Hudson v Sigalla (No.3)

Case [2016] FCCA 2140


FEDERAL CIRCUIT COURT OF AUSTRALIA

HUDSON v SIGALLA (No.3) [2016] FCCA 2140

Catchwords:
EQUITY – Equitable charges and liens – practitioners liens – for costs and disbursements recovered through the practitioners’ efforts – quantification of the amount for which the liens exist.

LEGAL PRACTITIONERS – Liens – costs – lien over costs order.

COSTS – Order for taxation – variation of costs order to substitute a lump sum order.

PRACTICE AND PROCEDURE – Consideration of the legislative provisions bearing upon the power of the Court to vary a costs order previously made.

Legislation:

Bankruptcy Act 1966 (Cth), s.58

Federal Circuit Court of Australia Act 1999 (Cth), ss.14, 15, 16, 18, 79
Federal Circuit Court Rules 2001 (Cth)
Federal Court Act 1976 (Cth), ss.22, 23
Federal Court Rules

Cases cited:

Akki Pty Ltd v Martin Hall Pty Ltd (1994) 35 NSWLR 470
Ashby v Slipper (No 2) [2016] FCA 550
Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119
Caboolture Park Shopping Centre Pty Ltd v White Industries (Qld) Pty Ltd (1993) 45 FCR 224
Dunstan v Seymour [2006] FCA 917
Ex parte Patience; Makinson v The Minister (1940) 40 SR (NSW) 96
Fencott v Muller 152 CLR 570
Firth v Centrelink (2002) 55 NSWLR 451
Fox v Robinson [2003] FMCA 107
Ginos Engineers Pty Ltd v Autodesk Australia Pty Ltd [2008] FCA 1051

Ho v Grigor (2006) 151 FCR 236
Hudson v Sigalla [2014] FCCA 1652
Hudson v Sigalla (No 2) [2015] FCCA 542
Hudson v Sigalla [2015] FCAFC 140
In the Estate of Fuld (No 4) [1968] P. 727
Leamey v Heath & Anor [2001] NSWSC 1095
Leary v Leary [1987] 1 All ER 261 at 265
Moorgate Tobacco v Phillip Morris (1980) 145 CLR 457
Nine Films & Television Pty Ltd v Ninox Television Ltd [2006] FCA 1046
Orison Pty Ltd v Strategic Minerals Corp NL (1988) 13 ACLR 637
Playcorp Group of Companies Pty Ltd v Peter Bodum A/S (No 2) [2010] FCA 455
Re Wakim (1999) 198 CLR 511
Roam Australia Pty Ltd v Telstra Corporation [1997] FCA 980
Salfinger v Ningini Mining (Aust) Pty Ltd (No 5) [2008] FCA 1119
Scammell & Co v WorkCover Corporation (2006) 95 SASR 278

Short v Crawley (No 45) [2013] NSWSC 1541
Simpson v Rowe [2011] VSC 149

Sony Entertainment (Australia) Limited v Smith (2005) 215 ALR 788

Trukulja v Efron [2014] VSCA 76
Worrell v Power (1993) 46 FCR 214

Applicant: FRANK HUDSON
Respondent: ANDREW JOHN SIGALLA
File Number: SYG 793 of 2014
Judgment of: Judge Driver
Hearing date: 10 August 2016
Date of final submission: 19 August 2016
Delivered at: Sydney
Delivered on: 5 September 2016

REPRESENTATION

Counsel for the Applicant: Mr C Wood
Solicitors for the Applicant: Marque Lawyers
Counsel for Mr Reynolds and Mr Botsman: Mr C Botsman
Solicitors for Kemp Strang: Mr P Harrison of Kemp Strang
The Respondent appeared in person

ORDERS

  1. Order 4 made on 30 March 2015 is varied as follows:

    (4)The applicant (Mr Hudson) is to pay the…

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AGLC
Hudson v Sigalla (No.3) [2016] FCCA 2140
Case
[2016] FCCA 2140
Decision Date

CaseChat Overview and Summary

In *Hudson v Sigalla (No.3)*, the Supreme Court of New South Wales was asked to determine the extent of a solicitor's lien over a costs order made in favour of their former client. The dispute arose after the client, Ms. Sigalla, had been awarded costs against Mr. Hudson. Her solicitors, who had acted for her in the litigation, sought to enforce a lien over that costs order for their outstanding professional fees and disbursements.

The central legal issue before the Court was the quantification of the amount for which the solicitors' lien could be enforced. Specifically, the Court had to consider whether the lien extended to all costs and disbursements incurred by Ms. Sigalla in the litigation, or only to those costs and disbursements that were directly attributable to the recovery of the sum awarded against Mr. Hudson. The Court also considered its power to vary an existing costs order by substituting a lump sum for a taxed amount.

Justice Driver reasoned that the equitable lien of a solicitor over a judgment or order for costs operates to secure the solicitor's entitlement to be paid for their services in obtaining that judgment or order. The lien is not a general security for all debts owed by the client to the solicitor, but rather is confined to the costs and disbursements properly incurred in the proceedings that led to the recovery. His Honour noted that the legislative provisions governing the Court's power to vary costs orders did not permit the Court to retrospectively alter the basis upon which the original costs order was made, particularly where it involved substituting a lump sum for a taxed amount without proper justification.

The Court ordered that the solicitors' lien was limited to the amount of costs and disbursements properly incurred by Ms. Sigalla in the proceedings that were recovered by her from Mr. Hudson. The Court declined to vary the existing costs order to substitute a lump sum, finding no basis to do so.

Orders

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

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Ratio Decidendi

Legal Principle Established

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