| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
S CI 2018 01010
| GENCO GUNESER | Appellant/Cross Respondent |
| v | |
| AITKEN PARTNERS PTY LTD (ACN 128 769 602) (trading as ‘Aitken Partners’) | Respondent/Cross Appellant |
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JUDGE: | Macaulay J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 18 February 2020 |
DATE OF JUDGMENT: | 5 June 2020 |
CASE MAY BE CITED AS: | Guneser v Aitken Partners (Cross appeal on costs) |
MEDIUM NEUTRAL CITATION: | [2020] VSC 329 |
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COSTS – Incorporated legal practice acting for itself in proceeding – Whether entitled to costs order in respect of work done by employee solicitors and other staff after High Court abolished the Chorley exception as part of the common law of Australia – Whether recoverable under the ‘well-established understanding’ in relation to in-house lawyers employed by governments and others – Appeal from a Costs Judge who denied the cross-appellant, an incorporated legal practice, its professional costs for acting for itself in litigation and only awarded reasonable disbursement costs – Costs Judge’s decision confirmed – Bell Lawyers Pty Ltd v Pentelow (2019) 93 ALJR 1007; [2019] HCA 29 - United Petroleum Australia Pty Ltd v Herbert Smith Freehills [2020] VSCA 15.
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APPEARANCES: | Counsel | Solicitors |
| For the Cross Appellant | Ms C Harris QC with Ms L Dawson | Aitken Partners Pty Ltd |
| For the Cross Respondent | Appeared for himself |
TABLE OF CONTENTS
Introduction........................................................................................................................................ 1
Background......................................................................................................................................... 2
Bell Lawyers decision........................................................................................................................ 4
United Petroleum decision................................................................................................................ 8
Costs Judge’s reasons for decision................................................................................................ 12
Principles of law on appeal............................................................................................................ 13
Did the Costs Judge make an error?............................................................................................. 14
Should some other decision have been made, and if so what?.............................................. 17
Does an incorporated practice fit within the general exclusionary rule?........................... 17
Does Aitken Partners’ claim fall within the ‘well-established understanding’?............... 19
Conclusion......................................................................................................................................... 22
HIS HONOUR:
Introduction
In Bell Lawyers Pty Ltd v Pentelow[1] (Bell Lawyers) the High Court decided that what was known as the Chorley exception to the rule that self-represented litigants could not recover the value of their time spent in litigation did not form part of the common law of Australia. The effect of that decision was that neither barristers nor solicitors who successfully acted for themselves in litigation could recover their professional costs for doing so.
In United Petroleum Australia Pty Ltd v Herbert Smith Freehills[2] (United Petroleum), the Victorian Court of Appeal, applying Bell Lawyers, held that a law firm (trading as a partnership) was precluded from recovering professional costs for the work of its employee solicitors after it had acted for itself in litigation. The firm conceded that it could not recover any professional costs for the work of its partners.
Both decisions acknowledged that the abolition of the Chorley exception did not affect the continued entitlement of in-house lawyers employed by government departments or corporations…
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- Case
- [2020] VSC 329
- Decision Date
CaseChat Overview and Summary
The legal issue before the court was whether an incorporated legal practice, acting for itself in litigation, could recover professional costs from the opposing party. The cross-appellant contended that the abolition of the Chorley exception by the High Court did not preclude it from recovering such costs, as there was a well-established understanding that in-house lawyers employed by governments and others could recover costs. The respondent argued that the cross-appellant's status as an incorporated legal practice meant that it was not entitled to professional costs, as it was not analogous to in-house lawyers employed by governments or other entities.
The court considered the decision of the High Court in Bell Lawyers Pty Ltd v Pentelow, which abolished the Chorley exception, and the subsequent decision of the Victorian Court of Appeal in United Petroleum Australia Pty Ltd v Herbert Smith Freehills, which applied the principle in Bell Lawyers to a similar situation. The court held that the abolition of the Chorley exception did not automatically entitle an incorporated legal practice to recover professional costs. Instead, the court found that the well-established understanding regarding in-house lawyers employed by governments and others did not extend to incorporated legal practices acting for themselves in litigation. The court confirmed the Costs Judge's decision, denying the cross-appellant's application for professional costs.
The court further noted that, while the cross-appellant might have been entitled to recover costs if it had acted as an agent for a client, it was not doing so in this case. Instead, the cross-appellant was acting for itself, and as such, it was not entitled to professional costs. The court found that the cross-appellant was only entitled to reasonable disbursement costs, as awarded by the Costs Judge. The cross-appellant's appeal was dismissed, and the decision of the Costs Judge was upheld.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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