Judgment of the Court
JUSTICE.-I am of opinion that this appeal must be allowed, and the judgment of Mr. Justice Rose, who reversed the decision of the referee, must be restored.
In the first place, the referee had no jurisdiction to make the order or ruling which he states in his certificate, depriving the solicitor of James J. Bell of his lien for costs, and of his right to payment in virtue of that lien out of the share of his client payable under the administration decree.
The authority of the referee to make such an order must be derived either under the administration decree or under some general order. find no such direction in the administration order made by Mr. Justice Ferguson, which was reinstated by the judgment of this court and under which the referee was proceeding. Neither do I find any general order authorizing such an interference with the primnd facie right of the solicitor to a fund which he had recovered for his client. The parties should have asked that the payment of costs should be provided for in this way by the decree. The general directions as to the powers and functions of the master, or referee, contained in the general order defining the jurisdiction of the master in taking accounts, does not, in my opinion, extend to a case like the present. It is not within the general direction to make just allowances.
The parties who are entitled to recover costs against James J. Bell are in no other or better position than any other creditors of his, and general creditors could not enforce an execution against this fund in court, which is just as much in the solicitor's hands as if it had been paid to him directly and personally instead of into court, except by way of execution by means of a charging or stop order.
Had the fund actually gone into the solicitor's hands, it is out of the question to say that it could be taken from him by a judgment creditor to the prejudice of his lien.
Whatever general observations of learned judges in some of the cases cited may seem to discountenance the view which I take, Lord Cairns L. J., in his considered judgment in Ex parte Cleland, In re Davies points out, that to order a set off in such a case as that before him, and in such a case as the present, would be to disregard that principle mutuality which is the essential basis of set off. In the present case, as soon as the fund in court was recovered a lien was by operation of law immediately VT attached to it in favour of the solicitor of James J. Bell. Therefore, if we are to regard this as a case of set off, it would be a set off against money in the hands of the court due to James J. Bell and his solicitor conjointly of money due by James J. Bell alone.
It cannot be said that the solicitor's lien is subject to the rights of all creditors of the client before any set off is ordered. Take the simple case of a debt recovered in an action at law, the money being paid into the hands of the solicitor of the plaintiff, no creditor can touch that money until the solicitor's lien is first satisfied. Then, as I have before stated, the rights of a solicitor as to money in court are exactly the same as if it was in his own hands (1).
In the case of Exparte Cleland Lord Cairns gives expression to the principle I have propounded in the following short passage in his judgment:
I should say that this case of Ex parte Cleland does not appear to have been cited to the Court of Appeal. This, it is true, is not strictly speaking a case of set off, but one in which execution against, or satisfaction out of, a fund is sought by creditors in priority to the solicitor, who recovered it, but viewed in that light, whilst the principle applied by Lord Cairns is also applicable here, its application is a fortiori.
The appeal must be allowed and Mr. Justice Rose's order of the 8th of May, 1894, must be restored with costs to the appellants both here and in the Court Appeal.
Justice.
Appeal allowed with costs.