EVETT & LAO

[2015] FamCA 723

FAMILY COURT OF AUSTRALIA

EVETT & LAO [2015] FamCA 723

FAMILY LAW – LEGAL PRACTITIONERS – Application by wife’s former solicitor for a lien over certain funds due and payable to the wife under property orders – Where as a consequence of the solicitor’s engagement by the wife, the wife was able to settle property proceedings –Where endeavours have been made to notify the wife – Where the application is ex parte – Where it is appropriate that there be an order for costs.

Family Law Act 1975 (Cth) ss 70NFB, 117, 117AA, 117AC, 118

Firth & Centrelink (2002) NSWSC 564

Marsh & Marsh (2014) FamCA 361

APPLICANT: Mr Evett

RESPONDENT: Ms Lao

FILE NUMBER: PAC 2326 of 2013

DATE DELIVERED: 19 August 2015

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: Foster J

HEARING DATE: 19 August 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Shaw

SOLICITOR FOR THE APPLICANT: Evett & Evett

Orders

1. That the Applicant Solicitor have leave to proceed ex parte.

2. The Applicant Solicitor Mr Evett have a lien to the extent of $100,000 over monies payable to the Wife pursuant to orders made on 27 May 2015 by the Husband in consideration of which the Wife is to transfer her interest in the property at B Street, Suburb C to the Husband.

3. That by reason of the lien referred to above the Solicitor Mr Evett shall do all things necessary and sign all necessary documents so as to direct the Husband on payment of funds to the Wife pursuant to order made on 27 May 2015 to pay directly to the Solicitor the sum of $100,000 from funds otherwise payable to the Wife.

4. That the Solicitor Mr Evett deposit those funds in an interest-bearing controlled monies account on trust for the Wife pending agreement as to costs payable to the Solicitor or assessment of those costs on taxation.

5. That upon agreement between the Solicitor and the Wife as to the Solicitor’s costs or in default of agreement upon completion of taxation or assessment the amount so assessed or taxed as due and payable to the Solicitor may be deducted by the Solicitor from the controlled monies account with the balance then remaining payable to the Wife.

6. That the Applicant Solicitor Mr Evett shall have a charge over the Wife’s interest in the property at B Street, Suburb C to the extent of his lien for costs as determined above and in respect of that charge be at liberty to register a caveat over the Wife’s interest in the said property pending discharge of his lien.

7. The Respondent Wife pay the Applicant Solicitor’s costs of this application as agreed within one month from the date of this order or as assessed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Evett & Lao has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER:  SYG 2326 of 2013

Mr Evett

Applicant

And

Ms Lao

Respondent

REASONS FOR JUDGMENT

1. The application before the Court is an Application in a Case filed by Mr Evett, the former solicitor for the wife in property proceedings in this registry. The wife is Ms Lao, and she is the respondent to the Application in a Case. The applicant seeks orders that will facilitate him having a lien over certain funds due and payable to the wife by reason of property orders made by consent on 27 May 2015 by Hannam J in this registry. 

2. In summary, those orders provide for the husband to pay to the wife the sum of $150,000 within 70 days of 27 May 2015, and in consideration of that payment, the wife transfer to the husband her interest in the property at B Street, Suburb C, being the whole of the land contained in Folio Identifier ….  Otherwise, the husband is required, simultaneously with the payment and the transfer of the property to him by the wife, to refinance the existing mortgage over the said property so as to relieve the wife from all or any liability in regard thereto. 

3. The applicant solicitor in his affidavit filed on 14 August 2015 says that he was engaged as the attorney for the wife in the proceedings and during the course of the property proceedings. The costs incurred by the wife, being solicitor-client cost and disbursements, were in the total sum of $92,366.50 and the solicitor provides a short overview of his carriage of the matter on the instructions from the wife. There is certainly no doubt that as a consequence of the solicitor’s engagement by the wife, the wife was able to settle property proceedings in terms of the consent orders made on 27 May 2015.

4. To that extent the moneys payable to the wife represent the fruits of that litigation, to which the solicitor contends he has a lien for his professional costs and disbursements. Subsequent to the consent orders the wife signed an authority directing payment to her solicitor of certain funds. The wife has since withdrawn those instructions and on 6 August 2015 the wife communicated a termination of the solicitor’s retainer by leaving at his office a letter to that effect. That letter comprises Annexure E to the solicitor’s affidavit filed on 14 August 2005. 

5. It appears that some arrangements had been made to effect a settlement pursuant to the orders but that, for reasons known only to the wife, she gave instructions to stop that transaction. So, at present, circumstances are that the husband in the proceedings is ready, willing and able to complete the acquisition of the wife’s interest in the subject property in accordance with the orders and the wife, it appears, for whatever reason, is reluctant to complete the settlement.  It appears at least from the evidence of the solicitor that settlement may well have been postponed until 2.00 pm on Friday, 21 August 2015. 

6. The nature of a solicitor’s lien for costs, whether taxed or untaxed or quantified or unquantified, has been the subject of well-settled principles of law. The basic principles that are applicable to the current matter are that:

   a)Firstly, the solicitor’s right exists over money recovered through obtaining judgment in litigation and also over money recovered through the settlement of litigation. 

   b)Secondly, the solicitor’s right exists over both the amount of a judgment in favour of the client and the amount of an order for costs in favour of the client. 

   c)Thirdly, the solicitor’s right exists over money which is in the possession of the solicitor or also over money which is in Court and money which is owed to the client but not paid into Court.

   d)Fourthly, the solicitor need not still be acting for the client at the time the money was recovered. 

   e)Fifthly, it must be shown that there is a sufficient causal link between the solicitor’s exertions and the recovery of the fund of money, and, as has been stated above, there is a direct causal link between the actions of the solicitor applicant in this application and the recovery of the settlement evidenced by consent orders by the wife. 

   f)Sixthly, in relation to those situations where it is necessary to ascertain the quantum owing to the solicitor, the solicitor’s right exists in the fund prior to the occurrence of the taxation.

   g)Seventhly, the lien is over the proceeds of a settlement, and that lien arises when the settlement agreement is entered into. That is, in this case, the making of the orders on 27 May 2015. 

7. These well-settled principles have been the subject of oft-quoted decisions, particularly Firth & Centrelink (2002) NSWSC 564, where Campbell J overviewed the development of the principles applicable to the present application. That decision has been directly applied in this Court in Marsh & Marsh (2014) FamCA 361 by Aldridge J.

8. Clearly, in the present case, the applicant’s solicitor is entitled to a lien, and in that regard, it is appropriate to make orders that give effect to the application by the solicitor. 

9. However the application is brought before this Court on an ex parte basis but in circumstances where endeavours have been made to notify the wife, who, it appears from the affidavits relied on by the solicitor has, as it were, gone to ground. The wife currently has a conveyancer acting on her behalf in relation to the conveyancing transaction relating to the acquisition of her interest in the subject property by the husband. 

10. The solicitor in his affidavit filed in Court today gives evidence of endeavouring to communicate with the wife on a mobile number known to him with the response that the message was diverted to an invalid number.  He has endeavoured to make other communication with the wife, and this morning via facsimile transmission at 8.39 am he forwarded a letter to the conveyancing firm D & Associates. That letter annexed a copy of the present Application in a Case confirming that the hearing date of the present application was today at 2.15 pm. 

11. The solicitor further caused to be forwarded by email transmission to the wife’s email address a copy of the Application in a Case seeking orders, with that application clearly demonstrating it being listed at 2.15 pm today. The email address to which the applicant solicitor forwarded a copy of the application was the email address used by the wife during the period of his retainer by the wife. 

12. In all of the circumstances, and having regard to the urgency of the matter, the Court is comfortably satisfied that it is appropriate to make the orders sought giving effect to the application by the applicant solicitor on an ex parte basis. 

13. Otherwise, the applicant solicitor seeks an order for his costs of and incidental to the present application. The wife is on notice as to the order for costs as sought by reason of her being provided with a copy of the Application in a Case in circumstances referred to above. 

14. The question of costs as between parties to litigation in this court governed by the provisions of s 117 of the Family Law Act 1975 (Cth) (“the Act”). The threshold issue, of course, is that each party should pay their own costs. However, that general position is subject to the provisions of subsection (2) of that section together with the provisions of ss 70NFB(1), 117AA, 117AC and 118 of the Act, those latter provisions having no relevance to the present application.

15. The provisions of subsection (2) provide that if the Court is of the opinion there are circumstances justifying an order for costs, then the Court may make such order for costs as it considers just. Section 117(2A) provides relevant circumstances in relation to displacing of the threshold position of each party paying their own costs. More relevantly, in this case, is the fact that the applicant solicitor has been wholly successful in his application for good reason and in accordance with the law. In such a circumstance, it is appropriate there be an order for costs.

I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 19 August 2015

Associate: 

Date:  19 August 2015