS:

Milner Lawyers for the applicant (Mr Laws)

McInnes Wilson Lawyers for Australian Unity Trustees Limited as the Administrator of the Estate

IB Thompson (solicitor for IBT Law) on his own behalf

  1. [1]
    This is an application by Mr David Laws who was counsel acting on behalf of the first and second applicants in respect of the substantive application.
  2. [2]
    Pursuant to an interlocutory application dated 21 July 2020 Mr Laws sought the following relief:

“1.  Order 4 of the orders of Boddice J dated 26 September 2019 is varied to read as follows:

“The Applicant’s costs of these proceedings be paid from the estate of Meryl Nola Williamson, deceased, in the following manner:

  1. (a)
    the amount of $118,343.37 to David Laws of counsel in satisfaction as between the estate and the applicants of any liability for costs in respect of fees charged by Mr Laws;
  1. (b)
    otherwise to be assessed on the indemnity basis.”
  1. Order 3 of the orders of Davis J dated 9 April 2020 is varied to read as follows:

“The Applicant’s costs of this application be paid from the estate of Meryl Nola Williamson, deceased, in the following manner:

  1. (a)
    the amount of $1,100 to David Laws of counsel in satisfaction as between the estate and the applicants of any liability for costs in respect of fees charged by Mr Laws with respect to the application;
  1. (b)
    otherwise to be assessed on the indemnity basis.”
  1. Ian Thompson, principal of IBT Law, is to pay the costs of this application
  1. (a)
    of Mr Laws, fixed in the amount of $30,000;
  1. (b)
    of AUTL, fixed in the amount of $15,000.
  1. Such further or other order, including directions as to the conduct of this application, as the Court considers appropriate.”
  1. [3]
    This application was initially listed in the applications list on 24 July 2020 and was subsequently listed for hearing before me on 9 September 2020.
  2. [4]
    At the hearing on 9 September 2020 Mr Ferrett QC appeared for Mr Laws in respect of the application.  Mr Thompson of IBT Law, who also acted for the first and second applicants in respect of the substantive application, appeared on his own behalf.  Further, Ms Brewer appeared on behalf of Australian Unity Trustees Limited as the Administrator of the Estate, but did not make submissions.
  3. [5]
    The applicant read the following material in relation to the application:
    1. (a)
      Order of Boddice J dated 26 September 2019;
    2. (b)
      Application by David Laws dated 21 July 2020;
    3. (c)
      Affidavit of Ms Milner filed on 23 July 2020;
    4. (d)
      Order of Boddice J dated 24 July 2020;
    5. (e)
      Affidavit of Ms Pezet filed on 27 August 2020; and
    6. (f)
      Affidavit of Ms Milner filed on 4 September 2020.
  4. [6]
    Leave to read and file further affidavit material of Ms Milner sworn on 8 September 2020 and 9 September 2020 was also granted at the hearing.
  5. [7]
    At the hearing, counsel on behalf of Mr Laws sought orders which are substantially different to the relief as identified in the interlocutory application.  The terms of the draft order provided to the Court are as follows:

“The order of the Court is that:

  1.  The amount of the costs order made in paragraph 4 of the orders of Boddice J dated 26 September 2020 (“the September Costs Order”) is fixed in the amount of $230,787.74 (“September Costs Amount”).
  1.  Ian Thompson is to pay the costs of David Laws of the latter’s application filed 21 July 2020, fixed in the amount of $82,404.00 (“Laws’ Costs”).
  1.  It is declared that David Laws of counsel has a lien over the September Costs Order securing payment of:
  1. (a)
    $120,474.32, being the total amount of the judgment obtained by him against Ian Thompson in the Magistrates  Court of Queensland, Brisbane Registry, on 20 March 2020 in proceeding number M381/2020 in respect of fees charged by David Laws in respect of his acting as counsel in this proceeding;
  1. (b)
    Interest on that amount from 20 March 2020 until the date of this order in the amount of $3,728.62; and
  1. (c)
    Laws’ Costs.
  1.  The administrator of the estate of the late Meryl Nola Williamson is to pay the September Costs Amount:
  1. (a)
     as to the amount of $206,606.94 to David Laws;
  1. (b)
    as to the remainder to Ian Thompson on trust for the applicants.
  1.  It is further declared that upon such payments being made the administrators of the estate of the late Meryl Nola Williamson will have satisfied the September Costs Order.”

Background

  1. [8]
    This application arises out of a dispute between Mr Laws of counsel and Mr Ian Thompson of IBT Law, who acted for the applicants in respect of the substantive application which was heard by Justice Boddice.
  2. [9]
    On 26 September 2019, Justice Boddice ordered that the applicants’ costs be paid out of the estate to be assessed on the indemnity basis.
  3. [10]
    Mr Laws has not been paid his fees in respect of the work done and invoiced in relation to the application.
  4. [11]
    The dispute between Mr Laws and Mr Thompson has escalated to the point that Mr Laws commenced Magistrates Court proceedings against Mr Thompson in respect of his fees and obtained default judgment.
  5. [12]
    The default judgment was obtained on 20 March 2020 and as at the date of the hearing had still not been paid.  The amount of the Magistrates Court judgment including interest and costs is $120,474.32.

Basis of relief claimed

  1. [13]
    Mr Laws seeks the orders set out in the draft order on the basis of an equitable interest in the costs order. 
  2. [14]
    Counsel on behalf of Mr Laws submits that a solicitor’s lien is not limited to the solicitor-client relationship but, on general principles, it would be applicable to a barrister. It is also submitted that it is not necessary to have a contractual relationship as a condition precedent to the existence of the lien.  Reliance was also placed on the analogous position of a liquidator who has an equitable interest over property of the company. 
  3. [15]
    Mr Laws claims the amount of the Magistrates Court judgment plus interest and the costs of enforcing the lien.  That is, an amount of $206,606.94 being the original Magistrates Court judgment amount of $120,474.32, plus interest on that amount since 20 March 2020 in the amount of $3,728.62, plus the costs of the application in the amount of $82,404.00.
  4. [16]
    Mr Malcomson, a Court approved cost assessor, has prepared a short form assessment of the applicants’ costs and outlays in the amount of $230,787.74.
  5. [17]
    Mr Laws’ application proceeds on the basis that the costs of the application should be fixed in the sum that is the same as this short form assessment.  Then, as a result of the equitable lien claimed, Mr Laws seeks orders that the total amount of $206,606.94 be paid to him directly and he can then give good discharge of that debt.
  6. [18]
    The draft order also seeks declarations to determine the rights of the various parties involved, in particular, it is submitted, to give some comfort to the estate so that it will not be prejudiced.
  7. [19]
    In relation to the costs sought of this application in the amount of $82,404.00, reliance is placed on the power of the Court to fix costs under r 687(2) of the Uniform Civil Procedure Rules 1999 (Qld) (‘UCPR’) as the basis for the claim for costs on an indemnity basis in the amount of $82,404.00.

Affidavit evidence

  1. [20]
    The affidavit of Ms Milner sworn on 21 July 2020 (‘First Milner Affidavit’) exhibits correspondence between Mr Laws and Mr Thompson in relation to the costs issue.  Included in the exhibits is a copy of the retainer agreement between Mr Laws and Mr Thompson dated 13 August 2018.  The letter is addressed to Mr Thompson of IBT Law and refers to the letter constituting disclosure under s 308 of the Legal Profession Act 2007 (Qld) and an offer to “enter into a costs agreement with you”.
  2. [21]
    Further, at page 4 of the retainer letter, it states:

“Your liability for my fees under this agreement is personal.  It is not dependent upon you/ your firm being put in funds by the late client.  You unequivocally accept personal liability and responsibility for the whole of the Fees set out in the face of each Memorandum of Fees (and in the event of protest or formal assessment, for such of those fees as shall be found to be proper) issued under this Cost Disclosure.”

  1. [22]
    There are also references in the letter to the “instructor” being a “sophisticated client”.  This is consistent with the “instructor” being Mr Thompson, as opposed to the individual applicants.
  2. [23]
    Exhibited to the affidavit are also copies of the various invoices issued in relation to the work undertaken by Mr Laws.  The invoices are addressed to Mr Thompson of IBT Law.
  3. [24]
    Consistent with the terms of the retainer, a letter dated 20 January 2020 from Milner Lawyers to Mr Thompson[1] makes a demand for the outstanding fees addressed to Mr Thompson.
  4. [25]
    Further, when Magistrates Court proceedings were commenced by Mr Laws against Mr Thompson trading as IBT Law, the claim and statement of claim[2] is pleaded on the basis that the liability for the unpaid fees is personally with Mr Thompson. 
  5. [26]
    The statement of claim sets out the relevant provisions of the retainer agreement including those which have been referred to earlier in these reasons.  The Magistrates Court proceedings claim the amount of $115,366.50 as a debt or liquidated amount due and owing by the Mr Thompson to Mr Laws pursuant to the retainer agreement together with interest in the sum of $1,771.67 as at 31 December 2019 and accruing per day.  The statement of claim also claims the amount of $1,824.10 for the costs of issuing the claim and statement of claim, being the filing fee of $402.10 and an amount for instructions to sue and service of $1,422.
  6. [27]
    Following further correspondence and attempts to resolve the costs claim, default judgment was entered on 20 March 2020 in the amount of $120,474.32, including $2,906.07 for interest to that day and the sum of $2,201.75 for costs.[3]
  7. [28]
    Mr Laws has proceeded on the basis that it is clear from the retainer agreement, and as pleaded in the Magistrates Court statement of claim, that the liability to pay Mr Laws’ costs resides with Mr Thompson. 
  8. [29]
    On or about 26 March 2020, Mr Laws purported to serve on Australian Unity Trustees Limited (the administrators of the estate) a notice of charge in relation to the fees owed to him.  This notice of charge claimed the amount of $120,474.32 in accordance with the default judgment.  The notice of charge purported to be over the costs ordered to be paid to the applicants by order 4 of the orders of Justice Boddice made on 26 September 2019. 
  9. [30]
    The affidavit of Ms Milner exhibits various correspondence between Mr Thompson and Mr Laws which shows the complete breakdown of the professional relationship between Mr Laws and Mr Thompson. 
  10. [31]
    The affidavit of Ms Milner also exhibits correspondence between Milner Lawyers and McInnes Wilson Lawyers, the solicitors acting on behalf of Australian Unity Trustees Limited.
  11. [32]
    In addition to the notice of charge served on Australian Unity Trustees Limited, Milner Lawyers also took steps to have an enforcement warrant issued by the Magistrates Court with respect to the default judgement and purported to serve the enforcement warrant on Australian Unity Trustees Limited.
  12. [33]
    McInnes Wilson Lawyers in correspondence pointed out a number of deficiencies in relation to these steps taken on behalf of Mr Laws.
  13. [34]
    Australian Unity Trustees Limited, as the administrator of the Will of Meryl Nola Williamson, was placed in a difficult position.  The estate was subject to the costs order made by Justice Boddice on 26 September 2019; however, it found itself embroiled in the costs fight between Mr Laws and Mr Thompson. 
  14. [35]
    Particularly as the estate included some beneficiaries who were not yet of age, Australian Unity Trustees Limited, through its lawyers McInnes Wilson Lawyers, indicated that it must act cautiously and appropriately in the circumstances.[4] 
  15. [36]
    Milner Lawyers responded to McInnes Wilson Lawyers in a letter dated 3 June 2020.  At paragraph 21 of that letter, it states “the Applicants have the benefit of the Order but that does not make them the party entitled to the costs.  The only person by whom legal costs may lawfully be charged is the lawyer and that is the person to whom the costs must be paid, not the Applicants.”[5] 
  16. [37]
    As a result of the actions taken by Mr Laws directly against Australian Unity Trustees Limited, considerable time and expense has been incurred by the administrator of the estate to deal with this issue.

Applicants’/clients’ position

  1. [38]
    From the various correspondence exhibited to Ms Milner’s affidavit, it appears that Mr Thompson sought to agree the applicants’ costs with the administrator of the estate on the basis of the short form assessment prepared by Mr Malcomson.
  2. [39]
    There is a reference in the letter dated 22 May 2020 from McInnes Wilson Lawyers to Milner Lawyers that, at least at some point in time, it appeared that the applicants disputed the fees charged by Mr Laws and were critical of Mr Laws’ conduct in the proceedings. 
  3. [40]
    However, other than this general reference there is no evidence that suggests that the applicants are denying that the costs should be paid to Mr Laws or asserting a priority to the money to be paid pursuant to the costs order.  In the absence of evidence to the contrary, the steps taken to agree the costs order on the basis of the short form assessment appear to be consistent with the applicants proceeding on the basis of the recovered costs being paid to counsel and the solicitor on the basis of the invoices included in the short form assessment.

Separate proceedings by the administrator of the estate

  1. [41]
    In separate proceedings, the administrator of the estate made an application to the Court for orders to resolve the issue in respect of the costs order.  This included directions from the Court as to whether it was justified in resolving the quantum of costs in accordance with the short form assessment of Mr Malcomson dated 21 February 2020.
  2. [42]
    As part of the application consideration was given to the costs involved in having the costs fully assessed, the likely outcome of any such assessment and the potential impact on the beneficiaries. 
  3. [43]
    In proceedings BS No 8586 of 2020, on 8 September 2020 I made orders including as follows:

“1.  Pursuant to section 96 of the Trusts Act 1973 (the Act), regarding Kara Williamson and Leah Williamson’s (the Applicants in BS 14093/18 (Proceeding)) costs pursuant to:

  1. (a)
     the Order of Boddice J dated 26 September 2019 (Costs), the Applicant is justified in resolving the quantum of the Costs, in accordance with the short form assessment of Mr Scott Malcomson dated 21 February 2020; and
  1. (b)
    the Applicant should pay from the estate of MERYL NOLA WILLIAMSON deceased (Estate), the costs of having the short form assessment performed, fixed in the sum of $11,550.
  1.  Pursuant to section 96 of the Act, the Applicant is justified in paying, from the estate:
  1. (a)
     the sum of $118,343.37, or any other sum ordered by this Court in BS 14093/18, directly to Mr Laws of counsel; and
  1. (b)
    the balance of the amount of the short form assessment, or any other sum ordered by this Court in BS 14093/18, to IBT Law.

…”

  1. [44]
    The administrator was also mindful of this current application before the Court and order 2 was framed in a way that the amount paid to Mr Laws would be the amount in counsel’s invoices included in the short form assessment “or any other sum ordered by this Court in BS No 14093/18”.  This was to take account of the current application being dealt with after those orders had been made (even though the hearings were listed for the same day).
  2. [45]
    These orders were provided to Mr Ferrett QC on behalf of Mr Laws at the hearing of Mr Laws’ application.  Further, an opportunity was provided to Mr Ferrett QC to consider the application in light of these orders.  Subsequent to this opportunity, Mr Laws pressed for the orders as proposed.

Barrister’s lien

  1. [46]
    The applicant relies upon an argument that, in the circumstances, a barrister’s lien secures Mr Laws’ entitlement to fees to be paid directly from the administrator to him, including an amount of interest and the costs of enforcement.
  2. [47]
    There are a number Australian authorities that recognise a barrister may have a lien over the “fruits of the action”, which would include a costs order.  However, none of these cases engage in a detailed analysis of the position, nor are they clearly determinative of the issue.
  3. [48]
    Simpson v Rowe[6] appears to be one of the first Australian cases that recognises a barrister’s lien, separate from a solicitor’s lien, over the funds resulting from successful litigation.  However, Simpson v Rowe was decided in the context of a barrister with a direct brief.  As set out below, it appears that the reasoning in that case was based on this fact. 
  4. [49]
    Simpson v Rowe was cited in obiter in Trukulja v Efron.[7]  In that case, which primarily concerned a solicitor’s lien, the Court recognised that a barrister may be entitled to a lien where a solicitor was not directly liable for counsel’s fees. 
  5. [50]
    In Hudson v Sigalla,[8] the Court made a declaration that a barrister had a lien over the fruits of the action, where on the facts counsel was not briefed directly.  However, at the same time, there was an application by the solicitor for a solicitor’s lien, the making of the declarations was not opposed and the judge recognised the issue was not central to the reasons.  Given these factors, this decision may be limited to the particular facts of the case. 
  6. [51]
    One further authority referred to by the applicant is Glasgow v ELS Law Ltd & Others.[9]  In that case, the High Court of England & Wales, in obiter, stated that the distinction between solicitors and barristers in relation to an equitable lien was potentially “unjust”.  However, the Court in that case did not need to decide the position and stated that it did not find Simpson v Rowe of assistance in the circumstances. 
  7. [52]
    As the applicant specifically relies on these cases in support of its application, I have considered these in more detail below.
  8. [53]
    Firstly, however, the case of Hewett v Court[10] is worth noting.  It concerned an arrangement for the respondent builder to construct transportable homes for the appellant purchaser.  During construction, the respondent became insolvent and arranged a variation to the agreement with the purchaser so that the purchaser could take away the partially complete house, and pay the company the outstanding value (but not the total contract price as the houses were not complete).   
  9. [54]
    The liquidators of the company claimed that the purchasers were unsecured creditors and had received a preference by taking the house.  The question to be determined by the High Court was whether the purchasers had an equitable lien upon the house.   
  10. [55]
    The judgment of Gibbs CJ is often cited in respect of equitable liens.  His Honour relevantly stated: 

“[An] equitable lien does not depend either upon contract or upon possession.  It arises by operation of law, under a doctrine of equity “as part of a scheme of equitable adjustment of mutual rights and obligations”; those words of Isaacs J. were used in Davies v Littlejohn, in relation to the doctrine of a vendor’s lien, but they have general application.  It would be difficult, if not impossible to state a general principle which would cover the diversity of cases in which an equitable lien has been held to be created... [In cases other than that of a vendor’s lien] an equitable lien may arise because of the relationship that exists between the parties (e.g., that of partnership, or trustee and beneficiary or solicitor and client) or by reason of subrogation or estoppel.  Cases of this kind ... do not closely resemble the present, but their existence shows that the rules governing the circumstances in which equity has considered that justice requires the recognition of the existence of a lien are not confined to one narrow category.”[11] (citations omitted) 

  1. [56]
    This supports the contention that an equitable lien is not confined to relationships that are defined by contract or rely upon a contractual relationship for their existence.  Further, the types of equitable liens are not limited by specific classes or categories and may arise in various circumstances.  A “barrister’s lien”, therefore, is not excluded from being recognised by the Court based on this general principle.  However, whether one will be recognised in a particular case depends on circumstances of each case, as the below case law illustrates.     
  2. [57]
    In Simpson v Rowe,[12] a barrister with a direct brief applied for a declaration that he was entitled to a lien over the funds resulting from successful litigation.  There were two costs agreements in place: first, the February Costs Agreement, which had an express clause entitling the barrister to a lien; second, the August Costs Agreement, which did not contain the same clause.  
  3. [58]
    His Honour Justice Habserberger noted:

“It is well established that a solicitor has a lien over the proceeds of a settlement or judgment in respect of which he or she has done work which has contributed to the money being payable to the client.  It is known as a ‘fruits of the action’ lien.  In all of the cases that I was referred to and in others that I have read, the context always seems to be a claim by a solicitor to exercise a lien.  In days gone by that would be understandable because at one stage barristers were not able to sue to recover their fees.  In more recent times the practice was that the solicitor who briefed the barrister was liable for his or her fees and the solicitor would then look to the client to put the solicitor in funds to pay the barrister’s fees.  As such there was no direct contractual relationship between the barrister and the client.   

In the absence of the written clause in the August costs agreement concerning a lien, there is a question as to whether a barrister would be in the same position as a solicitor. [The plaintiff] submitted there is no reason why, where the solicitor is not responsible for counsel’s fees and there is a direct contractual relationship between the barrister and the client, such a lien should not arise.  No argument to the contrary was put on behalf of the defendant.   

In my opinion, equity would recognise that it would be just where the barrister has done work which has contributed to the recovery of the judgment or the settlement proceeds, that the barrister should also be entitled to look to those proceeds for the payment of his or her fees.”[13] 

  1. [59]
    Habserberger J’s reasoning appears to be based on the premise that a barrister must have a direct brief with the client in order to be entitled to a lien.  This is evident by the plaintiff’s submissions in that case, which were unchallenged and apparently accepted by Haserberger J, that “where the solicitor is not responsible for counsel’s fees”, a lien should arise.    The case does not appear to be authority for the general principle that a barrister is entitled to a lien over the proceeds in other circumstances.
  2. [60]
    In Trukulja v Efron,[14] a solicitor (Efron) applied for a declaration that the solicitor had a lien over funds that the appellant (Trukulja) received as a result of separate proceedings.  The declaration was granted.  The appellant appealed that decision and contended that Efron worked on a pro bono basis and was not entitled to be paid. 
  3. [61]
    The appellant further contended that the barrister who had appeared in the separate proceedings had agreed to appear on the same pro bono basis.  The submission of the applicant was that, given he had retained counsel on that basis, Efron had no liability to pay counsel’s fees and, accordingly, any lien to which Efron might otherwise have been entitled should not include any amount referable to counsel’s fees. 
  4. [62]
    The appeal was dismissed.  In relation to a barrister’s lien, the Court, per Warren CJ and Santamaria JA, made the following comments:

“It is to be remembered that the greater proportion of the amounts retained relate to fees payable to counsel.  The appellant has not placed before the court any material emanating from counsel that suggests that counsel agreed to appear on the basis that he would only be remunerated out of costs recovered from the judgment creditors.  It is true that there is material that may be taken to suggest that the appellant retained counsel directly.  It may be the case that Efron is not be [sic] personally liable to pay counsel’s fees.  However, in that case, counsel would have his own lien in respect of the same fund (57: Simpson v Rowe [2011] VSC 149).”

  1. [63]
    This statement supports the contention that a barrister’s lien would be available where a solicitor is not personally liable to pay counsel’s fees.  This would arise, for example, where counsel is briefed directly. 
  2. [64]
    In Hudson v Sigalla[15] Mr Sigalla was the successful respondent in bankruptcy proceedings against Mr Hudson.  Mr Sigalla was awarded costs.  Those costs orders were unsuccessfully appealed against by Mr Hudson. 
  3. [65]
    Mr Sigalla failed to pay his solicitors’ and counsel’s fees, which prompted them to bring separate applications asserting that each held a lien over the funds constituted by the costs order.  Driver J previously made declarations that the practitioners, including counsel, had liens over the funds.
  4. [66]
    His Honour stated:

“Mr Hudson did not oppose the declarations made in relation to the practitioners’ liens.  The law in respect of practitioners’ liens is complex but sufficiently clear.  While the legal principles concerning practitioners’ liens are not central to these reasons … I have included as an attachment to these reasons the principles as put by counsel for the parties which I have acted upon.”[16]

  1. [67]
    In the attachment to the reasons, Driver J further stated:

“I accept that, as with solicitors, a barrister whose exertions have contributed to a fund has a lien in respect of his/her unpaid fees (33: Simpson v Rowe; Trukulja v Efron [2014] VSCA 76 at [100]).”[17]

  1. [68]
    His Honour did not consider the matter of a barrister’s lien further. 
  2. [69]
    Whether this decision can be regarded as an extension of the principle, if any exists, set out in Simpson v Rowe or, with respect, an error in the application of the principle in that case is not clear.  In any event, as on the facts there was an application for a solicitor’s lien in parallel, the declarations were not opposed and the issue was not central to the reasons, this decision may be appropriately limited to the particular facts of the case. 
  3. [70]
    In Glasgow v ELS Law Ltd & Others,[18] insurers of a claimant’s successful proceeding made an application that they should be entitled to a lien over the funds resulting from judgment because, as a result of the claimant going into bankruptcy in a foreign jurisdiction, the insurers were only recognised as unsecured creditors under the funding arrangements.  The insurers sought to use the lien to establish a proprietary right to the funds and, thus, gain priority over the funds. 
  4. [71]
    The insurers used the analogy of a solicitor’s lien to establish their right, in that, by the insurers’ exertions, judgment was found for the claimant.  In Dicker J’s reasons, his Honour rejected the insurers’ arguments and found that they had no right to a lien in the same capacity (or, rather, under the same exception) as solicitors. 
  5. [72]
    A further question arose as to whether a barrister had the same right as a solicitor to a lien over the funds of a judgment.  Because of separate agreements reached between the parties before and after the matter was heard, Dicker J did not need to make a finding on this point.  
  6. [73]
    However, in obiter, Dicker J stated:

“Given recent developments in the structure and conduct of the legal profession, it is difficult to identify any reason why, as a matter of principle, solicitors, but not also barristers, should be entitled to a lien. … law firms, partnerships, llps and limited companies through which the relevant legal services are provided may all assert a lien in their own name, although such entities are not strictly solicitors.”[19]

  1. [74]
    Further, after identifying that barristers could have agreements through, for example, direct briefs, his Honour stated:

“It is difficult to regard such distinctions [between barristers and solicitors] as anything other than illogical, unprincipled and potentially unfair.”[20]

  1. [75]
    Although Dicker J did refer to the decision of Simpson v Rowe,[21] his Honour did not apply it. 
  2. [76]
    This authority is of no real assistance in determining the application before the Court.

Solicitor’s liens as equitable liens

  1. [77]
    GE Dal Pont in his book “Law of Costs”[22] considers the authorities in respect of what is commonly described as a “solicitor’s lien”; and which he describes as a “particular lien”.  Prof. Dal Pont helpfully summarises the nature of the “particular lien” as follows:

“27.3 Instead of being possessory ‒ such as the retaining lien, which entitles a solicitor to retain the client’s property for the purpose of securing an entitlement to fees[23] ‒ the particular lien is a solicitor’s claim or right to ask for the intervention of the court for his protection, when, having obtained judgment for his client, he finds there is a probability of the client depriving him of his costs’.[24] This reference to ‘probability’ does not mean that ‘this has to be shown more probable than not’, but as requiring no more than proof of a ‘significant’ or ‘appreciable’ risk.[25]  In Johns v Cassel,[26] for example, that the client would not admit that anything was due to the solicitor, would not give an undertaking to pay the solicitor and had no other significant assets from which to satisfy the solicitor’s demand, was sufficient, according to Hodgson J, to substantiate ‘an appreciable risk’.  Conversely, in Doyles Construction Lawyers v D’Jamirze, where the client paid into court the sum in dispute, Michael Grove J refused a lien, reasoning as follows:[27]

In the present case the money is, as a result of payment into Court, under the control of the Court.  It is true that payment in was rejected until there was litigation on foot.  However, on the very day of receipt by the defendants’ new solicitors of the settlement money the plaintiff was invited to specify where it was acceptable to it for the money to be held … In my view, the intervention of the Court needs to be attracted by demonstration of a requirement for protection or, put another way, an appreciable risk that the plaintiff may be unable to recover his costs from the settlement monies.  There needs to be genuine utility (and dispute, other than simply whether or not the plaintiff’s contention can be endorsed) in order to attract the discretionary remedy of declaratory relief.

27.4 To obtain the benefit of the particular lien, the solicitor must make an interlocutory application, in the proceedings in which the client’s monetary entitlements arise, for a declaration both of the existence of the lien and for ancillary orders to facilitate the protection of the moneys its subject.[28]  This is what is meant when it is said that, unlike the retaining lien, the particular lien can be ‘actively enforced’.[29]  No order for payment of unpaid costs direct to the solicitor will ensue unless there is agreement as to their quantum.  Lacking such an agreement, an order that moneys representing the value of the lien be paid into court will be made pending the ascertainment of quantum by way of taxation or assessment.[30]  Accordingly, the lack of a formal costs agreement does not oust the availability of the particular lien.[31]” (emphasis added)

  1. [78]
    Further, Prof. Dal Pont continues:

“27.6 The particular lien is no more than an ‘inchoate right’[32] ‒ a right to seek the court’s assistance in equity in contradistinction to an existing property right at law.[33]  That it is the court’s equity jurisdiction that is invoked explains why the lien is sometimes termed the ‘equitable’ lien.  The equitable nature of the court’s intervention is manifested in three main ways.

First, the nature of the solicitor’s right has been variously described as an ‘equitable right’,[34] an ‘equitable interest’,[35] a ‘claim to … equitable interference’[36], ‘analogous to the right which would be created by an equitable assignment of a corresponding part of the money by the client to the solicitor’,[37] and ‘analogous to the right to trace funds into the hands of a third party’.[38]  It thus exhibits many if not all of the characteristics of an equitable proprietary right.  Equity plays a role because a solicitor acquires no common law title to a client’s right to receive the proceeds of a judgment, award or compromise.[39]  The solicitor’s equitable interest in that money operates in the form of a security or charge for the costs of work performed on the client’s behalf in obtaining the money.[40]

Second, the court retains a discretion as to whether or not to give effect to that right; the question in each case is whether it should exercise its discretion to enforce the solicitor’s ‘equity’.  Curial intervention is justified only if required for the solicitor’s protection, and then only to the extent necessary to safeguard the lien.[41]  The court will frame its order ‘on the basis of the minimum necessary to protect the firm’,[42] which reflects the ‘minimum equity’ concept that governs much of equitable relief.  Like other forms of equitable jurisdiction, it is informed by questions surrounding the conduct of the applicant and any delay underscoring it.[43]  Third, the particular lien has been described in terms of equity’s grundnorm, namely ‘a right to call in aid the jurisdiction of the court to prevent unconscionable conduct on the part of the client’.[44]” (emphasis added)

  1. [79]
    At [27.29] Prof. Dal Pont states:

“The court will not make an order that would give the solicitor an inequitable advantage when considered in light of the positions of the respective parties to litigation out of which the claim to the lien arose.[45]  In that costs between litigants belong to the party who is to recover them, not to his or her solicitor, the solicitor’s lien in respect of those costs can prevail against the set-off only if there is some equity in the solicitor superior to that entitlement to set-off.[46]  This is consistent with the nature of the lien as an equitable lien, for a court will not allow an equitable lien to prevail in circumstances where it would be contrary to justice to do so.”  (emphasis added)

  1. [80]
    Quick on Costs refers to the decision of Campbell J in Firth v Centrelink[47] in support of the principle that equitable liens carry interest and also the costs of proceedings to enforce a judgment. 

Consideration

  1. [81]
    Following consideration of the above principles, in the particular circumstances of this case I consider that the application should be dismissed.  In arriving at this decision I have taken into account the following particular circumstances:
    1. (a)
      Mr Thompson is liable for the costs of Mr Laws and this is reflected in the Magistrates Court judgment that has already been obtained by Mr Laws.  Mr Laws has the usual enforcement options available to him to enforce the judgment against Mr Thompson. 
    2. (b)
      A fundamental feature of the “equitable lien” (to use a neutral term) is that a court may intervene when there is a “probability of the client depriving him of his costs”.[48]  Here there is no evidence that this is a significant or appreciable risk.   Nor is there any evidence of “unconscionable conduct” by the client.  The relevant “client” is not Mr Thompson, but rather Kara and Leah Williamson.
    3. (c)
      Another fundamental feature of the “equitable lien” is that the relief is discretionary and is only to “the extent necessary”.[49]  Here, the administrator of the estate has obtained orders from the Court that will facilitate the payment of the amount of Mr Laws’ fees contained in the short form assessment of Mr Malcomson directly to Mr Laws.  To the extent of any difference between that amount and the Magistrates’ Court default judgment amount, Mr Laws has recourse directly against Mr Thompson.
    4. (d)
      As a result of the above matters it is not necessary to conclusively determine whether a solicitor’s lien is available in respect of a barrister.  However, to the extent that there is some support in the authorities for a barrister’s lien, it appears it may be limited to where counsel receives a direct brief from a client or where a solicitor was not directly liable for counsel’s fees.  This is to be contrasted to the current circumstance, where the retainer agreement expressly makes the solicitor directly liable for counsel’s fees and counsel has obtained a court judgment on that basis.
    5. (e)
      The applicant’s proposed orders seek to have the Court fix the costs in the amount of the short form assessment.  The costs awarded under the costs order belong to the client i.e. Kara and Leah Williamson.  Neither Mr Laws nor Mr Thompson were acting on behalf of Kara and Leah Williamson in respect of this application.  It is not apparent on what basis Mr Laws has in effect standing to bring such an application.  Rule 687 UCPR provides that the court may order a party to pay to another party an amount fixed by the court.  The application to fix costs is made by the party – or on behalf of the party.  Mr Laws’ application is on his own behalf: as counsel who previously acted on behalf of a party.
    6. (f)
      Even if the amount of Mr Laws’ invoices could be the subject of an equitable charge for the costs of work performed on the client’s behalf in obtaining the money, the costs claimed of $82,404.00 are unreasonable and the full amount would not be recoverable as costs of an application to “enforce” the equitable lien.  Any amount in respect of the costs of the application would be limited to the reasonable costs of making such an application.  The costs claimed are out of all proportion to the amount sought to be recovered and include items that relate to general debt recovery steps in respect of the costs dispute between Mr Laws and Mr Thompson.
  2. [82]
    The applicant has not made out an entitlement to the relief sought.  Further, to the extent that the relief is discretionary, the applicant has not established that it is appropriate for the Court to exercise its discretion in the particular circumstances of this case.
  3. [83]
    I order that:
  1. The application is dismissed.

Footnotes

[1]Exhibited at page 95 of the First Milner Affidavit.

[2]Exhibited at page 97 to 107 of the First Milner Affidavit.

[3]See page 121 of the exhibits to the First Milner Affidavit.

[4]See page 203 of the exhibits to the First Milner Affidavit, which is a letter from McInnes Wilson Lawyers dated 22 May 2020.

[5]See page 210 of the exhibits of the First Milner Affidavit. 

[6][2011] VSC 149.

[7][2014] VSCA 76.

[8](No. 3) [2016] FCCA 2140.

[9][2018] 1 WLR 1564.

[10](1983) 149 CLR 639.

[11]Ibid at 645 to 646.

[12][2011] VSC 149.

[13]Ibid at [5] to [7].

[14][2014] VSCA 76.

[15](No. 3) [2016] FCCA 2140.

[16]Ibid at [11].

[17]Ibid at [14] of the attachment to the judgment. 

[18][2018] 1 WLR 1564.

[19]Ibid at 1575.

[20]Ibid.

[21][2011] VSC 149.

[22]4th Edition 2018.

[23]As to the retaining lien, see Ch 26.

[24]Mercer v Graves (1872) LR 7 QB 499 at 503 per Cockburn CJ. See also Rutherford v Powell (1878) 4 VLR (L) 384 at 387 per Stawell CJ; Re Suttor (1890) 11 LR (NSW) L 401 at 405 per Darley CJ; Mills v R (1907) 9 WALR 167 at 169 per Burnside J; Sewell v Hampel (1910) 13 WAR (L) 44 at 46 per Parker CJ (FC); Puddephatt v Leith (No 2) [1916] 2 Ch 168 at 176-7 per Younger J; Ex parte Patience (1940) 40 SR (NSW) 96 at 100 per Jordan CJ; North West Construction Co Pty Ltd (in liq) v Marian [1965] WAR 205 at 212 per Nevile J; Re a Barrister and Solicitor (1979) 40 FLR 26 at 39‒40 (FC(ACT)); Johns v Cassel (1993) FLC ¶92‒364 at 79,819; BC9301999 per Hodgson J (SC(NSW)).

[25]Ex parte Patience (1940) 40 SR (NSW) 96 at 108 per Jordan CJ; Johns v Cassel (1993) FLC ¶92-364 at 79,818‒9; BC9301999 per Hodgson J (SC(NSW)); Clifford Harris & Co v Solland International Ltd [2005] 2 All ER 334; [2005] EWHC 141 (Ch) at [23] per Christopher Nugee QC.

[26](1993) FLC ¶92-364 at 79,819; BC9301999 (SC(NSW)).

[27][2004] NSWSC 507; BC200403516 at [17]‒[18].

[28]For this purpose, it has been suggested that the solicitor should provide the court with a detailed affidavit showing the nature and period of the retainer, a brief description of the work undertaking [sic] on the (former) client’s behalf, the costs rendered to the (former) client, the amount of unpaid costs, and evidence linking the work undertaken to the result of the litigation: see D H Katter , ‘A Solicitor’s Enforcement Right over Settlement Funds’ (August 2002) 22 Proctor 19 at 22.

[29]Re Meter Cabs Ltd [1911] 2 Ch 557 at 559 per Swinfen Eady J; Re a Barrister and Solicitor (1979) 40 FLR 26 at 39‒40 (FC(ACT)).

[30]M Graham, ‘Solicitor’s Equitable Charges’ (November 1997) 17 Proctor 17 at 18‒19.

[31]Lashansky v Legal Practice Board [2006] WASC 247; BC200609172 at [72] ‒[73] per Templeman J.

[32]James Bibby Ltd v Woods [1949] 2 All ER 1 at 3 per Lord Goddard CJ.

[33]McDonald v FAI (NZ) General Insurance Co Ltd [1999] 1 NZLR 583 at 596 per Giles J (HC) (affd Harley v McDonald [1999] 3 NZLR 545 (CA); reversed but on another ground: Harley v McDonald [2001] 2 AC 678; [2001] UKPC 18). 

[34]Ex parte Patience (1940) 40 SR (NSW) 96 at 100 per Jordan CJ; Kison v Papasian (1994) 61 SASR 567 at 568; BC9405581 per King CJ (FC); Chester v Cassidy Gibson Howlin (1995) 18 Fam LR 463 at 468 per Moss J.

[35]Re H & W Wallace Ltd (in liq) [1994] 1 NZLR 235 at 238‒9 per Thomas J (HC); Twigg v Keady (1996) 135 FLR 257 at 259 per Fogarty J (FC(Fam Ct)). Hence, such an interest is assignable, for example, by way of mortgage to secure an advance to the solicitor: Briscoe v Briscoe [1892] 3 Ch 543.

[36]Barker v St Quintin (1844) 12 M & W 441 at 451; 152 ER 1270 at 1274 per Parke B; Re Allied Glass Manufacturers Ltd (1936) 36 SR (NSW) 409 at 425 per Long Innes CJ in Eq.

[37]Ex parte Patience (1940) 40 SR (NSW) 96 at 100 per Jordan CJ. See also Akki Pty Ltd v Martin Hall Pty Ltd (1994) 35 NSWLR 470 at 483 per Windeyer J. Cf Ex parte Morrison (1868) LR 4 QB 153 at 156 per Blackburn J.

[38]Firth v Centrelink (2002) 55 NSWLR 451; [2002] NSWSC 564; BC200203753 at [41] per Campbell J (reasoning that this stems from the fact that a solicitor’s right of lien can prevail against an assignee of the asset who is not a bona fide purchaser for value without notice).

[39]Ex parte Patience (1940) 40 SR (NSW) 96 at 100 per Jordan CJ.

[40]Re Wright (1907) Tas LR 1 at 4 per McIntyre J; Ex parte Patience (1940) 40 SR (NSW) 96 at 100 per Jordan CJ; Re a Barrister and Solicitor (1979) 40 FLR 26 at 39‒40 (FC(ACT)); Akki Pty Ltd v Martin Hall Pty Ltd (1994) 35 NSWLR 470 at 474‒5 per Windeyer J; Re H & W Wallace Ltd (in liq) [1994] 1 NZLR 235 at 238‒9 per Thomas J (HC); Australian Receivables Ltd v Tekitu Pty Ltd (2012) 260 FLR 243; [2012] NSWSC 170; BC201200992 at [85]‒[86] per Ward J.

[41]Estate of Fuld (deceased) (No 4) [1968] P 727 at 737 per Scarman J; Abdul-Karim v Attorney-General’s Department [1999] NSWSC 79; BC9900623 at [23]‒[29] per Young J.

[42]Canatan Holdings Pty Ltd v Audori Pty Ltd (FCA, Einfeld J, 1 August 1994, unreported) at [16].

[43]See, for example, Karam v Palmone Shoes Pty Ltd (No 4) [2016] VSC 261; BC201603761 (where the delay in making the application was one of the reasons that disinclined J Forrest J from intervening: at [42]‒[46]).

[44]Gadens Ridgeway v Paroulakis (1992) 15 Fam LR 586 at 592 per Nygh J.

[45]Akki Pty Ltd v Martin Hall Pty Ltd (1994) 35 NSWLR 470 at 483 per Windeyer J.

[46]Inlay Hardwood Floor Co Ltd v Dierssen [1928] 2 DLR 560 at 561 per Macdonald CJA (CA(BC)). See, for example, Konstandopoulos v Giammaria [2004] NSWSC 1010; BC200408584 at [17]‒[20] per Windeyer J (who on the facts refused to allow the lien to oust the solicitor’s lien to defeat the plaintiffs’ entitlement to set-off, noting that ‘[t]he balance on the hardship scale favours the plaintiffs’: at [20]).

[47](2002) 55 NSWLR 451; [2002] NSWSC 564 at [113]-[120].

[48]Mercer v Graves (1872) LR 7 QB 499 per Cockburn CJ at 503.

[49]Estate of Fuld (deceased) (No 4) [1968] P 727 per Scarman J at 737.

Close

Editorial Notes

  • Published Case Name:

    Williamson & Williamson v Pay

  • Shortened Case Name:

    Williamson & Williamson v Pay

  • MNC:

    [2020] QSC 324

  • Court:

    QSC

  • Judge(s):

    Williams J

  • Date:

    27 Oct 2020

  • Selected for Reporting:

    Editor's Note

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.
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