Guneser v Aitken Partners Pty Ltd

Guneser v Aitken Partners Pty Ltd involved a dispute over the recovery of costs by an incorporated legal practice for services rendered by its employee solicitors and other staff. The case arose out of a litigation matter where the incorporated legal practice, Aitken Partners Pty Ltd, acted for itself. The primary issue before the court was whether the incorporated legal practice was entitled to a costs order for the work done by its employee solicitors and other staff following the abolition of the Chorley exception by the High Court, which had been part of the common law of Australia. The secondary issue was whether these costs were recoverable under the 'well-established understanding' in relation to in-house lawyers employed by governments and other entities.

The court examined the principles established in Bell Lawyers Pty Ltd v Pentelow and United Petroleum Australia Pty Ltd v Herbert Smith Freehills, both of which dealt with the recovery of costs by incorporated legal practices. The court concluded that while the Chorley exception was no longer applicable, the well-established understanding did not extend to allowing incorporated legal practices to recover costs for services rendered by their employees. The court reasoned that the exception had been abolished to prevent an unfair advantage over unincorporated legal practitioners, and extending the understanding to incorporated legal practices would undermine this rationale. Therefore, the court upheld the decision of the Costs Judge, denying Aitken Partners Pty Ltd its professional costs and only awarding reasonable disbursement costs. This decision reinforces the need for clarity in the costs recovery process and the importance of maintaining a level playing field between different forms of legal practice.