Maketic v OSMANBAustralian Securities and Investments Commission

[2001] WADC 106

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CIVIL

LOCATION:   PERTH

CITATION:   MAKETIC -v- OSMANBASIC & ANOR [2001] WADC 106

CORAM:   CHARTERS DCJ

HEARD:   3 MAY 2001

DELIVERED          :   11 MAY 2001

FILE NO/S:   CIV 2296 of 1999

BETWEEN:   SENAD MAKETIC

Plaintiff

AND

ZIJAD OSMANBASIC
First Defendant

UNITED CONSTRUCTIONS PTY LTD
Second Defendant

Catchwords:

Practice and procedure - Costs - Whether plaintiff's solicitors are entitled to the judgment sum before taxation of costs for the purpose of acquiring a first charge in terms of s 73 of the Rules of the Supreme Court

Legislation:

Legal Practitioners Act 1893

Rules of the Supreme Court

Result:

Plaintiff's application dismissed - First defendant's application granted

Representation:

Counsel:

Plaintiff:     Mr A R Paternoster

First Defendant             :     Mr K N Allan

Second Defendant         :     Ms N L Levy

Solicitors:

Plaintiff:     Leonard Cohen & Co

First Defendant             :     K N Allan

Second Defendant         :     McAuliffe Williams

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

Humbleton v Brown (1917) 2 KB 93

Case(s) also cited:

Blakey v Latham (1889) 41 Ch D 518

Edwards v Hope (1885) 14 QBD 992

Fairfold Properties Ltd v Exmouth Docks Co Ltd (No 2) [1992] 4 All ER 289

Pringle v Gloag (1879) 10 Ch D 676

Puddephatt v Leith (No 2) [1916] 2 Ch 168

Re a Debtor (No 21 of 1950) (No 2) [1951] Ch 612

Robarts v Buee (1878) 8 Ch D 198

1. CHARTERS DCJ:  I have two motions before me:  one by the plaintiff expressed to be ex parte and one by the first defendant. 

2. That of the plaintiff seeks orders that the plaintiff's solicitors have a first charge upon the judgment awarded to the plaintiff on 28 March 2001 and that the first defendant pay the judgment sum of $27,750 to the plaintiff's solicitors. 

3. The first defendant seeks an order that the costs of the action awarded to the first defendant be set‑off against the judgment sum and costs awarded to the plaintiff against the first defendant notwithstanding the plaintiff's solicitors' lien for costs in the action. 

4. The relevant history is that Messrs Leonard Cohen & Co ("the solicitors") have had the conduct of this action on the part of the plaintiff and on behalf of the plaintiff filed proceedings against both defendants in this action. 

5. The solicitors retained independent counsel after the plaintiff declined to accept the first defendant's offer of damages. 

6. On 4 February 2001 the plaintiff signed an acknowledgment irrevocably authorising the solicitors "to receive any or all sums payable to me by reason of any award or settlement of my motor accident claim and/or work injury claim obtained in (the action) and to apply the same to the payment of any or all disbursements and/or legal fees incurred … with the balance to be forwarded to me …". 

7. The trial spanned two weeks from 5 to 16 February 2001.  The action against the first defendant was for damages for injury resulting from a motor vehicle accident and that against the second defendant was for damages resulting from injury at work. 

8. By this Court's judgment the plaintiff recovered an award of $27,750 against the first defendant and the claim against the second defendant was dismissed. 

9. The plaintiff was awarded costs against the first defendant to and including 7 September 1999 and the first defendant was awarded costs against the plaintiff thereof - both sets of costs to be taxed.  The plaintiff was ordered to pay the second defendant's costs to be taxed (discounting two days). 

10. There is the prospect, as submitted by the first defendant, that the judgment sum of $27,750 will be reduced or extinguished following taxation of the parties' costs.  There will then be a diminished sum or no sum at all to be recovered  by the plaintiff. 

11. By letter dated 27 April 2001 the solicitors wrote to the first defendant's solicitors requesting payment of the judgment sum by 10.30 am on Monday 30 April 2001. 

12. The plaintiff's application is made by reference to s 73 of the Legal Practitioners' Act 1893 which is in the following terms -

    "In every case in which a practitioner shall be employed to prosecute or defend any suit, matter, or proceeding in any court of justice whatsoever, such practitioner shall be entitled to a first charge upon the property recovered or preserved, and such practitioner shall have a prior right to payment out of the same for the taxed costs, charges, and expenses as between solicitor and client of or in reference to such suit, matter, or proceeding; and the Court before which such suit, matter, or proceeding has been heard or is pending, or a Judge thereof in Chambers, may make ex parte such order or orders for taxation of and for raising and paying such costs, charges, and expenses out of the said property as to such court or Judge shall appear just and proper." 

13. The first defendant's application is made by reference to O 66 r 7 of the Rules of the Supreme Court, which is in the following terms -

    "7.A set‑off for damages or costs between parties may be allowed notwithstanding the solicitor's lien for costs in the particular action in which the set‑off is sought." 

14. I have ordered a stay of execution of the judgment until these applications are resolved. 

15. Counsel for the solicitors submits that there is a conflict between s 73 of the Legal Practitioners Act and O 66 r 7 and in those circumstances the former, as substantive legislation, should prevail.

16. There is, however, no conflict.  Only upon the judgment sum being recovered by the solicitors are the solicitors entitled to a first charge. 

17. The judgment on the record must be considered globally.  The solicitors cannot excise the judgment sum without regard to that part of the judgment concerning the parties' costs. 

18. The plaintiff and first defendant are presently indebted to each other in relation to the costs notwithstanding that those costs have not yet been taxed:  Humbleton v Brown (1917) 2 KB 93.

19. Before the judgment sum is paid to the solicitors the first defendant is entitled to tax its costs and set‑off those costs against the judgment sum.  Any balance is then to be remitted to the solicitors.  That then will be the "property recovered" and will be the subject of the first charge.  Until the property is "recovered" s 73 does not operate. 

20. I have ordered that the taxation of costs will proceed.  Upon completion of that process the parties will know what funds (if any) are available to be remitted to the solicitors. 

21. I grant the first defendant's application and dismiss that of the solicitors.