Supreme Court New South Wales Medium Neutral Citation: Cameron v Qantas Airways Limited [2011] NSWSC 1137 Hearing dates: 16 September 2011 Decision date: 23 September 2011 Jurisdiction: Common Law Before: Harrison J Decision: 1. The applicants on the notice of motion are entitled to orders for the payment out to them of funds in court representing portion of the balance of the plaintiff's verdict monies in her original proceedings, plus interest and costs. 2. I direct the parties to bring in short minutes of order, with calculations of interest made up to today. The short minutes should include an order that the costs of the application be paid by Ms Cameron. Catchwords: LEGAL PRACTITIONERS - costs - solicitor's lien - funds in court - where solicitors seek orders for payment of costs from the balance of the plaintiff's verdict monies from the original proceedings -where solicitors' costs have been assessed and certificates issued and judgments pursuant entered - solicitors entitled to the orders sought Legislation Cited: Legal Profession Act 2004 Uniform Civil Procedure Rules 2005 Cases Cited: Commonwealth Bank of Australia v The Estate of the Late Mahmoud Slieman [2010] NSWSC 661 Doyles Construction Lawyers v D'Jamirze [2004] NSWSC 507 Ex parte Patience; Makinson v The Minister (1940) 40 SR (NSW) 96 Mercer v Graves (1872) LR 7 QB 499 Vernon v Perry; Payne, Garnishee [1962] VR 223 Worrell (as trustee of the estate of Wedgwood) v Power & Power (1993) 118 ALR 237; (1993) 46 FCR 214 Category: Procedural and other rulings Parties: Rita Cameron (Plaintiff) Qantas Airways Limited (First Defendant) Walker Legal (Second Defendant) Craddock Murray Neumann (Third Defendant) Representation: J Catsanos (First Defendant) I Dicker (Second Defendant) HWL Ebsworth (First Defendant) Yeldham Price O'Brien Lusk (Second Defendant) Craddock Murray Neumann (Self-represented) (Third Defendant) File Number(s): 2001/92202 Publication restriction: None Judgment 1HIS HONOUR : By an amended notice of motion filed on 27 April 2011 John Dominic Wilson and Julian van Leer ("the solicitors") seek orders for the payment out to them of funds in court representing portion of the balance of the plaintiff's verdict monies in her original proceedings, plus interest and costs. Their claim is for professional costs and disbursements from when they acted for Ms Rita Cameron. The proceedings have a long and most unfortunate history in the District Court and this Court, as well as in the Court of Appeal. Several judgments at all levels have recited and repeated the facts giving rise to the proceedings in the first place and the events that have unfolded since they were settled. Ms Cameron has professed dissatisfaction with the settlement and the greatest part of anything that has occurred in these proceedings has its genesis in that fact. 2The solicitors acted for Ms Cameron between 31 January 2005 and 23 October 2007 in District Court proceedings 6941 of 2001. The proceedings were settled on 1 February 2008. Ms Cameron then rejected the settlement. Accordingly, in those circumstances, Qantas Airways Limited paid the settlement sum of $753,909.71 into court on 30 June 2008. On 24 September 2010, orders were made in this Court transferring the proceedings from the District Court. The solicitors now seek payment out of their professional costs from the balance of the monies that remains in court. 3The solicitors are the beneficiaries of three separate certificates of determination of costs arising from the District Court proceedings. They are assessment numbers 2009/1099 in the amount of $169,225.48, 234743 of 2009 in the amount of $2,701 and 234743 of 2009 in the amount of $295.17. The first of these was filed in the District Court on 8 October 2009, the second on 8 March 2010 and the third was filed in this Court some time thereafter. Pursuant to s 368(5) of the Legal Profession Act 2004 , these certificates are taken to be judgments of the District and Supreme Courts respectively. 4The background to these assessments is briefly as follows. On 27 January 2009 the solicitors filed an application for solicitor/client costs. An interim certificate of determination was issued by a costs assessor in their favour on 29 April 2009 in the sum of $70,000. On 4 May 2009 the solicitors filed a motion seeking orders that $70,000 of the money paid into court on 30 June 2008, which was charged as security for their unpaid costs, be paid out pursuant to the interim certificate of determination. On 10 June 2009 Johnstone DCJ ordered that the sum of $70,000 be paid out to the solicitors and that Ms Cameron pay their costs of the motion. That order is dated 23 June 2009. 5On 25 June 2009 the solicitors served a bill on Ms Cameron by registered post. On 29 September 2009 a costs assessor issued a certificate of determination in favour of the solicitors in the sum of $169,225.48. On 22 October 2009 the solicitors filed an application for assessment of their costs of the 10 June 2009 application. On 5 January 2010 a costs assessor issued a determination in favour of the solicitors in the sum of $2,701. That costs assessor also issued a determination on the same day in favour of the solicitors in respect of the costs of the costs assessor in the sum of $295.17. 6The balance owing to the solicitors under the original assessment is $99,225.48. Consideration 7UCPR 55.11 provides as follows: " 55.11 Proceedings for directions as to payment out of court (1) Funds that have been paid into court may only be paid out of court pursuant to the directions of the Supreme Court. (2) An application for such directions is to be made by filing a notice of motion in the proceedings in which the funds were paid into court." 8Regard should be had to three criteria when making an order or direction for the payment out of funds in court. These were referred to by Slattery J in Commonwealth Bank of Australia v The Estate of the Late Mahmoud Slieman [2010] NSWSC 661 at [8] - [10] as follows: "[8] An applicant under UCPR r 55.11 must establish three matters to justify an order for the payment of money out of Court. The first is to identify the person who is primarily entitled to any funds paid into Court and the basis of that entitlement. It is fundamental that the person be identified from the best evidence available, so that the Court can be sure that the person has been given appropriate notice of the application and can if necessary contest it. [9] The second matter that needs to be proved by a claimant is that he or she is not merely an unsecured creditor against the person primarily entitled to the fund but is a person who has an beneficial interest in the very fund that has been paid into Court. The same evidence that demonstrates a person's primary entitlement to the funds in Court often establishes this second matter. [10] Thirdly, it is necessary for an applicant to identify the other potential claimants to the fund in Court and to prove that those persons were notified of its claim. Those persons may consent to the claim. Alternatively, the applicant may prove that those persons either do not have valid claims against the fund or that their claims do not have priority over the applicant's claims." 9The solicitors' only source of access to the funds in court is in accordance with an order of the Court: Vernon v Perry; Payne, Garnishee [1962] VR 223. The solicitors contend that they are entitled to an equitable lien over the monies paid into court. A solicitor's lien arises even before there is a fund in court and before a judgment for costs has been quantified by assessment: see Worrell (as trustee of the estate of Wedgwood) v Power & Power (1993) 118 ALR 237; (1993) 46 FCR 214. 10In Ex parte Patience; Makinson v The Minister (1940) 40 SR (NSW) 96 the Court said this at 100: "A solicitor has no lien for his costs over any property which has not come into his possession. If, however, as the result of legal proceedings in which the solicitor has acted for the client, the client obtains a judgment or award or compromise for the payment of money, although the solicitor acquires no common law title to his client's right to receive the money or to any part of that right, he acquires a right to have his costs paid out of the money, which is 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. That is to say, the solicitor has an equitable right to be paid his costs out of the money; and if he gives notice of his right to the person who is liable to pay it, only the solicitor and not the client can give a good discharge to that person for an amount of the money equivalent to the solicitor's costs: Welsh v Hole. If the person liable to pay refuses, after notice, to pay the costs of the solicitor, the solicitor may obtain a rule of Court directing that the amount of his costs be paid to him and not to the client; and payment by the judgment debtor to the client after notice of the solicitor's claim is no answer to an application for such a rule: Read v Dupper; Ormerod v Tate; Ross v Buxton. Further, if the client and a judgment debtor make a collusive arrangement for the purpose of defeating the solicitor's right, the Court will enforce that right against the judgment debtor notwithstanding the arrangement and notwithstanding that no notice of the solicitor's claim had been given to the judgment debtor prior to the arrangement: Ross v Buxton ." 11There is support for the proposition that a solicitor, whose professional exertions have contributed in a causal sense towards the right of a former client to obtain money by verdict or settlement, can claim a lien over the fruits of the action: see Doyles Construction Lawyers v D'Jamirze [2004] NSWSC 507 at [14] per Grove J as follows: "[14] ...There can be no doubt that a solicitor whose exertions have contributed in a causal sense towards the right of a client to obtain money by verdict or settlement can claim a lien over the "fruits of action". The entitlement has been said to be analogous to the right created by an equitable assignment of a corresponding part of the money: Ex Parte Patience; Makinson v The Minister 1940 40 SR (NSW) 96. It is not necessary that the assessment of costs be finalised for the right to exist: Johns v Cassel (1993) FLC 92-364. Mr Doyle and Mr Cameron who respectively appeared on the summons have, in compliance with directions, supplied written submissions which extensively canvass authorities touching upon a wide range of aspects of a lien of the type claimed." 12The solicitor's lien permits the solicitor, in effect, to " ask for the intervention of the Court for his protection, when, having obtained a judgment for his client, he finds there is a probability of his client depriving him of his costs ": Mercer v Graves (1872) LR 7 QB 499 at 503. 13In the present case there is, in the solicitors' contention, no issue that their work as Ms Cameron's solicitors contributed to the settlement of her claim. They say that they substantially discounted their claim for legal costs in order to facilitate the settlement. However, whether they did so or not is presently irrelevant and is in any event not the subject of evidence before me. More to the point is the fact that the solicitors' costs have been assessed, certificates have issued and judgments pursuant to those certificates have been entered. The solicitors have in those circumstances become secured by way of a lien in respect of their unpaid professional fees over the funds in court. 14I have been provided with a schedule of interest calculations up to and including 5 August 2011. It would be preferable if orders were made that included interest up to the day that these reasons for judgment are published. 15I consider that the solicitors are entitled to the orders that they seek. Ms Cameron raised a series of complaints about the fact that she may be required to pay the solicitors' costs but did not contend that there was any legal impediment to the orders that the solicitors sought. This appears from what passed between me and Ms Cameron as follows: "HIS HONOUR: ... Miss Cameron, there is a costs certificate, as I understand it, that has issued in respect of the costs payable as between you and those represented by Mr Metlej. He moves the Court for an order that of the sums retained in Court it be paid out of that sum. What is your attitude to that? PLAINTIFF: I object to the amount of money claimed by Craddock Murray Neumann. I have always said that I had signed an agreement for $40,000. They went off that and continued to charge me excessive amounts of money for work which they have not done. They've been paid $70,000. They want another $99,000. It was awarded by the costs assessor after it was assessed. Before it was assessed, an amount of $70,000 was paid. They're claiming another 120 thousand something. I do not agree to that. HIS HONOUR: Hang on. Undoubtedly these arguments were raised before the cost assessor? PLAINTIFF: Yes. HIS HONOUR: That certificate now issued which amounts to a judgment for those costs. Have you sought to challenge that in any formal way? PLAINTIFF: No, I haven't. I believe it's a bit too late. HIS HONOUR: I think it might be. My question is why should I not make an order in the terms that are sought? PLAINTIFF: The interest of that has already been paid. The amount of $70,000 was paid before it was assessed. They have not done the work that I hired them to do. HIS HONOUR: You keep going back behind the order that has been made. The order that has been made, I'm assuming has been formulated and made after the arguments of the sort you are now agitating have been raised. PLAINTIFF: Yes, your Honour. HIS HONOUR: We can't endlessly keep raising them in the hope that some decision different to the one you don't like will emerge, can we? PLAINTIFF: They did not finish my trials or matters that were before his Honour down at the District Court. Mr Wilson actually did not follow any of my instructions. I don't think they should be paid. They did not bring my trial to a closure and in my benefit. HIS HONOUR: Well, I have discussed this with you before. PLAINTIFF: Yes, your Honour, I understand. ***** HIS HONOUR: I've got the motion and the affidavit, and the written submissions in support. Did you want to say anything else Miss Cameron? PLAINTIFF: The interests have been paid. It's inclusive of the figures that the costs assessor gave. I object to the whole amount of costs and the claimed amounts that they've claimed. They did not bring it to the final conclusion, I don't think they should be paid. They have not provided any receipts or documents to say they've paid for it. I totally object to the whole amount. HIS HONOUR: You agree that the arguments you are now putting to me were raised before the cost assessor. PLAINTIFF: Yes, I do. HIS HONOUR: You have not sought formally to challenge the assessment. PLAINTIFF: No, I didn't, your Honour. I didn't think I had the choice then but I think it got a bit too late." 16In these circumstances I will direct the parties to bring in short minutes of order, with calculations of interest made up to today. The short minutes should include an order that the costs of the application be paid by Ms Cameron. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 23 September 2011