Jean, Colin Sydney v Roger David Stores Pty Ltd
[1997] FCA 277
•18 Apr 1997
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION NO: VG 58 OF 1996
COLIN SYDNEY JEAN
Applicant
- and -
ROGER DAVID STORES PTY LTD (ACN 004 091 061)
JOHN SCULTHORPE GREGG
PATKARA PTY LTD (ACN 050 136 644)
FRANK DE PASQUALE
Respondents
CORAM : OLNEY J
PLACE : MELBOURNE
DATE : 18 APRIL 1997
MINUTE OF ORDER
THE COURT ORDERS THAT:
The application of which notice was given on 26 February
1997 be dismissed.
The applicant pay the costs of Paul Gerard Lynch
including any reserved costs.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION NO: VG 58 OF 1996
COLIN SYDNEY JEAN
Applicant
- and -
ROGER DAVID STORES PTY LTD (ACN 004 091 061)
JOHN SCULTHORPE GREGG
PATKARA PTY LTD (ACN 050 136 644)
FRANK DE PASQUALE
Respondents
CORAM : OLNEY J
PLACE : MELBOURNE
DATE : 18 APRIL 1997
REASONS FOR DECISION
This proceeding was commenced on 2 February 1996 when Messrs Lynch & Company, Solicitors of Brisbane filed an application and statement of claim on behalf of the applicant. Lynch & Company remained the solicitors on the record for the applicant until notice of change of solicitor was filed on 22 August 1996 by Messrs Anderson Rice of Melbourne. The notice advised that Anderson Rice were acting on behalf of the applicant in lieu of Lynch & Company. A further notice of change of practitioner was filed on 9 September 1996 when Mr John Yianoulatos, a Melbourne solicitor, gave notice that Anderson Rice had ceased to act for the applicant and that he acted in their place.
On 26 February 1997 the applicant's present solicitor filed notice of motion on behalf of the applicant seeking inter alia, an order that "Paul Lynch and Lynch & Co. provide to Yianoulatos Lawyers all files, documents and other material held by them in respect of this proceeding and in respect of proceeding QG 201 of 1995 for the purpose of presenting this proceeding."
Paul Gerard Lynch (Lynch) responded to the motion which was heard on 16 April 1997. He opposed the motion on the ground that he had a lien over all documents belonging to the applicant as security for costs owing to him in respect of his former retainer in this proceeding as the applicant's solicitor. The reference to proceeding QG 201 of 1995 is to a class or representative proceeding in the Queensland Registry of the Court in which Lynch & Company act for the applicant and in which the present applicant is a member of an applicant sub-group. John Douglas Hansen, a director of Falfire Pty Ltd, the applicant in QG 201 of 1995 has sworn an affidavit in this proceeding deposing to the fact that Falfire Pty Ltd does not consent to the delivery of any documents held by Lynch & Company to the present applicant. On the evidence before the Court the exact relationship between the present applicant and Lynch & Company in relation to proceeding QG 201 of 1995 is not altogether clear but in the circumstances of the present motion it is unnecessary to explore that issue any further.
Two affidavits were initially filed in support of the motion, one sworn on 26 February 1997 by John Yianoulatos, the applicant's present solicitor, and the other sworn on 25 February 1997 by the applicant. Lynch filed an affidavit sworn on 4 April 1997 and the applicant has filed an affidavit in reply sworn on 11 april 1997. The applicant's first affidavit has 19 documents exhibited to it whereas Lynch's has 22. Lynch's affidavit runs to some 110 paragraphs occupying more than 30 pages. In view of the opinion I have formed concerning the legal rights and obligations of the parties to the motion it will be necessary to refer to only a small part of the mass of material that has been filed. It should be stated however that the affidavit material demonstrates that there are many facts in dispute between the parties but as neither deponent was called for cross-examination I am unable to make findings in relation to disputed facts except to the extent that there is other objective evidence available.
The legal principles involved in circumstances when a solicitor's retainer is terminated in the course of litigation are simple and are best stated in Cordery on Solicitors, 9th Edition at paragraphs 955 and 956:
955 ... If the retainer is terminated by the client other than for misconduct by the solicitor, the solicitor's lien is virtually absolute. He cannot be required to hand over or produce for inspection any papers in his possession and he is entitled to keep them until his costs have been paid ...
956 ... Where during litigation a solicitor discharges himself, the usual practice of the court is to order him to hand over the client's papers to the new solicitor against an undertaking by the new solicitor to preserve the lien of the original solicitor, even if that renders the lien worthless. However, this is not automatic and the court exercises its discretion. In approaching the matter the overriding principle is that the order made should be that which would best serve, or at least not frustrate, the interests of justice ...
The leading English Court of Appeal decision (Goff and Templeman L.JJ.) in Gamlen Chemical Co. (UK) Ltd v Rochem Ltd [1980] 1 WLR 614 supports these views. The headnote to the report states:
Where a client discharged a solicitor the court had no power to call upon the solicitor to hand over documents because the solicitor's lien endured, but where the solicitor discharged himself in the course of an action his possessory lien over the documents became subject to the practice of the court, and the court would order the documents to be handed over to the new solicitors subject to the lien unless exceptional circumstances existed when the court might be justified in imposing terms."
The first arm of this principle is subject to the qualification that in a case where the client has discharged the solicitor by reason of the solicitor's misconduct, the solicitor will be regarded as having discharged himself. (Hughes v Hughes 1958 P 224).
The issues for determination in this matter are whether the applicant discharged Lynch & Company and second, if he did,
whether he did so by reason of misconduct on the part of the solicitor.
There is nothing in the evidence adduced by either party to suggest other than that the applicant discharged Lynch & Company as his solicitor in this proceeding nor is there any doubt that this occurred on or about 21 August 1996. It is also common cause that the statement of claim filed with the application on 2 February 1996 was struck out by order of Jenkinson J on 2 May 1996 and that an amended statement of claim was filed on 21 June 1996.
On 21 August 1996 after receipt of a facsimile letter from Anderson Rice enclosing a written authority from the applicant authorising him to deliver all files to Anderson Rice, Lynch made the files ready for transfer and sent Anderson Rice a final memorandum of his costs and outlays which he requested be paid. Lynch has since exercised a lien over the documents as the costs have not been paid. Proceedings commenced in the Magistrates Court in Brisbane for recovery of the costs are pending and are being defended by the applicant.
There is nothing in the vast amount of evidence before the Court to suggest that at any stage prior to the termination of Lynch's retainer the applicant had expressed any concern about the conduct of the proceedings other than the cost of same nor was any suggestion of misconduct levelled against the solicitor, and indeed, the same circumstances prevailed following 21 August 1996 until the Magistrates Court proceeding was commenced. It is now suggested that the fact of the original statement of claim being struck out is indicative of some lack of competence on Lynch's part. This is a proposition which cannot be supported without further evidence or explanation. Some of the most highly qualified and skilled lawyers in the country from time to time have their pleadings struck out. In any event, after the statement of claim was struck out the applicant was given leave to replead which he did. The amended statement of claim was settled by counsel and was referred to the applicant for comment. In fact the applicant suggested some amendments to the draft which Lynch made before the document was filed. At no time during this period nor in the period between the filing of the amended pleading and 21 August 1996 did the applicant raise any issue with Lynch which could be regarded as an indication of his dissatisfaction which Lynch's professional services, nor have any facts been established that leads to the conclusion that Lynch could be regarded as having engaged in any misconduct in his relationship with the applicant. It is true that since 21 August 1996 the applicant and Lynch have been engaged in a monumental struggle over the question of costs and this has generated a large part of the evidence now before the Court but what has occurred since 21 August 1996 has nothing to do with the matter now under consideration.
I am firmly of the opinion, and so find, that the applicant's discharge of Lynch on or about 21 August 1996 was not motivated by, nor could it be justified as a result of, any misconduct on Lynch's part. In these circumstances Lynch is entitled to maintain his lien.
It was suggested in the course of argument that even in the circumstances which I have found to be fact the Court retains some discretion in the matter. Such a proposition is contrary to the authorities and I reject it.
The applicant's motion of which notice was filed on 26 February 1997 will be dismissed with costs.
I certify that this and the preceding 5 pages are a true copy of the Reasons for Judgment of the Honourable Justice Olney
Associate:
Dated:
Heard: 16 April 1997
Place: Melbourne
Judgment: 18 April 1997
Appearances:
Mr G.J. Grabau (instructed by John Yianoulatos) appeared for the applicant in support of the motion.
Mr C. Dale (instructed by Clayton Utz) appeared for Paul Gerard Lynch in opposition to the motion.
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