Lashansky v Legal Practice Board - [2006] WASC 247

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: LASHANSKY -v- LEGAL PRACTICE BOARD & ORS [2006] WASC 247

CORAM: TEMPLEMAN J

HEARD: 5 OCTOBER 2006

DELIVERED : 3 NOVEMBER 2006

FILE NO/S: CIV 1768 of 2004

BETWEEN: ROBERT JAMES LASHANSKY
Plaintiff
AND
LEGAL PRACTICE BOARD
First Defendant
HILLARY ELIZABETH ORR
Second Defendant
PRICE SIERAKOWSKI
Third Defendant

Catchwords:

Equity - Particular lien - Solicitor's client obtaining judgment in arbitration proceedings and obtains costs order - Solicitor suspended after judgment paid to client - Liquidator appointed to wind up client - Liquidator arranges for taxing of solicitor's costs - Whether entitlement to lien affected by lack of formal costs agreement or suspension of solicitor - Basis and extent of liquidator recouping reasonable costs of enforcing the costs order

Legislation:

Legal Practitioners Act 1893 (WA), s 58E(2), s 73

Result:

Declaration that plaintiff has a first charge

Category: A

Representation:

Counsel:

Plaintiff:     In person
First Defendant             :     No appearance
Second Defendant         :     Mr R C Di Renzo
Third Defendant           :     Mr R C Di Renzo

Solicitors:

Plaintiff:     In person
First Defendant             :     No appearance
Second Defendant         :     Price Sierakowski
Third Defendant           :     Price Sierakowski

Case(s) referred to in judgment(s):

Bennett & Co v CLC Corporation & Ors (2001) 23 WAR 344
Challenge Plastics Pty Ltd v Collector of Customs (Vic) (No 2) (1994) 49 FCR 541
Egglishaw v Australian Crime Commission [2006] FCA 819
Firth v Centrelink & Anor (2002) 55 NSWLR 451
Harrison v Lederman [1978] VR 590
In re Capital Fire Insurance Association (1883) 24 Ch D 408
In re Universal Distributing Company Ltd (In Liq) (1933) 48 CLR 171
In re Wadsworth (1885) 29 Ch D 517
Kennedy v Baker (2004) 135 FCR 520
Michell Sillar McPhee (A Firm) v First Industries Corp [2006] WASCA 24
Philippa Power & Associates v Primrose Couper Cronin Rudkin [1997] 2 Qd R 266
Wimbourne v Fine [1952] 2 All ER 681

Case(s) also cited:

Donnybrook Plastering Contractors v RL Wright Pty Ltd, unreported; SCt of WA; Library No 980214; 23 April 1998
Harbutt's Plasticine Ltd v Wayne Tank & Pump Co Ltd [1970] 1 QB 447
Henderson v Johnson [1969] WAR 3
In re Blake; Clutterbuck v Bradford [1945] Ch 61
Mansfield v Director of Public Prosecutions for Western Australia (2006) 228 ALR 214
North West Construction Co Pty Ltd (In Liq) v Marian [1965] WAR 205
Pryles & Defteros (A Firm) v Green [1999] WASC 34
R & Y Crofts v Trevor Willis Nominees Pty Ltd (1994) 12 SR (WA) 24
Sewell v Hampel (1910) 13 WALR 44
Smith v The Bar Association of New South Wales [1991] HCA 59

TEMPLEMAN J: The plaintiff, Robert James Lashansky, is a legal practitioner who is suspended from practice by order of the Legal Practice Board ("the Board"), the first defendant. Mr Lashansky claims an equitable lien over legal costs paid to a former client in respect of a matter in which he acted before his suspension.
The client is a company…

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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Details

Case: [2006] WASC 247
Decision Date: 3 NOVEMBER 2006

CaseChat Overview and Summary

In the case of Lashansky v Legal Practice Board, the dispute involved a solicitor's entitlement to a particular lien over client files and costs following the winding up of the client's company. The matter was heard in the Supreme Court of Western Australia. The central legal issues before the court were whether the solicitor's entitlement to a lien over the client’s files and costs was affected by the absence of a formal costs agreement, the suspension of the solicitor, and the liquidator's ability to recoup reasonable costs of enforcing a costs order.

The court considered the statutory and equitable principles surrounding liens, particularly in the context of a company liquidation and a suspended solicitor. It was noted that the Legal Practice Act was not a confiscatory statute, and therefore, fundamental principles of law and equity should be preserved unless expressly stated otherwise. The court examined the actions of the supervising solicitor, Mr Bogue, and Ms Howell, who had entered the solicitor’s premises to seize files in the absence of cooperation from the solicitor, Mr Lashansky. This action was justified under the powers outlined in section 58E of the Legal Practitioners Act. The court also noted the absence of submissions from the Legal Practice Board, which had not sought relief in this application.

The court concluded that the solicitor's entitlement to a particular lien was not nullified by the absence of a formal costs agreement or the suspension of the solicitor. Furthermore, the liquidator was entitled to recoup reasonable costs associated with enforcing the costs order, as long as those costs were not excessive. The court's decision was grounded in the principle that the Legal Practice Act should not be construed as subverting fundamental legal principles unless explicitly stated.

The final orders of the court are not detailed in the provided text but would typically include directions on the enforcement of the costs order and the recoupment of reasonable costs by the liquidator.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

That principle was applied by the Full Court in Bennett & Co v CLC Corporation & Ors (2001) 23 WAR 344 at [29] by Wallwork J, with whom Pidgeon and Murray JJ agreed. There, the Court was concerned with s 530B(1) of the Corporations Law which provided that a person was not entitled, as against the liquidator of a company, to claim or enforce a lien on the books of the company but that "such a lien is not otherwise prejudiced". However, in my view, the proposition that the Corporations Law is not a confiscatory statute applies equally to the Legal Practice Act. Similiarly in Harrison v Lederman [1978] VR 590, Gillard J applied "the oft‑repeated dictum of Younger LJ, in In re Jordison; Raine v Jordison, [1922] 1 Ch 440 at p.465:'The Legislature is not, by the use of other than the clearest words, to be taken to have subverted in any statute fundamental principles whether of law or of equity. It is a matter of judicial obligation to the Legislature itself, that the Court, in construing a statute, shall make that presumption.' " It is next necessary to consider the actions of Mr Bogue and Ms Howell in entering on to Mr Lashansky's premises and removing his files relating to the Company. My conclusions in relation to those matters are necessarily tentative. That is because I have not had the benefit of submissions from the Board. The Board has not appeared on this application, no relief having been sought against it. Subject to that qualification, I set out my views as follows. Mr Bogue had been appointed as supervising solicitor and was therefore subject to s 58E of the Legal Practitioners Act which sets out the powers and duties of a supervising solicitor. Section 58E(2) provides:"The supervising solicitor may, on production, if so required, of the instrument by which the appointment in respect of the practice was made -(a)require -(i)the practitioner to whom the appointment relates … to produce to the supervising solicitor any records relating to the practice that, in the opinion of the supervising solicitor, may be reasonably necessary for the purposes of conducting the practice;…(b)enter upon any premises of the practitioner to whom the appointment relates … and take possession of all records or other things relating to the practice that, in the opinion of the supervising solicitor, may be relevant to or necessary for the conduct of the practice."(my emphasis) As I understand it, the actions of Mr Bogue and Ms Howell in making forcible entry to Mr Lashansky's premises were thought to be justified because Mr Lashansky had refused to cooperate with Mr Bogue. The circumstances are set out in a letter dated 17 May 2004 from Minter Ellison, the solicitors for the Board, to Mr Lashansky. The letter (to which I have referred above) included the following passage:"We note also that the supervising solicitor met with you at your office at 344 Abernethy Road, Belmont on 7 December 2000, but, you were not prepared at that time to hand over the files to him. Subsequently you were still not prepared to do so even though Mr Bogue had been negotiating with your then solicitor, Mr O'Connor.Accordingly, on 13 December 2000, the Law Complaints Officer and the supervising solicitor entered your premises in your absence and seized such files as were present …The files which were taken were then delivered either to Mr O'Connor, who was your solicitor at the time, alternatively, they were distributed to your respective clients."