Philippa Power & Associates v Primrose Couper Cronin Rudkin
[1997] QCA 3
To print this judgment please return to the case and click on the PDF icon
next to the
case name. For court use, a full PDF copy is required or preferred.
Exit Distraction Free Reading Mode
Please Note: You are about to print a copy of the onscreen
version of
this judgment. For court use, a full PDF copy of the judgment is required or preferred. Please
return to
the case for PDF printing options.
- Unreported Judgment
- Appeal Determined (QCA)
- Philippa Power & Associates v Primrose Couper Cronin Rudkin[1997] QCA 3
- Add to List
Philippa Power & Associates v Primrose Couper Cronin Rudkin[1997] QCA 3
Reported at [1997] 2 Qd R 266
Philippa Power & Associates v Primrose Couper Cronin Rudkin[1997] QCA 3
Reported at [1997] 2 Qd R 266
IN THE COURT OF APPEAL
SUPREME COURT OF QUEENSLAND
Appeal No. 145 of 1996
Brisbane
[Philippa Power & Associates v. Primrose Couper Cronin Rudkin]
BETWEEN:
PHILIPPA POWER & ASSOCIATES
(Garnishee) Appellant
AND:
PRIMROSE COUPER CRONIN RUDKIN
(Judgment Creditor/Plaintiff) Respondent
Macrossan CJ
Derrington J
White J
Judgment delivered 14/02/1997
Joint reasons for judgment of Macrossan CJ and White J, separate reasons for judgment of Derrington J concurring in the order.
APPEAL ALLOWED, JUDGMENT BELOW SET ASIDE AND GARNISHEE SUMMONSES DISMISSED. APPELLANT TO HAVE ITS COSTS OF AND INCIDENTAL TO THE APPEAL AND THE PROCEEDINGS IN THE DISTRICT COURT AND (IN THE SUM OF $1,082.25 IN THE) MAGISTRATES' COURT. RESPONDENT TO HAVE AN INDEMNITY CERTIFICATE UNDER s. 15(1) OF THE APPEAL COSTS FUND ACT 1973 IN RESPECT OF THE APPEAL. IN CONSEQUENCE OF THOSE ORDERS BY CONSENT FURTHER ORDERED THAT RESPONDENT PAY TO THE APPELLANT WITHIN FOURTEEN DAYS OF TODAY'S DATE THE SUM OF $11,214.55, TOGETHER WITH INTEREST AT THE RATE OF 11.5 PERCENT FROM THE SECOND DAY OF JANUARY 1996 TO THE DATE OF PAYMENT.
CATCHWORDS: | LIENS - Solicitor's lien - nature and strength of particular lien over judgment fund - time when lien arises - whether attaches to money in trust account - whether earlier lien defeats judgment creditor's garnishee orders - whether solicitor's lien is superior in quality to the judgment creditor's interest. LIENS - Solicitor's lien - whether general lien can extend to money held in a bank account. |
Counsel: | Mr P Keane QC and Mr W Hodges for the appellant. Mr D Logan for the respondent. |
Solicitors: | Philippa Power and Associates for the appellant. Primrose Couper Cronin Rudkin for the respondent. |
Hearing Date: | 16 August 1996. |
IN THE COURT OF APPEAL
SUPREME COURT OF QUEENSLAND
Appeal No. 145 of 1996
Brisbane
Before Macrossan CJ
Derrington J
White J
[Philippa Power & Associates v. Primrose Couper Cronin Rudkin]
BETWEEN:
PHILIPPA POWER & ASSOCIATES
(Garnishee) Appellant
AND:
PRIMROSE COUPER CRONIN RUDKIN
(Judgment Creditor/Plaintiff) Respondent
JOINT REASONS FOR JUDGMENT - THE CHIEF JUSTICE AND WHITE J
Judgment delivered 14/02/1997
This appeal is against the decision of a District Court Judge making garnishee orders absolute against a firm of solicitors holding funds in its trust account in the name of a judgment debtor.
The appellant garnishee firm had acted in Family Court proceedings for the debtor and it was as a result of an order made in that jurisdiction that the funds in question came to be paid into its trust account.
The respondent judgment creditor was itself a firm of solicitors and it had also previously acted for the same debtor in proceedings in the Family Court. Those earlier proceedings terminated without any satisfactory result being achieved so far as the debtor was concerned. In fact the debtor subsequently gave instructions that proceedings should be commenced against the respondent claiming damages for negligence in the prosecution of her property claims in the Family Court against her husband and other parties. Notwithstanding the outcome of the respondent's efforts on the debtor's behalf, substantial costs had been claimed against her by the respondent and while some of those costs had been paid, further sums remained outstanding. Proceedings based on those outstanding costs resulted in two judgments being obtained by the respondent against the debtor. Those judgments were the ones on which the garnishee proceedings came to be issued.
Two separate garnishee summonses had been issued at the suit of the respondent against the garnishee, the appellant, requiring it to show cause why the amounts of the respondent's judgment debts and costs should not be paid to it pursuant to orders nisi obtained under the relevant rule of the Magistrates' Court. The orders nisi purported to attach all moneys held in a bank account or trust account operated by the garnishee on behalf of the debtor. The total of the amounts for which the two Magistrates' Court summonses were issued was something in excess of $17,000. At a later stage in the Magistrates' Court proceedings, a third summons was issued but it was not for any additional amount and its purpose was simply to deal with some procedural difficulty which the respondent thought it might have to confront. It adds no complication to the determination of this appeal and needs no further mention.
The features of a solicitor's trust account and of a solicitor's entitlement to a lien for costs, received attention in the Magistrates' Court and the proceedings which had been commenced, ended there with the garnishee summonses being dismissed with costs. From that order the respondent successfully appealed to the District Court.
Before examining the basis of the decision in the District Court, it is necessary to place matters in perspective by mentioning some further details and providing a chronology of relevant events.
The Family Court proceedings in which the appellant firm acted for the debtor involved a claim in respect of property brought by her against her ex-husband and her ex-husband's daughter. In the end, this claim was settled, although again it did not produce any particularly satisfactory result for the debtor. However, it resulted in an order for the payment of a sum for the debtor's costs. That order was made on 4 July 1995 by a Family Court Judge and it directed the ex-husband's daughter to pay "to the wife's solicitors the sum of $20,000, such sum to be on account of costs" and it was to be made by two instalments of $10,000 each "to be in full and final satisfaction of all and any property claims howsoever arising against the husband and (the daughter)." The payments were to be made by transfer to the appellant firm at a nominated account with the Commonwealth Bank at Southport. On that basis, it was declared that the property claims of the parties to the Family Court proceedings should be dismissed with no other orders as to costs.
On 7 July 1995 the first of the agreed instalments of $10,000 was paid to the appellant's trust account. On 10 July 1995, the appellant paid out $8,785.45 to meet liabilities incurred and to cover certain expenditures in the proceedings on behalf of the debtor. This left in the trust account a balance of $1,214.55 out of the first instalment that had been paid.
On 11 July 1995 the appellant delivered its bill for $30,880.90 to the debtor for costs and further outlays. As already mentioned, the respondent's garnishee summonses were issued on 12 July 1995, which was the following day, and on that day also the garnishee orders nisi were served.
On 15 July 1995 the appellant obtained the debtor's signed authority to transfer from the firm's trust account to its business account in payment of its professional fees and disbursements the moneys paid by the daughter pursuant to the Family Court order of 4 July. The further instalment of $10,000 under that order was paid into the trust account on 25 July 1995. Pending the forthcoming hearing in the Magistrates' Court of the garnishee proceedings, the appellant made no further payments out from its trust account. Those proceedings took place on 11 August 1995.
The position then was that prior to the institution of the garnishee proceedings, one payment out from the trust account had been made leaving a balance from the instalments of $11,214.55 and a bill for costs and outlays had been delivered by the appellant for an amount far exceeding that sum. However, no further event which might be regarded as consolidating the appellant's entitlement had occurred. The respondent's claim also exceeded the balance sum referred to. It was only in respect of that balance that the competing claims of entitlement were made and determined in the Magistrates' Court and, on appeal, in the District Court.
In the proceedings in the District Court, the appellant resisted attachment of the balance sum in its trust account on two bases. It claimed that it had a general possessory lien for the amount of its costs over that money in its trust account. It also claimed what can conveniently be called a "particular" lien over the same fund on the basis that it represented the fruits of its labours: it was its efforts as solicitor acting on behalf of the debtor that had brought the fund into existence.
The learned District Court Judge rejected the appellant's arguments and upheld the attachment. He expressed no doubt that a solicitor's trust account can be the subject of a garnishee order. He also concluded that although the moneys paid into the solicitor's trust account had come pursuant to an order "on account of costs" they were received as property of the debtor and not of the appellant. They did not come under an agreement which might have the effect of determining entitlement between the debtor and her solicitor in favour of the latter. This view of the matter no doubt explains why the moneys in question had been paid into the trust account and subsequently dealt with as trust funds for which the appellant was accountable to its client. There was no dispute on these aspects before us.
It is obvious that the District Court Judge further thought that a sufficient general basis had been laid for bringing into existence both forms of lien. However, because the lien was claimed over moneys in a bank account and, perhaps particularly because it was in a trust account, he thought that the general lien did not apply. The fund could not be considered to be in the "possession" of the appellant firm because in its bank account it represented nothing more than a chose in action with a debtor/creditor relationship existing between the appellant and the bank holding moneys on the appellant's behalf. Accordingly, he held that an essential ingredient of the general lien, namely possession, could not exist. The position, he thought, was different from that which would apply if there were property like documents, money in specie, or other valuable items actually held in possession. In reaching this conclusion the Judge applied reasoning to be found in WFM Motors Pty Ltd v. Maydwell (1994) 6 B.P.R 13,381 and Shand v. M.J. Atkinson Limited (in liq) [1966] N.Z.L.R. 551 and Stewart v. Strevens [1976] 2 N.S.W.L.R. 321.
In looking at the "particular" lien claimed by the appellant, the Judge noted that at the time of hearing of the appeal the appellant had its client's authority to transfer the money into its general account but he considered that alone gave it no rights to the money itself. While s. 8(1)(c) of the Trust Accounts Act 1973 authorises a solicitor's withdrawing money from a trust account to pay his own costs and outlays when the payment is supported by the client's written authorisation, that situation did not apply until 15 July 1995 and in particular did not apply at 12 July when the garnishee summonses were served. The Judge held that this was fatal to the position of the garnishee: it had not "perfected" its lien at the relevant time. In reaching this conclusion, the Judge relied on James Bibby Ltd v. Woods and Howard [1949] 2 KB 449 considering that it was a situation of competing claims and the execution creditor had got in first. The question now is whether this analysis by the Judge is correct.
On the appeal, reference was made to both forms of lien but most emphasis was placed by counsel for the appellant on the claimed "particular" lien and it is convenient to consider it first.
James Bibby (supra) essentially turned on the nature of the right and accompanying remedy available to a solicitor claiming a lien for his costs upon a fund produced by his exertions. While the case drew a distinction between such liens and true possessory liens it seems that the view nevertheless adopted was that the former type of lien gave no more than a right to apply for a protective court order and until that was done, no right in the property existed. A contrary view could of course be considered, namely that there was an interest in the fund itself which the Court in lending its assistance merely upheld. This latter approach is the one that certain Australian cases have adopted. The distinction between the two positions is reminiscent of the discussion by Kitto J in Latec Investments Ltd v. Hotel Terrigal Pty Ltd (in liquidation) (1965) 113 CLR 265 at 277 where his Honour contrasted the character of an equity giving entitlement to take proceedings with that of an equitable estate or interest in property.
Ex parte Patience; Makinson v. The Minister (1940) 40 S.R (N.S.W.) 96 was a decision of Jordan CJ in which a lengthy examination of earlier cases was undertaken and the conclusion reached that a solicitor has equitable rights in the fruits of a judgment produced by his efforts which rights have an existence independently of the making of any declaration concerning them. The Court's assistance did not, his Honour thought, create the rights but merely enforced them. A declaration or other judicial remedy could restrain interference with the rights by the client "owner" of the fruits of the judgment or a third party claiming against them. The equitable right of the solicitor which would be declared could be for the amount of costs to be taxed, if taxation had not already occurred.
Worrell v. Power & Power (1993) 118 A.L.R. 237 adopted and applied the same approach. There, an act of bankruptcy was committed by a client after an order to pay costs to him had been made in certain proceedings and the quantum of the costs had been fixed by agreement. The act of bankruptcy then followed and, after that again, the amount of costs was paid over as had been agreed. Subsequently, the money that had been paid was transferred from the solicitor's trust account to a general account. Notwithstanding the relation back of the commencement of the bankruptcy to the earlier act of bankruptcy, it was held that the payment of the money to the general account was not a preference because the solicitor enjoyed the benefit of a particular lien from the date of the order to pay costs. In Kison v. Papasian (1994) 61 S.A.S.R. 567, the approach in ex parte Patience and in Worrell was applied and the solicitor's equitable interest in respect of his costs was held to have arisen when the order for payment of costs was made. See also Deputy Commissioner of Taxation v. GIO NSW (1992) 109 A.L.R. 159 at 172.
Once the nature of a solicitor's interest in a fund representing the fruits of his labours is appreciated and it is accepted that the solicitor's interest in the fund dates back to the time when the fund first comes into existence, or the original order providing for the payment of the sum constituting the fund is made, then it is clear that the interest of the solicitor will prevail over the right of an execution creditor subsequently seeking to attach the fund. The view of an execution creditor's right under a garnishee order nisi against a debt owing to the debtor by the garnishee that is offered in Choice Investments v. Midland Bank Ltd [1981] 1 Q.B. 149 at 155, is that it binds the debt in the hands of the garnishee, that is it creates a charge in favour of the execution creditor. However, in a case like the present, that view of the right will not assist the execution creditor because he cannot obtain any right against the fund beyond that which the debtor himself had or could give: in Re General Horticultural Co; ex parte Whitehouse (1886) 32 Ch.D 512 at 516 and Cole v. Eley [1894] 2 Q.B. 180 at 188. It would clearly be unjust to allow an execution creditor whose only right lies against the property and interests of the debtor to convert for his own benefit the rights and interests of third parties. Alternatively, but to the same effect, the view can be taken that both the garnishee and the execution creditor are claiming rights against the same fund but the garnishee's right arose at an earlier point in time and should prevail: cf. Holt v. Heatherfield Trust Ltd [1942] 2 K.B. 1 at 11.
A solicitor's right for his costs against a fund brought into existence by his labours is a right of a kind which finds parallels elsewhere. Dixon J in Universal Distributing Co (1933) 48 C.L.R. 171 at 174 spoke of the right of a party who by his efforts has brought a fund into court in the administration of which other parties are interested. The court in Worrell (supra) at 245 referred to other examples of equitable lien such as the right of a co-owner to recoup expenditure which benefits the joint property and that of a provisional liquidator for his expenses and remuneration engaged over assets under his administration. Further examples are given in Shirlaw v. Taylor (1991) 102 A.L.R. 551 at 557-561.
The substantial weight of the Australian decisions referred to so far is convincing and there is no reason why the principles established in them should not be followed. The result is that the existence of the appellant firm's "particular" lien entitles it to succeed. It may be mentioned in passing that the decision of Thomas J in Re Jalmoon Pty Ltd [1986] 2 Qd.R. 264, although it was founded upon the effect of a general possessory lien, does not stand in the way of this conclusion. The decision of Andrews SPJ in Gilshenan and Luton v. Commissioner of Taxation [1984] l Qd.R. 199 also involved a solicitor's general retaining lien although it may be observed that it took a narrow view of the point to which the commencement of the rights under such a possessory lien could be traced.
Since the appellant is entitled to succeed in the appeal without reference to further rights claimed under its general "possessory" lien, it is strictly unnecessary to say anything on that matter. However, without in this case expressing any final view, it may be suggested that broad principle and consistency in approach as well as a substantial body of authority could justify acceptance of the view that a possessory lien can exist over money in a bank account. It seems excessively literal to assert that relevant possession can exist only over physical items held and that money in a bank account gives rise to no more than a debt in favour of the depositor. The essential feature of possession is, after all, control, and the solicitor in whose trust account moneys are held is the one who, like any customer of a bank, controls its disposition by giving directions in respect of it which the bank must follow. This view of the matter is not impaired by the fact that the solicitor has his right to control operations on his trust account regulated by certain statutory provisions found in the Trust Accounts Act 1973. This regulation does not deprive him of his essential control or in its effect substitute any other controller. There does not appear to be any unwarranted extension of principle involved in saying that control of the funds in the bank account, equivalent to possession, remain with the solicitor with the bank being responsive to his directions in much the same way that possession of a physical object can be held on a person's behalf by a servant or agent answerable to him. Whilst final determination of this question may be left to another day, the following authorities may be included amongst those accepting that a possessory lien may exist over moneys in a bank account: Re Jalmoon Pty Ltd (supra); Gilshenan & Luton v. Commissioner of Taxation (supra) (whatever might be said about certain other propositions stated in that case); Loescher v. Dean [1950] 1 Ch 491; Prekookeanska Plovidba v LNT Lines SRL [1989] 1 WLR 753; Johns v Law Society of NSW [1982] 2 NSWLR 1 at 20 per Hope JA.
The appeal should be allowed and the judgment entered below set aside and the garnishee summonses dismissed. The appellant should have its costs of the appeal and of the proceedings in the District Court and Magistrates' Court. The respondent should have an indemnity certificate under s. 15(1) of the Appeal Costs Fund Act 1973 in respect of the appeal. The parties to be heard on any consequential orders sought.
IN THE COURT OF APPEAL
SUPREME COURT OF QUEENSLAND
Appeal No. 145 of 1996
Brisbane
Before Macrossan CJ
Derrington J
White J
[Philippa Power & Associates v. Primrose Couper Cronin Rudkin]
BETWEEN:
PHILIPPA POWER & ASSOCIATES
(Garnishee) Appellant
AND:
PRIMROSE COUPER CRONIN RUDKIN
(Judgment Creditor/Plaintiff) Respondent
REASONS FOR JUDGMENT - DERRINGTON J
Judgment delivered 14 February 1997
The facts and issues in this matter are fully set out in the joint judgment of the other members of the Court. Although I respectfully agree with their conclusions and proposed orders, I would add some observations of my own.
The issue whether the garnishee order nisi had application to the amount received into the appellant's trust account after the order came into force may be postponed, for as it will be found that the equity supporting that order is inferior to the equity of the appellant in respect of the amount already held there at the time of the order nisi then the former question is otiose. At least it is unarguable that the garnishee order nisi could apply to the second amount before it came into the hands of the appellant.
The charge by way of security for costs owing which a solicitor acquires over the fruits of successful litigation should not be described as a lien for it does not depend upon physical possession of the secured asset: Hewett v Court (1983) 149 CLR 639, 663. Because it is a charge to protect the solicitor in respect of unpaid costs, it should be given a scope and effect consistent with that purpose. Consequently, as the authorities show, it prevails over a garnishee order against the debt under the judgment obtained by the solicitor before any moneys are paid to the solicitor: See Ex parte Patience; Mathinson v. The Minister (1940) 40 SR(NSW) 96; Worrell v. Power & Power (1993) 118 ALR 237; Kison v. Papasian (1993) 61 SASR 567; Akki Pty Ltd v. Martin Hall Pty Ltd (1994) 35 SR(NSW) 470.
When the moneys from such a judgment are received into the solicitor's trust account in order to answer the judgment debt, the solicitor's security might be more secure in a practical way, but in theory it has no greater force than when it was held against the judgment debt itself. The difference in the situation means only that different steps are appropriate to the enforcement of the security.
The charge which the respondent as a garnishor obtained over the moneys held by the solicitor on behalf of the client is of a different order. Like the solicitor's charge, it is a creature of equity designed only to provide an equitable security to support the remedy. Its particular purpose is to secure the relevant funds against any transaction entered into after the order nisi and before the order absolute that would rob the judgment creditor of the fruits of the garnishee proceedings between the time of the order nisi and the judgment absolute (Chatterton v. Watney (1881) 17 Ch.D. 259). See the discussion on this topic in Relwood Pty Ltd v. Manning Homes Pty Ltd (No. 2) [1992] 2 Qd. R. 197.
It arises upon the order nisi, and it operates as a security in providing protection for the execution process against its emasculation by the debtor's disposition of the asset before the order can be made absolute. The quality of such a protective equity must be measured according to the nature of the judgment creditor's entitlement to it. That party will have had no association with the asset other than as a judgment creditor seeking to levy execution against an asset that has nothing to do with the debt, and as it has been shown the charge arises only to protect the process of execution.
This scant association between the judgment creditor and the asset may be contrasted with that of the holder of a floating debenture that crystallises over it (Relwood Pty Ltd v. Manning Homes Pty Ltd (No. 2) (above)). Similarly, it may be compared adversely with the equitable charge of a workman or a solicitor whose charge against the asset is derived from that party's work, without remuneration, in the production of it and its availability to the judgment debtor. As that work will have been performed in advance of the asset's coming into the power of the judgment debtor, equity, which looks to the substance rather than the form, would see the equity's creation as being at least contemporaneous with the asset's becoming available to the client. Manifestly the quality of the equity in such a case substantially exceeds that of the judgment creditor whose only equity is limited through his or her judgment nisi for garnishee.
See for example how the quality of the solicitor's charge was regarded as superior to the judgment creditor's charge in Shippey v. Grey 49 L.J. (Q.B. 524), James Bibby Ltd v. Woods and Howard [1949] 2 KB 449, 455, and Loescher v. Dean (1950) 1 Ch. 491. However it was assumed that the solicitors charge did not arise until at least an application was made for a charging order, and that was not, or was assumed not to have been, made at least until after the order nisi for garnishee. The latter was then thought to have priority because of its priority in time without regard to the superiority in quality of the former, which would not have been justified. The equitable context requires that the issue be determined on broad principles of right or justice (Cash Resources Australia Pty Ltd v. B.T. Securities Ltd [1990] VR 576).
The search for priority in time between the respective equities is premature because it is only where the equities are equal that the priority in time prevails, though in the evaluation of their respective qualities priority in time may be a factor (Latec Investments Ltd v. Hotel Terrigal Pty Ltd (1965) 113 CLR 265; Heid v. Reliance Finance Corporation Pty Ltd (1983) 154 CLR 326). Here the quality of the appellant's equity far outweighs that of the respondent and it also has the virtue of being the first in time.
Even if it were incorrect to engage in questions of quality, the result would be the same for the effect of the judgment creditor's charge is by its raison d'etre so limited as to defeat only interests that arise after it attaches. In the present case, the solicitor's charge attached first to the debtor's entitlement under the judgment for costs in her favour; and then it shifted to the moneys received into her trust account which replaced the client's rights under the order. Consequently, this antecedent charge was not affected by the judgment creditor's charge which, by its own terms, came into competition only with competing interests subsequently created. This inferiority in time of the respondent's equity is certainly not overcome by any superiority in quality.
It is argued that in some way while the judgment creditor's charge could attach to moneys held in the trust account the solicitor's charge could not do so. This is incorrect and the mere statement of the proposition tends to show its inherent self-contradiction. When the moneys were received into the trust account, the trust on which they were received included the solicitor's charge. In addition, if it were necessary, a party claiming an interest in trust funds could have recourse to the proposition that funds received into a trust account might subsequently have a further trust imposed upon them, either by the unanimous action of all the beneficiaries, being sui juris, or by the operation of law. Indeed, it is by the latter process that the judgment creditor would be entitled to claim its charge against the trust moneys, subject of course to superior competing interests.
The position in Gilshenan and Luton v. Commissioner of Taxation [1984] 1 Qd.R. 199 is clearly distinguishable. There, the moneys paid into the trust account by the client were not the proceeds of successful litigation on his behalf, and consequently not imprinted from the beginning with the solicitor's charge. The terms of the trust on which they were held was that they belonged to the client absolutely unless and until costs incurred in his defence became payable by him. Under the terms of the trust, the solicitors obtained no beneficial right in the trust funds until that time, and it was not reached until the costs were agreed to and the payment authorised by the client or the amount of the costs was determined by taxation. In effect, the terms of the trust were different from those in the present case, and the solicitor's beneficial interest in the trust moneys had not yet been created.
The same general remarks may be said of Prekookeanska Plovidba v. L.N.T. Lines SRL [1989] 1 WLR 753 where, however, it was held that the solicitors' general possessory lien operated against moneys paid into the trust account by the client to cover costs.
The issue was raised whether the solicitor's charge could come into existence before a charging order by the Court on the solicitor's application. No such order was made in this case nor was any attempt made to tax costs, though it seems that the client may well have agreed to the attribution of the trust funds towards costs by payment into the solicitor's general account. If it had been necessary, this may have been sufficient to avoid this issue.
On the basis of the reasons given in James Bibby Ltd v. Woods and Howard (supra), the judgment creditor argues that the solicitor's charge does not attach until a charging order is made or at least applied for. That is in conflict with Ex parte Patience; Makinson v. The Minister (supra) in which it was held that the charge attaches from the time of the judgment in favour of the client and that procedures such as charging orders are merely instruments to enforce the charge rather than to create it. With respect, the latter judgment is more considered and consonant with general principle. Its analysis and explanation of earlier authority is more profound and the propositions that it postulates are not adequately addressed in Bibby.
For similar reasons, and after a review of all of the authorities, the Full Federal Court came to the same conclusion in Worrell v. Power & Power (supra). This was followed in Kison v. Papasian (supra) without further discussion of the conflict with the English authorities. It should also be followed here.
For these reasons, it is unnecessary to venture into the question whether a solicitor has an ordinary general lien for costs over the client's moneys held in the trust account. Plainly it can operate only to the extent that the client owing the costs must have an interest in the trust moneys against which the solicitor's lien might attach and that competing interests superior to that of the client could not be affected by the lien. However, that aside, the preponderance of authority strongly supports the conclusion that a lien may exist in respect of the assets represented by the credit in the trust account notwithstanding that it does not consist of a physical entity capable of physical possession. See Re Jalmoon Pty Ltd (1986) 2 Qd.R. 264; Gilshenan & Luton v. The Commissioner of Taxation (1984) 1 Qd.R; Loescher v. Dean (1950) 1 Ch. 491. However, a simple lien relating to work done after the creation of the charge pursuant to the garnishee order, may find itself postponed to the latter because it is later in time and it does not bear the quality of a special charge associated with the recovery of the fruits of litigation that are the subject of the charge.
Because in every respect the solicitor's special charge and ordinary lien are both superior to the charge of the judgment creditor, it is unnecessary to consider whether the latter has any lien at all in respect of the sum received by the solicitor after the garnishee order nisi. It is argued that the solicitor's indebtedness to the client (if any) on receipt of those moneys was not a debt that was due, payable or accruing to which the garnishee order nisi was directed. If this had to be decided, it may have been necessary to investigate further whether the antecedent arrangements whereby the payment was to be received by the solicitor at a time which proved to be subsequent to the order nisi may amount to a debt within that description. There is no point in seeking the resolution of this issue.
The appeal should be upheld. As it has been indicated above, I agree with the orders proposed by the other members of this Court.