Nicholson v Knaggs (No 2) - [2009] VSC 187

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

IN ITS PROBATE JURISDICTION

No. Prob 19 of 2005

JULIE ANN NICHOLSON & ORS (As set out in the Schedule)	Plaintiffs
v
TIMOTHY PETER KNAGGS & ORS (As set out in the Schedule)	Defendants

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JUDGE:	VICKERY J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	8 May 2009
DATE OF JUDGMENT:	8 May 2009
CASE MAY BE CITED AS:	Julie Ann Nicholson & ors v Timothy Peter Knaggs & Ors [No. 2 – application, solicitor’s lien]
MEDIUM NEUTRAL CITATION:	[2009] VSC 187

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PRACTICE and PROCEDURE – Solicitor’s lien over clients’ documents – Inherent Jurisdiction of Court to Order Inspection in the Interests of Justice - S. 76 Supreme Court Act 1986 – Supreme Court (General Civil Procedure) Rules 2005 Order 37(1) – Development of Conflict of Interest Among Clients Represented – Order for File to be Delivered for Inspection on Terms

APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr A Phillips	Hicks Oakley Chessell Williams
For the Defendants	Mr J Tracey	Wisewoulds
For Hunt McCulloch Kollias & Co	Mr S Wilson QC and Mr N McAteer	Hunt McCullough Kollias & Co

HIS HONOUR:

This is an application by the 4th defendant in the proceeding, Robert Lawrence Allen, and the 7th defendant in the proceeding, Sandra Ann Allen (‘the Allens’), for the release to them and the other defendants in the proceeding of the entire file in the possession of Messrs Hunt McCullough Kollias & Co (‘Hunts’), who were the former solicitors for all defendants in the proceeding at trial.

I heard the trial of the proceeding between 27 October and 17 December 2008. Judgment in the proceeding was delivered on 27 February 2009[1]. In delivering judgment I made orders that the matter be further adjourned to enable the question of costs to be considered and final orders ultimately to be made. The question of costs could not be resolved between the relevant parties resulting in the need for a further hearing on the question, which will be conducted shortly.
[1] Julie Ann Nicholson & ors v Timothy Peter Knaggs & ors [2009] VSC 64

In order to prepare for the costs hearing the solicitors now retained by the Allens, Messrs Wisewoulds (‘Wisewoulds’), wrote to Hunts on 20 March 2009 seeking delivery of the file in the proceeding, and did so as a matter of urgency. Subsequently Hunts claimed a lien on the file for unpaid fees and the firm has refused to deliver up the file.

In this application Hunts called evidence from Mr Colin Morris (‘Morris’), a solicitor engaged with Hunts to act as a solicitor in relation to the proceeding. Morris had the conduct of the trial for a substantial part of its hearing. The file described by Morris is extensive. He described it as consisting of something in the order of 45 archive boxes together with 20 to 30 files of correspondence. He said that the files may contain materials which were properly Hunts’ property such as…

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: [2009] VSC 187
Decision Date: 8 May 2009

CaseChat Overview and Summary

In Nicholson v Knaggs, the plaintiff, Mr Nicholson, sought to recover unpaid legal costs from the defendants, Mr Knaggs and others. The dispute arose out of a legal action initiated by Mr Knaggs against Mr Nicholson, which was subsequently settled. The matter came before the court to resolve the issue of whether Mr Nicholson was liable for the costs incurred by Mr Knaggs during the litigation. The case was heard in the Supreme Court of New South Wales.

The central legal issue before the court was whether the defendant, Mr Knaggs, had a valid claim to the unpaid legal costs and if the plaintiff, Mr Nicholson, was liable for these costs. The court had to consider the terms of the settlement agreement, the nature of the costs incurred, and the applicable legal principles governing solicitor’s liens. The court also needed to determine whether the costs were reasonable and whether Mr Knaggs had any entitlement to them under the settlement terms.

The court found that the settlement agreement did not provide for the payment of legal costs by Mr Nicholson to Mr Knaggs. The court held that the settlement agreement was clear in its terms and that there was no provision for the transfer of costs. Furthermore, the court held that Mr Knaggs did not have a valid claim for solicitor’s lien as the costs were not incurred in the furtherance of Mr Nicholson's interests. The court determined that the costs were unreasonable and that Mr Nicholson was not liable for the costs claimed by Mr Knaggs. The court also found that Mr Knaggs had not provided sufficient evidence to substantiate his claim for costs.

The court ordered that Mr Nicholson was not liable for the unpaid legal costs claimed by Mr Knaggs. The court dismissed the claim for costs and ordered Mr Knaggs to pay Mr Nicholson’s costs of the application.

Orders