Capitan San Luis, The (Celebration)
| Jurisdiction | England & Wales |
| Date | 1993 |
| Year | 1993 |
| Court | Queen's Bench Division |
Admiralty - Costs - Limitation action - Contested issue - Whether costs to follow event -
Following a collision at sea between the plaintiffs' and defendants' vessels, the plaintiffs issued a writ in rem against the defendants, who by their defence and counterclaim claimed an entitlement to limit the amount of their liability pursuant to article 2 of the Convention on Limitation of Liability for Maritime Claims 1976, as applied to English law by section 17 of and Schedule 4 to the Merchant Shipping Act 1979.F1 The plaintiffs having disputed the defendants' entitlement to limitation in their defence to counterclaim, a contested hearing took place before the registrar, who struck out the defence to counterclaim. The defendants thereupon applied by a notice of motion for a declaration that they were entitled to limit their liability and sought an order that they were entitled to the costs of the limitation issue in any event.
On the question whether a shipowner seeking the protection of limitation was liable for the costs incurred in an investigation of the factual circumstances giving rise to the limitation claim: —
Held, that the Convention of 1976 provided for a new regime whereby a shipowner was entitled to a decree limiting his liability in respect of a claim against him falling within article 2 unless the claimant was able to prove under article 4 of the Convention that the shipowner had intended to cause the loss or had acted recklessly and with knowledge that such loss would probably result; that if the claimant chose to challenge the shipowner's entitlement to limitation, the costs incurred in the investigation of the relevant factual circumstances would ordinarily follow the event; and that, accordingly, since there were no grounds for refusing a declaration of the defendants' entitlement to limitation, the plaintiffs were liable for the costs incurred in the investigation of that entitlement (post, pp. 472A–B, G–473E).
The following cases are referred to in the judgment:
African Steam Ship Co. v. Swanzy (
Alletta, The (No. 2) [
Bowbelle, The [
S.S. Phamaceutical Co. Ltd. v. Qantas Airways Ltd. [
No additional cases were cited in argument.
MOTION
On 10 February 1989 the plaintiffs' cruise liner Celebration was in collision off the coast of Cuba with the defendants' vessel Capitan San Luis. On 9 November 1989 the owners of Celebration issued a writ in rem against the owners of the Capitan San Luis and served a statement of claim on 20 April 1990. On 21 May 1990 the defendants served a defence and counterclaim claiming an entitlement to limit their liability under article 2 of Schedule 4 to the Merchant Shipping Act 1979. On 16 September 1990 the plaintiffs issued a defence to counterclaim disputing the defendants' entitlement to limit their liability on the ground that they had acted recklessly in allowing the Capitan San Luis to sail with defective electrical equipment. On 19 November 1989 the Admiralty Registrar struck out the plaintiffs' defence to counterclaim and ordered them to pay the costs of the contested issue. On 12 February 1993 the action was settled on the basis that Celebration was 25 per cent. and the Capitan San Luis 75 per cent. to blame for the collision.
By a notice of motion the defendants applied for a declaration that they were entitled to limit their liability under the provisions of the Merchant Shipping Act 1979 and for an order that the plaintiffs should pay the costs of the contested issue relating to whether they were entitled to limit their liability.
Elizabeth Blackburn for the defendants. The principles relating to costs established by The Alletta (No. 2) [
Formerly, the shipowner had to prove that the damage was caused without actual fault. The burden of proof was on the shipowner. Under the Act of 1979 the shipowner is entitled to limit his liability and it is for the claimant to prove that the damage was caused by recklessness and with knowledge. If a claimant decides to challenge the issue of liability and fails in that challenge then costs should follow that event. The burden of proof has shifted to the claimant. [Reference was made to The Bowbelle [
David Steel Q.C. for the plaintiffs. Notwithstanding that the Convention on Limitation of Liability for Maritime Claims 1976 is now part of English law by reason of the Merchant Shipping Act 1979, the principles set out in The Alletta (No. 2) [
Costs are discretionary. Although they normally follow the event, the court can make orders requiring a successful party to pay costs if there are circumstances which make such orders fair: see
The current
30 July. CLARKE J. handed down the following judgment. On 10 February 1989 the defendants' vessel Capitan San Luis and the plaintiffs' cruise liner Celebration collided off the coast of Cuba. On 9 November 1989 the plaintiff owners of the Celebration issued a writ in rem in this action. On 20 April 1990 they served a statement of claim and on 21 May 1990 the defendants served a defence and counterclaim. By paragraph 6 of their defence and counterclaim they asserted that they were entitled (if necessary) to limit their liability pursuant to the Merchant Shipping Act 1979. The particulars which they gave of that allegation were:
“The plaintiffs' claim is one to which...
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