Sithakoul v Su

Background and procedural history

1. Ms Sithakoul was born in Laos. According to her affidavit, she does not speak English but does speak Mandarin. She says that, until she retained Longton (whose solicitors speak Mandarin), she was unable to communicate directly with the legal representatives who were acting for her in the proceedings. Instead communications were handled on her behalf by Mr Vincent Newey, who was her accountant.
2. Bridges took over conduct of the proceedings in October 2020. This was apparently on the recommendation of Mr Newey. The retainer took place through Mr Philip Parker, a partner of Bridges. He gave carriage of the matter to another partner, Ms Kylie Rae. She was assisted by a senior associate, Mr Tom Karle.
3. In May last year, the trial was fixed for hearing for three days beginning on 14 December. The hearing was allocated to me. On 1 September, the parties appeared before me for pre-trial directions. The hearing date was confirmed.
4. On 12 October, in advance of the hearing, which was then two months away, Mr Karle wrote to Mr Newey about fees. Bridges had issued bills to Ms Sithakoul for approximately $180,000. Two of those bills were for counsel's fees, totalling about $20,000. The other bills were for Bridges' fees and disbursements. Ms Sithakoul had paid a total of $60,000, covering the bills for counsel and the earliest of Bridges' bills. This left approximately $80,000 unpaid from bills issued by Bridges in June and July. There was also a sum of about $40,000 owing (or at least claimed to be owing) to another firm of solicitors, WB Legal Pty Limited, who had previously acted for Ms Sithakoul.
5. In his email Mr Karle estimated that Ms Sithakoul's further legal costs up to completion of the hearing would be $22,000 to $55,000. He said that she would be required to deposit $30,000 into Bridges' trust account before the trial.
6. According to Ms Sithakoul's affidavit, she learned in September 2021 that Bridges had charged her $150,000. She stated that she was surprised and disappointed by the amount charged.
7. It seems probable that the events Ms Sithakoul was referring to in her affidavit took place after receipt of the letter of 12 October, rather than in September. The figure for fees in the affidavit also does not match the figures in Mr Karle's letter. And according to the affidavit of Ms Rae filed on the application, there had been an earlier updated fee estimate provided in May.
8. Nevertheless, there is no reason to doubt that Ms Sithakoul became dissatisfied with the level of fees charged by Bridges. She also seems to have fallen out with Mr Newey at around this time. She approached Mr Kim Lap (known as "Tony") Chow of Longton to act for her.
9. On 18 October Ms Sithakoul executed an "authority to release" addressed to Bridges which purported to "direct and instruct" Bridges to transfer the file for the proceedings (and any funds in Bridges' trust account) to Longton. This was served on Bridges by email on 19 October.
10. On the morning of the following day, 20 October, Ms Rae responded to Longton by email: We assume from your communication below that Ms Sithakoul wishes to retain the services of your firm in relation to this matter. We advise that there are substantial costs outstanding by Ms Sithakoul to our office. There are no funds held in trust. Further, there is unbilled WIP on our ledger which will be billed today to Ms Sithakoul. Until all amounts outstanding to our firm are paid in full we will be asserting our solicitor's lien in respect of the file. We will deal with Ms Sithakoul directly in relation to payment of our fees and disbursements.
11. On 21 October, Bridges issued its final invoice for the work done on Ms Sithakoul's matter. The total billed was about $40,000, bringing Bridges' outstanding invoices to about $120,000.
12. Following Ms Rae's email of 19 October, further email correspondence passed back and forth between Longton and Bridges. Longton sought copies of documents relating to the proceedings, pointing out that the hearing was imminent. Longton also sought copies of documents relating to the retainer between Ms Sithakoul and Bridges, including retainer letters and invoices. Bridges maintained its lien over the former class of documents but observed that once Longton went on the record as Ms Sithakoul's solicitor, documents would be available from the Court. Otherwise Bridges referred Longton to Ms Sithakoul for relevant documents, including retainer documents.
13. Longton filed a notice of change of solicitor on 5 November 2021. By this stage Longton was suggesting to the solicitors for Mr Su that an adjournment would be required. Longton was also in communication with Ms Sithakoul's previous solicitors, WB Legal Pty Limited, and with Mr Newey, requesting relevant documents.
14. The correspondence between Longton and Bridges also continued. I will set out the critical parts of the correspondence in more detail when considering the parties' submissions below.
15. The notice of motion which has resulted in the present judgment was filed on 8 December. It came in for hearing before me on an urgent basis on the following day, 9 December.
16. There were three aspects to the notice of motion. First, an order was sought vacating the trial of the proceedings on 14 December. Mr Su, as the other party to the proceedings, was named as the first respondent to the motion.
17. The notice of motion next sought orders against Bridges for the delivery up of all of its records, including the file for the proceedings. Orders were also sought to have Bridges identify among its records any documents falling into various specified classes, such as particulars, affidavits, notices under the Evidence Act, settlement offers and other correspondence relating to costs. As I have mentioned, Bridges was named as the second respondent.
18. Finally, the notice of motion sought from Mr Newey delivery up of any documents concerning the proceedings in his possession. He was named as the third respondent.
19. The basis for the adjournment application in the motion was that Ms Sithakoul's legal advisers had been unable to obtain the documents needed to prepare for the trial. It emerged at the hearing that Mr Su's legal representatives were not ready either. As a result, there was no alternative but to vacate the hearing.
20. Counsel for Bridges made it clear at the hearing that Bridges' position was that, given that its retainer had been discharged by Ms Sithakoul, it was entitled to maintain its lien, and would only release the documents if security was provided for the $120,000 claimed in outstanding fees. That aspect of the application was adjourned to 15 December to allow counsel for Ms Sithakoul to obtain instructions. The application against Mr Newey was also adjourned.
21. The application was relisted on 15 December, at which point consent orders were made as between Ms Sithakoul and Bridges. Those orders provided for Ms Sithakoul to provide security for the amount claimed by Bridges over other real property owned by her. The application as against Mr Newey was also resolved by agreement and it is not necessary to say anything more about it.

Costs

1. Counsel for Bridges sought an order for costs in its favour on the basis that the application was for an indulgence and Bridges did not behave unreasonably in declining to release the file until security was provided in the consent orders on 15 December. Counsel for Ms Sithakoul contended, on the other hand, that Bridges' conduct had been unreasonable and Bridges should pay Ms Sithakoul's costs of the application.
2. In the following paragraphs I set out the relevant correspondence between Bridges and Longton leading up to the filing of the notice of motion on 8 December.
3. The correspondence began with an exchange of emails on 16 and 17 November: Email from Mr Karle to Mr McCay (assisting Mr Chow at Longton Legal) dated 16 November 2021 at 7.39 am We note you have requested copies of our itemised tax invoices issued to your client. Pursuant to section 187 of the Legal Profession Uniform Law (NSW), a request for an itemised tax invoice must be made within 30 days after the date on which the legal costs become payable. Please see attached Tax Invoice No. 11040 dated 21 October 2021. The due date for payment of the balance of our tax invoices issued to your client fall outside the scope of section 187 of the Legal Profession Uniform Law (NSW). We suggest that you obtain copies of those tax invoices from your client together with the written updated costs estimates provided to Ms Sithakoul. Our outstanding professional costs and disbursements are $121,384.95 (see attached, for your reference, Statement of Account dated 9 November 2021). We reserve all of our rights in relation to the outstanding costs including that should your client fail to either pay those costs in full immediately or contact us to arrange a suitable payment plan (any such plan to be within our sole discretion) enforcement action will be taken to recover those costs. Email from Mr Chow to Mr Karle dated 16 November 2021 at 4.49 pm [Mr Chow asked for a copy of one of the tax invoices referred to in the statement and continued:] Your email refers to a written updated costs estimate provided to Ms Sithakoul. Our client instructs that there were no written updates as to the estimate of costs. We would be pleased to receive a copy of the written updated costs estimates. We would also be pleased to receive a copy of counsel's costs agreement and correspondence informing our client of the same. Email from Mr Karle to Mr Chow dated 16 November 2021 at 5.30 pm [Mr Karle attached copies of tax invoice and counsel's costs agreement and continued:] As previously indicated, your client was provided with written updated costs estimates from time to time subsequent to entry into our retainer. We suggest that you obtain copies of that correspondence from your client. We reserve all of our rights in relation to the outstanding costs. Should your client fail to either pay those costs in full immediately or an arrangement for a suitable payment plan is agreed with us (any such plan to be within our sole discretion), enforcement action will be taken to recover those costs. Email from Mr Chow to Mr Karle dated 17 November 2021 at 10.18 am We refer to our telephone conversation this morning and take this opportunity to confirm our position. We acknowledge that you claim a lien over the legal file until your costs and disbursements are paid. We put to you that your legal costs and disbursements are disputed, particularly when you call for $121,384.95, but your tax invoices amount to $178,827.17. The matter is listed for hearing for 3 days in December 2021. We cannot prepare for hearing without the legal file. A Court would not deny the vacating of the hearing dates to the incoming solicitors when they do not have the legal file to prepare for hearing. The vacating of the hearing dates will inevitably cause delays and add to unnecessary costs. We confirm that our client is prepared to give you an undertaking to pay your legal costs as agreed or assessed. If this is not satisfactory to you, we are instructed to file an urgent Notice of Motion to seek orders for the legal file to be released. Email from Mr Karle to Mr Chow dated 17 November 2021 at 11.37 am [Mr Karle summarised in tabular form the invoices issued by Bridges to Ms Sithakoul, totalling $183,502.17, and continued:] Your client has paid us the sum of $62,117.22 (incl GST). This reduces the invoices rendered and outstanding balance to $121,384.95 (incl GST). There is no discrepancy (or dispute) regarding the amount outstanding by your client. The Statement of Account previously provided to you records the outstanding amounts due to be paid by your client. There is no discrepancy. Bridges Lawyers will continue to exercise its lien until we are paid in full. Please advise the legal basis for your claim that your client is entitled to our file when she has not paid her liability to this firm.
4. Twelve days later the issue was taken up by Mr Paul Sant, described as "principal and director" of Longton, resulting in further correspondence: Emailed letter from Mr Sant to Mr Parker and Mr Karle dated 29 November 2021 [Mr Sant referred to the upcoming trial and the fact that the proceeds of the Cecil Park property, understood to be about $600,000, had been paid into court, and continued:] The plaintiff cannot proceed to trial without copies of essential documents that this law practice has previously requested. [Categories of document were set set out] Absent those essential documents, the plaintiff must seek an adjournment of the trial. For the avoidance of doubt about our previous correspondence, pursuant to Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015, Rule 15, [Longton] undertakes to you that it will hold the documents subject to your lien and with security for the unpaid costs. The security for the unpaid costs is an undertaking by my client to the Supreme Court of New South Wales consenting to orders paying to you, out of the $600,000 net proceeds, the amount determined as fair and reasonable after costs assessment. Alternatively and in addition, [Longton] and our client will enter into the usual tripartite deed available from the Law Society of New South Wales, a copy of which is attached. We are instructed that your firm disclosed that costs were to be $22,000 but has claimed costs and disbursements of about $183,000. Absent sending us your written costs disclosure documents pursuant to the Legal Professional Uniform Law s.174 contradicting these instructions, it would appear prima facie you have failed to comply with disclosure obligations. That failure invokes s.178. That section mandates costs assessment. If you have proof contradicting our instructions then please send it to us as soon as possible. For the avoidance of doubt about our previous correspondence, for the release of our client's legal file, the security for your unpaid costs is; 1. an undertaking by our client to the Supreme Court of New South Wales, consenting to orders paying to you out of the proceeds held in court, the amount determined a fair and reasonable after costs assessment; 2. in the alternative and in addition, we and our client are prepared to enter into a tripartite deed with you. If the above is not acceptable to you, we are instructed to bring a motion seeking: A. adjournment of the trial, B. delivery-up of essential documents held by you, and C. an order that you personally pay costs of the motion and the adjournment of the trial, pursuant to s.99(1)(b) of the Civil Procedure Act 2005. Emailed letter from Mr Parker to Mr Sant and Mr Chow dated 1 December 2021 [Mr Parker reiterated that Bridges had a lien over the file for unpaid costs and disbursements (defined as "Costs"); denied in any event that Ms Sithakoul lacked access to any "essential" documents; gave details of costs disclosures and updates, rejecting the suggestion that there had been a failure to provide proper disclosure of costs; and stated that at Mr Newey's request Ms Sithakoul had been given time to pay, but she had never objected to the costs. He continued:] Our view remains that we are entitled to exercise our solicitor's lien in respect of the Costs and we will continue to do so until the Costs are paid in full or other satisfactory arrangements are reached. We note that the 29 November Letter contains, inter alia, an open offer to secure the Costs out of the funds currently paid into Court in the Proceedings, and that your firm undertakes to hold any documents released by us subject to that security and subject to our solicitor's lien ("Open Offer"). The funds currently paid into Court in the Proceedings are subject to a claim by both Ms Sithakoul and the Defendant. The Defendant asserts that he is entitled to the entirety of those funds. Aside from the fact that our firm is entitled to exercise its solicitor's lien, the principal issue with the Open Offer is that it presumes that Ms Sithakoul will recover sufficient monies from the funds held in Court in the Proceedings to pay the Costs. In addition to the Costs owing to this firm, there are costs owing to Ms Sithakoul's former solicitors which are already secured against Ms Sithakoul's share of the funds paid into Court (which is yet to be determined). Those costs are payable pursuant to orders made previously by the Court. Accordingly, the Offer contained in the 29 November Letter is not acceptable. We note that your client has not made any other offer to secure payment of the Costs and in the circumstances we will continue to exercise our solicitor's lien until such time as the Costs are paid or your client proffers security for the Costs which we consider (in our sole discretion) to be appropriate. … For the avoidance of doubt we also reserve the right to tender this letter in any proceedings brought against this firm and to make an application to the Court for indemnity costs and/or a personal costs order against any solicitor in your firm who executes any pleading in respect of such proceedings. Emailed letter from Mr Chow to Mr Parker and Mr Karle dated 3 December 2021 … 2. For the reason that follow, we invite you one last time to reconsider your position and avoid the trouble and expense of a motion. 3. Failing a reasonable, written offer to supply us with your entire file on or before Monday, 6 December 2021 at p.m., and production of that file within 24 hours after accepting the offer, we anticipate bring a notice of motion to adjourn the trial scheduled for 14 December 2021 and seek costs against you personally. Your breach of the Civil Procedure Act 2005, ss. 56-60 4. Your letter, and your conduct generally, fails to comply with your ongoing professional obligations under the Civil Procedure Act 2005, ss. 56-60: Tugrul v Tarrants Financial Consultants Pty Limited [No 5] [2014] NSWSC 437 at [69]-[77]. 5. We suggest you reflect on that case carefully when considering your position. … Lien 9. Contrary to your correspondence, we have always acknowledged your lien. Our correspondence speaks for itself. We have tried on several occasions to reach an agreement with you so that Ms Sithakoul can proceed to trial with the necessary documents while protecting your lien, but this has failed as you insist on nothing but full payment in the amount you claim. You have not proposed any security in lieu of full payment. [Mr Chow asserted that Bridges had failed to provide copies of cost disclosure documents, invoices, or an itemised bill.] … 14. Absent supporting paperwork, no solicitor could sensibly advise a client to pay anything. 15. May we suggest (a) it is not reasonable for you to insist on full payment in such circumstances, and (b) it is not reasonable for you to insist on exercising your solicitor's lien "until the Costs are paid in full or other satisfactory arrangements are reached" without proposing satisfactory arrangements yourself. Letter from Ms Rae to Mr Sant and Mr Chow dated 6 December 2021 … 5. We confirm your acknowledgment of our lien. Notwithstanding the acknowledgment of our lien you have repeatedly failed to advance any argument as to why our lien would not operate rather you continue to make demands for release of our files with no basis to do so. 6. We deny that we "insist on nothing but full payment" of our legal costs, as alleged in the 3 December Letter. [Ms Rae quoted passages from the 16 November emails and the 1 December letter about a payment plan or security being provided.] 7. At no time (until receipt of correspondence from your firm) has your client objected to the Costs. 8. It is not a matter for this firm to propose a form security in lieu of payment of the Costs. Such a proposal is a matter to be put forward by your client and considered in our sole discretion. At no stage has your client proffered an acceptable offer in respect of Costs. 9. We deny that that we have failed to provide you with our "own paperwork" in support of the payment of our Costs, as alleged in the 3 December Letter. [Ms Rae referred to the earlier correspondence.] … 14. We refer to our comments in paragraph 7 above and note that it is a matter for your client to propose a payment arrangement or security in lieu of payment of the Costs, such arrangement or security to be determined at our sole discretion.
5. The applicable legal principles were not the subject of any debate. They are somewhat complex, being made up of general law rules with statutory and professional conduct rule overlays.
6. The general law rules are summarised by McColl JA, giving the judgment of the Court of Appeal, in Bechara v Atie [2005] NSWCA 268 at [46]-[59]. At common law, where a solicitor's retainer had been terminated by the client otherwise than for good cause, the solicitor was entitled to retain the file unless the client was prepared to provide adequate substitute security.
7. The position was otherwise if the solicitor terminated the retainer (even if the termination was justified, for example by the refusal of the client to put the solicitor in funds). In that event, the court had a discretion, apparently equitable in character (Gamlen Chemical Co Ltd v Rochem Ltd [1980] 1 WLR 614 per Templeman LJ at 624H). The usual practice was to order the delivery up of any documents essential to the further conduct of the client's case to the new solicitor, subject only to the new solicitor undertaking to respect the former solicitor's lien. In practice that lien would however be of no value once the case was finished. In some circumstances the court could impose terms more favourable to the solicitor, such as a condition that some or all of the former solicitor's fees be paid.
8. There is now a statutory power conferred on this Court to order a solicitor to release the client's file "on any conditions that the [Court] may determine" (Legal Profession Uniform Law 2014, s 472(1)(b). See also Legal Profession Act 2004, s 728(1)(b); Legal Profession Act 1987, s 209C). But it seems that in practice the power is exercised in accordance with the previously established general law rules: see Bechara at [69]-[70], although cf [72]; Rafferty v Time 2000 West Pty Ltd (No 3) (2009) 257 ALR 503 at [38] (Besanko J); Gigi Entertainment Pty Ltd v Macree (No 2) [2011] NSWSC 869 at [35] (Slattery J).
9. By the time Bechara was decided, the rules of professional conduct made under the Legal Profession Act 2004 (NSW) (the Solicitors Rules) expressly dealt with the subject. The Rules provided that where the client had terminated the former solicitor's retainer the solicitor was entitled to retain the file unless the solicitor's costs were paid or "satisfactorily secured" (r 29.3). If the former solicitor had terminated the retainer in pending proceedings the solicitor could be required to deliver up documents essential to the conduct of the proceedings, provided that the incoming solicitor "ensure[d]" that the former solicitor's costs were "satisfactorily secured" or entered into an agreement with the client and the former solicitor to procure payment of the former solicitor's fees on completion of the proceedings (r 29.4).
10. In Bechara McColl JA noted that these provisions reflected the general law rules and interpreted them accordingly. The requirement of "satisfactory security" required that "like should be replaced with like". Where (as was the case in Bechara) the former solicitor's fees were subject to a conditional costs agreement that would "commonly" require an undertaking to retain sufficient monies out of the verdict or settlement monies to meet the solicitor's costs. An undertaking from the client merely to pay the amount found due was insufficient. See at [64]-[67].
11. Since Bechara the relevant professional conduct rules have been overhauled. The Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015 now provide, in rules 14.1 and 15.1: 14.1 A solicitor with designated responsibility for a client's matter, must ensure that, upon completion or termination of the law practice's engagement: 14.1.1 the client or former client, or 14.1.2 another person authorised by the client or former client, is given any client documents, (or if they are electronic documents copies of those documents), as soon as reasonably possible when requested to do so by the client, unless there is an effective lien. 15.1 Notwithstanding Rule 14, when a solicitor claims to exercise a lien for unpaid legal costs over client documents which are essential to the client's defence or prosecution of current proceedings: 15.1.1 if another solicitor is acting for the client, the first solicitor must surrender the documents to the second solicitor: (i) if the second solicitor undertakes to hold the documents subject to the lien and with reasonable security for the unpaid costs, or (ii) if the first solicitor agrees to the second solicitor agreeing to pay, or entering into an agreement with the client to procure payment of, the first solicitor's costs upon completion of the relevant proceedings, or 15.1.2 alternatively, the solicitor, upon receiving reasonable security for the unpaid costs, must deliver the documents to the client.
12. Rule 15.1.1 maintains the obligation on the former solicitor to deliver up essential client documents despite the lien, in two situations. One is if "reasonable security" (as opposed to "satisfactory security" under the former Solicitors Rules) is provided. The other is if a tripartite agreement is made between the former solicitor, the incoming solicitor and the client for payment of the former solicitor's costs upon completion of the proceedings. It is notable that this refers to an agreement being entered into, rather than an offer in such terms being made. The wording of the current Rule suggests, on the face of it, the former solicitor must actually agree; if this is so, then such an arrangement cannot be forced on the former solicitor, who may require "reasonable security" instead.
13. Another change is that the former distinction between retainers terminated by the client and retainers terminated by the solicitor has not been carried forward into the present rules. This has led Professor Dal Pont to suggest (Lawyers' Professional Responsibility (7th ed, 2021, Thomson Reuters) at [16.70]) that the distinction no longer exists and that a solicitor discharged by a client has lost the favourable position which such a solicitor held under the general law rules.
14. Rules 14.1 and 15.1 purport to require the solicitor to deliver up the file in cases where they apply. The Rules are not, as the former Solicitors Rules were, expressed to be subject to the Court's statutory power to order delivery up of the file. On the other hand, rule 2.3 provides that while a breach of the Rules is capable of constituting unsatisfactory professional conduct or professional misconduct, and may give rise to disciplinary action by the relevant regulatory authority, the Rules "cannot be enforced by a third party". If the overhaul of the professional conduct rules has indeed resulted in inconsistencies between solicitor's obligations under those rules and under the general law, it may be necessary to consider whether, in proceedings such as the present, the Rules actually apply so as to displace the general law.
15. None of this was the subject of any debate before me and I do not propose to try to resolve it.
16. In the present case, there is no suggestion that Bridges' retainer was terminated for just cause. Ms Sithakoul simply exercised her right to replace Bridges with another firm of solicitors of her choice. Under the general law rules, Ms Sithakoul was therefore not entitled to have Bridges' file delivered up without proffering security for the $120,000 in fees being claimed.
17. There appeared to be no dispute about this from counsel for Ms Sithakoul. At the hearing on 8 December counsel expressly acknowledged that Ms Sithakoul could not get the documents sought without putting up security for the amount claimed by Bridges.
18. Counsel stated at the hearing that security had been offered but rejected. Presumably this was a reference to the revised undertaking offered by Longton in Mr Sant's letter of 29 November (the earlier offer to pay the amount found due was obviously untenable: see Bechara at [58] and [67]). The revised undertaking was to pay Bridges' costs out of the proceeds of sale held in court.
19. At the time the offer was made, the monies were held in court pending the outcome of the case. As Bridges pointed out in their response, all of the monies were claimed by Mr Su. In effect, therefore, the offer was an offer of security over such monies, if any, as Ms Sithakoul might recover in the proceedings.
20. As already noted, such an offer was considered in Bechara to be an offer of "satisfactory security". But that was a case where the solicitor was charging fees on a conditional basis. The solicitor would only have been entitled to payment from the client if the client succeeded. In that sense, the offer of security over the proceeds in return for discharging the lien was an offer of "like for like".
21. In the present case, Ms Sithakoul's obligation to pay Bridges' fees was not conditional on the outcome of the proceedings. It therefore seems to me, in the absence of any argument that the applicable law has changed since Bechara was decided, that Longton's offer was not an offer of "reasonable security". I am not sure in the end that counsel for Ms Sithakoul contended to the contrary.
22. Instead, in written submissions, counsel for Ms Sithakoul tried to counter-attack. Counsel asserted that the solicitors at Bridges had breached their professional obligations with respect to the proper and efficient conduct of the proceedings under the Civil Procedure Act 2005 (NSW), ss 56 and 59. In this regard, counsel referred (as had Longton's correspondence) to the guidance laid down by Kunc J in Tugrul v Tarrants Financial Consultants Pty Ltd [No 5] [2014] NSWSC 437 at [68]-[77].
23. Counsel went so far as to suggest that the Court's power to make orders against legal practitioners personally under CPA s 99 was engaged. That power applies in cases where costs have been incurred as a result of the solicitor's serious neglect, serious incompetence, impropriety, or unreasonable conduct.
24. Counsel contended that Bridges should be ordered to pay the costs of the dispute with Longton (presumably from 19 October onwards), and those costs should be assessed on an indemnity basis after 29 November (the date of Mr Sant's letter).
25. These submissions treated the issue between Ms Sithakoul and Bridges as an interlocutory one arising in the course of Ms Sithakoul's action against Mr Su. This was reflected by the notice of motion procedure used to bring the dispute before the Court.
26. But this overlooks that once Bridges had been discharged as Ms Sithakoul's solicitor, its practitioners had no further obligations with respect to the prosecution of her claim. The subject matter of the motion was Bridges' right to maintain its lien in accordance with its prior contractual and professional relationship with Ms Sithakoul. As between Bridges and Ms Sithakoul, the issues were substantive, and distinct from the claims made by Ms Sithakoul against Mr Su.
27. At the hearing on 8 December, it was pointed out by counsel for Bridges that the notice of motion procedure was inappropriate. This was accepted by counsel for Ms Sithakoul, who acknowledged that if the application was to be pursued it should be by way of separate proceedings. In the end, the consent orders made on 15 December made the filing of a separate summons unnecessary.
28. The statement in Ms Rae's initial email of 19 October that Bridges would pursue its claim for costs directly against Ms Sithakoul was a clear intimation that the issues raised by that claim, including any dispute about a lien, were separate from the ongoing conduct of the proceedings between Ms Sithakoul and Mr Su. Longton of course did not have to accept the implicit brush-off. It was open to obtain instructions from Ms Sithakoul to act for her on the dispute with Bridges. But the costs of doing so would in no way be recoverable from Mr Su even if Ms Sithakoul eventually succeeded in her claim against him.
29. Arguably what was required was a separate retainer and the opening of a separate file. At the very least it was necessary to give clear advice to Ms Sithakoul on the nature of the dispute with Bridges and the costs implications of that dispute. That was particularly important given Ms Sithakoul's unfamiliarity with, and difficulties in understanding, the legal process.
30. It follows from all of this that the provisions of CPA ss 56 and 59 were not directly relevant to the dispute between Bridges and Longton. Nor was the guidance given by Kunc J in Tugrul. This of course did not mean that the parties were not obliged to behave reasonably and proportionally.
31. In support of his assertion of unreasonable conduct on the part of Bridges, counsel for Ms Sithakoul made two complaints. The first was that Bridges declined to provide a "comprehensive suite of documents" in support of costs claimed under their lien. The second was that Bridges did not identify what security they actually wanted until the very last moment, on 15 December.
32. In developing these submissions, counsel observed that Ms Sithakoul was in a vulnerable position, and Mr Parker and Ms Rae knew that. The suggestion seems to have been that in some way they exploited that vulnerability. I see no factual basis for any such suggestion, and why it was made is a mystery. Ms Sithakoul was throughout represented by Longton and the solicitors at Longton were clearly at no disadvantage whatever in their dealings with Bridges.
33. It is hard to see how counsel's first complaint, about failure to provide documents in support of the costs claimed, was relevant at all. On an application to have documents handed over despite the existence of a lien, the Court does not go into disputed issues about quantum. As I have said, and as counsel for Ms Sithakoul himself accepted, the obligation is to provide replacement security for the amount claimed. In any event the correspondence which I have quoted shows that Bridges did in fact provide particulars of the amounts claimed, and copies of documents in support.
34. It is not clear what counsel's second point actually meant. Counsel pointed out that there was no mention in Mr Karle's email of 17 November about the provision of security in lieu of the lien. But it was completely clear from the context that Bridges was relying on the lien. It went without saying that if Ms Sithakoul wished to obtain documents the subject of the lien she would have to offer security to replace it.
35. If counsel's point was that Bridges had some sort of obligation to specify the form of the security which it wanted, I disagree. It was sufficient for Bridges to say, as it did, that it maintained the lien. It is unlikely that the Bridges practitioners had full knowledge of Ms Sithakoul's financial position. In any event, any knowledge which they had acquired of her finances in the course of acting for her could not properly have been used by them for their own benefit in negotiations about the form of security. It was a task for Longton, as Ms Sithakoul's solicitor, to identify a suitable form of replacement security and offer it to Bridges.
36. I do not propose to go into the negotiations which took place immediately before the making of the consent orders on 15 December. The proceedings only reached that point because of the application made to the Court on Ms Sithakoul's behalf. Once counsel for Ms Sithakoul indicated that he needed to seek instructions on the provision of security for the amount claimed by Bridges, the additional costs associated with an adjournment were inevitable.
37. For these reasons, the attack made by counsel for Ms Sithakoul on the conduct of the solicitors at Bridges (which was, unfortunately, expressed in unnecessarily offensive terms) was unfounded. There were regrettable undertones of resentment and hostility in Bridges' correspondence. But the substance of the matter is that Bridges was entitled to maintain its lien until proper replacement security was belatedly proffered on Ms Sithakoul's behalf in the consent orders of 15 December. Ms Sithakoul must pay Bridges' costs of the application.
38. This result for Ms Sithakoul is unsatisfactory, to say the least. It is clear from the form of the orders ultimately made on 15 December that she always had sufficient assets to be able to provide security for the sums claimed by Bridges. In retrospect the whole dispute with Bridges has proved to be a waste of time and money.
39. I do not know what advice Ms Sithakoul was given but on the face of it costs have been unnecessarily incurred. I propose, in the exercise of the Court's powers under s 99 of the Civil Procedure Act, to require Longton to show cause why the Court should not order that any costs charged to Ms Sithakoul in connection with Longton's dealings with Bridges after 19 October be disallowed, and Longton should not be required to indemnify Ms Sithakoul against her liability to Bridges.

Orders

1. The orders on the motion dated 8 December 2021 are: 1. Order that the applicant (plaintiff) pay the second respondent's costs of the motion. 2. Direct that at 9:30am on 8 March 2022, or such other date as may be arranged with my Associate, the solicitors for the plaintiff, Longton Legal Pty Limited, show cause why the Court should not order: 1. that any costs charged to the plaintiff as a result of dealings between Longton Legal Pty Limited and Bridges Lawyers Pty Limited from 19 October 2021 onwards be disallowed; 2. that Longton Legal Pty Limited indemnify the plaintiff against the liability for costs in order (1).

Amendments 14 March 2022 - [56] change "was" to "were" [64] delete "her" 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: 14 March 2022