TGIF 14 August 2026 – Does A Solicitor’s Lien Attach To A Costs Order?

This week’s TGIF considers Enyo Lawyers Pty Ltd v Island Resorts (Facilities and Equipment) Pty Ltd [2026] QCA 133, where the Queensland Court of Appeal confirmed a solicitor’s lien attaches to costs orders at the time they are made, entitling the solicitor to priority over monies recovered under those orders.

The decision provides guidance on the scope and enforcement of a solicitor's equitable lien, particularly in the context of receivership.

Key takeaways

• A solicitor's equitable lien over a costs order crystallises when the order is made. There is no need for a fund to exist for a court to protect the solicitor’s priority. 
   
• Identifying the relevant property to which the lien attaches is critical. 
   
• In this case, the solicitor’s lien attached to monies recovered under the specific costs orders that the solicitor’s work had produced.

What happened?

Enyo Lawyers Pty Ltd (Enyo) acted on behalf of Couran Cove Resort Community Body Corporate (CBC) in successful litigation against two subsidiary bodies corporate, known as Eco Lodges and Broadwater Villas.

On 11 November 2022, CBC obtained costs orders against both parties. 

CBC never paid Enyo’s fees. In March 2025, Enyo obtained its own judgment against CBC for unpaid costs in the amount of $361,741.01. 

Prior to this, the first and second respondents (entities that provided services to the Couran Cove scheme) obtained a default judgment against CBC for $13,760,052.19 in March 2023. This led to the appointment of a receiver over CBC in October 2024. 

On 1 August 2025, with Enyo's agreement, the receiver applied to extend his appointment to include recovering assets to satisfy the Enyo judgment. Enyo sought an additional order: priority over monies recovered under the 11 November 2022 cost orders, on the basis that it held an equitable lien arising from the fruits of litigation doctrine.  

Trial judgment 

The primary judge (Freeburn J) refused the order sought by Enyo. His Honour found there was "no special fund or asset to which Enyo Lawyers seeks to attach its particular lien". Further, his Honour found Enyo was seeking to engraft its claim onto funds raised by the receiver from time to time as a result of issuing contribution notices. The causal connection between Enyo’s work and the receiver’s efforts was insufficient to entitle Enyo to claim from the fund. 

Appeal judgment 

The Court of Appeal (Boddice JA, Brown JA, and Kelly J) unanimously allowed the appeal. The Court found Enyo was not claiming priority over all monies the receiver might recover from Eco Lodges and Broadwater Villas. Its claim was confined to monies recovered pursuant to the specific costs orders that its work had produced. Once that distinction was correctly drawn, the objections fell away. 

On the substance of the lien, the Court was guided by the legal principles summarised by Campbell J in Firth v Centrelink (2002) 55 NSWLR 451, and considered in Re De Groot [2001] 2 Qd R 359 and Worrell v Power & Power (1993) 46 FCR 214, observing that:

• A solicitor has an equitable right in the fruits of litigation, that being the fund which his or her efforts have recovered.

• The quantum of money for which the solicitor has the equitable right is the amount which is properly owed to the solicitor by the client.

• The solicitor's equitable right exists before a court is asked to intervene. The court's role is to enforce and protect, not create, the right.

• The priority of the solicitor's right does not depend on whether the fund is in court, and is to be determined by application of general principles.

Applying those principles, the Court held the costs orders were an asset of CBC the receiver was bound to recover. Enyo's equitable interest attached to the costs orders from the date they were made. The fact that no fund yet existed did not prevent the Court from making a priority order. 

The Court also confirmed the causal link required is undemanding: it is enough that the solicitor acted for the client in the proceeding that produced the costs order. There is no need to show the solicitor's work directly produced a particular recovery mechanism (here, the receiver's contribution notices). 

Conclusion

This decision raises several important practical points for insolvency practitioners, solicitors, and creditors competing for priority over receivership assets:

• Solicitors' liens pre-date enforcement. A receiver takes assets subject to equitable interests that crystallised before its appointment - potentially years earlier. 

• No fund need exist before a priority order is made. Where the receiver's role extends to recovering on a costs order, a court will protect the solicitor's priority, not only once money has been collected.

• Draft orders precisely. The solicitor was unsuccessful at first instance because of uncertainty over the property to which the lien attached. In relation to costs orders, a solicitor’s lien will likely attach to monies recovered pursuant to the specific costs orders the solicitor’s work has produced.

• The causal threshold is low. The evidentiary threshold in each case will turn on its facts, but a solicitor will at least need to demonstrate that they acted in the proceeding that produced the order.