Leamey v Heath & Anor

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

5557/01 DAVID LEAMEY v STEPHEN HEATH & MOURAD MOUZAOUI

1 HIS HONOUR: The plaintiff in this matter, Mr David Leamey, is a solicitor. He was instructed by the second defendant to act for the second defendant in connection with some charges which had been laid by the police. For the purpose of dealing with those charges, Mr Leamey engaged the services of Mr Steirn, of senior counsel, and Mr Jones, of junior counsel. He also arranged for certain witnesses to provide assistance. 2 The basis upon which Mr Steirn and Mr Jones were engaged was, I am satisfied, a basis whereby Mr Leamey had a personal obligation to pay their fees. It would also be the usual arrangement when a solicitor arranged for a witness to assist in the preparation or hearing of a matter, in circumstances where that witness became entitled to be paid fees, for the solicitor to be personally liable for payment of those fees also. I am prepared to infer that the witnesses who were obtained by Mr Leamey gave their assistance on that basis. 3 The charges brought against the second defendant came on for the hearing at the Waverley Local Court on 14 August 2001. On that date, the informations were dismissed. Also on that date, the learned Magistrate, Mr Falzon, made an order for costs in favour of Mr Leamey's client. That order for costs was one which allotted specific sums of money for payment of the expenses of Mr Steirn, Mr Jones, Mr Leamey and other identified people who had been involved as witnesses. Mr Falzon allowed the New South Wales Police Service three months to pay those costs. For the purpose of assessing the amount of costs which was payable to Mr Steirn and Mr Jones, memoranda of fees from each of those barristers were tendered before the learned Magistrate. 4 The time for the police to appeal under s 120 of the Justices Act against that costs order expired on 11 September this year without any appeal being lodged. At some stage in November of this year, the Police Service paid an amount of $32,757, which was the total amount of costs and witnesses expenses which the learned Magistrate had ordered, to the clerk of the Waverley Local Court. The clerk of the Waverley Court issued a cheque to the second defendant for that amount, but that cheque came to be stopped. There is now a fund of money of $32,757 under the control of the first defendant in the present proceedings, Mr Heath, who is the Clerk of the Court at Waverley Courthouse. Mr Heath has filed an appearance in the present proceedings and submitted to any orders of the Court, save as to costs. 5 The present proceedings are ones whereby Mr Leamey seeks an injunction against Mr Heath preventing the disbursement of the sum of $32,757. He also seeks a declaration that he is entitled to a lien over those moneys and an order that Mr Heath pay the moneys to Mr Leamey, so that they can be disbursed in accordance with the payment regime which Mr Falzon ordered on 14 August. 6 There has been a falling out between Mr Leamey and his former client since 14 August. His former client now does not consent to him receiving the amount that the Magistrate ordered should be paid, or indeed any part of it. 7 The second defendant has been served with the initiating process in this matter and has not appeared today. He has sent to the Court, or caused to be sent to the Court, a doctor's certificate which says that he is unfit to attend Court from 21 November 2001 until 17 February 2002 and possibly for longer, "owing to personal illness". He has also sent to the Registrar a letter, which has become Exhibit B in the present proceedings, in which he says that he has been unable to organise legal representation in the period since the proceedings were served on him. He also says that he will be going overseas on Wednesday 19 December 2001 and will be returning to Australia on 14 February 2002. He says that his psychiatrist has advised him not to attend Court in person for any proceedings, in respect of the cheque, because his health is too fragile and he could not deal with the stress. While no application has been made by the second defendant for an adjournment, I have considered whether I should adjourn the proceedings of my own motion. For reasons which I will give later, I have decided not to do so. 8 It is clear that a solicitor who, by his efforts, causes a fund of money to come into existence is entitled to a lien over that fund of money for his own costs, and also for any disbursements for which he is liable to pay in connection with the work whereby that fund was generated. See Akki Pty Limited v Martin Hall Pty Limited (1994) 35 NSWLR 470, especially at 474; Kelso v McCulloch, Young J, 24 October 1994, unreported. Applying that principle to the present case, it is, it seems to me, clear that Mr Leamey has a lien over the fund presently in Court in the Waverly Local Court. 9 When the Magistrate made the costs order on 14 August 2001, he was exercising a power under s 81 of the Justices Act. That section enables a justice, when making an order dismissing an information complaint or charge against a defendant, to order the Prosecutor or complainant to pay to the defendant such professional costs as the justice or justices consider to be just and reasonable. There is provision in s 81 (1B) for the justice to adopt a scale of charges specified under a regulation, or alternatively to award, "such other amount as the justice … consider[s] to be just and reasonable in the circumstances of the case." It is apparent that it is the latter power which the learned Magistrate exercised on 14 August 2001. 10 It is apparent from the letter which the second defendant has sent to the Court that one of the reasons for his opposition to Mr Leamey receiving the cheque is that he wishes to have an assessment of costs conducted by the Supreme Court. In talking about that, he is, I take it, referring to the regime established under Part 11 of the Legal Profession Act 1987. There is provision in that Part of the Legal Profession Act for disclosure of costs, and for the provision of bills of costs, and, in those circumstances where there is no explicit fees agreement, for the assessment of costs. There is a regime under which a client is generally entitled to apply to an officer of the Supreme Court for an assessment of costs if the client is presented with a bill of costs. S 182 provides a sanction for failure to make the statutory required disclosures, in that the client need not, in those circumstances, pay the costs of legal services unless the costs have been assessed. In the present case there was neither disclosure, nor a fees agreement. 11 Subdivision 3 of Part 11 of the Legal Profession Act 1987 (which runs from s 208F to 208I inclusive) deals with how assessment of costs is to occur when those costs have been ordered by a Court or tribunal. S 208F proceeds on an assumption that even in relation to costs which have been ordered by a Court or tribunal, a costs assessor can have power to decide whether the amount of those costs is reasonable. However it is only a limited category of costs ordered by a court or tribunal that can ever come to be assessed under the Legal Profession Act. They are costs which are assessed under section 202 which says: "(1) A person who has paid or is liable to pay, or who is entitled to receive or who has received, costs as a result of any order for the payment of an unspecified amount of costs made by a court or a tribunal may apply to the proper officer of the Supreme Court for an assessment of the whole of, or any part of, those costs. (2) A court or tribunal may direct the proper officer of the Supreme Court to refer for assessment costs payable as a result of an order made by the court or tribunal. Any such direction is taken to be an application for assessment duly made under this Division. (3) An application or direction under this section may not be made in relation to costs arising out of criminal proceedings in a court." 12 The order for costs made by the learned Magistrate falls outside s.202 in two ways. It is outside s.202(1) because it is not an order "for the payment of an unspecified amount of costs". It is outside s.202(3) because it is a costs order arising out of criminal proceedings in a court. Further, s 208I says: "This Division does not limit any power of a court or a tribunal to determine in any particular case the amount of costs payable or that the amount of the costs is to be determined on an indemnity basis." 13 It seems to me that in the present case the learned Magistrate has determined the amount of costs payable in this particular case. 14 Under those circumstances, it seems to me that there is no scope for there to be a second assessment of those same costs by an officer of a different Court. Thus, it seems to me that the ground which the second defendant advanced for there being no payment out has no substance as a matter of law. Further, as the costs have all been paid by the Police Service, in the circumstances, the second defendant has no personal interest in opposing the payment out. The second defendant will not personally be out of pocket one cent as a consequence of the payment out occurring. It was those reasons, additional to the fact that no request for adjournment was actually made, which led me not to adjourn the present proceedings. 15 In the course of the argument, I have been assured by Mr Leamey's counsel that Mr Leamey will not seek to recover any costs relating to the litigation which ended on 14 August this year from the second defendant beyond that amount which has actually been paid by the police. 16 There was also a small problem arising from an error in transcribing the Magistrate's judgment concerning an amount which was to be paid to one of the witnesses, Ms Marie Gittany. At one stage it was thought that the amount that had been ordered to be paid to Ms Gittany was $200, and the Police Service has made its payment into Court on that basis. Closer examination of the Magistrate's notes relating to his judgment confirms that the amount that she was ordered to be paid is $800. Mr Leamey will disburse the money on the basis that she is paid the higher amount, not the lower amount, if it is paid to him; he will do so by accepting $600 less for his own costs than the amount the Magistrate awarded him. 17 I will, at the conclusion of these reasons for judgment, formalise the taking of undertakings to deal with the two matters I have just mentioned.

In these circumstances, I make the following orders:

1. I order that the first defendant not disburse the sum of $32,757, being moneys paid into Waverly Local Court by the New South Wales Commissioner of Police pursuant to orders made by Magistrate Falzon on 13 August 2001 in the matter Police v Mourad Mouzaoui, except in accordance with the orders of this Court.

2. I declare that the plaintiff is entitled to a lien over the moneys referred to in order 1.

3. I order that the first defendant pay the said moneys to the plaintiff.

I note the undertaking of the plaintiff that he will not seek to recover any extra costs from the second defendant beyond the amount of $32,757, which has already been paid by the police. I note that the plaintiff undertakes that he will apply the said sum in the following fashion:

Mr Steirn SC $11,450 Mr Jones $12,677 Marie Gittany $800 Karim Kattab $200 Carlos Rodriguez-Osebukhe $230

Leaving a balance of $7,400 to be retained by Mr Leamey for himself.

It is not appropriate to make any order for costs in the absence of the second defendant. I would not, in any event, be minded to make an order for costs against the first defendant.

I stand the summons over to Monday 4 March at 9.30 before the Registrar. The exhibits should remain with the file for the present time. **********

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