Three recent family law cases explore the nebulous area of solicitor-client relationships …  Termination of retainer in protracted litigation … Solicitors required to hand over hundreds of boxes to new lawyers … Lien over the fruits of the litigation … Breach of trust in distribution of house sale proceeds … Solicitor whacked with indemnity costs …  The secretary who moved firms, but without the client’s confidential information … Sohini Mehta reports 

IN Strahan & PP Lawyers the Full Family Court explored the treacherous zone of solicitors’ liens in one of the courts most expensive and long-winded cases. 

The appellant Ms Strahan, a former client of PP Lawyers, claimed that the entitlement to a lien was lost because PP Lawyers ceased representing her without good cause. 

The grounds of appeal took aim at the spartan reasoning of the primary judge, Deputy Chief Justice John Faulks. Faulks’ written reasons were markedly citation-free and were published nearly two years after the trial on February 17, 2016. 

May, Thackray & Ainslie-Wallace JJ found the parties could understand the basis of Faulks DCJ’s decision as the oral remarks he made during submissions had been formally incorporated into the reserved judgment. 

The primary judge hadn’t erred in failing to discuss the “relevant legal principles” – either the evidence established that the solicitors had just cause for terminating the retainer with Ms Strahan or it didn’t. 

Faulks oral finding that Ms Strahan had failed to “provide reasonable instructions in a timely way” was determinative of the solicitors’ entitlement to exercise the lien. 

However, an error of law was conceded in relation to the conditions on which files should be made available to new solicitors for use in ongoing litigation. 

Faulks DCJ had incorrectly stated that solicitors’ obligation to make the files available for use in ongoing litigation is, “subject to the condition that appropriate security is given for the payment of the solicitor’s fees”.  

PP Lawyers proposed Ms Strahan’s files be surrendered upon reimbursement of disbursements and payment into court of $321,420 as security.  

To avoid the grave consequences of clients being unable to obtain their papers, the so-called “litigation exception” enables courts to order that client files be handed over to the new solicitor upon an undertaking to return them at the end of proceedings. 

Exceptional circumstances need to exist before an order for “delivery up” of the files would be accompanied by onerous conditions or denied.  

May, Thackray & Ainslie-Wallace acknowledged PP Lawyers never had security for their costs and must have accepted that payment of their fees was dependent upon the success of Ms Strahan in her matrimonial litigation. 

With a trial date looming the balance of convenience fell in favour of Ms Strahan, who has spent millions of dollars in litigation that may be compromised by the unavailability of her voluminous files. 

The bench ordered PP Lawyers to hand over Ms Strahan’s papers to her new solicitors, provided the new solicitors undertake to preserve the lien and return the papers after the end of the litigation. 

As officers of the court, the solicitors were obliged to help bring to a close arguably “the most protracted and resource consuming” proceedings in the court’s history.

PP Lawyers retain an independent right to claim a lien over the fruits of the matrimonial litigation. 

They must await the results of the Strahan litigation to see whether they’ll be paid in full, or instead have to be content with the $2 million they’ve already received from Ms Strahan in legal fees.

In January, Judge Alexandra Harland of the Federal Circuit Court directed solicitor Jodie Lanham to file submissions addressing whether the court should refer her conduct, described in Laurens & Laurens (No.2), to the Legal Services Commissioner of Victoria. 

Ms Latham was the wife’s solicitor and acted by agreement on the sale of property on behalf of both parties. This is not an unusual cost-saving exercise in family proceedings.  

Lanham “mischievously” distributed payments of trust fund monies for her client’s benefit without distributing funds to the husband and pressured him to accept a settlement amount – reduced to $2,715.25 from $76,313 – not provided for in the final property adjustment orders.

After some preliminary grumbles about inaccurate pagination and hasty photocopying in the litigants’ court bundles, Judge Harland criticised Lanham for breaching her obligations as trustee on the sale of the matrimonial properties and ordered her to pay the husband’s costs of bringing an enforcement application on an indemnity basis. 

In Harland’s latest reasons in Laurens & Laurens (No. 3), delivered on February 17, she decided against referring Lanham to the Legal Services Commissioner. 

The judge considered the indemnity costs of $13,123 and the published reasons for judgment in Laurens & Laurens (No.2) sanction enough.  

Ms Lanham, who hasn’t previously had disciplinary action taken against her, “properly acknowledged where her conduct has fallen short” and intends to undertake CPD programmes on trustee obligations. 

Last month in Huda & Huda and Anor, Ms Huda sought to restrain Mr Y, her husband’s solicitor of 10 years, from acting for her husband because a secretary formerly employed by her solicitors had crossed over to work for Y’s firm.

Orders for restraint usually concern solicitors, but Justice Michelle May said they may also be granted in the case of “non-legally qualified law clerk[s]”, as in McMillan, or, as Ms Huda contended, legal secretaries. 

The circumstances of the secretary’s employment at Firm Y were benign. She filled the position due to a sudden resignation and was appointed to undertake mostly conveyancing work. 

By the time she commenced working at Firm Y, the Huda trial had concluded, although the decision was reserved. 

May J found that it wasn’t enough to allege that the secretary had access to Ms Huda’s file via the Commonwealth Courts portal. 

Ms Huda didn’t provide the requisite evidence that she had imparted relevant confidential information to the secretary. Nor did she meet the Osferatu evidential threshold – for evidence to be cogent and persuasive Ms Huda should have identified “the nature of the confidential information received or likely to have been received” by the secretary – without, for obvious reasons, divulging the information in question.  

The appeal was dismissed because, in the absence of evidence, it could not be inferred that the secretary had relevant confidential information. 

Confidential information which was once communicated in the past may no longer be confidential or available or material to a dispute. 

It’s unusual, then, that the Huda dispute reached the stage of an appeal, where it was unlikely that further evidence would be placed before the court.