Who You Gonna Call? Lien Busters

Supreme Court judges are solicitors’ lien busters. They can bust solicitors’ liens using:

1.  (Regardless of whether or not the matter to which the file relates had anything to do with the Supreme Court) their Court’s inherent jurisdiction over its officers including Victorian solicitors, reinforced by s. 76 of the Supreme Court Act, 1986; and

2.  (In relation to Supreme Court proceedings) order 37 rule 1(1) of the Supreme Court Rules.

In Nicholson v Knaggs (No 2) [2009] VSC 187, Justice Vickery adjudicated a dispute over possession of the defendants’ file maintained by their former lawyers. One firm acted for three defendant couples in Supreme Court proceedings which went to judgment.  As a result of findings made by his Honour, a dispute arose between the three sets of defendants in relation to costs, an aspect of the trial which was deferred to a separate hearing.  It became inevitable that the defendants’ solicitors would have to cease acting and they did so, though who was to be regarded, as a matter of substance, as having terminated the retainer was controversial.  His Honour said as a matter of substance, the retainer was frustrated (my word, not his).  His Honour ordered the delivery up of the file to the solicitors for one of the pairs of defendants since otherwise ‘their further conduct of the proceeding would be prejudiced and potentially, in my view, significantly prejudiced, depending on what the documents, which are yet to be examined, disclose’. He did so despite the fact that the order would substantially diminish the value of the lien:  once costs were determined, the case would be over, and the defendants’ need for the file very much reduced, and so the bargaining chip represented by the lien diminished.

And what is very interesting is that it is clear that his Honour contemplated the delivery up of the entire file, including the part traditionally owned by the solicitors (their deposition that to fillet the file would take 6 to 8 weeks may have backfired): he said at [22]:

‘However, given that the files are to be released to the solicitors Wisewoulds and maintained under their custody and then returned to Hunts by the end of this month, in my view any property of Hunt’s [sic.] in the documents to which Mr Morris referred would not be lost or destroyed and in all likelihood would be returned in good condition to Hunts at the end of the exercise. This is not a sufficient reason to deny the relief sought by the defendants.’

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