Can A Solicitor Claim A Lien Over A Passport?
In Council of the Law Society of NSW v Xu [2009] NSWADT 67 (30 March 2009) the NSW Administrative Tribunal found a solicitor guilty of misconduct for refusing to hand over a client’s passport. The Tribunal found that an Australian passport is the property of the Commonwealth: Section 6A of the Passports Act 1938 (Cth). It generally found that a passport ordinarily remains the property of the issuing country’s government.
However on appeal to the NSW Supreme Court of Appeal, Tobias JA, Basten JA and Handley AJA each found that a solicitor could claim a lien over a passport in Xu v Council of the Law Society of NSW [2009] NSWCA 430 (23 December 2009).
Basten JA gave a detailed analysis of the issue as follows:
Lien over passport
7 The circumstances in relation to the third complaint are set out by Handley AJA. As his Honour has noted, the retention of the passport after the solicitor’s instructions were withdrawn did not in fact cause his former client to remain in detention for longer than she did. That factual conclusion does not, however, determine the question of principle, which is whether the solicitor could retain a passport, properly received by him in the course of his professional duties, to secure payment of his fees: Re Wright; Ex parte Clout [1984] FCA 38; (1984) 1 FCR 51 at 53 (Beaumont J). In the present case, the solicitor obtained the passport in order to be able to surrender it to the court if that were (as he not unreasonably anticipated) a condition of bail. That immediate and legitimate purpose for which the solicitor held the passport came to an end when his instructions were terminated without bail having been granted on the anticipated condition of surrender of the passport, or at all. His continued right to retain the passport depended upon his right to assert a lien to secure his costs in the matter in the course of which he received the passport, and subject to any order of the Court: Legal Profession Act, s 728.
8 Before the Tribunal, the matter appears to have been debated and determined on the basis of the proper construction of s 9A(2) of the Passports Act 1938 (Cth) (since repealed). The Tribunal stated at [71]:
“We are satisfied that the passport was not a document that was created for or otherwise came into existence for the purposes of Ms Ning’s criminal matter, and that by operation of Commonwealth Legislation it could not properly be the subject of a solicitor’s lien. We are satisfied to the required standard that the Respondent’s assertion of a lien over the passport was improper in the circumstances.”
9 The Tribunal further found that the conduct was “a consistent failure” to maintain a reasonable standard of competence and diligence, apparently because the passport was held for some 13 days after the client withdrew her instructions and because for most of that period he had been “expressly informed of the provisions of Commonwealth Legislation”, that being a reference to the statement in a letter from the client’s new solicitors.
10 The relevant provisions of the Passports Act were in the following terms:
“6A Australian Passports to remain property of Commonwealth
An Australian passport remains always the property of the Commonwealth.
…
9A Offences relating to improper use or possession of passports etc
(1) A person who:
…
(b) in connection with travel or identification, uses an Australian passport that was issued to another person;
(c) being a person to whom an Australian passport has been issued, permits another person to use that passport in connection with travel or identification;
(d) has in his or her possession or under his or her control an Australian passport that was not issued to him or her;
…
is guilty of an offence ….
(2) Paragraphs (1)(a) to (f) (inclusive) do not apply if the person has a reasonable excuse.”
11 In its reasons, the Tribunal asserted that the solicitor had “conceded that a passport document cannot be the subject of a lien, as opposed to the Commonwealth’s interest or title in the document”: at [60]. This was presumably a finding that the solicitor could not assert a lien against a claim by the Commonwealth. Having accepted that the solicitor was asserting a lien over the passport, the Tribunal concluded that he was doing so “improperly”: at [62].
12 Reference to the passport being the property of the Commonwealth tends to distract attention from the real issues in the case. As explained in Yanner v Eaton [1999] HCA 53, 69; [1999] HCA 53; 201 CLR 351, in relation to a description of fauna as the property of the Crown, in s 7(1) of the Fauna Conservation Act 1974 (Qld), at [17], Gleeson CJ, Gaudron, Kirby and Hayne JJ stated:
“The word ‘property’ is often used to refer to something that belongs to another. But in the Fauna Act, as elsewhere in the law, ‘property’ does not refer to a thing; it is a description of a legal relationship with a thing. It refers to a degree of power that is recognised in law as power permissibly exercised over the thing. The concept of ‘property’ may be elusive. Usually it is treated as a ‘bundle of rights’.”
13 A similar analysis is to be found in the judgment of Gummow J at [85] ff. Further, the common law principle that the owner of land may have property in wild animals killed on his or her land was explained by Lord Westbury LC in Blades v Higgs [1865] EngR 593; (1865) 11 HLC 621; 11 ER 1474 at 1478, in the following terms: “I apprehend that the word ‘property’ can mean no more than the exclusive right to catch, kill and appropriate such animals which is sometimes called by the law a reduction of them into possession”. See also the discussion in Walden v Hensler [1987] HCA 54; 163 CLR 561 at 566 (Brennan J). In other circumstances, the conferral of property in the Crown may say nothing about possession or other rights, but may constitute a basis upon which the owner of the property can claim royalties for its exploitation.
14 In relation to the Passports Act, the attribution of “property” in the passport to the Commonwealth should properly be seen as the provision of a basis upon which the Commonwealth can exercise its statutory powers to control the use and misuse of documents issued by it to holders. For example, as between the Commonwealth and the person to whom the passport is issued, the rights of the Commonwealth to recover the passport may depend upon relevant statutory provisions and the exercise of powers conferred by statute in accordance with administrative law principles. In this sense, the Commonwealth has property in a passport. However, unless and until it exercises its powers the holder to whom the passport is issued also has “property” in the passport. The client of the solicitor, as the holder, has an immediate right to possession of the passport which would bring it within the category of her property which might be attached by a lien.
15 A consideration of s 6A does not advance the matter further in the present case. The same may be said in relation to the offences created by s 9A. It was not disputed that the solicitor committed no offence by being in possession of his client’s passport with her consent. It was also assumed, without consideration of the legal basis for the assumption, that a State court would have authority to require the surrender of a passport as a condition of bail: Bail Act 1978 (NSW), s 36(2)(i) and s 37A(1). In effect, these matters were accepted as examples of a “reasonable excuse” for the purposes of s 9A(2). The assumption reveals the circularity of the inquiry: whether a person has a reasonable excuse will depend upon whether the circumstances and principles of law warrant the retention of the passport. The true question must therefore be whether, under the general law or the law governing solicitors’ liens specifically, a solicitor is warranted in holding a client’s passport as security for payment of his or her fees.
16 It does not appear to have been in dispute before the Tribunal that a solicitor’s lien could extend to any property of a client received by the solicitor in the course of his or her professional employment, so long as it was the property of the client. Despite submissions to the contrary, the Tribunal accepted the proposition that this principle was not satisfied because the passport was not the “property” of the client, but of the Commonwealth.
17 In its submissions, the Law Society referred the Tribunal to a decision of the New Zealand High Court dealing with a claim of discrimination against a firm of solicitors who had retained the Indian passport of a client pursuant to a lien for payment of fees due to them: Vallant Hooker & Partners v Proceedings Commissioner [2001] 2 NZLR 357 (Laurenson J). Although the remarks appear to have been obiter and not the subject of reasoned submissions, the Court indicated a view that a solicitor could not assert a lien over the passport which, in accordance with a provision equivalent to s 6A of the Commonwealth Act, stated that the passport was “the property” of the government: at [29]-[31] and at [82]. Reference was also made in that case to aspects of the Passports Act 1992 (NZ), s 33, which went somewhat further than s 6A of the Commonwealth Act in prohibiting use of the passport as a security, pledge or deposit. It is not clear how those provisions might have affected the issue in the present case, nor is it necessary to pursue the matter. For the reasons set out above, the dicta of the New Zealand High Court are not persuasive.
18 On the basis on which the case was argued before the Tribunal, the charge should have been dismissed and the appeal should therefore be upheld. However, some caution should be noted in respect of the underlying principle. A passport is not necessarily to be treated as equivalent to any other document or property of the client for the purposes of a solicitor’s lien. Rather, it is a document issued by a central government to a citizen to facilitate travel outside the country of issue: Rubenstein K, Australian Citizenship Laws in Context (Lawbook Co, 2002) p 242-243; R v Brailsford [1905] 2 KB 730 at 745 (Lord Alverstone CJ). It operates to facilitate the exercise of the fundamental right enjoyed by a person under the International Covenant on Civil and Political Rights (1966) to be “free to leave any country including his own”: Article 12, par 2 and see Human Rights Committee, General Comment 27, UN Doc CCPR/C/21/Rev.1/Add.9 (1999). That right may be subject to restrictions identified in Article 12, par 3, which will form the basis of legitimate legal controls under domestic law, in circumstances where the Covenant applies. Although the Covenant has not been enacted as part of the domestic law of Australia, it is a Schedule to the Australian Human Rights Commission Act 1986 (Cth) and contraventions of the Covenant may engage the investigative powers conferred on the Australian Human Rights Commission under that Act and the procedures under the Optional Protocol to the Convention. It may be expected, absent any indication to the contrary, that the general law of Australia will conform to such principles especially in an area of direct relevance to transnational activity: cf Mabo v Queensland (No 2) [1992] HCA 23; 175 CLR 1 at 41-42 (Brennan J).
19 The circumstances of the present case did not directly raise any question as to restraints on freedom of travel: see generally, Robert S Lancy, “The Evolution of Australian Passport Law” (1982) 13 Melb UL Rev 428 at 443. In Vallant Hooker & Partners reference was made to the right to freedom of movement provided by s 18 of the New Zealand Bill of Rights Act 1990, but it had only peripheral relevance to the central issue which was a claim of racial discrimination. Consideration of the relevant principles may need to include the statutory circumstances in which the Commonwealth would not issue a passport. They included the existence of a reason to believe that the applicant owes money to the Commonwealth in respect of certain expenses or loans: Passports Act 1938, s 7C. Further, there is express provision in the Bankruptcy Act 1966 (Cth) requiring a bankrupt to deliver his or her passport to a trustee in bankruptcy: s 77(1)(a)(ii). Powers are conferred on the Family Court of Australia to make orders for delivery up of a passport where there is a fear that a child may be removed from the country: Family Law Act 1975 (Cth), s 67ZD.
20 These provisions indicate that there are circumstances where controls may be exercised over a passport in order to prevent a person leaving the country. Whether a private individual such as a solicitor, absent statutory authority, has a similar power of control of the passport of another is a large question. The place of a supposed general law lien of a solicitor to retain a client’s passport would need to be considered in the context of such provisions of Commonwealth laws, valid State laws and relevant statutory provisions governing the conduct of legal practitioners: cf Dal Pont, Lawyers’ Professional Responsibility (3rd ed, Lawbook Co, 2006) at [16.80]. These questions need not be pursued for present purposes, but nor should it be assumed that the solicitor’s lien necessarily extends to permit retention of a passport, obtained from a client for a specific purpose.
Handley AJA (with Tobias JA concurring) came to the same conclusion, finding:
52 The fact that the general property in an Australian passport always remained with the Commonwealth did not prevent the grantee of the passport having a special property in it. Possession of a chattel is a good title against anyone who does not have a better title: Gatward v Alley (1940) 40 SR (NSW) 174, 179. The grantee of an Australian passport in possession of it is a bailee at will of the Commonwealth with a good title against everyone except the Commonwealth.
53 The grantee of an Australian passport, as a bailee at will can create a sub-bailment in favour of others such as his or her travel agent, hotel, airline, solicitor, trustee in bankruptcy, or a Court. The sub-bailment would not be binding on the Commonwealth, but if it was created for reward the sub-bailee, subject to the terms of the bailment, could retain possession of the passport against the sub-bailor.
54 The solicitor having obtained possession of the passport for a legitimate forensic purpose, was entitled to retain possession against his client, and exercise a lien over it until his proper costs and disbursements were paid or payment thereof was secured. In my judgment he had a reasonable excuse for having and retaining possession of the passport for the purposes of s.9A(2) of the Passports Act 1938.
55 A bailee with a right to retain possession against his bailor is entitled for the protection of the criminal law: Paton Bailment in the Common Law 1952 pp 444-6. He is also entitled to vindicate his right to possession against the bailor in an action for trespass, conversion or detinue: City Motors (1933) Pty Ltd v Southern Aerial Super Service Pty Ltd [1961] HCA 53; (1961) 106 CLR 477 at 483-4, 490-1.
56 The solicitor could not have asserted his lien against the Commonwealth which had not authorised the client to create it: Dinmore Meatworks Pty Ltd v Kerr [1962] HCA 47; (1962) 108 CLR 628, 632; but he was entitled to assert it against the client.
57 Since writing the above I have had the benefit of reading the reasons for judgment of Basten JA in draft. I only wish to add that although a solicitor may have a lien on his client’s passport the Court may decline to enforce it if its exercise would deprive an impecunious client of his liberty. In such a case the Court might, for example, order the solicitor to deliver the passport to the Court that would be considering the clients’ bail application subject to his lien.
Of course for migration agents, the Code of Conduct says this:
10.3 Australian passports, and most foreign passports, are the property of the issuing Government and must not be withheld.
This means that solicitors who are also acting for clients as a migration agent should not claim a lien over their client’s passport despite the decision of Xu because to do so would be a breach of the Code of Conduct.