Nautical Challenge Ltd v Evergreen Marine (UK) Ltd
| Jurisdiction | England & Wales |
| Judge | Sir Nigel Teare |
| Judgment Date | 05 April 2022 |
| Neutral Citation | [2022] EWHC 830 (Admlty) |
| Docket Number | Case No: AD-2015-000131 & AD-2016-000017 |
| Court | Queen's Bench Division (Admiralty) |
[2022] EWHC 830 (Admlty)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMIRALTY COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Sir Nigel Teare
Sitting as a Judge of the High Court
Case No: AD-2015-000131 & AD-2016-000017
Vasanti Selvaratnam QC and James Shirley (instructed by Clyde & Co. LLP) for the Claimant
Simon Rainey QC and Nigel Jacobs QC (instructed by Stann Marine) for the Defendant
Written submissions: Received between 21 February and 4 April 2022
Approved Judgment
I direct that no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Sir Nigel Teare SITTING AS A JUDGE OF THE HIGH COURT
On 8 February 2022 I handed down a judgment in this collision action (“the substantive judgment”) which apportioned liability for the collision between ALEXANDRA 1 and EVER SMART 70:30 in favour of ALEXANDRA 1; see [2022] EWHC 206 (Admlty). This further judgment is concerned with matters consequential upon the substantive judgment. Although much of the draft order giving effect to my judgment has been agreed substantial matters are not agreed. The substantial matters in dispute concern costs, a stay of execution and permission to appeal. I shall deal with those substantial matters in the expectation that the draft order can then be agreed.
Costs
In my substantive judgment I described the case as having had a long and unusual history; see paragraph 1. To that history can now be added the following facts. On 23 October 2015 the Owners of ALEXANDRA 1 offered to settle the dispute as to apportionment of liability 70:30 in favour of ALEXANDRA 1. That offer was not accepted and the litigation proceeded. On 10 August 2016, which was prior to the first trial in the Admiralty Court the Owners of ALEXANDRA 1 offered to settle the dispute as to apportionment of liability 60:40 in favour of ALEXANDRA 1. On 19 June 2020, which was after the decision of the Court of Appeal and before the appeal to the Supreme Court, the Owners of ALEXANDRA 1 again offered to settle the dispute as to apportionment of liability 60:40 in favour of ALEXANDRA 1. On 24 February 2021, which was after the decision of the Supreme Court and before the re-apportionment hearing before me, the Owners of ALEXANDRA 1 once again offered to settle the dispute as to apportionment of liability 60:40 in favour of ALEXANDRA 1.
There is no dispute that with regard to the first trial and the re-apportionment hearing the Owners of EVER SMART must pay the costs of the Owners of ALEXANDRA 1 from 14 November 2015 and 70% of the costs of ALEXANDRA 1 incurred before that date. There is also no dispute that the Owners of ALEXANDRA 1 must pay 30% of the costs of the Owners of EVER SMART incurred before 14 November 2015. That date is of course 21 days from the date of the offer made by the Owners of ALEXANDRA 1 on 23 October 2015 upon which the Owners of EVER SMART were unable to improve by continuing with the litigation.
In addition, the Owners of ALEXANDRA 1 seek an order that the Owners of EVER SMART shall pay the costs incurred by the Owners of ALEXANDRA 1 in successfully resisting the appeal of the Owners of EVER SMART to the Court of Appeal and in unsuccessfully seeking to resist the appeal of the Owners of EVER SMART to the Supreme Court. Such orders are resisted by the Owners of EVER SMART who seek an order that the Owners of ALEXANDRA 1 should pay the costs of both appeals.
This dispute has been referred to me by the Supreme Court by order dated 18 February 2022.
The submission made by counsel on behalf of ALEXANDRA 1 is simple. The Owners of EVER SMART have not been able to improve upon the offer made on 23 October 2015 and therefore the Owners of EVER SMART must pay the costs of ALEXANDRA 1 incurred after 14 November 2015 which include the costs of the appeals to the Court of Appeal and the Supreme Court.
The submission made by counsel of behalf of EVER SMART is almost as simple. The Supreme Court allowed the appeal of the Owners of EVER SMART on the two issues of principle argued before the Supreme Court. The Owners of EVER SMART were thus the winners and should have the costs of the appeal to the Supreme Court and also the costs of the appeal to the Court of Appeal whose decision on those two issues of principle was held to be wrong. Although the Owners of ALEXANDRA 1 defeated the Owners of EVER SMART on a further issue in the Court of Appeal which was not renewed on appeal to the Supreme Court, that circumstance did not need to be reflected in the costs order because the Owners of ALEXANDRA 1 had lost on their Respondent's Notice.
The court's jurisdiction with respect to costs
I have been referred to CPR 61.4 which concerns collision actions and provides as follows:
“(10) The consequences set out in paragraph (11) apply where a party to a claim to establish liability for a collision claim (other than a claim for loss of life or personal injury) –
(a) makes an offer to settle in the form set out in paragraph (12) not less than 21 days before the start of the trial;
(b) that offer is not accepted; and
(c) the maker of the offer obtains at trial an apportionment equal to or more favourable than his offer.
(11) Where paragraph (10) applies the parties will, unless the court considers it unjust, be entitled to the following costs –
(a) the maker of the offer will be entitled to –
(i) all his costs from 21 days after the offer was made; and
(ii) his costs before then in accordance with the apportionment found at trial; and
(b) all other parties to whom the offer was made –
(i) will be entitled to their costs up to 21 days after the offer was made in accordance with the apportionment found at trial; but
(ii) will not be entitled to their costs thereafter.
(12) 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.”
I have also been referred to CPR 44.2 which deals with costs and provides as follows:
“(1) The court has discretion as to –
(a) whether costs are payable by one party to another;
(b) the amount of those costs; and
(c) when they are to be paid.
(2) If the court decides to make an order about costs –
(a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but
(b) the court may make a different order.
(3) The general rule does not apply to the following proceedings –
(a) proceedings in the Court of Appeal on an application or appeal made in connection with proceedings in the Family Division; or
(b) proceedings in the Court of Appeal from a judgment, direction, decision or order given or made in probate proceedings or family proceedings.
(4) In deciding what order (if any) to make about costs, the court will have regard to all the circumstances, including –
(a) the conduct of all the parties;
(b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; and
(c) any admissible offer to settle made by a party which is drawn to the court's attention, and which is not an offer to which costs consequences under Part 36 apply.
(5) The conduct of the parties includes –
(a) conduct before, as well as during, the proceedings and in particular the extent to which the parties followed the Practice Direction – Pre-Action Conduct or any relevant pre-action protocol;
(b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;
(c) the manner in which a party has pursued or defended its case or a particular allegation or issue; and
(d) whether a claimant who has succeeded in the claim, in whole or in part, exaggerated its claim.”
Costs in the Supreme Court
The Supreme Court has power to award costs. The Rules of the Supreme Court provide that the Supreme Court may make “such orders as it considers just in respect of the costs of any appeal, application for permission to appeal, or other application to or proceeding before the Court”; see rule 46.1. Counsel did not suggest that there was any reason to doubt that costs generally follow the event or that the Supreme Court is able to take into account when exercising its discretion the terms of any offer which a respondent has made to settle an appeal to the Supreme Court.
The costs in the Supreme Court in this case
The submission made by counsel for EVER SMART was that
“in the present case there can be no doubt as to the identity of the successful party in the appeal process. “The event” in the Supreme Court related solely to the two points of construction raised by Questions 1 & 2. ES Interests overturned the decisions at first instance and in the Court of Appeal as to the application of the crossing rules. Accordingly ES Interests must be entitled to its costs, irrespective of the subsequent re-apportionment exercise.”
The submission made by counsel for ALEXANDRA 1 was that
“the appellate process in this case cannot properly be regarded as separate from the determination and apportionment of liability”.
It was said that the approach of EVER SMART was
“wrongly predicated on the idea that the relevant event is the determination of the crossing rules point of principle” and “ignores the importance of the Re-apportionment in determining where responsibility for the appellate costs should lie”.
I was told (see paragraph 14 of...
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