Kattos v Prettys (a Firm)

An unqualified appellate costs order requiring one party to pay the other’s costs of the action and of the appeal covers all costs of the action, including costs previously awarded by a lower court in the opposite direction. It cannot be construed as preserving an inconsistent lower costs order.

A court considering an application under the slip rule may construe its own order. Where the existing wording already has the intended and effective meaning, amendment is unnecessary.

The claimant brought a professional-negligence claim against her former solicitors. A deputy district judge resolved a limitation issue for her, but a judge of the Queen’s Bench Division allowed the solicitors’ appeal and made costs orders in their favour.

The claimant then appealed to the Court of Appeal. Before that appeal was heard, the parties compromised the whole action. A consent order dismissed the appeal and required the solicitors to pay the claimant’s costs of the action and of the appeal.

On detailed assessment, a district judge declared that the order did not permit recovery of the costs of the two earlier limitation hearings. The claimant applied to the Court of Appeal for a declaration as to the meaning of its order, alternatively for correction under the slip rule.

Application allowed in substance. Lord Justice Rix, with whom Mr Justice Holman agreed, held that the Court of Appeal could and should construe its own order when determining whether correction under the slip rule was required.

1. The earlier order of the Queen’s Bench Division could not be treated as wholly unaffected by the subsequent consent order. The parties had compromised the action as a whole, although the earlier order would otherwise have left parts of the claim struck out and time-barred.

2. The phrase costs of the action was unlimited. Read with the separate award of the costs of the appeal, both awards being made in the claimant’s favour, it could not properly exclude the costs covered by the earlier order in the solicitors’ favour.

3. The definitions in the Practice Direction for Part 44 did not alter that construction. The list was expressly non-exhaustive and did not define costs of the action.

4. The order therefore covered all costs of the action and appeal. Its effect was wider than an order for costs “here and below”, because it embraced all action costs, including the disputed lower-hearing costs.

5. No amendment under rule 40.12 was needed. The claimant was awarded the costs of the application. The court stressed that it was construing its own order, not determining an appeal from the district judge’s declaration.

• Court of Appeal (Civil Division): On the present application, the court construed its consent order as covering the costs of both earlier hearings and held that no slip-rule amendment was needed.
• Cambridge County Court: District Judge Temple had declared that the Court of Appeal order did not allow recovery of the costs of the deputy district judge’s and Judge Langan QC’s hearings.
• Court of Appeal (Civil Division): The claimant’s earlier appeal was dismissed by consent after the parties compromised the whole action. The consent order required the solicitors to pay the claimant’s costs of the action and of the appeal.
• Queen’s Bench Division: His Honour Judge Langan QC allowed the solicitors’ appeal on the limitation issue, overturned the deputy district judge’s decision, and awarded the solicitors the costs of both hearings.
• First instance: Deputy District Judge Watkins determined the limitation issue for the claimant and awarded her the costs of that hearing.