Birketu Pty Ltd v Atanaskovic

The High Court of Australia considered an appeal concerning costs awarded to an unincorporated law firm, Atanaskovic Hartnell, against Birketu Pty Ltd. The dispute centred on whether the law firm was entitled to recover costs for legal work performed by its employed solicitors, as opposed to the partners of the firm.

The primary legal issue before the High Court was whether an order for costs in favour of an unincorporated law firm permits that firm to obtain recompense for legal work undertaken by its employed solicitors. This question arose in the context of the court's previous decision in *Bell Lawyers Pty Ltd v Pentelow*, which abolished the "Chorley exception" that allowed lawyers acting as self-represented litigants to recover costs for their own time.

The High Court, by majority, determined that an unincorporated law firm cannot recover costs for the work of its employed solicitors. The Court reasoned that allowing such recovery would, in substance, resurrect the abolished Chorley exception and undermine the principle of equality for litigants established in *Bell Lawyers*. The Court found that the labour and skill of employee solicitors are relevantly the labour and skill of the firm itself, and recovering their salaries would amount to the firm recovering its own time and effort, placing it in a privileged position compared to other self-represented litigants. The Court also considered and overruled the decision of the Victorian Court of Appeal in *United Petroleum*, which had taken a different view on the interpretation of "costs" and "remuneration".

The appeal was dismissed with costs.