Hudson v Sigalla (No.3)

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.