FEDERAL COURT OF AUSTRALIA

Wilmoth Field Warne v Castel Electronics Pty Ltd [2011] FCA 193

THE COURT ORDERS THAT:

1.    The motion on notice filed on 25 February 2011 by the Third Party be dismissed.

2.    The costs of the Third Party and the applicant Castel Electronics Pty Ltd of and incidental to the motion on notice be reserved to the Registrar conducting a taxation of any bill of costs submitted by the Third Party or otherwise to a Judge of the Court.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

1    There is before the Court a notice of motion by a firm of solicitors, Wilmoth Field Warne (“the Third Party”), which acted for the applicant Castel Electronics Pty Ltd (“Castel”) for most of the duration of the substantive proceedings in this action. Judgment was entered for Castel on 9 December 2010 for damages and interest amounting in all to $4,660,483.51. By paragraph 1 of its notice of motion the Third Party claims a:

1.    [Declaration] that Wilmoth Field Warne has an equitable lien, to the extent of $580,105.99 over the judgment debts set out below as ordered by Justice Ryan in this honourable Court in favour of Castel Electronics Pty Ltd and against Toshiba Singapore Pte Ltd:

(1)    on 28 September 2010 Toshiba Singapore Pte Ltd was ordered to pay Castel Electronics Pty Ltd the sum of $2,613,127.00;

(2)    on 9 December 2010 Toshiba Singapore Pte Ltd was ordered to pay Castel Electronics Pty Ltd the sum of $2,047,356.51;

such equitable lien being in relation to the legal costs owed to Wilmoth Field Warne in acting as the legal practitioners for the Applicant in this proceeding.

As I have already outlined, judgment was, in fact, not entered in favour of Castel until 9 December when it was entered for the total amount which I have indicated constituted by the award of damages and interest. However, nothing turns on this difference between the recital in the notice of motion and the date and form of judgment actually entered. The notice of motion then continues to claim:

2.    That Castel Electronics Pty Ltd pay the sum of $580,105.99 into Court and that such sum be held by the Court, to secure the equitable lien of Wilmoth Field Warne referred to under paragraph 1, until further order.

3.    Alternatively to paragraph 2, that Castel Electronics Pty Ltd be restrained from either disposing of, transferring, or in any way encumbering, to the extent of $580,105.99, any part of the judgment sums paid to it by Toshiba Singapore Pte Ltd between about 9 and 22 December 2010 and which remain in its possession.

4.    Further and alternatively to paragraphs 1 to 3, a declaration that Castel Electronics Pty Ltd be restrained from dealing with any judgment sum obtained by it, up to the extent of $580,105.99, in the appeal proceedings until the equitable lien referred to in order 1 herein is satisfied.

5.    That the applicant pay the third party’s costs of this application.

2    The evidence discloses that on 22 December 2010, the judgment debt and interest was paid by the respondent Toshiba Singapore Pte Ltd (“Toshiba”) directly to Castel. I have come to a clear view that it would not at present be an appropriate exercise of the Court’s discretion to make any of the orders sought in the notice of motion. I shall indicate briefly my reasons for coming to that conclusion.

3    In the first place, I entertain considerable doubt whether a solicitor’s lien over the fruits of litigation can attach where the fruits of litigation no longer exist, either in the form of a chose in action, a sum of money in court, or an obligation by the unsuccessful party to satisfy the judgment, or a sum of money held by a solicitor on behalf of a party to the action. In this case, the chose in action has been discharged, it appears, by a payment by Toshiba to Castel. There is no money in Court and no money held by a solicitor for a party to the litigation. I have not been referred to any authority where a lien of the kind invoked by the Third Party has been held to attach to moneys which have, as I infer has happened in this case, been taken into the general funds of the successful party to the litigation.

4    In the second place, I am not able to quantify, and indeed Mr Stirling of Counsel for the Third Party candidly accepted, that I was not in a position to ascertain, the amount to which the Third Party is entitled by way of its claim for unpaid costs in this action. There is evidence that a considerable sum has already been paid by Castel to the Third Party in respect of its exertions in the litigation before 18 September 2009. In any event, the entitlement of the Third Party to further payments of costs must depend, as is common ground, on the outcome of a taxation of a bill in proper form by a Registrar of this Court.

5    I have not been persuaded that I should grant interlocutory relief in either the form suggested in paragraph 2 or that proposed in paragraph 3 of the notice of motion. That would require the payment into Court either of the claimed sum of $580,105.99, or some other sum which the Court, in its discretion, might fix as appropriate. The alternative formulation of the prayer for interlocutory relief is in the nature of a Mareva injunction restraining Castel from disposing of either the amount of $580,105.99 or some other, lower, sum which the Court might fix, out of the funds and assets under its control. I have not been persuaded to grant interlocutory relief in that form because the evidence does not suggest any likelihood that Castel could not satisfy an order for payment of the claimed costs after that has been quantified on taxation. From my knowledge of the extent of its commercial activities, which I have gleaned during the course of the trial, it seems that Castel is in a very substantial way of business indeed and its ability to satisfy a liability for costs, even in excess of half a million dollars, does not appear to me to be in the slightest degree questionable.

6    Similar reasons have led me to decline to restrain Castel in the manner proposed by paragraph 4 of the notice of motion from dealing with the moneys paid to it in satisfaction of the judgment. I have considered the possibility of making a bare declaration that the Third Party has a lien over the proceeds of judgment in the substantive proceedings. A similar declaration, amongst other relief, was granted by Weinberg J in Color Point Pty Ltd v Markby’s Communication Group Pty Ltd [1998] FCA 1516. However, in that case, his Honour made it clear that, in consequence of such a declaration, there would be an order, which he made in [3] of his Orders, that;

... such amount as is approved upon the taxation of the bill of costs rendered ... in relation to proceeding VG 749 of 1996 be paid to [the firm of solicitors claiming a lien over the fruits of the action]

His Honour indicated that those moneys representing the fruits of the action were presently held in Court.

7    The reason for declining to make any such bare declaration is, in the first place, my doubt as to whether a lien of the kind discussed in the authorities continues to exist where there is no identifiable fund, or at least no identifiable fund held in court, or by a party other than the solicitor claiming to enforce the presumptive lien. In the second place, I am not persuaded that, in the circumstances, including the view which I have taken of the solvency of Castel, that there would be any utility in the grant of such a bare declaration. For these reasons the motion on notice will be dismissed. I shall order that the costs of the Third Party and Castel of the motion be reserved to the Registrar conducting the taxation of any bill of costs which may be submitted in this matter or otherwise to a Judge of the Court.

Associate:

Dated:    4 March 2011