Applicant v Respondent

1. I accept the applicant's submission that the applicable standard of review is the correctness standard. The decision made by the learned judicial registrar demanded a unique outcome, that is, a finding as to whether or not the costs jurisdiction of the Court was enlivened by the orders of Magistrate Braun made on 9 July 2019. Whether the jurisdiction was enlivened was not a decision that tolerated a range of outcomes.
2. The applicant bears the onus of demonstrating error in the Reasons of the learned judicial registrar.

1. This application for review follows a now quite prolonged history of disputation between these parties. It is difficult to comprehend that the amounts involved in the initial proceedings could have justified, or remain in any way proportionate to, the likely costs of such prolonged litigation.
2. The applicant commenced the principal litigation against the respondent in the Magistrates' Court on 17 May 2017. The claim concerned a debt owed by the respondent to the applicant for building works at a commercial building she owned. The hearing of the matter spanned nine sitting days. The learned Magistrate found in favour of the applicant and, on 9 July 2019, made orders for damages and costs as follows:
   1. Judgement for [the applicant] against [the respondent] ordered to pay $13,073.00 and interest $2,808.01.
   2. [The respondent] ordered to pay [the applicant'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.
   3. Liberty reserved to apply in respect of an offer of Compromise made by [the applicant] and dated 24/10/2017.
3. On 24 October 2019, the applicant exercised its liberty to apply and issued an application for an 'uplift' of the costs of the proceeding pursuant to r 26.08(2)(b) of the Magistrates' Court General Civil Procedure Rules 2010 ('MC Rules') relying on its offer of compromise made on 24 October 2017.
4. The 'uplift' application was heard in the respondent's absence on 22 December 2020. For reasons which are not relevant here, the learned Magistrate dismissed the application for an uplift of the costs. However, his Honour proceeded to 'rectify' the July 2019 costs order which contained errors. His Honour ordered that:
   1. 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 the [respondent] pay [the applicant] 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.
   2. The application dated 24 October 2019 be dismissed.
5. The purpose and effect of the 'rectification' was to correct, by the making of a new order using the slip rule powers, the terms of the costs order that had been made on 9 July 2019, including to replace the start date for the costs order with 17 May 2017, being the commencement date of the proceeding. The slip rule amendment also resolved other ambiguities to the start and end dates in which different scales of costs had been ordered to apply. There was no other amendment to that order.
6. On 25 May 2022, the respondent filed an application for a re-hearing of the 22 December 2020 hearing, as well as for a review of the July 2019 orders, including the amended costs order. The Magistrates' Court upheld the respondent's application for a re-hearing in relation to the slip rule order made on 22 December 2020 because she was not present at the hearing. In doing so, the learned Magistrate set aside the orders made on 22 December 2020 in her absence, remitting the matter to Magistrate Braun for redetermination. The learned Magistrate dismissed the respondent's application for a re-hearing in relation to the 9 July 2019 orders on the basis that she was present, and so could only obtain a review of those orders by way of appeal.
7. On 23 March 2023, the proceeding was re-listed for hearing before Magistrate Braun on the remittal. Magistrate Braun did not make a new slip rule order, having determined that his powers were spent.
8. On 19 October 2021, the applicant had filed a summons in the Costs Court for taxation of its costs pursuant to the 9 July 2019 costs order that had been made by Magistrate Braun. By order of the Costs Registrar dated 3 July 2023, the applicant's party/party costs were taxed and allowed in the sum of $54,772.95.
9. On 17 July 2023, the respondent filed a notice of application for review pursuant to s 17H(1) of the Act and r 63.91 of the Rules in respect of the Costs Registrar's order.
10. The learned judicial registrar heard the respondent's application on 12 February 2024 and on 29 May 2024, after which the parties filed further material. The learned judicial registrar delivered his Reasons on 25 September 2024 and made orders (subsequently amended by the slip rule) with effect from 4 October 2024, setting aside the orders of the Costs Registrar made on 3 July 2023 and providing that the summons for taxation be struck out with a right of re-instatement.
11. The applicant then made this application, seeking review of the learned judicial registrar's orders.

1. The applicant's grounds of review are that the learned judicial registrar erred in holding that:

(a) the costs order in order 2 of the 9 July 2019 orders was 'superseded by order 1 of the December 2020 order and became defunct';[1] and

(b) the summons for taxation issued by the applicant did not enliven the jurisdiction of the Costs Court.

(a) first, the effect of the 'slip rule' order made in December 2020 on the 9 July 2019 order; and

(b) second, the effect of the setting aside of the 'slip rule' order made on 22 December 2020 in June 2022.

1. For the Magistrates' Court, the slip rule power is contained in r 36.08 of the MC Rules, which states:

(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.

This rule is substantially the same as the statement of the 'slip rule' as it appears in the Rules of this Court, and in other jurisdictions.

1. In his Reasons, the learned judicial registrar expressed his view that the 22 December 2020 order was 'a new order' replacing the order made on 9 July 2019,[2] a conclusion for which he found support in the use of the word 'substituting' in the terms of that order. He reasoned that the effect of the 22 December 2020 order was that 'order 2 of the July 2019 order became defunct.'[3] That the learned judicial registrar considered the effect was that order 2 as made on 9 July 2019 ceased to exist, remain operative[4] or have any effect can also be discerned from his description of what did not happen to order 1 of the July 2019 orders, namely:

Order 1 of the July 2019 order, granting ICS damages and interest, was not considered or altered by the learned Magistrate in the December 2020 order and remains in force.[5]

The learned judicial registrar repeated his conclusion that the order made on 9 July 2019 was defunct later in the Reasons,[6] including describing it as having been 'superseded' as follows:

Order 2 of the July 2019 order granting costs to [the applicant] was superseded by Order 1 of the December 2020 order and became defunct.[7]

1. The applicant submits, in my view correctly, that in so far as the learned judicial registrar found that the 'slip rule' order had irremediably terminated the 9 July 2019 order, that conclusion is in error. Although I was not directed to any authority by the applicant, there 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.[8]

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.

What is the effect of the setting aside of the 'slip rule' order?

1. The applicant submits, again in my view correctly, that the effect of the setting aside of the 'slip rule' order by Magistrate Goldberg in June 2022 was to reverse the amendments that had been made to the 9 July 2019 order on 22 December 2020 and to restore it to its uncorrected form, in which it now remains.
2. The only order that was set aside by Magistrate Goldberg was the actual slip rule order, that is, the order that was made on 22 December 2020 to make amendments to correct an error in the form of expression of the 9 July 2019 order. I have reviewed the audio recording of the hearing before Magistrate Goldberg,[9] in which he explains his reasons for setting aside the slip rule order. In effect, he says that the order was made in the absence of the respondent, who should have been able to make submissions as to whether there had been a slip or not, and on that basis, he granted a re-hearing on that issue.[10] When questioned by the respondent, his Honour stated that he did not intend to set aside the 9 July 2019 costs order.
3. 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 the respondent at which the issue of whether to make the order which in effect likely increased the costs that would be assessed as payable by the respondent, 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.
4. The difficulty that ensued was that when the matter was re-heard on the remittal, counsel for the applicant who had not been present at the hearing before Magistrate Goldberg could not explain the basis on which the order had been set aside. Magistrate Braun, on hearing the remittal, did not have before him a transcript. It is in the ensuing search for answers that the exchange recorded at paragraphs 38 to 39 of the Reasons, and in the transcript annexed, occurred. The audio recording reveals that the following exchange occurred:

His Honour: So, now you have no order for costs.

Counsel: Well, no we don't have ... ... the initial order that your Honour made on the 9th of July 2019 still remains. Magistrate Goldberg only set aside the first order of the first order that you made on the 22nd of December 2020.

...

Counsel So, as I understand it Your Honour Magistrate Goldberg set aside the amended order and the initial order that you made that Your Honour made on the 9th of the seventh 2019 remains.

...

His Honour: How can I revisit the original order? Am I not to use the Latin expression which is still in current use functus officio? To spell that out a little further does it not mean that that order remains untouchable by anybody other than a Court on appeal .... ... from me.

Counsel: Your Honour, at the hearing Magistrate Goldberg made it clear that the only relevant application that he would entertain and deal with was the application by the defendant to set aside the December 2020 slip rule order.

...

His Honour: If you're not prepared to appeal it, it will in fact have the effect that we have now identified of leaving my order of the 9th of July to be the only order which means you lose some of the costs that you would've got, if in fact His Honour had not disturbed my order. That order still remains and I don't see how I can revisit it.

...

His Honour: I made an order under the slip rule clarifying the other orders at the same time as including a further period of time for which I was prepared to grant costs.

Counsel: Correct, Your Honour.

His Honour: That was the order made. That was the order that I made on the 22nd of December.

Counsel: Yes, correct Your Honour.

His Honour: .. 2020 . Mr Goldberg, His Honour has set that aside.

Counsel: Yes, he has and that's why we are here today.

His Honour: And he...... And he has remitted to me my original order, but I can't see how I can deal with it on Ms Harrison's application. Liberty was not reserved to her by that order. It was reserved to you and you have sought successfully that.....that liberty be applied, it was and Mr Goldberg, His Honour has now disturbed my orders made as a result.

Counsel: Yes

His Honour: With the result that as I keep saying, the first order remains in place and I am functus officio unless you make an application pursuant to that order and then I might still find myself unable to deal with it because I have already dealt with it. In other words, you've made your application, it was successful. It was overturned by His Honour Magistrate Goldberg for reasons that you can't tell me and then the matter becomes finalized. That is where the Court becomes functus officio and can't further hear the matter. So, the short answer Mr Doukas that we come to, is, how can I entertain any application by Ms Harrison today? Which is the only application before the Court today. I will stand the matter down so you can consider your position.

1. The learned judicial registrar described the assertions of Counsel as made in the hearing and set out above to the effect that the 9 July 2019 order remained in place to be 'an erroneous assertion that derailed what would otherwise have been the clear function of the Magistrate pursuant to Magistrate Goldberg's order...'[11] There was clearly confusion in that hearing as to what order was intended to be remitted - Magistrate Braun appears to be under the impression that the remitted order was the July 2019 order, whilst Counsel was endeavouring to explain, without the benefit of the transcript, that it was the slip rule order. There was additional confusion because the application was seen as one being made by the respondent.
2. His Honour Magistrate Bruan concluded he was no longer empowered to consider the July 2019 order, and so dismissed the matter. Whether that was an erroneous conclusion or not, the consequence of not making a new slip rule order on that day was that the July 2019 costs order remained in effect, albeit in an uncorrected form. The only order that was set aside by Magistrate Goldberg 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.
3. For the above reasons, I consider that the learned judicial registrar made an error in concluding that the 9 July 2019 order had been set aside such that the Costs Registrar erred in taxing the costs claimed pursuant to that order.

1. I will order that the orders of the learned judicial registrar made on 4 October 2024 (as amended under the 'slip rule' on 7 October 2024) be set aside, and in lieu of those orders, the following orders be made:

(a) Reinstate Order 1 of the orders of the Costs Registrar dated 3 July 2023; and

(b) The respondent pay the applicant's costs of the review before the learned judicial registrar.

[8] 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].

[9] Each audio recording of the various Magistrates' Court hearings are before the Cost Court, having been filed and served in this proceeding.