Cost Law Commentary

The New County Court Scale, cost orders and the Slip Rule

It's an appropriate time to consider the application of the slip rule to vary cost orders. This is in light of the new County Court scale which includes a scale of counsels fees and by implication, provides that the Cost Court has no discretion in relation to counsels fees where costs are payable pursuant to an order of the court. It's long been the case in the County Court, that the Costs Court had no discretion in relation to counsels fees where they were payable pursuant to an order of the trial judge. The new scale extends this to any order of the court, whether final or interlocutory, and will include circumstances where orders are made by consent.

The principle Victorian case in relation to the application of the slip rule on cost orders is Sands & McDougall (Wholesale) Pty Ltd (in liq) & Anor v Commissioner of Taxation.

In considering the applicaiton of the rule in circumstances where a party was arguing the application of order 26 entitled it to solicitor client costs, Brooking JA stated:

"This is the impossibility of saying, with the necessary degree of conviction, that an award of solicitor and client costs would have been made had the matter been drawn to the attention of the Court of Appeal."

The bar is high, and it will not be enough to simply argue that it was an oversight not to seek certification of counsel's fees.  

The particular question of variation of a cost order to accommodate counsels fees, where there was a consent order, was considered in English case of Somerset v Ley [1964] 1 WLR 640, which was cited at length in M v. W (No. 2) [2009] QDC 344.

The plaintiffs were executors of an estate.  In proceedings involving the estate, consent orders were made that the plaintiffs’ costs should be taxed and paid out of the residuary estate of the testator, but there was no express provision for the fees of senior counsel who had been engaged on behalf o the plaintiffs. The taxing master held that the relevant rules required the order to expressly allow for senior counsel's fees, otherwise they could not be allowed on taxation.  The plaintiffs applied to the court, asking either that a certificate for those costs should now be granted, notwithstanding that it had not been asked for at the hearing, or that the order should be amended under the slip rule to provide for them.

It was held that, the order having been a consent order, it could only be amended under the slip rule to include a provision for the fees of leading counsel if the agreement between the parties upon which it had been based had contained, expressly or by implication, a term to the effect that they should be provided for.

Cross J said at 646-47:

 “I think it is quite clear that none of the lawyers who prepared and approved the minutes and were present at the joint consultation had this point in mind. In those circumstances, I think that the test of the problem before me is this: supposing I, when the case came before me, had thought of the point and had played the pat of the officious bystander postulated by Mackinnon L.J. and had said: “What about the costs of the plaintiffs’ ‘leading counsel?’, what would the reaction have been? I have no doubt whatever that counsel for the plaintiffs would have said: ‘Of course they are to be included.’ What would have been the reaction of counsel for the infant? Mr Wilmers is in a difficult position, because he is asked to throw his mind back to what would have happened two years ago on a hypothesis which was not in fact realised, but he says, and I accept this completely, that he is sure that he and Mr Arnold, whatever their own views might have been, would have felt obliged to consult the guardian ad litem as to whether or not the words, “including the fees of ‘leading counsel’ should go into the order. Mr Wilmers said that he remembered vividly that it had not been at all easy to bring the guardian to the point of agreeing to a compromise at all, and that neither counsel nor their instructing solicitors would in the circumstances have taken it on themselves to vary the agreed terms by a hair’s breadth without her consent.

 So one has to ask what was her state of mind. Here I am in a difficulty, because no formal evidence has been put before me as to what her state of mind was. She has not sworn an affidavit or been examined but certain points have been conceded by Mr Wilmers. It is conceded that she knew that leading counsel had been instructed on behalf of the plaintiffs, and I think it is conceded (at all events, I shall assume) that she had no personal knowledge of paragraph 2(3) and did not interpret that she had not had put before her any estimate of the costs which included specifically any fees for leading counsel.

 I think that I am justified in assuming in favour of the plaintiffs that had she been asked before the order was drawn up: “Do you think this order will include leading counsel’s fees?”, she would have said: “I think it will. They have had leading counsel. The costs will be taxed by the court, but I presume they will include something for Mr Peter Foster.” That is what I think she would have said.

 But does that carry the plaintiffs far enough? If this point had been specifically mentioned to her, if Mr Arnold and Mr Wilmers had come to her and said: “Look here, the formula which we have put to the other side and which they have agreed may not include the costs of leading counsel, and they want an express reference made to them,” is there anything which would have prevented her, if she had been disposed to be difficult about the matter, from saying: “Well, I do not know about that. If that formula will not include the costs of leading counsel, that is just too bad. But I am not disposed to budge a hair’s breadth from what I have agreed to.” With the best will in the world – my sympathies, as I have indicated, are with the plaintiffs in the matter – I find it impossible to say that she could not, if she so desired, have taken that line. Therefore, I am, with regret, obliged to refuse the application. I say ‘with regret’ because I cannot help thinking that if the matter had been raised in October 1961, Mr Arnold and Mr Wilmers would probably have advised the guardian ad litem that it was in the spirit of the arrangement that this addition should be made to the order, and it may be that at that date, under pressure from them, and perhaps with a little help from me, she would have agreed to that addition. Unfortunately, that was not done, and now Mr Wilmers tells me that he and his instructing solicitors have done their best to induce the lady to agree, but that she will not now do so. So, as I say, with regret, I feel obliged to refuse the motion.”