Analysis
The claimant and third to sixth defendants were beneficiaries under a will. The first and second defendants were the witnesses and executors of the will. The claimant unsuccessfully challenged the will with costs orders being made against the claimant in favour of the first and second defendants and the third to sixth defendants. As regards the third to sixth defendants’ costs the order provided that the costs (if not previously paid) should be payable out of what remained of the claimant’s pecuniary legacy after payment of the first and second defendants’ costs prior to the distribution of such legacy to the claimant. At the detailed assessment of those costs the costs judge raised the issue of whether the order operated so as to limit the amount of the costs recoverable by the third to sixth defendants from the claimant to the amount remaining of her legacy after payment of the costs of the first and second defendants and declined to issue an interim costs certificate until the order was clarified or varied. The third to sixth defendants applied under CPR r40.12 seeking clarification or amendment of the order, the essential question being whether the order provided that the costs to be recovered by the third to sixth defendants from the claimant should be limited by reference to the amount of the pecuniary legacy left to the claimant under the will.
Held, amending the order to make its meaning clear beyond argument:
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- 1) In interpreting a court order the question is what a reasonable person having all the background knowledge which would have been available at the time to the maker of the document would have understood him to be using the language in the document to mean (Mannai v Eagle Star, Investors Compensation Scheme v West Bromwich BS [1998] 1 WLR, Chartbrook Limited v persimmon Homes [2009] 1 AC 1101 and Rainy Sky SA v Kookmin Bank [2011] 1 WLR 2900). The court performs that exercise in light of (i) the natural meaning of the words in issue, (ii) any other relevant provisions of the document, (iii) the purpose of the clause in question and the document as a whole, (iv) the background facts and circumstances known or assumed by the maker of the document or by both of the contracting parties at the time that the document was executed and (v) business common sense, but (vi) disregarding subjective evidence of intention (Arnold v Britton [2015] 2 WLR 1593).
- 2) There was no ambiguity in the terms of the Order when interpreted against the relevant background. No reasonable person having all the background knowledge available to the parties at the time that the Order was drawn up and sealed could have had any doubt that the trial judge intended and had decided that the claimant would be personally liable for the entirety of the assessed costs of the defendants without any limitation on recovery of those costs by reference to the amount of her legacy.
- 3) However the order would be amended pursuant to the court’s inherent power referred to in CPR 40BPD 4.5 to amend the terms of the order to make its meaning clear beyond argument
- 4) OBITER: It was not necessary to resort to the slip rule (CPR r40.12) to correct any mistake or omission in the order. However if there had been any real ambiguity in the terms of the order, the court would have unhesitatingly have held it appropriate to use the slip rule to give effect to the intention that the trial judge had indicated that he had. There is a clear distinction between amending an order so as to give true effect to a court’s first thoughts and intentions and a court having second thoughts about the case and seeking as a natural form of exculpation to suggest that there was an accidental mistake in the order which should be corrected. The former is capable of being dealt with under the slip rule: the latter is not, and can only be corrected (if at all) by an appellate court (Bristol-Myers v Baker Norton (No.2) [2001] RPC 45).
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