Miom 1 Ltd and Another v SEA Echo ENE (No 2)

JurisdictionEngland & Wales
JudgeMR. JUSTICE TEARE,Mr. Justice Teare
Judgment Date26 October 2011
Neutral Citation[2011] EWHC 2715 (Admlty)
Date26 October 2011
CourtQueen's Bench Division (Admiralty)
Docket NumberCase No: 2009 FOLIO 1117

[2011] EWHC 2715 (Admlty)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

ADMIRALTY COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Mr. Justice Teare

Case No: 2009 FOLIO 1117

Between:
(1) Miom 1 Limited
(2) The Isle Of Man Steampacket Company Limited
Claimants
and
SEA Echo E.N.E. (No.2)
Defendant

John Kimbell (instructed by Weightmans LLP) for the Claimants

Nigel Jacobs QC (instructed by Wikborg Rein) for the Defendant

Hearing dates: 27–28 September 2011

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

MR. JUSTICE TEARE Mr. Justice Teare
1

On 8 December 2010 I gave judgment on liability in this collision action and determined that liability for the collision must be borne equally by the Claimant and the Defendant; see [2010] EWHC 3180 (Admlty). The parties have been unable to agree the question of costs and so have returned to Court. The costs dispute has given rise to one or two issues of interest, at least to Admiralty lawyers. The parties' respective positions may be summarised as follows.

2

The Defendant claims to have made an offer pursuant to CPR 61 on 5 February 2010 to settle liability for the collision on the basis that each ship was equally to blame. Accordingly the Defendant contends that as from 21 days after the date of that offer the Claimant should pay the Defendant's costs of the action and that prior to that date costs should be apportioned in accordance with the collision liability, or alternatively, that there should be no order as to costs.

3

The Claimant says that the Defendant should pay the Claimant's costs of the action incurred before 26 February 2010 because it obtained judgment on its claim, albeit for 50% of its damages, and the Defendant had not issued a claim form within the period of two years from the date of the collision so that there was no effective counterclaim. So far as costs incurred after 26 February 2010 were concerned it was said that the Defendant's offer dated 5 February 2010 failed to comply with CPR Part 61 and so the Defendant ought not to be awarded its costs from 26 February 2010. If the offer is to be accorded some weight then the appropriate order is "no order as to costs" for the period after 26 February 2010.

4

In response to the Claimant's case that there is no effective counterclaim the Defendant said that it is now too late to raise the time-bar point, that the Claimant is stopped from relying upon it, that time should be extended for making the counterclaim pursuant to section 190(5) of the Merchant Shipping Act 1995 and that in any event, having regard to the single liability principle established by the decision of the House of Lords in The Khedive (1882) LR 7 App.Cas. 795, alternatively the principle of equitable set-off, the Claimant is only entitled to judgment for the sum by which 50% of its claim exceeds 50% of the Defendant's claim.

Costs incurred after 26 February 2010

5

Mr. Jacobs QC, on behalf of the Defendant, submitted that the question of costs after 26 February 2010 could be resolved solely by reference to the offer dated 5 February 2010. Mr. Kimbell, on behalf of the Claimant, accepted that that was so. Since it is common ground that more costs were incurred after rather before 26 February 2010 it seems sensible to begin with those costs and a consideration of the terms of the offer dated 5 February 2010.

6

Prior to that offer there had been two other offers. On 23 November 2009 the Claimant offered to settle liability for the collision on the basis of 60/40 in favour of the Claimant. That offer complied with the provisions of CPR Part 61.4(12). On 7 December 2009 the Defendant offered to settle liability for the collision on the basis of 60/40 in favour of the Defendant. That offer was said to have been made pursuant to CPR Part 61 and on the same basis as the Claimant's offer of 23 November 2009.

7

On 5 February 2010 the Defendant wrote to the Claimant as follows:

"We refer to previous correspondence in this matter and to the consent order dated 18 January 2010. While we consider our clients to have a strong legal position with respect to this claim, they are conscious that the parties are now entering into the stage of the proceedings where legal costs and expenses accumulate quickly. With this in mind, we are instructed by clients to offer to settle the issue of liability on the basis of each vessel being equally to blame for the collision.

Such offer is made pursuant to Parts 61 and 36 of the CPR and shall remain open for 21 days."

8

CPR Part 61 .4(10)-(12) deal specifically with collision actions. Sub-para.(12) provides as follows:

"An offer under paragraph (10) must be in writing and must contain

(a) an offer to settle liability at stated percentages;

(b) an offer to pay costs in accordance with the same percentages;

(c) a term that the offer remain open for 21 days after the date it is made; and

(d) a term that, unless the court orders otherwise, on expiry of that period the offer remains open on the same terms except that the offeree should pay all the costs from that date until acceptance."

9

Mr. Kimbell submitted that the offer dated 5 February 2010 did not comply with sub-para.(12) because the offer did not comply with sub-paragraphs (b) and (d) of CPR 61.4(12).

10

In construing the offer dated 5 February 2010 it is necessary to follow the guidance of the Court of Appeal in C v D [2011] EWCA Civ 646. The question is how a reasonable solicitor would have understood the offer in its context, including the known context of the dispute as it stood at the time; see Rix LJ at para. 45. Rimer LJ, at para.75, said:

"It was expressly stated to be an 'Offer to Settle under CPR Part 36' that was 'intended to have the consequences set out in Part 36….' Of course, that does not mean that it did in fact comply with Part 36 and therefore must, come what may, somehow be shoehorned into the confines of its four corners: a stated bid to attain a particular goal does not also mean that the goal has been attained. The answer to the critical question still turns on how the reasonable man would read the offer. The relevance, however, of the claimant's expressed intention to make its offer a Part 36 offer is that, if there are any ambiguities in it raising a question as to whether the offer does or does not comply with the requirements of Part 36, the reasonable man will interpret it in a way that is so compliant. That is because, objectively assessed, that is what the offeror can be taken to have intended."

11

I consider that a reasonable solicitor would have understood the offer dated 5 February 2010 as complying with CPR Part 61.4(12). It is true that, although the offer was expressed to made pursuant to Part 61, no specific reference was made either to costs or to the terms which applied on expiry of the offer (sub-paragraphs (b) and (d) of Part 61.4(12)). But the offer was the third of three offers, the first of which expressly set out the matters required by Part 61.4(12) and the second of which was said to be on the same basis as the first. The third offer began by referring to the previous correspondence. In that context I consider that the reasonable solicitor would understand the third offer to have been made on the same basis as the earlier two offers which expressly or by incorporation complied with CPR Part 61.4(12). It is true that the offer made reference to the 21 day duration of the offer, and so complied with sub-paragraph Part 61.4(12)(c), which might be said to introduce an uncertainty as to whether sub-paragraphs (b) and (d) were intended to be complied with but the reasonable solicitor would, in my judgment, interpret the offer in context as complying with the provisions of Part 61.4(12) because it was expressed to be made pursuant to Part 61.

12

In circumstances where the Defendant obtained at trial an apportionment equal to its offer the Defendant is entitled to all its costs from 21 days after the offer was made unless such order was unjust; see CPR Part 61.4 (10)-(11). Such an order would not be unjust and so the Defendant is entitled to payment of its costs incurred from 26 February 2010, that is 21 days after the date of the offer.

13

If I am wrong in concluding that the offer complies with CPR Part 61 it was, nevertheless, an offer to settle which, pursuant to CPR 44.3(4)(c), I am entitled to take into account when determining the incidence of costs. There was no dispute that in doing so it was appropriate to apply the causation test to which I made reference in The Samco Europe [2011] EWHC 1656 (Admlty) at paragraph 26. That test requires the court to consider whether the costs incurred after 26 February 2010 would have been incurred by the parties had the offer been accepted. It is plain that they would not. It was not suggested that the Claimant had good reason not to accept the offer and so, even if the offer dated 5 February 2010 did not comply with CPR Part 61, I would have decided, in the exercise of my discretion, that the Claimant should pay the Defendant's costs incurred after 26 February 2010

14

It is unnecessary to consider CPR 36 because Part 61 is the rule which deals with offers in Admiralty collision actions.

15

After the oral hearing Mr. Jacobs, who had said at the hearing that costs on the indemnity basis were not sought, changed his mind and in a written note sought costs on the indemnity basis on the basis that Part 36.14 provided for that where a Part 36 offer was successful and the same approach should apply where a Part 61 offer was successful. Mr. Kimbell said that Mr. Jacobs should not be permitted to withdraw his concession but since it was withdrawn before I had delivered judgment and Mr....

To continue reading

Request your trial
6 cases
  • The Former Owners of the Motor Vessel "melissa K" Now Named "jasmine I" v The Former Owners of the Motor Tanker "tomsk" Subsequently Named "pure Energy" and Now Named "thayer"
    • United Kingdom
    • Queen's Bench Division (Admiralty)
    • 27 Noviembre 2015
    ...consequences do not apply in an Admiralty collision action when a claimant beats his offer made under CPR 61.4 (10) to (12): MIOM 1 Ltd v Sea Echo ENE (No 2) [2011] EWHC 2715 (Admlty), [2012] 1 Lloyd's Rep 140 at [16]. Moreover, while CPR 36.3(2)(a) expressly allows a Part 36 offer to be m......
  • Bridgehouse (Bradford No 2) Ltd v BAE Systems Plc
    • United Kingdom
    • Chancery Division
    • Invalid date
    ...1028(3) of the 2006 Act.39 In support of its submissions, BB2 relied on Teare J’s decision inMIOM 1 Ltd v Sea Echo ENE (No 2) [2012] 1 Lloyd’s Rep 140. That caseinvolved a costs dispute following a decision that the liability for a collisionbetween two vessels in the River Mersey should be ......
  • The Owners of the Ship Theresa Libra v The Owners of the Ship MSC Pamela
    • United Kingdom
    • Queen's Bench Division (Admiralty)
    • 19 Septiembre 2013
    ...and on such conditions as it thinks fit." As in The Pearl of Jebel Ali [2009] 2 Lloyd's Reports 484 (see paragraphs 35–38) and in MIOM 1 Limited v Sea Echo ENE [2012] 1 Lloyd's Reports 140 (see paragraphs 53–63) it is common ground that, although the discretion to extend time is expressed i......
  • Toucan Energy Holdings Ltd v Wirsol Energy Ltd
    • United Kingdom
    • Queen's Bench Division (Commercial Court)
    • 14 Abril 2021
    ...is under a duty to speak if it wishes to rely on a matter, an example being Teare J's decision in MIOM 1 Ltd v Sea Echo ENE (No.2) [2011] EWHC 2715 (Admlty). (3) Representation 813 In order to achieve Taking Over under § 10 of the EPC Contracts, seven conditions had to be satisfied. These ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT