COURT IN THE FULL COURT OF THE SUPREME COURT OF SOUTH AUSTRALIA KING CJ(1), BOLLEN(2) AND MULLIGHAN(3) JJ
CWDS Legal practitioners - liens - lien on benefit of order for costs for unpaid charges - benef it of such order subject to solicitor's lien made after commencement of bankruptcy not vesting in trustee in bankruptcy - bankrupt entitled to enforce order for benefit of solicitor Bankruptcy Actsections 58, 116, 122. In re Clark ex parte Beardmore (1894) 2 QB 393 at 410; In re Eastgate ex parte Ward (1905) 1 KB 465 at 467; Tilley v Bowman Ltd (1910) 1 KB 745 at 750; Re Crowley (1949-52) 15 ABC 19 esp at p.23 and Ex parte Patience; Makinson v The Minister (1940) 40 SR(NSW) 96 at p.100, applied. Worrell v Power (Full Federal Court unreported delivered 19.11.93), considered.
Bankruptcy - Property divisible among creditors and vesting in trustee - order for costs subject to lien of solicitor for unpaid charges - such order subject to solicitor's lien not vesting in trustee whether made before or after commencement of bankruptcy.
Bankruptcy Actsections 58, 116, 122. In re Clark ex parte Beardmore (1894) 2 QB 393 at 410; In re Eastgate ex parte Ward (1905) 1 KB 465 at 467; Tilley v Bowman Ltd (1910) 1 KB 745 at 750; Re Crowley (1949-52) 15 ABC 19 esp at p.23 and Ex parte Patience; Makinson v The Minister (1940) 40 SR(NSW) 96 at p.l00, applied. Worrell v Power (Full Federal Court unreported delivered 19.11.93), considered.
HRNG ADELAIDE, 8 February 1994 #DATE 30:3:1994
Counsel for appellant: Mr T R Bryant
Solicitors for appellant: Barratt Lindquist
Counsel for respondent: Mr R Deegan
Solicitors for respondent: Hume Taylor and Co
ORDER Appeal dismissed.
JUDGE1 KING CJ The facts are set out in the judgment of Bollen J. The basis of the appellant's argument that the respondent was not entitled to enforce the order for costs was the contention that the benefit of the order was after acquired property which was divisible among the creditors pursuant to s.116(1) of the Bankruptcy Act (Cth) 1966 and therefore vested in the trustee in bankruptcy pursuant to s.58. It is necessary to examine the soundness of this contention.
2. It is common ground that the order for costs was made in litigation in which the respondent was represented by solicitors and that he is indebted to the solicitors for their costs in connection with the litigation. It is not contended that the costs recoverable under the order exceed the amount presently due to the solicitors.
3. It is well established that a solicitor has an equitable right, often referred to as a lien, entitling him to be paid his costs out of monies recovered by his exertions. Where an order for costs has been made in favour of the client, the equitable right or lien exists in respect of the proceeds of the order; Worrell v Power (Full Federal Court; unreported judgment…
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.
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AGLC
Kison v Papasian [1994] SASC 4476
Case
[1994] SASC 4476
Decision Date
CaseChat Overview and Summary
In the case of Kison v Papasian, the Full Court of the Supreme Court of South Australia addressed the issue of whether a bankrupt, after being discharged, could enforce an order for costs made in their favour prior to their bankruptcy. The court was required to decide whether the benefit of the order for costs, which was after-acquired property, vested in the trustee in bankruptcy or if the bankrupt could enforce the order themselves. The court examined the relevant sections of the Bankruptcy Act 1966 and considered relevant case law, including Ex parte Patience; Makinson v The Minister and Worrell v Power. The court found that the equitable lien of the solicitor for unpaid charges attached to the order for costs, and the bankrupt was entitled to enforce the order for costs, as the benefit of the order did not vest in the trustee in bankruptcy. The Full Court dismissed the appeal and confirmed the orders made by the Local Court, allowing the bankrupt to enforce the order for costs.