Moloney v Marler and Darvall - [2004] QCA 310

SUPREME COURT OF QUEENSLAND

CITATION:

Moloney & Anor v Marler & Darvall [2004] QCA 310

PARTIES:

GREGORY MICHAEL MOLONEY & 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 (IN LIQUIDATION) ACN 056 262 723
(applicants/respondents)
v
MARLER & DARVALL formerly CB DARVALL & DARVALL (a firm)
(respondent/appellant)

FILE NO/S:

Appeal No 6471 of 2004
SC No 1713 of 2004

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

27 August 2004

DELIVERED AT:

Brisbane

HEARING DATE:

28 July 2004

JUDGES:

de Jersey CJ, Williams JA and Mullins J
Separate reasons for judgment of each member of the Court, each concurring as to the orders made

ORDER:

1.     The direction made by the learned trial judge on 21 July 2004 be varied by adding at the commencement the words “Subject to the payment by the applicants to the respondent of the sum of $15,000,”

2.     The appeal be otherwise dismissed

3.     The appellant pay the respondents’ costs of the appeal to be assessed

CATCHWORDS:

PROFESSIONS AND TRADES - LAWYERS - LIENS - WHEN LIEN ARISES - appellant claimed a solicitors’ lien in respect of title deeds for outstanding fees owed by company which had conducted unregistered managed investment schemes - where title deeds were of land subject to a mortgage which had been acquired by the company using funds obtained from investors in one of the managed investment schemes - whether appellant held the title deeds for the company or for the original investors in that managed investment scheme - where appellant acted for the company but received instructions from the original investors on the disbursement of the funds paid to the appellant’s trust account to invest in the mortgage - appellant had no possessory lien which could be relied on for payment of fees owed by the company where the title deeds were held for its original investors

Andersen v Lockhart [1991] 1 Qd R 501, cited
Brandao v Barnett (1846) 12 Cl & F 787; 8 ER 1622, cited
Duke Finance Ltd (in liquidation) v Commonwealth Bank of Australia (1990) 22 NSWLR 236, cited
In re Clark; Ex parte Newland (1876) 4 Ch D 515, cited
Official Trustee in Bankruptcy v Kioussis [2000] NSWSC 248, 10 BPR 18,021, cited
Re London and Globe Finance Corporation [1902] 2 Ch 416, cited
Stumore v Campbell& Co [1892] 1 QB 314, cited
Leeper v Primary Producers’ Bank of Australia Ltd (in voluntary liquidation) (1935) 53 CLR 250, cited

COUNSEL:

F L Harrison QC, with P J Dunning, for the appellant
D A Savage SC, with R M Derrington, for the respondents

SOLICITORS:

Marler & Darvall for the appellant
Gadens Lawyers for the respondents

:de JERSEY CJ I have had the advantage of reading the respective reasons for judgment of Williams JA and Mullins…

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] QCA 310
Decision Date: 27 August 2004

CaseChat Overview and Summary

In the case of Moloney v Marler and Darvall, the appellant, a solicitor, sought to enforce a lien on title deeds held by him for a company which had invested in a mortgage. The appellant claimed that the lien arose due to outstanding fees owed by the company. The company had acquired the mortgaged land using funds obtained from investors in one of its unregistered managed investment schemes. The dispute centered on whether the title deeds were held for the company or for the original investors, and whether the appellant could rely on the lien for payment of the fees. The Full Court of the Federal Court of Australia was tasked with determining these legal issues.

The primary legal issues were whether the appellant held the title deeds for the company or for the original investors, and if the former, whether the appellant had a possessory lien which could be relied on for payment of fees owed by the company. The court considered whether the solicitor's lien applied and whether the solicitor had any rights over the title deeds to secure payment of his fees. The court also examined the nature of the solicitor's relationship with the company and the original investors, and whether the solicitor had any instructions from the investors regarding the disbursement of funds.

The court held that the appellant had no possessory lien which could be relied on for payment of fees owed by the company, as the title deeds were held for the original investors. The court found that the appellant acted for the company but received instructions from the original investors on the disbursement of the funds paid to the appellant’s trust account to invest in the mortgage. The court reasoned that the title deeds were held for the benefit of the investors and not for the company, and therefore, the appellant could not claim a lien over the title deeds to secure payment of fees. The court also noted that the appellant's lien was not absolute and could be defeated by the rights of third parties. The appeal was dismissed, with the appellant ordered to pay the respondents’ costs of the appeal.

The final orders included varying the direction made by the trial judge to require the payment of $15,000 by the applicants to the respondent before any further action could be taken. The appeal was otherwise dismissed, and the appellant was ordered to pay the respondents’ costs of the appeal.

Orders

Orders of the court

1. The direction made by the learned trial judge on 21 July 2004 be varied by adding at the commencement the words “Subject to the payment by the applicants to the respondent of the sum of $15,000,”

2. The appeal be otherwise dismissed

3. The appellant pay the respondents’ costs of the appeal to be assessed

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

JERSEY CJ

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: JERSEY CJ

Full text does not contain this section.

CITATION:	Moloney & Anor v Marler & Darvall [2004] QCA 310
PARTIES:	GREGORY MICHAEL MOLONEY & 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 (IN LIQUIDATION) ACN 056 262 723 (applicants/respondents) v MARLER & DARVALL formerly CB DARVALL & DARVALL (a firm) (respondent/appellant)
FILE NO/S:	Appeal No 6471 of 2004 SC No 1713 of 2004
DIVISION:	Court of Appeal
PROCEEDING:	General Civil Appeal
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	27 August 2004
DELIVERED AT:	Brisbane
HEARING DATE:	28 July 2004
JUDGES:	de Jersey CJ, Williams JA and Mullins J Separate reasons for judgment of each member of the Court, each concurring as to the orders made
ORDER:	1. The direction made by the learned trial judge on 21 July 2004 be varied by adding at the commencement the words “Subject to the payment by the applicants to the respondent of the sum of $15,000,” 2. The appeal be otherwise dismissed 3. The appellant pay the respondents’ costs of the appeal to be assessed
CATCHWORDS:	PROFESSIONS AND TRADES - LAWYERS - LIENS - WHEN LIEN ARISES - appellant claimed a solicitors’ lien in respect of title deeds for outstanding fees owed by company which had conducted unregistered managed investment schemes - where title deeds were of land subject to a mortgage which had been acquired by the company using funds obtained from investors in one of the managed investment schemes - whether appellant held the title deeds for the company or for the original investors in that managed investment scheme - where appellant acted for the company but received instructions from the original investors on the disbursement of the funds paid to the appellant’s trust account to invest in the mortgage - appellant had no possessory lien which could be relied on for payment of fees owed by the company where the title deeds were held for its original investors Andersen v Lockhart [1991] 1 Qd R 501, cited Brandao v Barnett (1846) 12 Cl & F 787; 8 ER 1622, cited Duke Finance Ltd (in liquidation) v Commonwealth Bank of Australia (1990) 22 NSWLR 236, cited In re Clark; Ex parte Newland (1876) 4 Ch D 515, cited Official Trustee in Bankruptcy v Kioussis [2000] NSWSC 248, 10 BPR 18,021, cited Re London and Globe Finance Corporation [1902] 2 Ch 416, cited Stumore v Campbell& Co [1892] 1 QB 314, cited Leeper v Primary Producers’ Bank of Australia Ltd (in voluntary liquidation) (1935) 53 CLR 250, cited
COUNSEL:	F L Harrison QC, with P J Dunning, for the appellant D A Savage SC, with R M Derrington, for the respondents
SOLICITORS:	Marler & Darvall for the appellant Gadens Lawyers for the respondents