Leeper v Primary Producers' Bank of Australia Ltd (In Voluntary Liquidation) [1935] HCA 19

High Court of Australia|1935-07-01|Before: Drxon J

PRIMARY PRODUCERS' BANK OF AUS- TRALIA LTD. (IN VOLUNTARY LIQUIDA-| Responpenr. TION) ite, 20, Kostas 08 tae ee |

H.C. or A, Lien - Solicitor - Document obtained from client by solicitor's agent - Undertaki

by agent to redeliver document to client upon completion of specified purpose. Ww Authority of agent - Liability of solicitor - Unpaid costs - Solicitor's retaining lien Sypney, Mar. 27, 28; A solicitor's general lien extends to documents which have come into his pos April 17. session in his professional capacity for a particular purpose, if that pt

Be ein has been served, but any undertaking by a solicitor to redeliver a documer Dixon, ava on completion of a sole purpose for which the document has been held is ae inconsistent with its retention under a general lien.

A solicitor acting for a bank commenced proceedings on behalf of the bank through another solicitor as his agent against a customer of the bank. Ji was obtained and execution issued. The bank held a certificate of title of certain land in which the customer had an interest and which was mortgaged t the bank. The bank purchased the customer's equity of redemption, and complete the transaction handed over the certificate of title to the solici agent. A receipt dated 8th November 1929 was given by the agent to th effect that the document was received for the sole purpose of registerit transfer to the bank, upon completion of which the agent undertook to de the document to the bank. 'The solicitor had become ill and the bank dé with the agent until the conclusion of the transaction. After registration h been effected the solicitor retained the certificate of title claiming a lien for his unpaid costs. On proceedings being taken by the bank for the recovery 0

had been handed over to the agent in October 1929 and the receipt was not "signed until the 8th November 1929.

Held :- - (1) That the solicitor held the document upon the conditions expressed in the receipt and that he did not have a general retaining lien over the _ document.

(2) That the agent's authority to act in the transaction on behalf of the

solicitor was wide enough to enable him to give the receipt, which operated as an acknowledgment defining the nature and conditions of the bailment.

Decision of the Supreme Court of Queensland (Full Court) affirmed.

_ An action was commenced in the Supreme Court of Queensland

y the Primary Producers' Bank of Australia Ltd. (in voluntary

tion) against Richard John Leeper and Richard John Leeper

younger, in which the bank claimed to recover possession of a certificate of title. The defendant Richard John Leeper was a

Leeper claiming that he was entitled to retain the certificate e by virtue of a lien for unpaid costs in respect of work performed olicitor for the bank. The defendant Richard John Leeper the er alleged that he never had possession of the certificate of e on his own account, and that any de facto possession on his part ras solely as the agent of the defendant Richard John Leeper. action was heard by Hart A.J. without a jury, in Brisbane, who d for the defendants. The bank appealed to the Full Court eensland and that Court reversed the decision of the trial on the grounds that the evidence of the defendants, although tradicted, was inconsistent with the documentary evidence hould not have been acted on, and allowed the appeal and set the judgment of the trial Judge. rom this decision the two defendants now appealed to the High

Primary Propucers' BANK OF AUSTRALIA Lap. (Lx Vouuxrary Liquipa- TION).

Ww LEEPER v PRIMARY PrRopvcERs' Bank or AUSTRALIA Lr. (IN Vouunrary Liquipa- TI0N).

Webb (with him Robert Smith), for the appellants. The documents on the face of them show that from a certain stage onwards the father had ceased to be the solicitor for the bank, and the son had become the bank's solicitor. The father had possession of the deed and was entitled to a lien. The son had the document in his posses- sion as de facto possession. The receipt of the 8th November 1929 was given in the ordinary course of business but not in due course of business. The son did not sign the receipt for any purpose other than a receipt. There is a general lien. The Statute of Limitations does not affect liens (In re Margetts (1) ).

Even though the document were lodged in the terms of the receipt, the lien still subsists. As to the case where deeds were deposited for : a particular purpose, see Hx parte Pemberton (3) and In re Messenger ; Ex parte Calvert (4). Even if there is an undertaking to lend the document to the bank, the matter has never been completed. If there was an agreement to return the deed upon completion, the matter is not complete until the costs are paid. A solicitor is entitled _ to say in the ordinary course of events that he has a lien on a deed for his costs. It is an equitable charge and the document cannot be tendered to the Registrar-General's office to be registered free from any encumbrance. If there is an encumbrance, there cannot be completion of the registration until the costs are paid. The receipt was not signed by the son with the understanding of either the bank or the son that it should give any contractual rights. The trial Judge heard the witnesses, observed their demeanour and - accepted the explanation of the appellants as to the receipt. The bank brought no evidence in reply as to the lien. A solicitor has a lien on documents for the balance of costs in respect of all documents (In re Faithful and In re London, Brighton and South Coast Railway Co. (5) ). The receipt could not destroy the solicitor's general lien, - because the bank manager and the son as agent had no power to enter into any agreement which would destroy the solicitor's general lien. If any costs are due to the solicitor, there is a lien on the deed

(1) (1896) 2 Ch. 263. (3) (1810) 18 Ves, Jun, 282; 34 E.R. 324. (2) (1870) 23 L.-T. 884. (4) (1876) 3 Ch. D. 317. (5) (1868) L.R. 6 Eq. 325.

"that the deed is encumbered, and until that encumbrance is ved the matter cannot be completed. Assuming the receipt nts to a special agreement to waive the solicitor's general lien the particular circumstances, the receipt was not signed within e apparent scope of the agent's authority. It cannot be inferred the agent had a right to sign any document, which would waive only the particular lien, but the general lien. The receipt was intended by the parties thereto to give rise to any rights whatso- : The receipt was the customary document used by the bank handing over deeds to people other than its own clients. It was 'not a practice of the bank to ask its solicitor when handing over ments to him to obtain an undertaking as set out in the receipt. e trial Judge found that the receipt was not signed as a document ich would give rise to any obligations at all. If a document is en to a solicitor in the ordinary course of business, and if he receives a document for a particular purpose in connection with professional ork, then unless he excepts his lien by a completed agreement the icitor is entitled to have recourse to the document for all his bills of costs (In re Faithful and In re London, Brighton and South Coast way Co. (1) ). There is nothing in the facts which could take matter out of the ordinary transaction in which the deed is ceived and in the ordinary circumstances of which a lien arises in operation of law, and when the undertaking is signed it is signed sa receipt. It was not suggested at any time that the solicitor's

ly, on the undisputed facts the debt was the debt not of the { but of the son, that is to say, the son was, except at the very

tly stages, the principal and not the agent. Secondly, the reason. 'the existence of the receipt was that there was no lien in respect this particular document, and therefore the lien could not be fully set up by either appellant. If the son were the principal, he had been paid and no question of lien would arise. If the were the principal and the son merely the agent, then the er has been expressly excluded by the receipt from any lien he

LeEPer v. PRmMARY PRopucERs" Bank OF AUSTRALIA Lrp.

H.C. oF A. 35. Ww LEEPER . PRIMARY PRODUCERS' BANK OF AUSTRALIA Lr. (Ly Vouutary Liquma-

might have. The Full Court came to the proper conclusion when it said that the evidence of the appellants was so unreliable that could not be reasonably accepted in the face of the documents. The evidence of the appellants as to their obtaining possession the certificate of title is at variance and opposed to the documenta evidence. In all matters in which the evidence of the father and son could be checked it was found to be unreliable. This case falls within the three exceptions mentioned in Federal Commissioner of - Taxation v. Clarke (1). The position is not altered in law whether - the receipt was signed on the day the deed was actually taken or subsequently, because it was simply an acknowledgment by the agent of the terms on which he held the document. Whenever the - receipt was given it must be taken to mean that there was a reduction into writing of an acknowledgment by the signatory that the di had been received in accordance with the terms therein expressed, and that it was simply an acknowledgment in writing of an und taking which had been given verbally at some other date. Assun that the son was the father's agent, then undoubtedly he had author far greater than is ordinarily given by a solicitor principal to solicitor agent, because in this case all subsequent communicati were with the son direct who had taken the matter over completely The son was clothed with full authority, and he has never been - divested of that authority, and has retained the document and rendered bills of costs signed by him. Whether the son signed on - his own behalf or his father's behalf, both are bound. Whether the son was the agent of the father or whether he was principal in the transaction, both are bound by the receipt, and a lien is thereby excluded. With regard to solicitors' liens, see Cowell v. Simpso (2). In the case of a bank such a receipt is necessary, as the bi may require the deed immediately and a solicitor may not ren his bill of costs for some considerable time.

Webb, in reply. This land was later sold by contract and legal work was done in connection with it. Obviously, if the deed were given for a specific object, there was additional work dont which is not covered by the undertaking. Supposing a docum

(1) (1927) 40 C.L.R. 246, at p. 264. (2) (1809) 16 Ves. Jun. 275; 33 E.R.

in such circumstances that no lien arose in regard to a H.C. oF A.

transaction and that it was promised to be handed back a

n something was done, and subsequently to that other legal work - Lezrer me and there is no agreement as to that, the original arrange- yet he

ent is varied and a lien could be claimed. The case does not fall pin actly within Ha parte Pemberton (1). The father was the solicitor AUSTRALIA

Lrp. hout the whole transaction. The son was simply the agent. (Ix Vouunrary Ligupa-

the following written judgments were delivered : - April. 17 u, Dixon, Evarr anp McTiernan JJ. The appellant, R. J. zeper the elder, was employed by the respondent bank before it nt into liquidation to act as its solicitor in a number of transactions. lis costs in respect of several of them have not been paid. The : upon this appeal is whether his solicitor's general retaining enables him to withhold from the liquidators a certificate of of the bank which came into his possession in the course, as he ys, of the performance of professional work in one of these matters. e carried on a solicitor's practice at Warwick in Queensland. At hbouring town of Stanthorpe his son, who bore his father's s, carried on an independent practice as a solicitor. n May 1929, the manager of the Warwick branch of the bank ed the father to take proceedings against a customer for recovery of the amount of his indebtedness to the bank. Stanthorpe there is a registry of the Supreme Court. Father

n to issue the writ and cause it to be served, and no doubt , to sign judgment and issue execution. In July the er caused a search to be made against the judgment debtor to cover what land he owned. The search did not disclose any perty of the judgment debtor, except an undivided moiety as lant in common of a parcel of about eighty-one acres which he dy mortgaged to the bank. The bank decided to take in and sell the equity of redemption in the interest of the debtor in this land. But, at that stage, R. J. Leeper the

elder had fallen ill. On 22nd August 1929 he went into ho and there remained until 5th September 1929. He says that h informed the local manager that his son would do all that y necessary during his absence. On 29th August 1929 the Wa branch of the bank wrote direct to the son at Stanthorpe furni him with the number of the certificate of title and the deserip} of the land, and requested him to advertise it for sale as soon possible. On 5th September the son issued a fi. fa. and notified the bank that the land would be sold on 16th October at the Cor house at Stanthorpe. On that day the manager of the Wa branch attended and bought in the equity of redemption. On October the Deputy Sheriff signed a transfer to the bank which the son had prepared. On 8th November 1929 the transfer ¥ presented at the office of the Commissioner of Stamp Duties. According to father and son, the certificate of title was obtained from the bank between 16th and 25th October 1929 for the pr of preparing the transfer and effecting registration. The father now claims to retain the certificate of title in the exercise of his solicitor's general lien, and it is this claim which is the subject of the pres appeal. Father and son say that on an occasion when the local manager was discussing the sale with the father in his office at Warwick, son happened to come in, that the father then asked him to go to the bank with the manager and obtain the certificate of tit and that this was done. But the liquidators produced a receip for the document signed by the son which bore the date 8th November 1929. The receipt was on the bank's printed form and ran follows: '' Received from, or held on account of, the Pri Producers' Bank of Australia Ltd., the undermentioned and/or documents for the sole purpose of registering transfer t bank upon completion of which I/we undertake to deliver s deeds and/or documents to the said bank." Now, if the terms of this receipt express a condition binding on the father upon which the certificate of title was held by him, lien is displaced. A solicitor's general lien extends to document which have come into his possession in his professional cay even for a particular purpose, at any rate after that purpose hi

served. But the undertaking to redeliver the instrument to the after completion of the registration of the transfer, and the mitation imposed by the word "sole" upon the purposes of the ment are together inconsistent with the retention of the certificate erageneral lien, Accordingly, if, as the father says, he, and not son, was the solicitor to whom the bank entrusted the certificate of title, the appeal depends upon the question whether the terms receipt express a condition by which the father is bound. The son gave evidence that he signed the receipt some weeks after he obtained the document on behalf of his father from the branch ger at Warwick. He said that one day he met the manager ho asked him for a receipt, telling him that he had been transferred ewhere and was cleaning matters up prior to handing over the branch to his successor and that he found that he had no receipt or the certificate of title he had given him some time before. In tis evidence, the son said that before signing the receipt, which was d in but undated, he asked the manager when the document been handed over, but neither of them was able to remember, he put down 8th November 1929 as in effect his estimate of the imate date. No oral testimony was adduced by the liquidators, the evidence of the father and son went uncontradicted. The Judge accepted their account of the matter and found that the was the solicitor entrusted with the certificate of title, and

it he was not bound by the receipt. 4 Full Court reversed his decision on the ground that the ence of the father and son was in some respects inconsistent ith the documents, and for that reason, and also because they had ot adhered steadily to one statement of the occasion and date en the certificate had been handed over, it ought not to be acted At first the father had deposed that the certificate was d over before he went into hospital and on the occasion when

he was away. The son, in answer to an interrogatory, had 'that he received the certificate for his father, but had put the in November 1929. It appeared also that, from 29th 1929 onwards, the bank dealt directly with the son who did

reat deal of further work in connection with the matter, and 'Vou, um, a

7 garnishee proceedings to recover it. How it happened that a debt.

that ultimately, with the father's concurrence, the bill of costs was rendered by the son in his own name, and that he fixed with the liquidators the amount of the costs at a lump sum to avoid a taxation. Indeed, the delivery of the bill by the son and the fixing of the cos by him appear to be the source of all the trouble. When this was done, the solicitor acting for the liquidators recollected an old | judgment debt owing by the son to one of his clients, and took

provable in a liquidation came to be garnisheed has not been explained. (Cf. Boyse v. Simpson (1); Dawson v. Malley (2) Mack v. Ward (3); Prout v. Gregory (4), and Spence v. Coleman ( explaining Klauber v. Weill (6); ep. Evans v. Stephen (7).) But, whatever be the explanation, the sum fixed for costs owing by thi liquidating bank upon the bill so rendered was in fact garnisheed under the old judgment against the son. It now appears that there were other costs owing to the father, so even if he were precluded by his concurrence in the delivery of the bill in his son's from disputing that the costs it covered were owing to his son not to him, and even if the efficacy of the garnishee proceedings to extinguish the debt cannot be challenged, his claim to a gene lien would not be thereby affected. But the Full Court considered that the matters referred to together so far shook the probability. of the case made by the father as to render it unsafe to act upon it. An examination of the evidence and the documents suggests that father and son were attempting to reconstruct events of five years before which at the time they occurred were of little significance, and that in some respects their reconstruction was erroneous. The learned Judge was impressed by the honesty of father and son, and there does not appear to be any sufficient ground for questioning the correctness of his estimate of their truthfulness as distinguished from their accuracy. The basis of their ultimate reconstruction of the order of events seems to have been their beli that the certificate of title was needed for the preparation as well

(1) (1859) 8 1.C.L.R. 523, (4) (1889) 24 Q.B.D. 281, (2) (1867) LR. 1 CL. 207; 15 (5) (1901) 2 K.B. 195 W.R. 791. (6) (1901) 17 T.LR. 344,

h e registration of the transfer and their recollection of some conver- m as a result of which the son went with the manager to fetch he certificate from the bank. The son too must be taken to have e recollection that, when he gave the receipt dated 8th November , the certificate of title had been already handed over by the and that he antedated the receipt. No doubt there is a ibility that the certificate was obtained before the transfer executed and before it was presented to the Stamps Commissioner, hich was done actually on 8th November. But the information | the possession of the solicitors was sufficient for the preparation the transfer and the certificate was not, at that stage, absolutely for that purpose. It is impossible upon the whole of the

e not to feel some doubt whether father and son have tly reconstructed the events concerning the handing over of certificate of title. But, even if it be the case that the document 8 delivered to the son for and on behalf of the father between and 25th October and the receipt was not signed by the son il some time after 8th November 1929, it does not follow that the er is not bound by the condition expressed by the receipt. That ipt was in the ordinary form of the bank. If the son had signed en the certificate was given to him, undoubtedly it would have dthe father. It was for the bank to state upon what conditions vould entrust documents to its solicitor. The solicitor could not in if it refused to expose a document to his potential lien. e son as his agent, even if his agency were limited to obtaining certificate, would, on the occasion of receiving it, have possessed

'ity from his father to sign such a receipt. But his agency was not limited to obtaining the instrument. His father had dy put him in his place to carry through the transaction. The er had resumed the supervision of his business, and, no doubt, th he was compelled to return to hospital three or four months his physical condition did not at that time disable him from g out the transaction himself. But the bank manager ly looked to the son to complete it, and the father acquiesced lat position even to the extent of subsequently concurring in his tendering the bill of costs in his own name. In a regular

of business strictly conducted, when the bank manager gave

Leever Primary PRODUCERS' BANK oF AUSTRALIA Lap. (Is Vouustary Ligurpa- TION).

H.C. or A. the certificate of title to the son, he should have obtained the receipt 1935.

from him. In all these circumstances, the son's authority to act in the transaction on behalf of his father appears to have been wide enough afterwards to give the receipt when the bank manager requested him to do so. When given it operated as an acknowledg- ment defining the nature and conditions of the bailment.

For these reasons the father should be considered to hold the certificate upon the conditions expressed in the receipt dated 8th November 1929 which are inconsistent with a general retaining lien,

Srarxe J. The bank - the respondent - brought an action against the appellants for the return of a certificate of title to certain land, and damages for its detention. Hart A.J. gave judgment in favour of R. J. Leeper senior, one of the appellants here and the father of the other appellant, but on appeal to the Full Court of the Supreme Court of Queensland, his judgment was set aside and judgment entered for the bank for the return of the certificate of title. An appeal is now brought to this Court.

The appellants are father and son, who, separately, practise as solicitors in Queensland. The father acted as solicitor for the bank in various matters. In May 1929 the bank instructed the father to take action against one Johnston for the payment of moneys due to it. A writ was accordingly issued against Johnston, out of the Stanthorpe District Registry of the Supreme Court. The father, who practised as a solicitor in Warwick, procured his son, who practised as a solicitor in Stanthorpe, to issue the necessary process, ; and in due course to sign judgment in favour of the bank, and there- after to proceed to execution. In September 1929 a writ of fi. fa. was issued, which was executed against certain land in the name of Johnston mortgaged to the bank. The certificate of title to these lands was in the possession of the bank. The father was not in good health, and became a patient in the Mater Misericordi Private Hospital in Brisbane for about two weeks in August September 1929, and for about six weeks in February and 1930. The proceedings against Johnston were conducted in greal part by the son, but the business was that of the father, and

'no doubt, in my opinion, that the father was always the solicitor d and employed by the bank in connection with these gs. The son was his father's agent, but he had full ithority to represent and act for his father in the Johnston matter, nd also to attend to his practice during his illness.

It is not disputed that the bank bought in the equity of the land in the name of Johnston, and that the certificate of title was required

Nor is it disputed that the bank in 1929 handed over the certificate or that purpose, that it reached the hands of the son and that in 29 the son signed an undertaking relating to it in the following : " Received from or held on account of the Primary Producers' of Australia Limited the " (certificate of title) "for the sole purpose of registering transfer to bank upon completion of which [ undertake to deliver such" (certificate of title) "to the said bank." This undertaking bears date the 8th November 1929, but the father and son both deposed that the certificate of title was D over at an earlier date. The trial Judge accepted this , though the son had sworn, in an answer to interrogatories, he did "in the month of November 1929 obtain de facto posses- m from the plaintiff of the certificate of title but such de facto on was not possession on my own part but on the part of " father. There were other discrepancies in their evidence which the Full Court on appeal to regard their evidence as " so untrust- y and so inconsistent that it should not be accepted." There good deal to be said for this latter conclusion. But it appears ) me that the undertaking is, and, according to ordinary notions », should be, decisive of the rights of the parties. A solicitor 'no doubt, a right to hold papers of his client, which come to in the course of business in his professional capacity, until his

particular occasion on which the papers are delivered. But may be excluded by contract, or the exclusion may be inferred m the conduct and course of dealing between the parties. If in nt case the certificate of title was handed over and the rl executed at one and the same time, then the case for appellants is unarguable: the undertaking to redeliver the

certificate of title to the bank upon registration of the transfer s

S' cogent and really conclusive evidence of the terms upon which the

inconsistent with the right to retain the document, and there with any lien over it. But even if the undertaking were executed some time after the delivery of the certificate of title, still it is

certificate of title was received and accepted, and is equally incon- sistent with the existence of any lien. It was no doubt executed by the son, but the son had full authority, as I have said, to' represent the father and transact his business.

The conduct of the father and son was criticized upon this appeal. It was pointed out that the son held the certificate of title unti June 1933, when, being apparently in pecuniary difficulties, returned it to the father. It was also suggested that the father allowed the son to render and settle a bill of costs at £67 10s. in the Johnston matter as if he were the principal, but disowned position when these costs were the subject of garnishee proceedings against the bank. But I do not find it necessary to discuss or form any opinion upon these matters.

In my opinion, the father has no lien over the certificate of title claimed by the bank, and the judgment of the Supreme Court of Queensland in Full Court should be affirmed and this ap, dismissed.

Solicitor for the appellants, J. B. Moffatt for McSweeny & Leeper, Brisbane.

Solicitors for the respondent, John Hickey & Quinn, for Neil O'Sullivan, Brisbane.

At a glance

Court

Decision date

Before

Source

Judgment (64 paragraphs)