Certain Lloyd's Underwriters Subscribing to Contract No IH00AAQS v Cross

Certain Lloyd's Underwriters Subscribing to Contract No IH00AAQS (the Underwriters) sought to set aside a costs order made by the Full Court of the Federal Court of Australia. The dispute arose from an undertaking given by the Underwriters that they would bear the costs of an application and appeal to the High Court, regardless of the outcome. The Underwriters were ultimately successful in their appeal to the High Court.

The primary legal issue before the High Court was whether the costs order made by the Full Court of the Federal Court should have been set aside pursuant to the slip rule, or alternatively, whether the High Court should exercise its inherent jurisdiction to correct the order. This involved determining whether the Full Court's costs order was the result of an "accidental slip or omission" or a misapprehension of the effect of the special leave undertaking.

French CJ held that the slip rule applied only to obvious errors or omissions that did not involve a substantive alteration of the judgment. His Honour found that the Full Court's costs order was not a mere slip but reflected a considered, albeit potentially erroneous, application of the law to the facts before it. The undertaking given by the Underwriters was interpreted as relating to the costs of the High Court proceedings, not as a basis for retrospectively altering costs orders made by lower courts.

Consequently, French CJ dismissed the applications by the Underwriters, ordering that they pay the costs of the proceedings.