Campbell v Watson

Freezing orders: relevant principles

1. The relevant principles for the granting of a freezing order are not controversial. The position is largely governed by Part 25 of the UCPR. The purpose of the power is to make orders "for the purpose of preventing the frustration or inhibition of the court's processes by seeking to meet a danger that a judgment or prospective judgment of the court will be wholly or partly unsatisfied". As practically every authority reiterates, it is a drastic or exceptional remedy, not to be granted lightly: see most recently KR Properties Global Pty Ltd (ACN 602 693 729) t/as AK Properties Group (ABN 62 971 068 965) v Kazzi [2024] NSWCA 141 per Mitchelmore JA at [15].
2. Relevantly, the applicant for a freezing order must establish a "good arguable claim on an accrued or prospective cause of action that is justiciable in…the court": r 25.14(1)(b)(i).
3. The "good arguable claim" criterion is capable of being satisfied without either involving or requiring any prediction about the likely ultimate success of the claim: Ninemia Maritime Corp v Travel GmbH & Co KG (the Niedersachsen) [1984] 1 All ER 398 at 404 per Mustill J. The claim must be more than barely capable of serious argument, although it is not necessary that it have better than a 50% chance of success. This test is conformable with that applied by the High Court in Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 at 408, in which Mareva orders were sought under s 37A of the Conveyancing Act 1919 (NSW). A claim may be reasonably arguable with respect to the legal propositions advanced, the factual matters in issue or both.
4. In the context of the present application, it is also worth noting that a "good arguable claim" may be established on a prospective cause of action. Even a cause of action that has not accrued may found a freezing order where the justice of the case requires it: Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319 at 329. Equally, in my view, where a cause of action has accrued but may be presently unenforceable, if the justice of the case otherwise requires the making of the order, the existence of the cause of action may ground a freezing order if it would later become justiciable in the Court. Put another way, if a prospective cause of action may be justiciable in the Court within the meaning of r 25.14, there does not appear to be any reason in principle why a cause of action that has accrued but is subject to a prohibition as to its immediate enforcement is not also justiciable.
5. The other key requirement for the exercise of the power to make a freezing order is that there be a risk of dissipation but for the making of the orders, as set out in r 24.14(4): 25.14 Order against judgment debtor or prospective judgment debtor or third party(cf Federal Court Rules Order 25A, rule 5) … (4) The court may make a freezing order or an ancillary order or both against a judgment debtor or prospective judgment debtor if the court is satisfied, having regard to all the circumstances, that there is a danger that a judgment or prospective judgment will be wholly or partly unsatisfied because any of the following might occur - … (b) the assets of the judgment debtor, prospective judgment debtor or another person are - … (ii) disposed of, dealt with or diminished in value.
6. The level of danger required is that there be an apparent danger that the assets will be dealt with in a way which will, in fact, prevent the plaintiff from recovering on any judgment: Patterson at 321; Cardile at [26]. The plaintiff need not establish a positive intention to frustrate the judgment: Cardile at [26].
7. The real danger or real likelihood criterion is inherently impressionistic. Nevertheless, a mere assertion of the apprehension of a risk of dissipation will generally be inadequate to justify the making and/or continuation of the order: The Niederachsen, Patterson at 321.
8. Finally, any relevant discretionary factors must be taken into account. These include the balance of convenience: Samimi v Seyedabadi; Seyedabadi v Samimi [2013] NSWCA 279 at [75].

Facts

1. The evidence relevantly establishes the following matters to the requisite standard: 1. In June 2019, the defendant was representing himself as the applicant in the Federal Court proceedings. The respondents in those proceedings were the defendant's former client, Peter Kriticos, and WhiteWater West Industries Ltd (WhiteWater), who acquired an interest in the intellectual property from Mr Kriticos. Although not the inventor of the subject invention, the defendant acquired an interest in its intellectual property by entering into an arrangement with the inventor in lieu of fees he was due as a patent attorney. He believed his cause of action was worth many millions of dollars. 2. The plaintiff came to represent the defendant in the Federal Court proceedings. On 19 June 2019 the parties executed a Costs Agreement (the First Costs Agreement) for the plaintiff to provide the defendant with legal advice and assistance on a direct access basis. Relevantly, the First Costs Agreement set out the services to be performed and provided an estimate of $25,000 plus GST. It also contained the following clause: "Bear in mind that this is only an estimate. Actual costs may differ considerably from the initial estimate. Litigation is uncertain. New or unforeseen issues often arise. It is not possible for one party to control the actions of other parties." 1. Between 19 June 2019 and 3 March 2023 (the first period), the plaintiff provided legal services to the defendant. Over that time, the complexity of the Federal Court proceedings grew: satellite litigation was commenced in many overseas jurisdictions and claims for breaches of fiduciary duty and a Barnes v Addy claim were added. The defendant provided copious documents to the plaintiff for review, and the respondents to the Federal Court proceedings made multiple interlocutory applications. Legal work in the matter increased considerably. 2. The plaintiff invoiced the defendant from time to time during the first period. In October 2019, after default in payment of one of the plaintiff's invoices issued directly to the defendant, and on the plaintiff's demand for payment of that invoice, the defendant lodged a complaint against the plaintiff with the Office of the NSW Legal Services Commissioner (OLSC). This was understood by the parties as precluding the plaintiff from bringing proceedings against the defendant for recovery of his fees, pursuant to s 194 of the Legal Profession Uniform Law (NSW) (LPUL) (s 194 is discussed below). This was the first of several occasions on which the defendant took this course with respect to fees invoiced by the plaintiff as well as fees invoiced by other legal practitioners whom the defendant retained in connection with the Federal Court proceedings. 3. The plaintiff refused subsequently to appear for the defendant in the Federal Court proceedings unless the defendant withdrew his complaint and paid the outstanding fees. The defendant agreed to do so, withdrawing his complaint and paying the fees that were claimed. 4. On 6 November 2019, the plaintiff entered into a conditional costs agreement with solicitors he had arranged to act for the defendant in the Federal Court proceedings. That agreement provided for a 25% uplift on fees if the proceedings were successful. Success was defined in cl 3.2.1 to include the receipt, by the defendant, of any amount of money, property or other valuable consideration from Mr Kriticos or WhiteWater. 5. In about April 2020, the plaintiff notified the defendant that there were again invoices that had not been paid. Again, the defendant did not pay those fees but lodged a complaint against the plaintiff with the OLSC. Again, the plaintiff refused to appear further for the defendant in the Federal Court proceedings unless the defendant withdrew his complaints, apologised to the plaintiff and to the solicitor whom the plaintiff had arranged to assist with the Federal Court proceedings. 6. The defendant withdrew his complaints and paid the solicitor. He also provided the plaintiff with a letter of apology as follows: "Letter of Apology In response to my phone call with Garth shortly before I apologise for filing the complaints that I filed with the Office of Legal Services Commission and the Police. As I said to Garth, I wanted you both to keep acting and was doing what I thought I needed to do to achieve that. Also as discussed with Garth I have withdrawn the complaints. I know that Kerry said at one stage that all goodwill or something to that effect was gone. However, I haven't had any ill will toward you and have been doing everything that I believe I need to do to literally survive in very terrible circumstances." [Emphasis added] 1. Kerry was the solicitor who refused to do any further work for the defendant. The defendant, thereafter, independently procured the services of another solicitor, a friend of his, from late May 2020. The plaintiff thereafter sent invoices to the new solicitor. Eventually, that solicitor also ceased acting, following a falling out with the defendant in November 2022. 2. In an email exchange between the plaintiff and the defendant in May 2020, the plaintiff expressly informed the defendant that he would no longer act on the basis of any conditional costs agreement and that he would invoice the new solicitor according to his hourly rates. 3. On 27 October 2021, the plaintiff secured an indemnity costs order on the defendant's behalf in the Federal Court proceedings taxed in the amount of $53,545, which was payable forthwith. The first respondent, Mr Kriticos, refused to pay that costs order and, at the plaintiff's suggestion, the defendant retained an insolvency specialist solicitor to pursue the costs claim. That approach was successful: a bankruptcy creditor's petition was served and the costs were paid shortly thereafter. Those costs were not paid to the plaintiff but were used to retain an expert. When the solicitor invoiced $2,645.25 for that service, the defendant refused to pay and lodged a complaint against the solicitor with the OLSC. 4. The plaintiff refused to provide any further services to the defendant unless he withdrew his complaint against the solicitor. The defendant complied and, on 22 March 2024, he sent the following email to the OLSC, copied to the solicitor: "Dear Sir/Madam I withdraw my complaint against [the solicitor]. In addition to the reasons my email below explains, I could not pay the invoices because of fraud against me [alleged against his ex-wife with whom he was engaged in Family Law proceedings, not any of his legal advisors] and I needed to pay my experts report for my Federal Court proceeding NSD 970/2019 or I would not obtain income I am owed relating to that proceeding. I also believe that the Cost is conditional on success related to that work but the payment by Mr Kriticos was independent of and unrelated to that work. Irrespective, I was, and am, happy to pay Peter for his work but for reasons explained above I was seeking to pay when I could afford to pay. …" [Emphasis added] 1. As may be seen, the defendant's approach to paying invoices and making complaints appears, on the strength of his own correspondence, to have been governed by his ability to pay rather than any genuine complaint about the services provided or the amount of fees charged. It strongly suggests that the defendant uses complaints to the OLSC as a tactic to delay payment of legal fees. The plaintiff submitted that such complaints were not made in good faith. 2. In the period between June 2019 and March 2023, the plaintiff performed legal work for the defendant in the Federal Court proceedings for which he was paid $23,230. The defendant says the true amount paid is higher. The plaintiff also performed work for which he invoiced a further $115,815.21 and for which he was not paid. During this period, the defendant sought, but was unsuccessful in obtaining, litigation funding. 3. On 3 March 2023, the plaintiff and defendant entered into a new direct costs agreement. That agreement included an estimate of the total legal costs for the plaintiff's legal services in providing legal advice, drafting documents and appearing in the Federal Court proceedings of $130,000 plus GST. It also included the following clause: "In addition to the above, you agree that you will be personally liable to the [plaintiff] for all unpaid fees that you have incurred on this matter to date for the work of the [plaintiff] under previous costs agreements with solicitors or otherwise, which currently amounts to a total of $115,815.21 including GST. This amount is immediately due and payable by the [defendant] to the [plaintiff] and is in addition to any amounts invoiced going forward." 1. The plaintiff contends that the above clause, while in the same document as the costs agreement proper, is a separate legal obligation that is not an agreement for the provision of legal services and the payment of fees therefor. It is, he contends, either an acknowledgement of an existing debt, or a promise to make good a debt owed primarily by the solicitor on amounts invoiced to him, in consideration for the provision of further legal services, payment for which was also to be paid for at rates agreed in the agreement. The due date for payment was 3 March 2023. 2. The Federal Court proceedings continued and the plaintiff continued to act for the defendant on a direct brief basis. 3. As at 3 March 2023, the second respondent in the Federal Court proceedings had yet to give discovery, which was to include large numbers of technical documents. Typical of patent litigation, the plaintiff expected that there would be disputes over the scope of discovery and eventually an expert would need to be retained for an opinion as to the patent infringement part of the Federal Court proceedings. On 7 March 2023, the second respondent (WhiteWater) served its list of documents, including 355 technical drawings. On 19 April 2023, the Federal Court proceedings were set down for a three-week hearing commencing 11 September 2023, however, that hearing date was vacated due to a lengthy discovery dispute. The defendant's expert evidence in the Federal Court proceedings was finalised and filed on 29 February 2024. 4. Sometime since the commencement of the relationship between the plaintiff and the defendant, the defendant moved to Queensland, likely between March 2023 and August 2024. 5. Since 3 March 2023, the plaintiff rendered invoices to the defendant on a regular basis, however, although those invoices were payable on 30-day terms, the plaintiff did not take any further steps to press for payment. The invoices were in the following sums: 1. $12,859, invoiced on 29 May 2023; 2. $15,980.25, invoiced on 18 July 2023; 3. $1,608.75, invoiced on 1 November 2023; 4. $3,003.00, invoiced on 6 April 2024; 5. $19,956.75, invoiced on 28 July 2024; and 6. $6,088.50 invoiced on 9 August 2024. 1. The above sums were well within the $130,000 estimate set out in the 3 March 2023 costs agreement. 2. On 1 August 2024, the parties to the Federal Court proceedings attended mediation in Brisbane, at which an in-principle agreement was reached, subject to final agreement and the execution of a deed of settlement. The deed of settlement, executed on 14 August 2024, provided for payment by WhiteWater to the defendant of $200,000, inclusive of GST and tax liabilities. Payment of the settlement sum was due within 28 clear calendar days of all parties executing the deed of settlement and was to be paid into the account of Bellator Pty Ltd (Bellator), a company controlled by the defendant. As the plaintiff did not operate a trust fund, he was unable to accept payment of the settlement sum, which the respondents insisted was to be paid into an account controlled by the defendant. 3. During the mediation, the plaintiff and defendant verbally agreed that if the defendant paid the plaintiff $100,000 immediately on receipt of the settlement funds, as contemplated by the in-principle agreement, the plaintiff would not pursue the remainder of the amount due to him for legal services. This was subsequently confirmed in an exchange of emails between the parties on 6 August 2024. 4. The settlement sum in the Federal Court proceedings was paid into a National Australia Bank account belonging to Bellator, ending in #0609, on or about 3 September 2024. The defendant did not notify the plaintiff that the monies had been received. 5. On 22 September 2024, assuming the settlement monies must have been received by then, the plaintiff wrote to the defendant seeking payment of the $100,000 that had been agreed as a compromise between them on 1 August 2024. He noted that the full amount of his fees was $175,347.50. He indicated that should payment of the $100,000, agreed as a compromise, not be forthcoming by 24 September 2024, he would assume that the defendant had decided not to honour that agreement and indicated that he would commence proceedings for recovery of the full $175,347.50 without further notice. 6. On 26 September 2024 the plaintiff and defendant had a telephone conversation in which the defendant said words to the effect, "I have hearings in November in my family law matter. It's very important that I keep all the settlement money to pay for those proceedings. I can pay you interest on the money if we agree that gets paid later, so can we do that?" The plaintiff refused and reiterated that if the defendant did not pay the lesser sum of $100,000 immediately, he would chase the defendant for the $175,000. The defendant agreed and said that he just needed the plaintiff's bank account details, even though they were already on the plaintiff's invoices. 7. On 30 September 2024, the defendant made a complaint against the plaintiff with the OLSC. In that complaint, the defendant alleged that the conduct of the plaintiff caused him "loss of the value of the proceeding" and "relatedly a lower payout", costs since and inclusive of the respondents' summary judgement and strike out applications, including the costs of discovery, and lost income. He said that the reason he could not pay his advisors, or engage other advisors, was because of the fraud upon which the Federal Court proceedings was based, resulting in him being dependent on his advisors without control over what they did. More particularly, the defendant alleged: 1. He had wanted to settle the proceedings prior to discovery, however, he had been precluded from doing so because of the conduct of the plaintiff. The plaintiff's conduct, or advice, in recommending settlement follow discovery, was negligent, false, misleading and deceptive. The defendant went on to allege that the plaintiff gave this advice because it advantaged him financially and professionally. The complaint continues, alleging that the plaintiff's conduct was fraudulent. 2. The plaintiff's demand understates the amount actually paid (being $25,000 instead of $23,230) and asserts that the whole of the work performed by the plaintiff ought to have been on a contingency basis beyond the first $25,000 and that the plaintiff forced the defendant to sign a different costs agreement, knowing that the defendant had no alternative because of the fraud suffered by him (on which the Federal Court proceedings had been based) and that he was unable to engage another barrister. 1. On the same day, the OLSC wrote to the defendant, notifying him that his complaint had been allocated a file number and been referred to the Council of the NSW Bar Association. The defendant had not served notice on the plaintiff of the fact of the complaint and the plaintiff only learned of the complaint after commencement of these proceedings. 2. The current proceedings were commenced on 3 October 2024. On 4 October 2024, the plaintiff sought and obtained on an ex parte basis the freezing order which he now seeks to extend. 3. The defendant made a further complaint against the plaintiff at the OLSC on 15 October 2024. In the second complaint, the defendant elevates his complaints against the plaintiff and complains more stridently of fraud and having been forced to settle the Federal Court proceedings due, inter alia, to fraud against him by the plaintiff. The complaints essentially were that the plaintiff was bound by a conditional costs agreement and was not entitled to any costs, that if the defendant had agreed to anything else, it was the result of fraud by the plaintiff, that the plaintiff prevented settlement before discovery, that the present proceedings were fraudulent, that the interim freezing order was obtained fraudulently and that the plaintiff's affidavit in support was dishonest.
2. It should be noted that counsel appearing for the defendant before me expressly disavowed the allegations made by the defendant of fraud as against the plaintiff.
3. It is a truism that a barrister is not a mere mouthpiece and owes duties to the Court, to his, her or their opponent and to the administration of justice as well as duties to the client. Rule 42 of the Legal Profession Uniform Conduct (Barristers) Rules 2015 (NSW) (the Rules) provides that a barrister must not act as the mere mouthpiece of the client or of the instructing solicitor and must exercise the forensic judgments called for during the case independently, after the appropriate consideration of the client's and the instructing solicitor's wishes where practicable. Rule 65(a) of the Rules expressly provides that a barrister must not allege any matter of fact amounting to criminality, fraud or other serious misconduct against any person unless the barrister believes on reasonable grounds that available material by which the allegation could be supported provides a proper basis for it.
4. In my view, the material before the Court did not rise to the level of fraud, even if the allegations of the defendant were accepted. On this basis, I consider that the conduct of the defendant's counsel was entirely appropriate.

Is there a good arguable case?

1. The plaintiff's case against the defendant has two principal components.
2. First, the plaintiff says as a matter of contract, he is entitled to damages for breach by the defendant of costs agreements entered in 2020 and 2023 on which he is entitled to sue like any other contract, subject to the provisions of the LPUL: s 184 LPUL.
3. Secondly, and of more significance to the plaintiff's case, he claims an equitable "fruits of the action" lien over so much of the settlement monies received in Bellator's account as equals his fees and interest thereon.

The contract claim and the Legal Profession Uniform Law

1. Subject to the operation of the LPUL, this is a straightforward contractual claim. On the basis of the matters set out above, subject to the LPUL, I consider that the plaintiff has a good arguable case that agreements for the provision of legal services were entered between the parties, those services were provided and the defendant is liable to pay the amounts invoiced in accordance with those agreements.
2. The LPUL was relied on by the defendant as precluding the plaintiff from bringing the present proceedings and from obtaining any interlocutory relief in aid of the final relief sought.
3. Section 194(2) of the LPUL relevantly provides (with emphasis added): 194 Restriction on commencing proceedings to recover legal costs … (2) A law practice must not commence legal proceedings to recover legal costs from a person who has been given a bill until - (a) where the legal costs are the subject of a costs dispute before the designated local regulatory authority - the authority has closed or resolved the dispute; …
4. The plaintiff submitted, however, that the defendant's reliance on the LPUL is misplaced. His position is threefold.
5. First, the plaintiff says that, properly understood, $115,815.21 of his claim is not pursuant to any costs agreement at all but a debt acknowledged to be due on 3 March 2023 and not subject to the LPUL.
6. Secondly, the plaintiff says that to the extent the sums claimed are properly characterised as a "costs dispute", all but $6,088.00 of the sum claimed is outside the 60-day time limit set out in s 272 of the LPUL.
7. Thirdly, the plaintiff says that notwithstanding that a complaint had been made to the OLSC on 30 September 2024 and these proceedings were not commenced until 3 October 2024, the mere lodgement of a complaint does not create a "costs dispute" within the meaning of the LPUL, which requires an anterior determination by the OLSC (or its delegate) before it acquires that characteristic.
8. Bearing in mind that the requisite standard of satisfaction is that the plaintiff need only demonstrate a good arguable case, I am satisfied for the reasons below that the plaintiff has met that standard.
9. First, I accept that it is plainly arguable that the acknowledgement of a debt in the sum of $115,815.21 on 3 March 2023 was not a costs agreement, notwithstanding that it was recorded in the same document.
10. Secondly, s 272 of the LPUL relevantly provides: 272 Time limits on making complaints … (2) To the extent that a complaint involves a costs dispute, the complaint must be made within the required period referred to in subsection (3), but the designated local regulatory authority may waive the time requirement if satisfied that - (a) the complaint is made within 4 months after the required period; and (b) it is just and fair to deal with the complaint having regard to the delay and reasons for the delay; and (c) the lawyer or law practice has not commenced legal proceedings in respect of the legal costs. (3) For the purposes of subsection (2), the required period is the period of - (a) 60 days after the legal costs become payable, except as provided by paragraph (b); or (b) if an itemised bill was requested in respect of those costs in accordance with section 187(2) - 30 days after the request was complied with. (4) The designated local regulatory authority's decision to waive or refuse to waive a time requirement under this section is final and cannot be challenged in any proceedings by the complainant or the respondent.
11. It can be seen that the time limit is 60 days, which can be extended subject to a hard limit of 4 months if it is fair and reasonable to do so and, as is the case here, the lawyer has not commenced legal proceedings in respect of the legal costs. All but $6,088.50 of the plaintiff's claim is outside the 60-day period and all but $26,045.25 is outside the 4-month period in s 272(2)(a). It would fall to the defendant to establish that the time requirement ought be waived because it would be just and fair to deal with the complaint having regard to the delay and the reasons for it. While the defendant might make out such grounds, in light of the history of the matter, I do not consider that such a waiver could be assumed. To this extent, therefore, there is little doubt that the plaintiff's claim is arguable, notwithstanding s 194 of the LPUL.
12. The remaining basis on which the plaintiff contends s 194 of the LPUL does not preclude the bringing of the present proceedings is that the "costs dispute" did not arise on the making of the complaint.
13. "Costs dispute" is defined in s 269 as a particular class of consumer matter (notes omitted, emphasis added): 269 Consumer matters (including costs disputes) (1) A consumer matter is so much of a complaint about a lawyer or a law practice as relates to the provision of legal services to the complainant by the lawyer or law practice and as the designated local regulatory authority determines should be resolved by the exercise of functions relating to consumer matters. (2) A costs dispute is a consumer matter involving a dispute about legal costs payable on a solicitor-client basis where the dispute is between a lawyer or law practice and a person who is charged with those legal costs or is liable to pay those legal costs (other than under a court or tribunal order for costs), whether as a client of the lawyer or law practice or as a third party payer.
14. The plaintiff submitted that a "consumer matter" only arises once the designated local regulatory authority makes a determination that the complaint should be resolved by the exercise of functions related to such matters. Until such a determination is made, the complaint does not acquire that character. Even if the parties have taken up contrary positions with respect to the payment of costs, they are not parties to a "consumer matter" and hence a "costs dispute" within the meaning of s 269 unless and until the designated local regulatory authority makes the relevant determination.
15. The plaintiff went on to submit that no such determination had been made, at least as at the commencement of these proceedings on 3 October 2024.
16. The plaintiff derived support for this submission from s 276 of the LPUL, which provides that the designated local regulatory authority must conduct a preliminary assessment of a complaint, and s 277, which provides that it may close the complaint, inter alia, if the complaint was made out of time (s 277(1)(b)) or is vexatious, misconceived, frivolous or lacking in substance (s 277(1)(a)). It can do so without any investigation or without completing an investigation: s 277(3).
17. "Designated local regulatory authority" is defined in s 6 of the LPUL as "a person or body specified or described in a law of this jurisdiction for the purposes of a provision, or part of a provision, of this Law in which the term is used". For the purpose of s 194, the designated local regulatory authority is the Legal Services Commissioner: s 11, s 27 Legal Profession Uniform Law Application Act 2014 (NSW). Under s 406(1) of the LPUL, the Commissioner may delegate any of his, her or their powers under the LPUL to an entity of a class prescribed, by jurisdictional legislation. There was no dispute that the NSW Bar Association is such an entity.
18. The defendant primarily opposed the relief sought on the basis that the plaintiff had not established a sufficient risk of dissipation to justify the making of the orders and that there were good discretionary reasons to refuse the relief sought. Counsel for the defendant further submitted that a costs dispute arises on the making of the complaint because the complainant has, by that action, disputed its obligation to pay the costs sought. Accordingly, any response by either the Commissioner or the NSW Bar Association involves a determination to exercise functions related to consumer matters.
19. While I had the benefit of some argument on these matters, in the time available, the parties did not provide full and detailed submissions on these matters of statutory construction. This is not a criticism of them; an interlocutory dispute in this Court is not the most obvious forum for the determination of these issues. Much may ultimately turn on the true construction of s 269 where, as the facts of this case show, the complaint was made and there was a referral by the Commissioner to the NSW Bar Association, without more, prior to the commencement of the proceedings. If this can properly be characterised as a determination that the matter "should be resolved by the exercise of functions relating to consumer matters", the defendant's criticism may be made out. If that is the true construction, however, it is difficult to see any circumstance which does not fall within s 269(1).
20. As matters presently stand, therefore, the plaintiff's construction of s 194 of the LPUL appears to me to be reasonably arguable. As it is not necessary for me to reach any conclusion more certain than this, I do not purport to do so and the parties may revisit this question in any final hearing.

Equitable "fruits of the action" lien

1. My findings as to the plaintiff's debt claim are sufficient to establish a good arguable case for the purpose of the present application. Nevertheless, I have also considered the second component of the plaintiff's claim, being the equitable lien, as the nature of the right claimed may have some additional impact on my exercise of the discretion whether or not to extend the freezing order and, if so, on what terms.
2. Traditionally, solicitors had available to them two types of lien to safeguard their costs: the general, or possessory, lien to retain all papers or other chattels and money which came into their possession as the client's solicitors until all their costs and charges as the client's solicitors are paid; and the particular lien which arises over any personal property recovered or preserved or any judgment obtained for the client by the solicitor's exertions in the litigation: G E Dal Pont, Law of Costs (3rd ed, 2013, LexisNexis Butterworths) at para 27.1.
3. The particular lien, also known as the "non-possessory", "equitable" or "fruits of the action" lien does not depend on any pre-existing proprietary or possessory relationship of the solicitor to the property, although it is itself a form of proprietary interest in the property or fund. It is "particular" in the sense that is confined to a particular fund and does not apply to safeguard costs at large. Although a recognised right, it is probably not really a lien at all, although that question of characterisation need not be further explored here.
4. Historically, the "fruits of the action" lien was only available to solicitors and not barristers because counsel's fees were treated by the general law as a mere gratuity, the right to the fee being one of honour and not of legal entitlement, whether in contract or otherwise. Counsel had no right, as against the client, to recover his, her or their fees: Dal Pont at para 4.55. Counsel's remedy, to the extent there was one at all, was against the solicitor. Statutory modification of the general law, including relevantly the LPUL, now permits the entry into a direct contract between counsel and the client and a right to sue and be sued thereunder: s 184 LPUL. Whether a contract exists between a barrister and a client, particularly where there is a solicitor who has also been retained, obviously depends on the particular circumstances of the case.
5. I was not directed to any authority which suggests that a barrister is not entitled to an equitable lien to safeguard his, her or their costs. The old general law distinction between solicitors and barristers appears to have become irrelevant in the current context where the plaintiff contracted directly with the defendant with respect to payment of his fees. Accordingly, it appears to me to be at least arguable (and, in my view, likely correct) that the fruits of the action lien is available to barristers, at least in circumstances such as the present where there is a direct contractual relationship between the plaintiff and the defendant, who has accepted liability for payment of counsel's fees.
6. The plaintiff relied on the decision of Campbell J, as his Honour then was, in Firth v Centrelink & Anor (2002) 55 NSWLR 451; [2002] NSWSC 564 as setting out the relevant principles as to the operation of the equitable lien. His Honour set out, with his Honour's typical thoroughness and clarity, the propositions established by the authorities as to the existence and features of the solicitor's "fruits of the action" lien. The relevant passages are extracted below: "Nature of a Solicitor's 'Fruits of the Action' Lien 33 A solicitor whose efforts result in the recovery of money for his client has an equitable right to have his proper costs and disbursements paid from the money so recovered. 34 In Ex Parte Patience; Makinson v The Minister (1940) 40 SR (NSW) 96 Jordan CJ gave what has become a classic exposition of the solicitor's right, contrasting that right with a common law lien. Jordan CJ said, at 100-101: 'A solicitor has no lien for his costs over any property which has not come into his possession. If, however, as the result of legal proceedings in which the solicitor has acted for the client, the client obtains a judgment or award or compromise for the payment of money, although the solicitor acquires no common law title to his client's right to receive the money or to any part of that right, he acquires a right to have his costs paid out of the money, which is analogous to the right which would be created by an equitable assignment of a corresponding part of the money by the client to the solicitor. That is to say, the solicitor has an equitable right to be paid his costs out of the money; and if he gives notice of his right to the person who is liable to pay it, only the solicitor and not the client can give a good discharge to that person for an amount of the money equivalent to the solicitor's costs: Welsh v Hole 1 Doug 238. … These special rights have no resemblance to a solicitor's general possessory lien, although they are sometimes miscalled liens: Bozon v Holland 4 My & Cr 354. In Barker v St Quinton 12 M & W 441 at 451 Parke B said that 'the lien which an attorney is said to have on a judgment (which is, perhaps, an incorrect expression) is merely a claim to the equitable interference of the Court to have that judgment held as security for his debt,' a remark which is reproduced in Chitty's Archbold, and has been repeated in many later authorities: cf also Smedley v Philpot 3 M & W 573 at 585-7; North v Stewart 15 App Cas 452 at 463. In practice, however, the solicitor has always been treated as possessing equitable rights in the judgment independently of any declaration of those rights, and the Court's assistance is invoked not to create the rights but to enforce them: Lord v Colvin 2 Drew & Sm 82 at 92-3; Haymes v Cooper 33 Beav 431 at 433. The rights are assignable: Briscoe v Briscoe [1892] 3 Ch 543. 35 The authorities establish the following propositions concerning this right of the solicitor: (a) The solicitor's right exists over money recovered through obtaining judgment in litigation, and also over money recovered through the settlement of litigation: Carew Counsel Pty Ltd v French [2002] VSCA 1 at [33]; Roam Australia Pty Ltd v Telstra Corporation Ltd [1997] FCA 980, Lehane J, 22 September 1997, unreported at 4. … (c) It exists over money which is in the possession of the solicitor, and also over money which is in court ( In Re Meter Cabs [1911] 2 Ch 557 at 562) and money which is owed to the client but not paid into court ( In The Estate of Fuld (No 4) [1968] P 727; Re de Groot [2001] 2 Qd R 359 at 375) (d) The solicitor need not be still acting for the client at the time that the money was recovered: In The Estate of Fuld (No 4) [1968] P 727; Kelso v McCulloch (Supreme Court of NSW, Young J, 24 October 1994 unreported); Twigg v Keady (1996) 135 FLR 257 at 289 per Kay J; Roam Australia Pty Ltd v Telstra Corporation Ltd [1997] FCA 980, Lehane J, 22 September 1997, unreported at 4 (e) For the right to arise it must be shown that there is a sufficient causal link between solicitor's exertions and the recovery of the fund of money: Roam Australia Pty Ltd v Telstra Corporation Ltd [1997] FCA 980, Lehane J, 22 September 1997, unreported at 4 - 5; Carew Counsel Pty Ltd v French [2002] VSCA 1 at [33]. (f) The quantum of money for which the solicitor has the equitable right is the amount which is properly owing to the solicitor by the client, whether that amount be ascertained by taxation of a bill of costs, or assessment, or pursuant to a costs agreement: Roam Australia Pty Ltd v Telstra Corporation Ltd [1997] FCA 980 (Lehane J, 22 September 1997, unreported at 4). In relation to those situations where taxation is necessary to ascertain the quantum owing to the solicitor, the solicitor's right exists in the fund prior to the occurrence of the taxation ( Johns v Cassel (1993) 6 BPR 13,134 at 3,136 per Hodgson J; Twigg v Keady (1996) 135 FLR 257 at 289 per Kay J; In The Estate of Fuld (No 4) [1968] P 727 at 740; Roam Australia Pty ltd v Telstra Corporation Ltd [1997] FCA 980 (Lehane J, 22 September 1997, unreported at 6). (g) The solicitor's equitable right exists before the court is asked to intervene to protect it; it 'arises immediately upon the recovery of monies through the exertions of the solicitor': Carew Counsel Pty Ltd v French [2002] VSCA 1 at [33]; if the lien is over the proceeds of an order for costs, it comes into existence at the time of making of that order for cost: Phillipa Power & Associates v Primrose Couper Cronin Rudkin [1997] 2 Qd R 266; Kison v Papasian (1994) 61 SASR 567. If the lien is over the proceeds of a settlement, it arises when the settlement agreement is entered into: Re de Groot [2001] 2 Qd R 359 at 368. (These statements concern when the lien comes into existence as an item of present property - they are not concerned with the ability of the solicitor to deal with the rights under the lien as future property before the fund is in existence.) (h) The right of the solicitor is one which the solicitor can enforce against the client, entitling the solicitor to an injunction to prevent the payment of the fund to the client without notice to the solicitor until such time as the quantum of the solicitor's entitlement to be paid from the fund is ascertained: In The Estate of Fuld (No 4) [1968] P 727. If the quantum of the solicitor's entitlement has been ascertained, the solicitor is entitled to an order that the amount of his entitlement be paid to him from the fund, notwithstanding opposition from the client: Leamey v Heath [2001] NSWSC 1095 (Campbell J, 22 November 2001, unreported). …. 38 In all these circumstances, it is apparent that the equitable right which a solicitor has to be paid costs and disbursements from the fund which his efforts have recovered, is a kind of proprietary interest in that fund…"
7. On the evidence before me, it is plainly arguable that an equitable, "fruits of the action" lien has arisen in the plaintiff's favour over the settlement monies paid into Bellator's account on 3 September 2024. The plaintiff acted continuously for the defendant in the Federal Court proceedings and participated in the mediation and settlement communications by which the Federal Court proceedings ultimately settled. The settlement monies were the fruits of those proceedings. It is clearly arguable that the plaintiff acquired a proprietary interest over those monies on their receipt into Bellator's account, in accordance with the principles enunciated by Campbell J in Firth.
8. It might be noted that s 134(1) of the District Court Act 1973 (NSW) limits the jurisdiction of this Court in the enforcement of any charge or lien to claims where the amount owing in respect of the charge or lien exceeds $100,000. While that jurisdictional limitation does not affect the jurisdiction of the Court in respect of the plaintiff's damages claim or to grant the freezing order sought, the parties may need to address the question of whether that juridical basis for the plaintiff's claim will necessitate an application for the transfer of these proceedings to the Supreme Court of New South Wales.
9. Accordingly, I am satisfied that the plaintiff has established a "good arguable claim on an accrued or prospective cause of action that is justiciable in the Court" within the meaning of r 25.14(1)(b)(i) of the UCPR.

Assets of the defendant

1. In his first affidavit, the defendant estimated that the net assets pool in the Family Law proceedings was about $3.2 million. He has deposed that he has the following assets legally or in equity in Australia (excluding superannuation): 1. a matrimonial property in Raglan St, Mosman, New South Wales, valued at approximately $1,400,000 with an outstanding mortgage of approximately $500,000; 2. a matrimonial property in Belmore Terrace, Sunshine Beach, Queensland, valued at approximately $2,800,000 with an outstanding mortgage of $1,600,000; 3. $186,699.73 in bank accounts, almost all of which was in a NAB account in the name of Bellator Pty Ltd ending in #0609. The account ending in #0609 was specifically identified in the freezing order made by Dicker SC DCJ on 4 October 2024; 4. 100% of the issued shares in Bellator; and 5. a Mercedes C250, valued at $9,000.
2. In his 17 October 2024 affidavit, the defendant refers to and exhibits an email from his ex-wife's solicitors in his Family Law proceedings dated 15 October 2024. That email attaches the latest joint balance sheet, setting out his ex-wife's estimates of the value of the pool of matrimonial assets. The estimated joint value of the assets was $5,640,190 and joint liabilities were $2,881,495, leaving a net asset pool (excluding superannuation) of $2,758,695.
3. The estimates of the equity in the two matrimonial properties largely conform with the defendant's estimates. The additional net assets comprise a Toyota RAV 4 ($45,000), Commonwealth Bank of Australia accounts (about $96,000) and Accenture shares (CGT payable on disposal - $300,000). According to the balance sheet, each of these assets, together with the properties in Mosman and Sunshine Beach, are the property of the defendant's ex-wife. There are no joint assets, although the balance sheet makes an allowance for the Mercedes, account #0609 and the defendant's superannuation. Indeed, the two properties are registered in the name of the defendant's ex-wife, alone, and he does not have any legal interest in them.
4. As to what the defendant's interest is in those properties and the assets claimed by his ex-wife, the highest the defendant's counsel could put the position was that the defendant asserted an equitable interest in them. The defendant has asserted a 65% entitlement to all of the matrimonial assets. This was, however, only put on the basis of an email from the plaintiff's solicitor in the Family Law proceedings to him dated 17 December 2020. In that email, the solicitor referred to how counsel framed proposed final relief in which the defendant would seek a 65:35% split of the joint assets. This was not, contrary to the defendant's affidavit, an advice to that effect.
5. Assuming the defendant maintains his claim to an equitable interest in the properties, title to them and a determination of the rights and assets of the parties to the marriage will be in issue in Family Law proceedings, set down for a mediation and final hearing next month. There was nothing in the evidence that indicates that the defendant will be successful in asserting the 65% entitlement that he claims, or indeed, any substantial entitlement to the assets claimed by his ex-wife at all. The evidence did not establish that there was any merit at all in the 65% claim, which was articulated in an email to him setting out a proposal for final relief almost four years ago. It is impossible to put any monetary value at all on the defendant's estimates of his entitlement to any equity in the matrimonial properties or other assets.
6. Finally, the issued capital of Bellator comprises 100 A class, 100 B class and 100 C class shares. According to a company search obtained on 3 October 2024, the defendant owns all of the shares. He beneficially owns all of the A class and B class shares, but does not beneficially own the C class shares. There is no evidence as to what rights attach to any class of shares. Similarly, there is no evidence as to what assets are owned by Bellator or as to what value the defendant's shares may have. I cannot ascribe any value to them. They were not referred to at all in the 15 October 2024 balance sheet.
7. Accordingly, I find that the assets of the defendant ought be assessed as no more than the value of the moneys standing to the credit of Bellator, as set out in paragraph 53(3) above, and the defendant's Mercedes, as set out in paragraph 53(5) above.

Risk of dissipation

1. On the defendant's own case, he proposes to dissipate his assets. He says that his evidence in this regard goes to the balance of convenience and is relevant to the Court's exercise of its discretion to extend the freezing order.
2. The defendant has engaged DA Family Lawyers as his solicitors in his Family Law proceedings, who have briefed Senior Counsel. He estimates that his legal costs in those proceedings up to the date of the proposed mediation will be $42,000. He seeks an exception of $1,000 per week as ordinary living expenses and the release of $20,000, subject to further variation, for the conduct of these proceedings. If the Family Law proceedings do not settle at mediation, he estimates that he will need approximately $150,000 for a 5-day trial set down from 18 November 2024. He says that he has no income, which he alleges is a direct consequence of the plaintiff's actions against him, and that he has funded his legal fees in these proceedings, the Family Law proceedings to date and his daily living expenses by loans from his parents. He says that his legal costs in these proceedings, including a potential cross-claim against the plaintiff are likely to be a further $30,000.
3. The defendant says that he has no income and that the reason for this is the conduct of the plaintiff. I do not see how the conduct of the plaintiff would have precluded the defendant from earning an income as a patent attorney. Nevertheless, while a lack of income may be relevant to the balance of convenience, it is also a factor in considering the risk of dissipation.
4. On the evidence, it is clear that absent the extension of the freezing order, the monies presently held in account #0609 will be dissipated and the plaintiff's claim for damages and for enforcement of the alleged equitable lien will be frustrated.

Disposition

1. In my view, the plaintiff has demonstrated a proper basis for the extension of the current freezing order until trial or as otherwise ordered by the Court. The plaintiff has established a good arguable case, as a matter of contract and, alternatively, on the basis of an equitable lien arising on settlement of the Federal Court proceedings, that he is entitled to recover the sum of what is now, including interest, in excess of $189,414.93.
2. The evidence shows, to the requisite standard of proof, that the plaintiff and defendant entered into a succession of costs agreements, the most recent of which was enforceable directly against the defendant, with respect to the provision by the plaintiff of legal services to the defendant. I am satisfied (to that standard) that those services were provided and there has been no argument before me that the invoices, themselves, suffered from any defect such as to preclude the plaintiff's reliance on them. See, in any event, s 172(4), LPUL.
3. The defendant relied on the fact of complaint having been made to the OLSC on 30 September 2024 as precluding the plaintiff from bringing these proceedings and as a discretionary factor against extending the orders. In my view, it is at least arguable that the defendant's complaint does not impact the plaintiff's claim to the extent that the sums claimed are not properly the subject of a costs dispute (as to $115,815.21) or outside the time limit provided in s 272(2) of the LPUL. While the defendant might seek leave to extend that period by a further two months, this will not affect the bulk of the claim and it cannot be assumed that such an extension would be granted.
4. Finally, whether or not the present proceedings were commenced in breach of s 194 of the LPUL is a matter upon which I express no concluded view. I accept that the plaintiff's argument, that s 194 has not properly be engaged at all, is at least reasonably arguable.
5. In any event, I do not consider that the freezing order would not be available to the plaintiff even if the proceedings were commenced in breach of s 194. The defendant has not sought the dismissal of the proceedings or to have the Statement of Claim struck out. The claim remains on foot unless and until such an application is successfully made. Even if the proceedings were stayed, this would not automatically result in the freezing order being set aside, although it might be relevant as a matter of discretion.
6. Further, I consider the plaintiff's claim to enforce his alleged equitable lien to be significant, both as to establishing a good arguable case and with respect to my discretion to extend the order. As the plaintiff submitted, if he is successful in this component of his claim, by operation of the lien, the money in the Bellator account is (and has always been) his money, not the defendant's.
7. I have not disregarded the allegations made in the two complaints to the OLSC with respect to the alleged negligent or otherwise improper conduct of the plaintiff in the provision of legal services and in invoicing the defendant in the Federal Court proceedings. Those allegations faced obvious difficulty to the extent that they were, to some extent, contradicted by the contemporaneous documents, such as the terms of the 3 March 2023 costs agreement. However, the question before me was whether the plaintiff has established a reasonably arguable case on his causes of action and the defendant's evidence did not establish otherwise.
8. I again note that counsel for the defendant did not press any allegation of fraud against the plaintiff and that, in my view, his decision not to do so was appropriate and conformable with rules 42 and 65 of the Rules. However, even if the defendant's factual allegations (as opposed to their characterisation in his correspondence) were accepted at their highest, it is by no means clear how they could defeat the plaintiff's claim or his entitlement to the freezing order. It may be that they would found a cross-claim for damages, however, no such cross-claim has been articulated and no set-off has been foreshadowed.
9. The defendant's evidence as to his assets did not satisfy me that he has any assets which could be called upon to satisfy a judgment in these proceedings. Further, the nature of the plaintiff's claimed equitable lien places the monies in the Bellator account in a special position. As the plaintiff has established a reasonably arguable claim to a proprietary interest in those monies, I see no reason why those monies should not be specifically preserved pending final determination of his claim.
10. It is plain that the defendant proposes to dissipate the monies in Bellator account #0609. Indeed, he relied on that intention to contend that the balance of convenience favours releasing some or all of the monies to allow him to fund his living expenses and the conduct of these and the Family Law proceedings.
11. The discretionary matters relied upon by the defendant are not sufficient to persuade me not to extend the freezing order until the hearing of these proceedings in their current terms.
12. Accordingly, on the basis of the continuation by the plaintiff of the undertaking as to damages set out in the Penal Notice that was Annexure A to the orders made by Dicker SC DCJ on 4 October 2024, I will extend the present freezing orders to 5:00pm on the first day of the hearing in these proceedings. In the event that either party seeks to vary the amount or terms of the order, I will grant liberty to apply.

Orders

1. The orders of the Court therefore are: 1. Upon the plaintiff continuing to give the usual undertaking as to damages set out in the Penal Notice marked as Annexure A to the orders of Dicker SC DCJ in these proceedings on 4 October 2024, extend Order 3 of the orders made by Dicker SC DCJ on 4 October 2024, as extended by Order 1 of the orders made by Gibson DCJ on 14 October 2024, until 5:00pm on the first day of the final hearing of these proceedings, or such other time as the Court may order. 2. The plaintiff is to serve a copy of these orders on the National Australia Bank by 5:00pm on 25 October 2024. 3. Costs are reserved. 4. The parties have liberty to apply on 3 days' notice.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 25 October 2024