State of Queensland v Masman

In the case of State of Queensland v Masman, the state sought to restrain the first and second respondents from dealing with any property connected with their alleged drug trafficking activities. The applicants argued that the $95,000 paid by the first and second respondents to the third respondent as a retainer for legal services was held by the third respondent on trust for the first and second respondents and was therefore subject to the restraining order. The first and second respondents argued that the money had become the property of the third respondent and was not held in trust for them. The court was required to determine whether the money paid to the third respondent was held on trust for the first and/or second respondents, and whether the restraining order applied to the money.

The court examined the terms of the retainer agreement and concluded that the money was paid to the third respondent as consideration for the obligations imposed on them by the agreement. The court held that the money became the property of the third respondent and was not held on trust for the first and/or second respondents. The court further held that the money could not be subject to the restraining order as it was not property connected with the alleged criminal activity. The court noted that the contract did not refer to any trust and the terms of the agreement were inconsistent with the existence of any trust.

The court ordered that the third respondent, Nyst Lawyers, be added as a party to the proceedings. The court ordered that the third respondent pay the sum of $95,000 forthwith to the Public Trustee of Queensland. The court granted the third respondent liberty to apply to vary the order for payment based on services performed between 3 November 2009 and 12 November 2009, for the first and second respondents, on giving two business days notice to the other parties. The court dismissed the respondents' cross applications and ordered the respondents to pay the costs of the applicant.