The New South Wales Court of Appeal has recently affirmed1 that a solicitor’s general lien over trust money extends to all funds in the account, and is not confined to the quantum of costs still outstanding.2
Further, a general retaining lien covers not only costs incurred on client instructions, but also by the solicitor as a litigant in quantifying or enforcing that entitlement to costs.3
The decision occurred in the context of the sale of Studio B’s salon business, the proceeds of which it deposited into its solicitor’s trust account, but later terminated the retainer leaving $37,940 in costs unpaid.4
The solicitor recovered his initial assessed fees via a garnishee order, but maintained a general retaining lien over the remaining $91,180.38 in trust to cover enforcement costs from review proceedings and ongoing litigation.5 Studio B sought restitution of the remaining trust balance, which the primary judge dismissed.6
The salon submitted that a solicitor’s lien cannot exceed the face value of an outstanding bill, relying on a statement attributed to Baron Parke in Miller v Atlee7 that ‘[m]oney is divisible, and the plaintiff has no lien beyond the amount of this bill’, reasoning that if it were otherwise, a client would have to ‘first pay the bill, and then run the risk of the solvency of the attorney’.8
However, Adamson JA doubted the report’s accuracy, noting in particular that it overlooked the client’s right to direct their solicitor to ‘pay himself from the trust money and pay the balance to the client’.9
Quoting Johns v Law Society of New South Wales,10 Her Honour affirmed:
“Over all money which the solicitor holds for his client, as well as other property of his client which he holds, the solicitor has a general lien for costs. This lien, however, is a mere retaining lien, ie, it gives a right to withhold the property from the client until payment of costs; it does not give any right to payment out of money (or other property) which is the subject of the lien.”11
Emphasising the phrase ‘[o]ver all money’, the Court therefore noted that there was a strong indication that Miller v Atlee was no longer ‘good law and ought not be followed’,12 finding further support in an authority cited by the High Court in Legal Services Board v Gillespie-Jones.13 In the case, the Court adopted the metaphor ‘of the property covered by the lien being locked up in the solicitor’s box, for which the solicitor has the key which may be kept in his pocket until the client satisfies the amount of the demand’.14
While money is certainly divisible, until costs are quantified, the precise amount of recoverable debt remains uncertain; a solicitor’s lien therefore extends over all money, no different from other client property.15
On the second issue, Studio B argued that pursuing fees constitutes adverse litigation outside the ‘provision of legal services’ ascribed by the Uniform Law, relying on White v Bini.16 The Court, however, characterised the judgment itself as an erroneous reading of In Re Long17 and In Re Taylor, Stileman, & Underwood,18 returning back to the House of Lords authority of Gray v Graham:19
[I]f a solicitor has a lien upon his client’s deeds for costs incurred by him, and the client upon application refuses to pay those costs, and the solicitor is consequently driven to bring an action […] the lien must extend as well to the costs of enforcing the bill of costs as to costs incurred by the client himself.20
The Court found no principled basis to exclude enforcement costs from general retaining liens when they are routinely covered by particular liens, including ‘fruits of the action’ liens.21 Denying a lien over enforcement costs would further provide defaulting clients with an unfair advantage, misaligned with the purpose of the general lien as recognised by the Uniform Law – to promote payment for legal services.22
The Court of Appeal (Adamson JA, with Payne and Ball JJA agreeing) granted leave to appeal to resolve ‘inconsistencies in the authorities and texts’ on important matters of principle as to whether a solicitor may claim a general lien over the whole of money held in a trust account and whether the lien extends to costs incurred by the solicitor, but dismissed the appeal by Studio B in question.23
Footnotes
1 Studio B Hair Design Pty Ltd trading as Studio B Hair Design v Kerrison trading as Kerrisons Legal Services [2026] NSWCA 193 (‘Studio B’).
2 Ibid [55], [66], [68].
3 Ibid [103], [106], [109].
4 Ibid [8]-[9].
5 Ibid [31]-[33].
6 Schmidt AJ in Studio B Hair Design Pty Ltd t/as Studio B Hair Design v Kerrison t/as Kerrisons Legal [2025] NSWSC 924; Studio B Hair Design Pty Ltd t/as Studio B Hair Design v Kerrison t/as Kerrisons Legal Services (No 2) [2025] NSWSC 1222.
7 (1849) 3 Ex 799.
8 Ibid 800, cited in Studio B (n 1) at [42]-[43].
9 Studio B (n 1) [43].
10 [1982] 2 NSWLR 1.
11 18-19, at [53] in Studio B (n 1) (original emphasis omitted, emphasis added).
12 Studio B (n 1) [54].
13 (2013) 249 CLR 493, [105].
14 Studio B (n 1) [64]; Barratt v Gough-Thomas [1951] Ch 242 at 250 (Evershed MR), citing Blunden v Desart (1842) 2 Dr & W 405.
15 Studio B (n 1) [66].
16 [2003] FCA 669.
17 [1929] VLR 318.
18 [1891] 1 Ch 590.
19 (1855) 2 Macq 435.
20 Ibid 439-440.
21 Studio B (n 1) [97]-[101], citing Firth v Centrelink (2002) 55 NSWLR 451; [2002] NSWSC 564; Re Meter Cabs Ltd [1911] 2 Ch 557.
22 Studio B (n 1) [107].
23 Ibid [37] – [39].
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