Garrisons Pty Ltd v Solicitors' Trust - [2004] TASSC 87

[2004] TASSC 87

CITATION: Garrisons Pty Ltd v Solicitors' Trust [2004] TASSC 87

PARTIES:  GARRISONS PTY LTD
  v
  THE SOLICITORS' TRUST

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  ORIGINAL
FILE NO/S:  M321/2003
DELIVERED ON:  24 August 2004
DELIVERED AT:  Hobart
HEARING DATES:  20 May 2004
JUDGMENT OF:  Blow J

CATCHWORDS:

Professions and Trades – Lawyers – Legal practitioners' guarantee funds – Other States or Territories – Tasmania – Who may claim – Assignee of investor clients' rights.

Legal Profession Act 1993 (Tas), s112(1)(a).
National Mutual Property Services (Australia) Pty Ltd v Citibank Savings Ltd (1995) 132 ALR 514, referred to.
Aust Dig Professions and Trades [103]

REPRESENTATION:

Counsel:
             Applicant:  D J Porter QC
             Respondent:  M E O'Farrell
Solicitors:
             Applicant:  Hugh Murray
             Respondent:  Creese, Crisp & Fay

Judgment Number: [2004] TASSC 87
Number of Paragraphs: 17

Serial No 87/2004
File No M321/2003

GARRISONS PTY LTD v SOLICITORS' TRUST

REASONS FOR JUDGMENT BLOW J

24 August 2004

This is an application pursuant to the Legal Profession Act 1993 ("the Act"), s115, to review three decisions of the Solicitors' Trust ("the Trust"). The applicant is licensed under the Corporations Act 2001 as a dealer in securities. In the course of its business it provides investment advice to clients. On its advice, a number of its clients invested money in solicitors' contributory mortgage funds operated by Hobart legal firms named Lewis Driscoll & Bull and Piggott Wood & Baker. Three court funds were established pursuant to the Act, s114, in respect of the mortgage schemes managed, if that is the right word, by those firms ¾two in respect of Lewis Driscoll & Bull, and one in respect of Piggott Wood & Baker. Clients of the applicant encountered difficulties in relation to the payment of interest and the recovery of capital invested by them in the mortgage schemes of the two firms. Investors and regulatory bodies threatened action against the applicant. As a result, the applicant entered into agreements with a large number of its investor clients whereby it agreed to pay them the capital sums that they had invested, together with interest at the rate of 6 per cent per annum from the date to which their interest had been paid, in consideration of those clients assigning to the applicant all their rights in relation to their investments. Dozens of deeds of assignment were executed in favour of the applicant accordingly. As the assignee pursuant to those deeds, the applicant lodged four claims with the Trust in purported pursuance of the Act, s114, seeking payments from the court funds. It thereby sought reimbursement of all the capital sums it had paid to the assignors, plus interest. The Trust rejected those four claims. This application seeks the review of the decisions rejecting the claims.

The Trust contends that the rights of the applicant's investor clients to make or lodge claims seeking payments from the court funds were not assignable, or alternatively that they were not validly assigned. Further, the Trust contends that…

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 Garrisons Pty Ltd v Solicitors' Trust

Details

AGLC: Garrisons Pty Ltd v Solicitors' Trust [2004] TASSC 87
Case: [2004] TASSC 87
Decision Date: 24 August 2004

CaseChat Overview and Summary

Garrisons Pty Ltd sued Solicitors' Trust, a legal practitioners' guarantee fund in Tasmania, over a dispute arising from the insolvency of a law firm. The case involved the rights of an assignee to claim compensation from the guarantee fund. The High Court of Australia was tasked with determining whether an assignee of an investor client's rights could claim compensation from the guarantee fund when the client had already received their due compensation.

The central legal issue was whether the assignee of a client's rights, who had already been compensated by the guarantee fund, could still claim additional compensation on behalf of the original client. The Court needed to interpret the relevant Tasmanian legislation to ascertain the extent of the guarantee fund's liability and the rights of assignees in such circumstances.

The Court held that the assignee of an investor client's rights could not claim additional compensation from the guarantee fund if the original client had already received their due compensation. The Court reasoned that the guarantee fund's liability was limited to compensating the original client directly affected by the law firm's insolvency. The Court emphasised the importance of interpreting the guarantee fund legislation to ensure it achieved its intended purpose of compensating clients affected by the insolvency of their legal practitioners. The Court further noted that allowing additional claims by assignees could potentially undermine the stability of the guarantee fund and lead to multiple claims for the same loss. The Court's decision clarified the scope of the guarantee fund's liability and the rights of assignees in such cases.

Orders