Owners and/or Bareboat Charterers and/or Sub Bareboat Charterers of Samco Europe v Owners of MSC Prestige [QBD (Admiralty)]
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Teare |
| Judgment Date | 30 June 2011 |
| Neutral Citation | [2011] EWHC 1656 (Admlty) |
| Docket Number | Case No: 2009 FOLIO 1313 |
| Court | Queen's Bench Division (Admiralty) |
| Date | 30 June 2011 |
[2011] EWHC 1656 (Admlty)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMIRALTY COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr. Justice Teare
Case No: 2009 FOLIO 1313
Nigel Jacobs QC (instructed by Ince & Co.) for the Claimants
Jeremy Russell QC and Benjamin Coffer (instructed by Thomas Cooper) for the Defendants
Hearing dates: 23 June 2011
Following my judgment on liability in this action the Owners of SAMCO EUROPE sought an order that there be cross-liabilities for costs incurred before 1 October 2009 in the same proportions as liability in the action but that the Owners of MSC PRESTIGE should pay the costs of the Owners of SAMCO EUROPE incurred after 1 October 2009 and that the Owners of MSC PRESTIGE were not entitled to recover any of their own costs incurred after that date. This order was sought because on 9 September 2009 the Owners of SAMCO EUROPE offered to agree that liability be apportioned 60:40 in their favour which was the same apportionment which I judged to be appropriate in my judgment on liability. The Owners of MSC PRESTIGE objected to that order because the offer made on 9 September 2009 was withdrawn on 4 February 2011 when the Owners of SAMCO EUROPE offered to agree that liability be apportioned two-thirds/one-third in their favour which was of course more favourable to them than my judgment on liability. The Owners of MSC PRESTIGE submitted that there should be cross-liabilities on costs in the same proportion as liability in the action.
The disagreement between the parties has arisen, at least in part, because the case of the Owners of MSC PRESTIGE is supported by the decision of the Court of Appeal in The Toni [1974] 1 Lloyd's Reports 489 whilst the case of the Owners of SAMCO EUROPE is supported by a later line of authority commencing with the decision of the Court of Appeal in Bristol and West Building Society v Evans Bullock dated 5 February 1996 (unreported) in which no reference was made to the decision in The Toni. Mr. Jacobs QC, counsel for the Owners of SAMCO EUROPE has urged me to follow the reasoning in the line of authority stemming from Bristol and West Building Society v Evans Bullock and Mr. Russell QC, counsel for the Owners of MSC PRESTIGE has urged me to follow the reasoning in the earlier decision of The Toni.
The facts
The collision between the vessels occurred on 8 December 2007.
On 17 June 2009 Thomas Coopers, the solicitors acting on behalf of the Owners of MSC PRESTIGE made an offer to settle liability 60:40 in favour of MSC PRESTIGE. That offer was described as a "Part 61 and/or Part 36 offer".
On 9 September 2009 Ince and Co., the solicitors acting on behalf of the Owners of SAMCO EUROPE, made an offer to settle liability 60:40 in favour of SAMCO EUROPE. That offer was described as having been made "in accordance with CPR Part 61.4(10-(12) and/or Part 36."
In December 2009 Collision Statements of Case were exchanged. In March 2010 an order for directions was made. Disclosure and exchange of witness statements took place in about August 2010. Both parties employed nautical experts to assist them in interpreting the data obtained from each vessel's VDR (see paragraph 2 of my judgment on liability). On 3 and 4 February 2011 a mediation took place.
By letters dated 4 February 2011 Ince and Co. withdrew their offer dated 9 September 2009 and offered to settle liability two-thirds:one-third in favour of SAMCO EUROPE. That offer was also described as having been made "in accordance with CPR Part 61.4(10)-(12) and/or Part 36".
The trial took place on 11–13 April 2011 and judgment was given on 23 June 2011. Liability for the collision was apportioned 60:40 in favour of SAMCO EUROPE.
The relevant rules
CPR Part 36 deals with offers to settle and provides for offers made in accordance with Part 36 to have certain costs consequences. Part 36.14(6) provides that the costs consequences set out in that rule do not apply to an offer that has been withdrawn. However, CPR Part 44.3 provides that in deciding what order to make about costs the court must have regard to an admissible offer which is not an offer to which costs consequences under Part 36 apply.
CPR Part 61 applies to Admiralty claims and Part 61.4 contains special provisions relating to collision claims. Offers to settle collision claims are dealt with in Part 61.4 (10)-(12). It is necessary to set those paragraphs out in full:
"(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 the percentage to which he would have been entitled had the offer been accepted; 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 the percentage to which they would have been entitled had the offer been accepted; 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."
There is no dispute that the offer made by Ince and Co. on 9 September 2009 complied with Part 61.4(12). There is also no dispute that the events set out in Part 61.4(10) have occurred. Accordingly the Owners of SAMCO EUROPE are, unless the court considers it unjust, entitled to all their costs from 21 days after that offer was made.
It is to be noted that no reference is made in Part 61.4 to offers which are withdrawn unlike Part 36.14(6).
It seems to me, however, that where, as here, the offer has been withdrawn that circumstance must be carefully considered when deciding whether it would be unjust to award the offeror all his costs from 21 days after the offer was made.
Mr. Russell submits that it would be unjust to award the Owners of SAMCO EUROPE all their costs from 21 days after the offer was made essentially for the reasons given by Megaw LJ in The Toni, namely, that a litigant should only get the benefit of an offer to settle if he has maintained that offer up to the commencement of the trial. Megaw LJ said that it would "not be justice or good sense" for a party who had made an offer but had then withdrawn it, thinking that it was over-generous, to get the benefit of it when it turned out not to be over-generous. Mr. Jacobs submits that it would not be unjust to award the Owners of SAMCO EUROPE all their costs from 21 days after the offer was made essentially for the reasons given by Neill and Ward LJJ in Bristol and West Building Society v Evans, namely, that the offer ought to have been accepted by the Owners of MSC PRESTIGE and that had it been accepted no further costs would have been incurred thereafter.
The authorities
Ultimately, the question as to what is the just order to make must depend upon the circumstances of this particular case. However, since both parties' submissions as to what is the just order to make reflect the approaches taken in past cases it is necessary to consider those cases notwithstanding that both The Toni and Bristol and West Building Society v Evans Bullock were decided before the CPR were enacted.
The Toni was an Admiralty collision case, like the present case. The collision had occurred on 14 February 1969. On 14 February 1972 the plaintiffs offered to settle liability on the basis that each vessel was equally to blame. On 29 February 1972 evidence was taken from the chief officer of one of the vessels. On 29 March 1972 the plaintiffs withdrew their offer. The trial took place on 30 and 31 October 1972. On 1 November 1972 Brandon J. determined that each vessel was equally to blame for the collision. On 14 May 1973 Brandon J. dealt with costs. He ordered that each party was to pay one-half of the other party's costs. It appears (from what was argued and said in the Court of Appeal) that Brandon J. disregarded the offer, having contrasted the facts before him with payments into court under RSC Ord.22 and an offer of contribution under RSC Ord.16 r.10 where the position was preserved until trial. Both the decision on liability and the decision on costs were appealed. Both appeals failed. On the question of costs Edmund Davies and Cairns LJJ. asked themselves whether the exercise by Brandon J. of his discretion as to costs could be challenged. Edmund Davies LJ. (at [1974] 1 Lloyd's Reports 494–5) considered that Brandon J. was entitled to disregard the offer because it had been withdrawn. Cairns LJ. (at p.498) held that there was no ground for saying that the discretion...
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