Atanaskovic Hartnell v Birketu Pty Ltd

The appeal concerned a dispute over legal fees claimed by Atanaskovic Hartnell (the solicitors) from Birketu Pty Ltd (the client). The retainer involved the solicitors investigating a dispute between the client and a third party, which arose from frauds committed by an employee of the solicitors. The central issue was whether the solicitors had obtained the client's fully informed consent to act, given an actual conflict between their personal interests and their fiduciary duty to the client. A further issue was whether the nature of this conflict was such that it precluded reliance on any consent obtained.

The court was required to determine whether the solicitors were entitled to recover fees for work performed under the retainer, and whether they were bound by an undertaking not to charge for certain work. This undertaking was given in a professional capacity, and the court had to consider whether reliance, loss, or consideration was necessary for its enforcement, and whether the court should prevent the solicitors from reneging on it.

The Court of Appeal upheld the primary judge's decision, finding that the solicitors had not obtained fully informed consent from the client to act in circumstances where their personal interests conflicted with their duty. The court reasoned that the nature of the conflict was so significant that it could not be waived by consent. Furthermore, the court found that the solicitors were bound by their undertaking not to charge for specific work, and that this undertaking was enforceable without proof of reliance, loss, or consideration.

Consequently, the appeal was dismissed, and the appellants, Atanaskovic Hartnell, were ordered to pay the respondents’ costs.