Lismore Buildings Limited (In Receivership) v. Bank Of Ireland Finance Limited (No.2)

Factual and Procedural Background

On 11 February 1998 the Court made five separate cost orders in respect of appeals from earlier High Court orders for security for costs dated 2 March 1992. In summary:

• The Plaintiff recovered costs against the Bank.
• The Plaintiff recovered costs against the Accountants.
• The Quantity Surveyors recovered costs against the Plaintiff.
• The Auctioneers recovered costs against the Plaintiff.
• The Receiver recovered costs against the Plaintiff.

The Plaintiff company is insolvent. The Plaintiff’s Solicitor, who remains unpaid, applied to this Court under Section 3 of the Legal Practitioners (Ireland) Act 1876 and at common law for a charging order over the monies payable to the Plaintiff under the first and second cost orders. All five Defendants received notice of the application.

The Quantity Surveyors and Auctioneers have indicated their intention to initiate garnishee proceedings to attach the same funds, and the Solicitor anticipates a similar step by the Receiver. The present application seeks to secure priority for the Solicitor’s fees and outlay.

Legal Issues Presented

1. Whether Section 3 of the Legal Practitioners (Ireland) Act 1876 empowers the Court to grant the Plaintiff’s Solicitor a charge over the monies payable under the first and second cost orders.
2. The scope of any such charge, specifically whether it should be limited to the amount presently due to the Solicitor on a solicitor-and-client basis.

Arguments of the Parties

Applicant (Plaintiff’s Solicitor)

• Because the Plaintiff is insolvent, the Solicitor will be unable to recover his fees unless a charge is imposed on the monies due under the first and second cost orders.
• Section 3 expressly authorises the Court that issued the underlying orders to declare the Solicitor entitled to such a charge.
• The charging order formalises the inherent solicitor’s lien that already attaches to the fund recovered through the Solicitor’s efforts.

Respondents

• They contend that certain items in the Solicitor’s bill have already been satisfied, reducing or eliminating any outstanding lien.
• Other creditors (Quantity Surveyors, Auctioneers and Receiver) intend to seek garnishee orders and may dispute the Solicitor’s priority.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Court affirmed the common-law principle that an unpaid solicitor enjoys a lien over property or funds recovered through his efforts, including costs awarded in litigation. Section 3 of the 1876 Act empowers the Court that made the underlying order to convert that lien into a formal charge.

Applying this principle, the Court declared that the Solicitor is entitled to a charge over the monies payable to the Plaintiff under the first and second cost orders. The charge is limited to the amount actually due to the Solicitor on a solicitor-and-client basis; if the Solicitor has already been paid in full or in part, the charge diminishes accordingly.

The Court emphasised that the lien and charging order exist primarily to protect the Solicitor against his own client, even though they may incidentally affect third parties. It expressly declined to adjudicate on disputed questions of fact concerning the amount owed or on issues of priority between competing claims, leaving those matters to be resolved in other proceedings.

Holding and Implications

ORDER GRANTED: The Court granted a charging order in favour of the Plaintiff’s Solicitor over all monies recoverable by the Plaintiff under the first and second cost orders dated 11 February 1998, limited to the unpaid costs and outlay due on a solicitor-and-client basis.

Implications: The Solicitor now holds a statutory charge with priority over the specified fund to the extent of the outstanding fees. Any disputes as to the exact amount owed or the relative priority of other creditors must be litigated separately. The decision applies settled principles and sets no new precedent.