68 It is accordingly necessary in the present matter to determine whether it was the solicitor Kemp Strang who terminated the retainer or whether it was the client Mr Blanda who terminated the retainer. Counsel for Mr Blanda submitted that I should find that it was the solicitor who terminated the retainer and pointed to Kemp Strang's letter of 6 June 2005, in which Kemp Strang said that, as Mr Blanda had failed to pay Kemp Strang's account or to comply with the agreement set out in the letter of 3 May 2005, Kemp Strang had no alternative but to advise Mr Blanda that it could no longer act for Mr Blanda.
69 Counsel for Mr Blanda referred to Major Projects Pty Limited v Sibmark Pty Limited [1992] ANZ ConvR 349 in which McLelland J said at p 6:-
"Where during the course of litigation, solicitors for a party terminate their retainer and the client retains new solicitors who for the purposes of the litigation require documents of the client in the possession of the former solicitors, who in turn claim a possessory lien over the documents to secure payment of outstanding costs, the normal practice of the Court is to order the new solicitors to preserve the former solicitors' lien and to return the documents to the original solicitors at the conclusion of the litigation. This practice is designed 'to save the client's litigation from catastrophe', and the principle is that the former solicitors' security should be interfered with only so far as necessary for the progress of the litigation. Where the former solicitors have declined to continue to act for the client unless outstanding costs are paid, and the client, being unable or unwilling to pay those costs retains the new solicitors, the former solicitors are treated as having terminated the retainer for the purposes of the application of this practice (see generally Gamlen Chemicals v Rochem (1980) 1 WLR 614, and cf. Ex Parte Clowes 87 WN (1) 364 and Bolger v Bolger 82 FLR 46)"
70 Counsel for Kemp Strang submitted that I should find that it was the client who had terminated the retainer and pointed to evidence of events occurring between 6 June 2005 and 20 July 2005, which, it was submitted, had superseded the letter of 6 June 2005.
71 In Jankowski Hodgson J said at p 8 that a court should not take an overly technical approach to the question of whether it was the client who had discharged the solicitor or whether it was the solicitor who had discharged himself but should look at the question "as a matter of real substance".
72 In the present case, if the relationship of solicitor-client had ended immediately or shortly after Kemp Strang sent its letter of 6 June 2005, I would have considered that it was Kemp Strang which had discharged itself. However, after the letter of 6 June 2005 was sent, no notice of ceasing to act was filed by Kemp Strang in the District Court proceedings, Kemp Strang did further work for Mr Blanda which was itemised in the timesheet, Mr Blanda, who had not previously made any payment after entering into the agreement evidenced by the letter of 3 May 2005, made a payment to Kemp Strang on 15 June 2005 of $20,000 and, importantly, Kemp Strang wrote the letter of 19 July 2005 in which Ms Roppolo said that, following upon Mr Ward ceasing to be employed by Kemp Strang, she and Ms King of Kemp Strang would take over the conduct of Mr Blanda's matter and in which she referred to steps currently being taken by Kemp Strang in the conduct of the matter.
73 In these circumstances, I consider that I should find that it was Mr Blanda who in the telephone conversation of 20 July 2005 with Ms Roppolo terminated the retainer.
74 As I have held that it was the client who terminated the retainer, it is necessary to determine whether Kemp Strang's costs, not having been paid by Mr Blanda, would have been satisfactorily secured under any of the offers made by McLachlan Chilton on behalf of Mr Blanda.
75 In Bechara McColl JA, on the question of whether an undertaking by the new solicitors satisfactorily secured the previous solicitors' costs, held at par 67 that it did not, because "it did not, on its face, provide an equivalent in monetary value to the solicitors' claim for costs and disbursements" . At par 64 of her judgment her Honour said:-
"The expression "satisfactorily secured" should be understood, both by reference to the authorities dealing with possessory liens, and in its textual context, to refer to the provision, in lieu of payment, of something of monetary value which would ensure the satisfaction of the possessory lien. Like should be replaced with like….."
76 In the present case offers or undertakings were contained in the authority and direction enclosed with McLachlan Chiltons' letter of 1 August 2005, in the draft agreement enclosed with McLachlan Chiltons' letter of 3 November 2005 and in the further undertaking of 27 January 2006. I do not consider that Kemp Strang's costs would have been satisfactorily secured under any of these offers. None of the offers provided an equivalent in monetary value to Kemp Strang's claim for its costs.
77 The authority and direction enclosed with the letter of 1 August 2005 was an authority and direction from Mr Blanda to McLachlan Chilton to pay Kemp Strang's costs and counsel's fees but only "at the successful conclusion of the matter". The draft agreement enclosed with the letter of 3 November 2005 contained an unsecured promise by Mr Blanda to pay Kemp Strang's costs, an authority from Mr Blanda to the other party to the District Court proceedings in effect directing payment of any proceeds of the District Court proceedings to McLachlan Chilton and an agreement by all parties to the effect that McLachlan Chilton should pay Kemp Strang's costs to Kemp Strang "within 21 days of the receipt and availability of cleared funds". The undertaking forwarded with the letter of 27 January 2006 included an undertaking by McLachlan Chilton to retain the balance of Kemp Strang's outstanding costs out of any settlement or award arising out of the District Court proceedings.
78 None of these offers provided any security to Kemp Strang, except in the event of Mr Blanda succeeding in the District Court proceedings and there being "proceeds" of the District Court proceedings, that is there being a judgment or a settlement of the District Court proceedings in favour of Mr Blanda.
79 The retainers of Kemp Strang by Mr Blanda in the present case, unlike the retainer in Bechara, were not conditional costs agreements under which Kemp Strang would be entitled to costs only in the event of proceedings by Mr Blanda succeeding (compare Bechara at pars 14 and 42). Kemp Strang is entitled to its proper costs, whether or not Mr Blanda succeeds in obtaining any judgment or settlement in the District Court proceedings and no security has been offered for Kemp Strang's costs in the event of Mr Blanda not succeeding in obtaining a judgment or settlement in the District Court proceedings.
80 I conclude that an order should be made in favour of Mr Blanda under s 728 of the Legal Profession Act but only on condition that Kemp Strang's claim for its costs and disbursements is satisfactorily secured.
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