Island Resorts (Facilities and Equipment) Pty Ltd & Island Resorts (Infrastructure) Pty Ltd v Couran Cove Resort Community Body Corporate [2025] QSC 269

• [1] On 15 October 2024, I ordered that Mr Bill Karageozis be appointed as a receiver to the defendant to recover the debts owed by the defendant ('CBC') to the plaintiffs (the 'service companies'). CBC owed the service companies about $10 million pursuant to judgments of the court.
• [2] The order appointing Mr Karageozis as receiver required that he pay all of the money realised from his receipt of CBC's property and assets:

(a) firstly, to meet his costs of the receivership;

(b) secondly, to meet his claims for reasonable remuneration for the receivership; and

(c) thirdly, to the plaintiffs to satisfy, as far as possible, their judgments, plus accrued interest and costs of the application to appoint the receiver.

• [3] Enyo Lawyers have been the solicitors acting for CBC. In March 2025, Enyo Lawyers obtained a judgment against CBC for $361,741 for their legal fees. That judgment for their fees is almost entirely unsatisfied and Enyo Lawyers seeks to enforce its judgment against CBC.
• [4] There are other complications. On 11 November 2022, a costs order was made in an associated proceeding (SC No 601 of 2021). CBC was entitled to the benefit of that costs order as against The Proprietors of Couran Cove Resort - Eco Lodges - GTP 106783 ('Eco Lodges'). On the same day two further costs orders were also made in favour of CBC against The Proprietors of Couran Cove Resort - Broadwater Villas GTP 106807 ('Broadwater Villas').
• [5] It is desirable that only one receiver be appointed to CBC. Mr Karageozis is content for the receivership order to be extended to the recovery of Enyo Lawyers' judgment debt. He proposes that order (c) at [2] above be altered so that Mr Karageozis is authorised to pay the service providers and Enyo Lawyers pari passu.
• [6] Enyo Lawyers is not content with that. Enyo Lawyers seeks priority for their debts.

• [7] Enyo Lawyers contends that it has an equitable interest in the three costs orders in favour of CBC due to their "fruits of litigation" lien.
• [8] The issue, therefore, is whether Enyo Lawyers is entitled to priority over other unsecured creditors by reason of their "fruits of litigation" lien.
• [9] Enyo did not identify the type of solicitors' lien relied on. The two possibilities are a 'retaining lien' or a 'particular lien'. However, Enyo quoted extensively from the judgment of Campbell J in Firth v Centrelink - a case that concerned a particular lien.[1] That type of lien was also carefully considered by Muir J in Re De Groot.[2]
• [10] The difficulty here is that Enyo has two types of claims. First, they have a judgment debt against CBC for $361,741.[3] That judgment debt would provide the basis for the appointment of Mr Karageozis as a receiver in order to receive CBC's property and assets and to satisfy their judgment against the defendant.
• [11] Second, Enyo Lawyers seeks to rely on the three costs orders which CBC has in its favour against Eco Lodges and Broadwater. Those are costs orders that CBC has in its favour and, in respect of which, Enyo Lawyers claims an equitable interest pursuant to its particular lien (or "fruits of litigation" lien).
• [12] And so, the situation is as follows:

(a) Mr Karageozis has been appointed receiver of CBC for the purposes of getting in and receiving for the plaintiffs, that is the service providers, the amounts owning under the judgments obtained by the service providers against CBC;

(b) Enyo Lawyers is also owed an amount roughly equivalent to its judgment debt of $361,741 by CBC pursuant to a judgment for its legal costs;

(c) Enyo Lawyers would be entitled to apply to appoint a receiver to CBC for the purpose of getting in and receiving for Enyo the amount of $361,741 owing pursuant to Enyo's judgment debt;[4]

(d) there are sensible and practical reasons why Mr Karageozis should be the receiver appointed for the purpose of recovering both the service providers' judgment debt and Enyo Lawyers' judgment debt;

(e) on that basis, Mr Karageozis should apply the sums received (after the costs of receivership and reasonable remuneration) to the judgment debts of both judgment creditors on a pari passu basis.[5]

• [13] Enyo Lawyers' claim to priority is not based on its judgment debt at all. Instead, what Enyo Lawyers says is that it has an equitable interest by virtue of its particular lien in the costs ordered to be paid by Eco Lodges and Broadwater to CBC.

• [14] To obtain the benefit of a particular lien, the solicitor normally makes an interlocutory application in the proceedings in which the client's monetary entitlements arise.[6] That interlocutory application is usually for a declaration as to the existence of the lien, and for ancillary orders to facilitate the protection of moneys subject to the lien.[7]
• [15] Here, Enyo Lawyers has not applied for a declaration as to the existence of the lien. That poses a problem. If such an application were made, Enyo Lawyers' client, CBC, may wish to be heard on such an application for a declaration as to the existence of the particular lien.[8] Whilst CBC may have been represented at the hearing, no direct declaratory relief was sought. Rather the issue was fought by way of competing orders from Mr Kidston of counsel for Enyo Lawyers and Mr A O'Brien of counsel for the receiver.
• [16] Even assuming that problem can be overcome, there are further problems. Those problems make it necessary to explain the equitable basis for the particular lien and then why that equitable relief should not be granted in this case.

• [17] The particular lien is no more than an inchoate right, that is a right to seek the court's assistance in equity.[9] Whilst the particular lien exhibits some of the characteristics of equitable proprietary rights, it is not, as Enyo argues, a property right that entitles Enyo to be regarded as, in effect a secured creditor and entitled to payment in priority of unsecured creditors.[10]
• [18] Importantly, the question in each case is whether the court should exercise its discretion to enforce the solicitor's 'equity'.
• [19] The court will frame its order on the basis of the minimum necessary to protect the solicitors.[11] The concept is that the solicitors are entitled to call on the particular lien to prevent unconscionable conduct on the part of the client.[12]
• [20] The reach of the particular lien is wide. As Dal Pont explains:

"Though usually expressed to apply over the fruits of a judgment recovered by the solicitor, the particular lien also applies to a fund arising out of a compromise of the action. It extends to personal property recovered or preserved by the judgment or compromise; in this context, the term 'property' is accorded the widest meaning, and includes a chose in action and therefore a judgment debt. And it can also arise over a fund generated from an interlocutory application; for instance, over a sum paid pursuant to an undertaking as to damages upon the discharge of an interlocutory injunction."[13]

• [21] However, for the court to give effect to the particular lien, there must be a link between the property recovered pursuant to the judgment or compromise, and the work performed by the solicitor. That is, essentially, an inquiry as to causation.[14]

• [22] These principles are not easily applied to the present situation.
• [23] The first problem in applying the principles of particular liens is that there is no special fund or asset to which Enyo Lawyers seeks to attach its particular lien. Mr Karageozis is engaged in an exercise which involves him standing in the shoes of CBC and raising funds through issuing of contribution notices to CBC's subsidiary body corporates.[15]
• [24] And so, what is happening is that Mr Karageozis is raising funds from CBC's subsidiary body corporates which is then, after costs, being used to pay down the judgment debt owed by CBC to the service providers.
• [25] Thus, there is no specific fund to which Enyo Lawyers seeks to attach its particular lien. Instead, Enyo Lawyers seeks to engraft its claim onto funds raised by the receiver from time to time by the use of his powers as receiver in issuing contribution notices.[16]
• [26] The second (and related) problem is that there is no real connection between the efforts of the receiver in raising these funds by means of contribution notices and the professional work of Enyo. In other words, no causal connection has been established.
• [27] In a real sense, the only connection is that both the service providers and Enyo Lawyers are judgment creditors owed money by CBC.
• [28] That raises the third (and also related) problem. If the receiver is to raise funds by reason of contribution notices, there is no logical reason why Enyo Lawyers should have preference or priority over CBC's other creditors. That is a factor against the exercise of the court's discretion.

• [29] For those reasons, Enyo's application will be dismissed but orders will be made authorising pari passu distributions. Those are the orders proposed by and agreed to by Mr Karageozis.

[1] [2002] NSWSC 564; (2002) 55 NSWLR 451. Enyo relies on paragraph [35].

[2] [2001] 2 Qd R 359 at [33]-[38].

[3] A relatively small sum has been paid. For present purposes, and in the interests of simplicity, I am using the amount of the judgment debt. There may be payments or interest that may need to be taken into account.

[4] Again, for reasons of simplicity I am using the judgment debt amount.

[5] As the submissions for Mr Karageozis point out, the pari passu principle is a fundamental one.

[6] Dal Pont, Law of Costs, 5th ed (LexisNexis) at [27.4].

[8] That would be a reason to adjourn this application so that CBC could be afforded an opportunity to be heard.

[9] See Dal Point (supra) at [27.6] citing James Bibby Ltd v Woods [1949] 2 All ER at 3 and McDonald v FAI (NZ) General Insurance Co Ltd [1998] NZHC 2788; [1999] 1 NZLR 583 at 596.

[10] Enyo Lawyer's submissions at [15].

[11] Canatan Holdings Pty Ltd v Audori (FCA, Einfield J, 1/8/1994, unreported) at [16].

[12] Gadens Ridgeway v Paroulakis [1992] FamCA 101; (1992) 108 FLR 195 at 202.

[14] Dal Pont (supra) at [27.14]; see, for example, Doyles Construction Lawyers v Harsands Pty Ltd (1996) NSWSC McLelland CJ in Eq, 24/12/1996 unreported.

[15] These include Eco Lodges and Broadwater Villas.

[16] The receiver is also seeking to recover debts owed by reason of unpaid contribution notices.