Cosgriff v McAra - [2012] VSC 21

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

S CI 2011 04647

IN THE MATTER of an application by Maree Anne Cosgriff for payment out of Court of funds paid into Court on her behalf in respect of her entitlement from the estate of John Graham Edwards deceased, as between:

MAREE ANNE COSGRIFF	Plaintiff
– and –
NATALIE MAREE McARA and
BRENDAN MARCHESI (as trustee of the bankrupt estate of Issac Alexander Brott)	Defendants

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JUDGE:	MUKHTAR AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	5, 19, 20 December 2011
DATE OF JUDGMENT:	6 February 2012
CASE MAY BE CITED AS:	Cosgriff v McAra and anor
MEDIUM NEUTRAL CITATION:	[2012] VSC 21

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SOLICITOR’S LIEN ― “Fruits of judgment” lien over client’s settlement moneys ― Nature and features of lien.

COSTS ― Fees rendered for conduct of litigation ― Subsequent settlement of litigation ― Solicitor’s lien over “fruits of judgment” ― Sale of debts due to solicitor ― No express assignment of lien to purchaser― Purchaser’s right to take benefit of lien ― No implied entitlement to take benefit of lien under sale of debt agreement ― No independent right at law to take benefit of lien.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr A. Ritchie	Mirabelli, D’Ortenzio & Co
For the First Defendant	Mr S. Thomas	Pinto Law

HIS HONOUR:

The administrator of the deceased estate of John Graham Edwards has paid into this Court under section 69(1) of the Trustee Act the sum of $100 616.29 stating that to be the balance of funds held on behalf of Maree Anne Cosgriff, the daughter of the deceased. That occurred in June 2011. Her claim to that money arises from a compromise of her claim in litigation involving her father’s deceased estate, which gave her a right to be paid money. The administrator took the impartial course of paying the money into this Court because a law firm, Issac Brott and Co, asserted the law gave it a right to have all of that money because it stands as security for legal fees owing by her to them for their professional services in connection with that litigation. That is an assertion of what is commonly known as a “fruits of litigation” lien.

The case has its complications. In circumstances and with timing I am about to expose, before Maree Cosgriff’s litigation was settled the principal of the law firm, Mr Issac Brott, had his practising certificate cancelled for misconduct and unsatisfactory conduct. Cosgriff then obtained new solicitors to continue the litigation. Brott was later made bankrupt and his name was struck off the roll of practitioners at this Court. But before his bankruptcy, he sold his debts to his de facto wife, Natalie Maree McAra under a written agreement for a stated purchase price of $30 000. McAra now contends she is entitled to Brott’s lien over the money in Court as those funds were the partial result of Brott’s exertions as Cosgriff’s ex‑solicitor. She…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Cosgriff v McAra

Details

AGLC: Cosgriff v McAra [2012] VSC 21
Case: [2012] VSC 21
Decision Date: 6 February 2012

CaseChat Overview and Summary

Cosgriff v McAra involved a dispute between the plaintiff, Cosgriff, and the defendant, McAra. The central issue was the nature and extent of a solicitor’s lien over settlement moneys received by the client. The matter was heard in the Supreme Court of New South Wales. Cosgriff sought to enforce a lien over settlement funds that had been received by McAra, asserting that the funds were the "fruits of judgment" and thus subject to the lien. McAra, on the other hand, argued that the purchaser of the debt, who had acquired it after the settlement but before the funds were received, was entitled to the benefit of the lien.

The court was required to determine the legal characteristics and enforceability of a solicitor’s lien over settlement funds, particularly in the context where the debt had been sold to a third party. The central issue was whether the purchaser of the debt, who did not have an express assignment of the lien, could still claim the benefit of the lien. The court examined whether there was an implied entitlement to the lien under the sale of debt agreement and whether there existed any independent right at law that would allow the purchaser to benefit from the lien.

The court held that a solicitor’s lien over the "fruits of judgment" does not automatically transfer to a purchaser of the debt unless there is an express assignment of the lien. It found that there was no implied entitlement to the lien under the sale of debt agreement. Furthermore, the court concluded that there was no independent right at law that would allow the purchaser to take the benefit of the lien without an express assignment. The court's reasoning was based on the principle that the lien is personal to the solicitor and attaches to the proceeds of the litigation, which were the settlement funds. Without an express assignment, the purchaser of the debt could not claim the benefit of the lien.

Consequently, the court ruled in favour of McAra, determining that the purchaser of the debt could not enforce the solicitor’s lien over the settlement funds. The court clarified that the lien remains with the original solicitor unless expressly assigned to another party. The final order was that the purchaser of the debt had no right to the benefit of the lien over the settlement funds.

Orders