Reliance on the slip rule not necessary | Practical Law

Reliance on the slip rule not necessary | Practical Law

Anne Freeman (Partner), Piper Alderman

Reliance on the slip rule not necessary

Practical Law Legal Update 9-503-1431 (Approx. 3 pages)

Reliance on the slip rule not necessary

Published on 31 Aug 2010 • Australia, International
Anne Freeman (Partner), Piper Alderman
In a decision dated 30 July 2010, the Supreme Court of New South Wales provided a valuable summary of the "slip rule" power.
In ABB Service v Pyrmont Light Rail Company [2010] NSWSC 831, proceedings were commenced in the Supreme Court of New South Wales seeking a declaration that certain orders made by an arbitrator, which amended earlier costs orders, were valid and binding on the parties.
The earlier costs orders provided for the applicant's costs to be paid by the respondent on a party/party basis and part of the respondent's costs to be paid by the cross-respondent on a party/party basis "such costs to be agreed or assessed".
The arbitrator also ordered that the parties endeavour to agree on the appointment of a costs assessor and that if they could not do so, they accept an assessor appointed by the Chairman of the New South Wales Chapter of the Institute of Arbitrators and Mediators.
Some time later, the parties reconvened before the arbitrator and argued that the term "assess" under the Commercial Arbitration Act NSW (1984) (1984 Act) was defined by reference to the Legal Profession Act and required a formal costs assessment, with a costs assessor appointed by the Supreme Court. Therefore, there was an internal inconsistency within the arbitrator's orders.
The arbitrator indicated to the parties that he had not intended that there be a formal costs assessment process. Since his only powers under section 34 of the 1984 Act were either to "settle" the costs or "arrange for their assessment", he relied on the slip rule (which allows clerical mistakes and accidental omissions in judgments and orders to be corrected by the court at any time on application by a party) to correct the earlier orders and substituted the words "settled by me" for the word "assess".
The Supreme Court found:
  • The arbitrator did not have the power to make the original costs orders under section 34 of the 1984 Act, and those orders were therefore beyond power and a nullity.
  • Until the making of a valid costs award, the arbitrator retained the jurisdiction conferred on him and he was therefore not functus officio when he purported to correct his earlier costs order.
  • The arbitrator, therefore, did not need to rely on the "slip rule" power to make the revised orders that he did.
The court also admitted evidence of the arbitrator's statement as to his subjective intention when he made the original costs orders which indicated that his immediate reaction was that he had made a mistake and his intention to amend the orders.
The court also stated that if the arbitrator had not retained jurisdiction and had to rely on the "slip rule", it would have found that the amendment went beyond the scope of the "slip rule" power, as the arbitrator had put in place a new procedure involving his direct participation in the determination of costs, something he had not originally intended.
The case provides a valuable summary of the "slip rule" power.