Moloney v Marler and Darvall - [2004] QSC 228

SUPREME COURT OF QUEENSLAND

CITATION:

Moloney & Anor v Marler & Darvall [2004] QSC 228

PARTIES:

GREGORY MICHAEL MOLONEY and PETER IVAN FELIX GEROFF AS COURT APPOINTED LIQUIDATORS AND TRUSTEES OF THE UNREGISTERED MANAGED INVESTMENT SCHEME KNOWN AS THE SENTRY ALLIANCE SCHEME FORMERLY CONDUCTED BY ATLANTIC 3 FINANCIAL (AUST) PTY LTD ACN 056 262 723 (IN LIQUIDATION)
(applicants)
v
MARLER & DARVALL FORMERLY C.B. DARVALL & DARVALL (A FIRM)
(respondent)

FILE NO/S:

BS 1713 of 2004

DIVISION:

Trial Division

PROCEEDING:

Trial

ORIGINATING COURT:

Supreme Court

DELIVERED ON:

9 July 2004

DELIVERED AT:

Brisbane

HEARING DATE:

29, 30 June and 1 July 2004

JUDGE:

Muir J

ORDER:

Declare that the respondent has no lien over the title deeds described in the application filed on 20 February 2004.

Order that the respondent pay the applicants’ costs of and incidental to the application to be assessed on the standard basis.

CATCHWORDS:

PROFESSIONS AND TRADES – LAWYERS – LIENS – WHEN LIEN ARISES – where the respondent is claiming a solicitors’ lien in respect of title deeds held by the applicant liquidators/trustees – whether the respondent is entitled to a lien in respect of the title deeds –

EQUITY – TRUSTS AND TRUSTEES – POWERS, DUTIES, RIGHTS AND LIABILITIES OF TRUSTEES – INDEMNITY, LIEN AND REIMBURSEMENT – GENERAL PRINCIPLES – solicitor lienee’s right of subrogation – limits of lienor’s rights of retention – limits on trustees rights of indemnity - right of a trustee to indemnity from the trust assets

Barlow Clowes International Ltd (In Liquidation) v Vaughan [1992] 4 All ER 22

Barratt v Gough-Thomas [1951] Ch 242

Bozon v Bolland (1839) 4 M Y & CR 354: 41 ER

138

Brandao v Barnett (1846) 8 ER 1622

Cohen v Cohen (1929) 42 CLR 91

Duke Finance Ltd (In Liquidation) v Commonwealth Bank of Australia (1990) 22 NSWLR 236

Ecclesiastical Commissioners v Pinney [1900] 2 Ch 736

Gatsios Holdings Pty Ltd v Nick Kritharas Holdings Pty Ltd (In Liquidation) [2002] NSWCA 29

Gibson v May (1853) 4 De G M & G 512

Leeper v Primary Producers’ Bank of Australia Ltd (In Voluntary Liquidation) (1935) 53 CLR 250

MPS Constructions Pty Ltd (In Liquidation) v Rural Bank of New South Wales (1980) 49 FLR 430
Official Trustee in Bankruptcy v Kioussis [2000] NSWSC 248

Octavo Investments Pty Ltd v Knight (1979) 144 CLR 360

Re ADM Franchise Pty Ltd (1983) 7 ACLR 987

Re Byrne Australia Pty Ltd (No2) [1981] 2 NSWLR 364

Re Enhill Pty Ltd [1983] 1 VR 561

Re Global Finance Pty Ltd [2002] 26 WAR 385

Re Johnson (1880) 15 ChD 548

Re London & Globe Finance Corporation [1902] 2 Ch 416

Re Matheson (1994) 121 ALR 605

Re Suco Gold Pty Ltd (In Liquidation) (1983) 33 SASR 99

Staniar v Evans (1886) 34 ChD 470

Stumore v Campbell [1891] 1 QB 86

COUNSEL:

D A Savage SC, with him R M Derrington for the applicants
P J Dunning for the respondent

SOLICITORS:

Gadens Lawyers, solicitors for the applicants

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: [2004] QSC 228
Decision Date: 9 July 2004

CaseChat Overview and Summary

In the matter of Moloney v Marler and Darvall, the Federal Court was tasked with determining the rights of a solicitor who claimed a lien over title deeds held by the applicants, who were liquidators and trustees. The central issue was whether the respondent solicitor was entitled to a lien over the title deeds. The court had to consider the circumstances under which a lien arises, the rights of a solicitor in relation to a lien, and the extent to which a solicitor can exercise their lien in the context of the duties and powers of trustees.

The court examined the principles governing the rights of a solicitor to a lien and the limits of those rights. It noted that a solicitor may have a lien over documents and assets in their possession as a matter of professional practice and ethical obligation, to secure payment for services rendered. However, the court also recognised that the rights of a solicitor claiming a lien must be balanced against the duties and powers of trustees, particularly in cases where the trustees are acting as liquidators. The court held that the respondent solicitor’s claim to a lien over the title deeds was not supported by the circumstances of the case, given the nature of the trustees’ role and the applicable legal principles.

The court concluded that the respondent did not have a valid lien over the title deeds in question. It reasoned that the solicitors’ claim to a lien was not justified, as the liquidators and trustees were not in a position to be held liable for the solicitor's fees in the manner that would give rise to a lien. The court also noted that the liquidators and trustees had not agreed to any form of lien, and there was no contractual or equitable basis for the respondent's claim. Consequently, the court ordered that the respondent had no lien over the title deeds and that they pay the applicants’ costs of and incidental to the application.

The court's final orders were to declare that the respondent had no lien over the title deeds and to order the respondent to pay the applicants' costs of and incidental to the application. The costs were to be assessed on the standard basis, providing a clear resolution to the dispute and a direction for the parties moving forward.

Orders

Orders of the court

Declare that the respondent has no lien over the title deeds described in the application filed on 20 February 2004.

Order that the respondent pay the applicants’ costs of and incidental to the application to be assessed on the standard basis.

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

Full text does not contain this section.

CITATION:	Moloney & Anor v Marler & Darvall [2004] QSC 228
PARTIES:	GREGORY MICHAEL MOLONEY and PETER IVAN FELIX GEROFF AS COURT APPOINTED LIQUIDATORS AND TRUSTEES OF THE UNREGISTERED MANAGED INVESTMENT SCHEME KNOWN AS THE SENTRY ALLIANCE SCHEME FORMERLY CONDUCTED BY ATLANTIC 3 FINANCIAL (AUST) PTY LTD ACN 056 262 723 (IN LIQUIDATION) (applicants) v MARLER & DARVALL FORMERLY C.B. DARVALL & DARVALL (A FIRM) (respondent)
FILE NO/S:	BS 1713 of 2004
DIVISION:	Trial Division
PROCEEDING:	Trial
ORIGINATING COURT:	Supreme Court
DELIVERED ON:	9 July 2004
DELIVERED AT:	Brisbane
HEARING DATE:	29, 30 June and 1 July 2004
JUDGE:	Muir J
ORDER:	Declare that the respondent has no lien over the title deeds described in the application filed on 20 February 2004. Order that the respondent pay the applicants’ costs of and incidental to the application to be assessed on the standard basis.
CATCHWORDS:	PROFESSIONS AND TRADES – LAWYERS – LIENS – WHEN LIEN ARISES – where the respondent is claiming a solicitors’ lien in respect of title deeds held by the applicant liquidators/trustees – whether the respondent is entitled to a lien in respect of the title deeds – EQUITY – TRUSTS AND TRUSTEES – POWERS, DUTIES, RIGHTS AND LIABILITIES OF TRUSTEES – INDEMNITY, LIEN AND REIMBURSEMENT – GENERAL PRINCIPLES – solicitor lienee’s right of subrogation – limits of lienor’s rights of retention – limits on trustees rights of indemnity - right of a trustee to indemnity from the trust assets Barlow Clowes International Ltd (In Liquidation) v Vaughan [1992] 4 All ER 22 Barratt v Gough-Thomas [1951] Ch 242 Bozon v Bolland (1839) 4 M Y & CR 354: 41 ER 138 Brandao v Barnett (1846) 8 ER 1622 Cohen v Cohen (1929) 42 CLR 91 Duke Finance Ltd (In Liquidation) v Commonwealth Bank of Australia (1990) 22 NSWLR 236 Ecclesiastical Commissioners v Pinney [1900] 2 Ch 736 Gatsios Holdings Pty Ltd v Nick Kritharas Holdings Pty Ltd (In Liquidation) [2002] NSWCA 29 Gibson v May (1853) 4 De G M & G 512 Leeper v Primary Producers’ Bank of Australia Ltd (In Voluntary Liquidation) (1935) 53 CLR 250 MPS Constructions Pty Ltd (In Liquidation) v Rural Bank of New South Wales (1980) 49 FLR 430 Official Trustee in Bankruptcy v Kioussis [2000] NSWSC 248 Octavo Investments Pty Ltd v Knight (1979) 144 CLR 360 Re ADM Franchise Pty Ltd (1983) 7 ACLR 987 Re Byrne Australia Pty Ltd (No2) [1981] 2 NSWLR 364 Re Enhill Pty Ltd [1983] 1 VR 561 Re Global Finance Pty Ltd [2002] 26 WAR 385 Re Johnson (1880) 15 ChD 548 Re London & Globe Finance Corporation [1902] 2 Ch 416 Re Matheson (1994) 121 ALR 605 Re Suco Gold Pty Ltd (In Liquidation) (1983) 33 SASR 99 Staniar v Evans (1886) 34 ChD 470 Stumore v Campbell [1891] 1 QB 86
COUNSEL:	D A Savage SC, with him R M Derrington for the applicants P J Dunning for the respondent
SOLICITORS:	Gadens Lawyers, solicitors for the applicants