Appellant v Respondent

2 ICS issued a summons for taxation of the costs order. A Costs Registrar made an order on that summons taxing ICS' costs ('taxation order'). The taxation order was subsequently set aside by a Judicial Registrar on an application for review by Harrison ('Judicial Registrar order'). On an application for review by ICS, an Associate Judge set aside the Judicial Registrar order and reinstated the taxation order ('Associate Judge order').[1]

3 Harrison has appealed the Associate Judge order under s 17I of the Supreme Court Act 1986 (Vic) ('Act') and rr 63.96-63.103 of the Supreme Court (General Civil Procedure) Rules 2025 (Vic) ('Rules'). An appeal brought pursuant to s 17I of the Act is governed by r 77.06 of the Rules. It is generally necessary for an appellant to show legal, factual or discretionary error to succeed on appeal.[2]

4 Harrison has set out nine grounds in her notice of appeal. However, the central issue raised by the appeal is Harrison's submission that the effect of the December 2020 order was to set aside and replace the costs order. Harrison submitted that because the December 2020 order was vacated there was no operative costs order in favour of ICS that could be the subject of the summons for taxation.

5 For the reasons that follow, I conclude that the appeal by Harrison is without merit and should be dismissed.

6 The dispute between the parties has a lengthy history. ICS commenced the principal litigation against Harrison in the Magistrates' Court of Victoria on 17 May 2017, seeking payment of a debt of $13,073 for construction work it performed for Harrison at a commercial building she owned.

7 On 9 July 2019, after a contested trial, the trial Magistrate found in favour of ICS, gave judgment for $13,073 and interest of $2808, and made the costs order in the following terms:

1. [Harrison] ordered to pay [ICS's] costs on Scale D from 22/08/2017 thereafter on Scale G until 3/07/2019 and on Scale D from 04/07/2019 to date such costs to be taxed by the Costs Court in default of agreement.
2. Liberty reserved to apply in respect of an Offer of Compromise made by [ICS] and dated 24/10/2017.

8 On 24 October 2019, ICS filed an application for an uplift of the costs of the proceeding ('uplift application'). The uplift application was heard on 22 December 2020, in the absence of Harrison. The trial Magistrate dismissed the uplift application and made the December 2020 order which included the following order:

1. That order 2 of the orders made on 9 July 2019 be rectified pursuant to the "slip rule" by substituting for order 2 the following order 2: order [Harrison] pay [ICS] its costs on scale D from 17 May 2017 until 21 August 2017 and on scale G from 22 August 2017 until 3 July 2019 and on scale D from 4 July 2019 until 9 July 2019, such costs to be taxed by the Costs Court in default of agreement.

9 On 25 May 2022, Harrison filed an application for a re-hearing on the ground that she was not present at the hearing when the December 2020 order was made. In the application Harrison also submitted that the costs order should be set aside.[3]

10 On 21 June 2022, a second Magistrate granted Harrison's application to set aside the December 2020 order and remitted the matter for re-hearing by the trial Magistrate ('June 2022 order'). The second Magistrate did not grant the application by Harrison for re-hearing of the costs order because Harrison was present at the hearing when those orders were made.

11 At the remittal hearing on 23 March 2023, the trial Magistrate confirmed dismissal of the uplift application. In the reasons for decision, the trial Magistrate noted he did not have power to revisit the costs order.

12 On 19 October 2021, ICS filed a summons for taxation of its costs in accordance with the costs order. On 3 July 2023, the Costs Registrar made the taxation order which taxed and allowed ICS' costs in the sum of $56,136.55.

13 On 17 July 2023, Harrison filed an application for review of the taxation order. On 4 October 2024, the Judicial Registrar set aside the taxation order and ordered that ICS' summons for taxation be struck out with a right of re-instatement. The Judicial Registrar concluded that the December 2020 order was made in substitution for the costs order which as a result 'became defunct and no longer operative'.

14 On 9 October 2024, ICS filed an application for review of the Judicial Registrar orders. On 8 May 2025, the Associate Judge set aside the Judicial Registrar orders and reinstated the taxation order.

15 The Associate Judge noted the application for review of the Judicial Registrar's decision was made under s 17H(a)(1) of the Act. The Associate Judge concluded the correctness standard was applicable to the question of whether the costs jurisdiction of the Court was enlivened by the costs order, because that was not a decision that tolerated a range of outcomes.

16 The Associate Judge referred to the slip rule power contained in r 36.08 of the Magistrates' Court General Civil Procedure Rules 2020 (Vic) ('Magistrates' Court Rules'), which reads:

(1) The Court constituted by a magistrate or a registrar may at any time correct a clerical mistake in an order or an error arising in an order from any accidental slip or omission.

17 The Associate Judge said, considering the effect of an order made under the slip rule:

[T]here are many authorities considering the effect of the exercise of the slip rule by Courts in various jurisdictions. Those authorities confirm that where an order is made under the slip rule:

its effect is that the 'clerical mistake' or 'error' in the original judgment or order is eradicated so that the original judgment or order is treated as having been always made as corrected.[4]

The implication of this is that the corrected order has effect from the day on which the original order was made containing the error. It does not render the earlier order defunct, or no longer in force. On the contrary, it treats it as having always been made in the corrected form. The eradication that occurs is eradication of the error, not of the order. Accordingly, the 22 December 2020 order corrected the costs order made on 9 July 2019, and that order continued in force as corrected.

18 The Associate Judge then considered the hearing and reasons of the second Magistrate for making the June 2022 orders. The Associate Judge said in respect of the hearing before the second Magistrate:

When questioned by [Harrison], his Honour stated that he did not intend to set aside the 9 July 2019 costs order.

Based on the recording, it is clear that his Honour intended only to set aside the 'slip rule' order, and to have a re-hearing in the presence of [Harrison] at which the issue of whether to make the order which in effect likely increased the costs that would be assessed as payable by [Harrison], and whether it was a valid slip-rule order, would be re-considered. He specifically declined to hear the application for review of the orders that had been made on 9 July 2019, correctly observing that they could only be reviewed on appeal. His Honour also declined to stay the Costs Court assessment proceeding which was already on foot, having been commenced on 19 October 2021, which he described as having 'utility'. That too demonstrates that his Honour had no intention, in setting aside the slip-rule order, to disturb the 9 July 2019 costs order upon which Costs Court proceeding was based.

The only order that was set aside by [the second Magistrate] was the actual order made pursuant to the slip rule on 22 December 2020 to correct the July 2019 order, and when that slip rule order was set aside the corrections were undone, but the original order remained extant.

19 It is unnecessary to set out Harrison's nine grounds of review in detail. Grounds 1, 2, 4, 5 and 6 raise the issue of whether the Associate Judge erred in finding there was a valid and operational order on which the taxation of costs by the Costs Registrar could proceed. Harrison contends by these grounds that the costs order was formally set aside and substituted by the December 2020 order; the June 2022 order set aside the December 2020 order; and as a consequence there was no operative costs order to enliven the jurisdiction of the Costs Court and the Associate Judge therefore erred in determining the application and effect of the slip rule and in reinstating the taxation order.

20 By grounds 3 and 8, Harrison contends she was denied procedural fairness because the Associate Judge did not take into account 'the substantive arguments, submissions, evidentiary material and relevant documents' on which she relied.

21 Under ground 7, Harrison contends that the decision of the Associate Judge was 'so unreasonable and plainly unjust' that it should be inferred there was a failure to exercise the Court's discretion.

22 By ground 9, Harrison contends there was a relevant abuse of process by ICS and its legal representatives.

23 The December 2020 order was contentious, made ex parte and substantively changed the rights and liabilities of the parties in relation to the scale and period of costs allowed. It was not a mere correction pursuant to the slip rule but a new order made in substitution for the costs order. The Associate Judge erred in failing to conclude that the effect of the December 2020 order was to set aside the costs order. The June 2022 order vacated the December 2020 order and thus determined the costs issues between the parties. At the March 2023 hearing, the trial Magistrate refused to revisit the issue of costs of the Magistrates' Court proceeding. As a consequence, there was no operative costs order in the Magistrates' Court proceeding and no jurisdictional basis for taxation of ICS' bill of costs by the Costs Court.

24 The Associate Judge correctly concluded that the effect of a slip rule order was only to eradicate error so that the original order was always treated as having been made in the correct form. This conclusion is supported by the express reference to the December 2020 order being made under the 'slip rule' which the Court was empowered to do under r 36.08(1) of the Magistrates' Court Rules. Rule 36.08(1) of the Magistrates' Court Rules relates to the 'amendment' of orders. This implies that the slip rule empowers the original order to be amended, not that the original order is set aside. It follows that the December 2020 order did not set aside the costs order and that when the December 2020 order was set aside the costs order became operational in its original form. That conclusion is further supported by the transcript of hearings and reasons for decision of the trial Magistrate at the hearing on 22 December 2020 and of the second Magistrate at the hearing on 21 June 2022.

25 The trial Magistrate had power to amend the costs order to correct a clerical mistake or error in the order from any accidental slip or omission.

26 The trial Magistrate clearly expressed the December 2020 order as being a rectification of the costs order 'pursuant to the "slip rule"'. I reject Harrison's submission that use by the trial Magistrate of the words 'substituting for' in the December 2020 order shows that the costs order was 'extinguished'. The costs order was the substantive costs order made by the trial Magistrate. The December 2020 order simply substituted wording to remove ambiguity that potentially arose from the costs order as originally made so that it clearly reflected the intention of the trial Magistrate.

27 A court may have regard to extrinsic material including reasons for judgment[5] and the nature of an application[6] when construing court orders.

28 At the hearing on 12 December 2020, the trial Magistrate said the costs order 'was mis-entered into the court record by the administration staff assisting the court on the day' and as a result was very difficult to understand. The trial Magistrate said 'The first thing I ought to do is rectify that order, under the slip rule'. Having stated the form of the correcting order the trial Magistrate said:

Now that we can look at again just to make sure that it's correct, but that seems to rectify, it would rectify the order, would rectify the order that was made on the day in terms of its entry into the court record.

The trial Magistrate then said that an order would be made in the terms stated to rectify the court record.

29 At the hearing on 22 June 2022, the second Magistrate noted the application being dealt with was based on Harrison's complaint that she was not present and did not participate in the argument about costs on 22 December 2020. The second Magistrate said 'That's the only matter that I'm concerned about, where there's no returning to the earlier order'. The second Magistrate confirmed the application by Harrison did not concern 'the whole setting aside the costs' and was only about what Harrison was unable to participate in at the December 2020 hearing that she did not attend. In giving the reasons for decision the second Magistrate said:

Ms Harrison seeks a number of orders. She seeks in effect the setting aside of not only the order of 9 July where she was present, but the order of 22 December 2020 where she was not present. She says that the court failed to attend to considerations pursuant to the Civil Procedure Act, that there were matters that would reflect upon issues in respect of costs in respect of the behaviour ... in relation to both lawyers and parties. She says that in those circumstances the court should not have contemplated the sorts of orders that were made.

Those matters raise issues as to a legal issue of complaint and dissatisfaction in the making of the order are matters that are not properly countenanced in an application of this sort. This application can only be considered on the basis for the circumstance of Ms Harrison not being present and participating on 22 December. The court cannot make an order in relation to 9 July where there was participation and obviously there is dissatisfaction with the order that was made.

It is evident that the second Magistrate considered that any challenge to the costs order could only be by way of appeal.

The application to set aside, insofar it is an application to set aside, should be granted in respect of that single determination of 22 December 2020 and not for any other period of time. That is, not for 9 July, and not to generate argument about costs that were determined on 9 July.

31 There is no doubt that in making the December 2020 order the trial Magistrate intended to rectify or correct the costs order so that it unambiguously reflected his intention as to costs. Nor is there any doubt that the second Magistrate intended only to set aside the December 2020 order on the grounds that Harrison was not present at that hearing, to leave in place the costs order, and to remit to the trial Magistrate the question of any necessary correction or rectification of that order.

32 In the reasons for decision at the remittal hearing on 17 March 2023, the trial Magistrate noted that the December 2020 order made amendments of a cosmetic nature to the costs order.

33 The trial Magistrate only had limited powers to amend the costs order after it was made. There was power to correct the costs order under the slip rule. The liberty reserved to ICS to apply in respect of an offer of compromise served during the Magistrates' Court proceeding could only have resulted, if successful, in a change to the basis on which costs were assessed. Ultimately the application made by ICS relying on liberty to apply was unsuccessful. The trial Magistrate did not have the power in December 2020 or at any time after the costs order was made to simply vacate the costs order in favour of ICS. Harrison could only achieve that result by way of a successful appeal.

34 The Associate Judge correctly concluded that upon the December 2020 order being set aside, the costs order remained in force in the form that it was originally made.

36 In its written submissions on review to the Associate Judge, ICS did not place specific reliance on r 36.08 of the Magistrates' Court Rules. At the hearing before the Associate Judge there was no reference to the decision in Elyard Corp Pty Ltd v DDB Needham Sydney Pty Ltd ('Elyard').[7] Harrison had no opportunity to address either of these matters at the hearing before the Associate Judge, and was thus denied procedural fairness.

37 The effect of the costs order, December 2020 order and June 2022 order was the basis of the review before the Associate Judge as outlined in ICS' submissions filed and served on Harrison on 22 November 2024. The December 2020 order expressly referred to the orders being made under the 'slip rule'. It follows that analysis of the slip rule would be in contention before the Associate Judge.

38 During the hearing before the Associate Judge, Harrison objected to submissions made by ICS that relied on r 36.08 of the Magistrates' Court Rules. In discussion, the Associate Judge pointed out that reference to r 36.08 simply identified the statutory power being exercised by the trial Magistrate when making the December 2020 order.

39 I accept the submission for ICS. Harrison was on notice at all times of the need to address whether the December 2020 order was made under the slip rule and if so what consequence that had for a continuation of the costs order. The specific reference to r 36.08 of the Magistrates' Court Rules took the matter no further.

40 Reference by the Associate Judge to the decision in Elyard was not central to the outcome of the review. Elyard is authority for the principle that correction of an order made under the slip rule operates from the date of the substantive order. The reasoning of the Associate Judge that a slip rule order does not render the corrected order defunct or no longer in force is not dependent on an acceptance of the correctness and applicability of Elyard. When given the opportunity in the hearing before me, Harrison's argument in relation to Elyard amounted to no more than an assertion that it was not applicable in the circumstances of this case. I conclude there was no material failure by the Associate Judge to accord procedural fairness to Harrison by referencing Elyard in the reasons of the decision.

41 There is no basis for complaints by Harrison that she was not given an opportunity by the Costs Registrar to contest the quantum of costs on taxation and that the Associate Judge failed to take her submissions and the material on which she relied into account. The Costs Registrar recorded the opportunities afforded to Harrison to engage with the taxation in 'other matters' in the taxation order. It is evident from the transcript of the hearing and the reasons that the Associate Judge responded to every argument raised by Harrison on the application for review.

42 The discretion of the Costs Registrar miscarried on the taxation orders. Accordingly, the reinstatement by the Associate Judge of the taxation orders was so unreasonable and plainly unjust that there was a failure to properly exercise the discretion in accordance with the principles enunciated in House v The King ('House').[8]

43 The rule in House is not engaged. There was no basis for the assertion that the taxation order involved the exercise of a discretion by the Costs Registrar that miscarried. The question before the Associate Judge was whether the costs order continued to operate so that the Costs Court had jurisdiction on the taxation before the Costs Registrar. The Associate Judge was correct to conclude that answering that question did not involve an exercise of discretion and that the applicable standard of review was the correctness standard.

44 This proceeding constitutes an abuse of process. ICS has breached the Civil Procedure Act 2010 (Vic) ('CPA') by:

(a) prosecuting a baseless claim;

(b) failing to amend pleadings; and

(c) commencing proceedings in the Costs Court which, due to the June 2022 order, had no jurisdiction.

45 At every stage from the hearing before the second Magistrate onwards Harrison has attempted to re-agitate the merits of the Magistrates' Court proceeding and to raise as a relevant consideration the conduct by ICS and its legal representatives throughout the proceeding. Those matters could only possibly be relevant on an appeal of the substantive orders made in the Magistrates' Court. However, Harrison has not brought such an appeal. The merits of the claim and the conduct by ICS and its legal representatives in the Magistrates' Court proceeding were not in issue on the application for review determined by the Associate Judge and cannot be an issue on the appeal heard by me. There is no merit to this ground of appeal.

46 At the hearing of this appeal Harrison sought to argue that the Costs Registrar failed to consider and apply the principles in Kuek v Devflan Pty Ltd ('Kuek').[9] Harrison submitted that in response to applications she made, ICS should have been required by the Costs Registrar to produce documents evidencing the costs agreement with its legal representatives and the costs actually paid to them in order to determine whether the indemnity principle was breached by the bill of costs on which the summons for taxation relied.

47 The Kuek issue was argued by Harrison at the hearing before the Judicial Registrar. Having found in Harrison's favour by concluding that the costs order was no longer operative, the Judicial Registrar said:

[I]t is not necessary for me to provide a detailed consideration of all the other matters raised by Ms Harrison in her notice of review, suffice to say that, apart from the issues concerning Ms Harrison's principle ground of review on which I have ruled, I was not persuaded that any of the other issues raised have merit and accordingly, they are dismissed.

Harrison did not seek to argue the Kuek issue on the review before the Associate Judge. Further, the issue is not raised by any ground in the notice of appeal from the decision of the Associate Judge. Accordingly, the Kuek issue is not properly before me.

48 Finally, Harrison's reliance on the indemnity principle and the decision in Kuek is misplaced. Harrison did not point to any evidence supporting her assertion that the bill of costs relied on by ICS was quantified at a rate higher than its actual liability to its legal representatives. Unlike in Kuek, there was no evidentiary basis for Harrison's assertion that the indemnity principle was an issue in this case.

49 The costs of the initial trial and the appeal process following taxation are disproportionate to the amounts involved in the Magistrates' Court proceeding. Consequently, the Court must address who bears responsibility for the prolonged litigation and resulting disproportionate costs. ICS and its legal representative have breached the CPA, the Legal Profession Uniform Law Application Act 2014 (Vic) and the Magistrates' Court Act 1989 (Vic) by commencing the proceeding without a proper basis and for an improper purpose and prolonging the proceeding. ICS chose to take the more expensive step of reviewing the Judicial Registrar orders rather than seeking to reinstate the summons for taxation in the Costs Court, thereby multiplying costs and procedural complexity. ICS and its legal representative's conduct in these proceedings erodes the public confidence in the judicial system and brings the administration of justice into disrepute. In the circumstances no order for costs should be made against Harrison in respect of this appeal.

50 As a general matter of practice in civil proceedings, costs follow the event.

52 ICS has been wholly successful on this appeal. The usual order is that costs follow the event.

53 Reliance by Harrison on conduct by ICS and its legal representatives in the Magistrates' Court proceeding is misplaced. It was for Harrison to raise those matters at an appropriate time before the trial Magistrate. To the extent that she did so, the costs orders reflect her lack of success. Harrison has not sought to appeal any order made in the Magistrates' Court.

54 While the Judicial Registrar did not expressly say so, the reasons for decision and orders made may have left open to ICS the possibility of returning to the Magistrates' Court in a further attempt to have appropriate costs orders made. It is not clear, having regard to the most recent hearing before the trial Magistrate in March 2023 that such an application by ICS would have been successful. Even if that possibility existed, there was nothing improper about ICS exercising its right to review the decision of the Judicial Registrar. Taking that step was likely the most efficient way forward.

55 The application for review was successful and Harrison's appeal has failed. Costs should be awarded to ICS on the appeal.

56 The appeal by Harrison has no merit and is dismissed.

57 I will order that Harrison pay ICS' costs of the appeal.

[1] Integrated Construction Services Pty Ltd v Harrison [2025] VSC 239.

[2] AJH Lawyers v Mathieson Nominees Pty Ltd [2015] VSC 37 [29], [118].

[3] The application was made pursuant to s 110 of the Magistrates' Court Act 1989 (Vic) and r 46.08 of the Magistrates' Court General Civil Procedure Rules 2020 (Vic).

[4] Elyard Corp Pty Ltd v DDB Needham Sydney Pty Ltd [1995] FCA 943; (1995) 133 ALR 206, 219; VFS Group Pty Ltd v BM2008 Pty Ltd (in liq); Perth Freight Lines Pty Ltd v BM2008 Pty Ltd (in liq) [2010] ACSR 240, 245-6 [25].

[5] Slea Pty Ltd v Connective Services Pty Ltd [2018] VSCA 180; (2018) 341 FLR 208, 214-5, [30]-[31].

[6] Guardianship and Administration Tribunal (QLD) v Perpetual Trustees Queensland Limited [2008] QSC 49; (2008) 2 Qd R 323, 331 [36].

[7] [1995] FCA 943; (1995) 61 FCR 385.

[9] [2011] VSCA 25; (2011) 31 VR 264.