Monjasa Ltd & Anor v Vessel "Astoria" & Anor

4 or ADM 12. Paragraph 3 provides that the Claimants should be permitted to discontinue the claims against the Defendants. The matters which the parties have agreed should be referred to the court are set out follows:

Section A includes the Claim Form, the Acknowledgment of service, form ADM 4 dated the 7^th August 2020 which contained the Claimants’ usual undertaking to pay the Admiralty Marshal’s expenses in respect of the arrest of property, its care and custody whilst under arrest and the release of the property, form ADM 12 dated 30^th August 2020 being the Claimants’ request to release the vessel which contained identical undertakings, the application for discontinuance dated the 18^th of September 2020, two witness statements made by Mr Thomas Moisley of

Section B contains the emails between the Admiralty Marshal, the Port of Tilbury and Penningtons between the 7^th of August 2020 and the 1^st September 2020;

Section C contains the emails between the Admiralty Marshal and both Penningtons and Hill Dickinson LLP (“Hill Dickinson”) between 6^th August 2020 and 5^th

Section D contains the emails mostly between Penningtons and Hill Dickinson between 5^th August 2020 and 3^rd November 2020.

an order that the First Defendant pays the Claimants’ wasted costs arising out of “the port charges issue” in the sum of £31,981.50 together with the costs of preparing its written submissions of £5,010.50. The First Defendant contends that it should be awarded the sum of £14,424.86, being the costs of the claim except for the port charges issue, that the First Defendant is not liable to pay costs associated with the ports charges issue to the Claimants but is entitled to costs of £20,285.50, being its costs of dealing with that issue, and further that it is entitled to recover £6,345 for the preparation of its written submissions.

The First and Second Claimants are suppliers of ships bunkers. In these proceedings they are represented by Mr T Moisley of Penningtons. It appears that, at all material times, the registered owner of the vessel was Islands Cruises Tranportes Maritimos Unipessoal Lda, an insolvent company situated in Portugal (the “Owner”).

The Administrator of the owning company had leased the vessel to the Second Defendant (“Global”) under a bareboat charter made on the 27^th June 2014. It was therefore Global which operated the vessel until the charter was terminated as appears below.

As a consequence of the Covid 19 pandemic the vessel was unable to operate and Global became insolvent. As a result the bareboat charter, which was due to terminate on the 25^th September 2020, was actually terminated on the 21^st July 2020. According to the Owner the vessel was re-delivered to them at that time. The vessel had remained idle from March 2020 and was lying at Tilbury. At some point during that period the vessel was detained by the Maritime and Coastguard Agency (“the MCA”).

On the 7^th August 2020 the Claimants caused an in rem claim form ADM1 and a warrant for arrest of the vessel to be issued. (As appears below apparently the claim was improperly served on the 8^th August 2020 and was actually re-served on the 19^th August 2020 when the arrest was effected). The claim sought to recover the cost of the bunkers supplied by the Claimants to the vessel on 5 occasions during 2020 for which no payment was made. As, at the time of the supply of the bunkers, the vessel was operated by Global it was that company which had requested the supply of the bunkers.

After the claim was issued the Owner, acting by its Administrator, instructed Messrs Hill Dickinson LLP to advise. On the 17^th August 2020 Mr Haddon of Hill Dickinson wrote to Penningtons and informed them that the Owner was under administration, that Global had abandoned the vessel to the Owner on 21^st July 2020, that therefore the provisions of s.21 of the Senior Courts Act 1981 could not be satisfied and that the vessel should be released from arrest.

On the 18^th August the Admiralty Marshal informed Penningtons that the claim (and arrest) had not been properly served and asked whether the Claimants wanted the arrest to be effected in the light of the contents of the email from Hill Dickinson.

On the 31^st August Penningtons wrote to Hill Dickinson stating that the Claimants had made a request for the release of the vessel but stating that the Claimants were not abandoning their claims “against the vessel and/or the insolvent estate and/or the demise charterer. Those claims are maintained and all our clients’ rights are fully reserved. You are put on notice that our clients do not accept that the demise charter between your client and Global Cruise Services Ltd ended on or around the 21 July 2020 as you have suggested. . . .”.

On the 1^st September 2020 the vessel was released from arrest upon a solicitors’ undertaking to the Admiralty Marshal that his fees and expenses would be paid. Initially it was understood that there were no outstanding charges against the vessel however, on the same day by an email timed at 1703, the Admiralty Marshal informed Penningtons that the port authorities were in fact seeking to recover port fees from 19^th August to 1^st September. It is to be noted that the email does not specifically state that the port authorities were seeking to recover the berthing costs from the Admiralty Marshal or that he was proposing to pay them if such a claim was made; however his email did contain the following statement: “I am waiting for the Port to provide an itemised bill but if you have not already you may wish to contact them to ascertain the amount. Once the port has confirmed the final figures you will understand that I will need to come to you to recover these costs as dictated by the undertaking you gave to the court at the time of the arrest.”

Also on the 1^st September 2020 at 1919 Mr Philip Haddon of Hill Dickinson sent an email to Penningtons responding to its email of the 31^st August 2020 and indicating that the Owner did not accept the matters alleged in that email and that those would be contested. Hill Dickinson also stated: “At this time we just make one point – you/your client arrested the vessel just 17 days after the bareboat charter was repudiated, in circumstances where our clients were thrown into a situation not of their making where the vessel had obviously not been previously under their management. As you can no doubt imagine, there were many issues to be sorted out before the vessel could sail, but the delay since has been down to the arrest instigated by your clients. Harbour dues that need to be settled prior to the vessel being allowed to sail will no doubt be settled by our clients once they know when the vessel can sail – mainly dependent upon when your clients release the arrest, but in any event that will not include the harbour dues for the period of the arrest which fall within the classification of Admiralty Marshal’s costs”.

On the 4^th September Penningtons wrote to the Admiralty Marshal stating that they would send an explanation of why they did not consider the Marshal was liable to pay the vessel’s berth charges and on the 7^th September Penningtons made enquiries of the MCA and were informed that the vessel was still detained by the MCA.

It does not appear that Penningtons did provide an explanation as to why they did not consider that the Marshal was liable to pay the berthing charges, however, on the 10^th September 2020 at 1145, Penningtons sent an email to the Marshal referring to the vessel’s release on the 1^st September 2020, stating that they would apply to the Court for an order for discontinuance pursuant to CPR Part 38.2 and confirming that the undertakings would be performed “in accordance with their proper effect”. Penningtons then referred to the fact that they were still awaiting details of any charges paid by the Marshal and asked for confirmation that no fees were owed by the Marshal. They then proceeded to ask the Marshal to provide information: “for the purposes of establishing the scope and effect of the undertakings (and the extent and amount, if any, of any liability thereunder),it is important that it is clear whether, why and in what amount any charges fall to be borne or paid by the Admiralty Marshal and/or by this firm pursuant to the undertakings” and posed a number of questions to the Marshal, in effect requiring him to provide particulars as to the nature of the port charges paid and the reasonableness of the charges.

Further on the 10^th September 2020, at 1414 and 1421, Ms Rosie Goncare, of Hill Dickinson emailed Penningtons requesting that the Claimants should discontinue the in rem proceedings with immediate effect and confirm it by 15^th September failing which the First Defendant would make an application challenging the jurisdiction of the court and seeking to recover all its costs on an indemnity basis.

On the 15^th September at 1421 the Admiralty Marshal emailed Penningtons in response to its email of the 10^th September stating, inter alia: “At no time did I contact the Port of Tilbury and request any services of them but I do not ordinarily step in to agree berthing terms with a port following the recent arrest of a vessel unless I am asked by one of the parties or if there is a particular concern about the safety an security of the vessel or those onboard”.

Also on the 15^th September, at 1515, Mr Haddon emailed Mr Cheuk at Penningtons, reminded him that there was a deadline for the First Defendant to challenge the court’s jurisdiction which expired on 18^th September and stated that unless the application for discontinuance was served on Hill Dickinson by return that would necessitate the First Defendant to prepare its own application.

On the 16^th September 2020 the Claimants made an application to the Court for orders: (i) that the court should grant permission to discontinue the claims against both the Defendants; (ii) that the Claimants should pay the First and Second Defendants’ costs from 7^th August 2020 to 2^nd September 2020; (iii) that the Court should reserve the question of the scope and effect of the undertakings given by the Claimants to the Admiralty Marshal on Forms ADM 4 and/or ADM 12; (iv) including the question of any liability of the Claimants to the Admiralty Marshal.

On the 17^th September 2020, at 1205, the Admiralty Marshal sent an email to Mr Haddon making him aware that the port dues requested by the Port Authority for the period of the arrest was £129,984.96.

Following the filing of the Claimants’ application of the 16^th September referred to above there was some communication between the solicitors as to the date of a hearing and as a result the order referred to above was made.

On the 30^th September 2020 the court gave directions for a ‘CMC’ to take place on the 5^th November 2020. It is not clear why the order was made for a CMC rather than simply for the hearing of the application but the parties appear to have treated the 5^th November as being the date for the hearing of the application and nothing appears to turn on this.

On the 27^th October Mr Cheuk of Penningtons sent an email to Hill Dickinson referring to the directions and attaching a draft order for agreement between the parties (see p.176 of the bundle). Whether a copy of that order appears in the hearing bundles is not certain however the order appearing at p.188 of the bundles appears to have been the one referred to in Mr Haddon’s email of the 29^th October at 1846 which refers to Mr Cheuk’s email referred to here (see pp.346-347 of the hearing bundle). The first paragraph of that draft is for an order that there are no sums due to the Admiralty Marshal under the undertakings provided to him, the second that the Claimants have permission to discontinue the claims against the Defendants and the third that the First and Second Claimants shall pay the First Defendant’s costs incurred by reason of the arrest on the standard basis, such costs to be summarily assessed if not agreed. The fourth paragraph was to the effect that the Claimants’ application for “costs wasted by reason of the First Defendant’s assertion (made in correspondence on 1 September 2020, and now withdrawn) that the Admiralty Marshal was liable to pay the port charges incurred during the period of arrest shall be determined on paper and summarily assessed . . .” (emphasis added).

On the 29^th October 2020, at 1729, Mr Haddon of Hill Dickinson sent an email to the Admiralty Marshal, copied to Mr Moisley of Penningtons, referring to the email sent by the Marshal to Mr Haddon on the 17^th September (by which the Marshal informed Mr Haddon aware of the outstanding port charges amounting to £129,984.96), in which Mr Haddon confirmed that Owner had settled the Port of Tilbury’s costs, including those incurred during the period of the arrest. Mr Haddon stated that the Owner was not looking to any other party for a contribution to such costs.

Further on the 29^th October 2020, at 1846, Mr Haddon sent an email to Mr Moisley in which he referred to the draft order proposed by the Claimants (see above) and stated that the First Defendant had no objection to the matters set out in the first and second paragraphs of the draft but that paragraphs 3 and 4 were not accepted and proposing that paragraph 3 should read “The First and Second Claimants shall pay the First Defendants’ costs of the Claims from 7^th August 2020 to 29^th October 2020, such costs to be assessed by the Admiralty Registrar if not agreed.” On the same day, by the email timed at 1856, Mr Haddon sent an unsigned schedule of the First

On the 30^th October 2020 the Claimants filed a Case Memorandum. In that:

On the 2^nd November 2020 Mr Haddon sent an email to Mr. Moisley in which, inter alia, he pointed out: (a) that the Owner had no objection to the Claimants application for discontinuance; (b) that where there is no necessity for an application to the court the Claimants are usually responsible for the Defendants’ costs until notice of discontinuance is given; (c) that in cases where undertakings have been made to the court it is necessary to obtain the consent of the court and the discontinuance is not effective until such order is made so that the Claimants remain liable for the Owner’s costs until that time; (d) that there could be no basis for restricting the Owner’s costs related to the arrest particularly where, by its email

On the 3^rd November 2020 the emails indicate that there was an element of agreement between the solicitors leading to the Order which was put before the court for approval so as to avoid the hearing. This led to the Order dated 5^th November and the hearing on the 5^th November being vacated. Thereafter the parties provided their written submissions.

The Claimants accept that the First Defendant is entitled to its ‘costs of the arrest’ up to the date of the discontinuance on the 5^th November 2020 in accordance with CPR Part 38.6. They submit that, having instructed an independent costs consultant, the relevant sum to be allowed equates with what the First Defendant has claimed in Part 1 of its costs schedule (for work done from 9^th August to the 1^st September 2020) together with small portions of the sums claimed for work done between 2^nd to the 15^th September (Part 2 of the Schedule) and between 30^th October to 5^th November (Part 3 of the Schedule). The Claimants submit that the appropriate sum to be allowed is £14,424.86.

The second matter is stated to be an issue as to whether the First Defendant is entitled to its costs with respect to a separate claim “for contribution to port charges

The Claimants also submit that the majority of the First Defendant’s costs incurred after the 1^st September and all the costs incurred between the 15^th September and 29^th October 2020 related not to the arrest but to either the port charges issue or the “MCA detention issue”. In this respect the Claimants have submitted that where, as in the present case the Admiralty Marshal did not request the port for any services the liability for the port charges remains with the owners or demise charterers and that, in the absence of an order for sale the decision in The Queen of the South [1968] P. 449 did not apply. Thus, submit the Claimants, the port charges issue should never have been raised by the First Defendant but that, by doing so, the First Defendant “placed the Claimants in a difficult position in which it had no option but to resist the assertion (that a contribution was due from the Admiralty Marshal or the claimant) made by the First Defendant on behalf of themselves and the Admiralty Marshal”.

Consequentially the Claimants assert that “in order to resist the claim for a contribution (of £130,000) considerable thought had to be given as to how the

Alternatively, if it is decided that the First Defendant is the successful party (according to the Claimants’ reasoning: because it is decided that an issue based approach is not appropriate) then it is submitted that it is necessary to depart from the general rule and a ground for doing so, by reason of the provisions of CPR Part 44.2(5)(b), “whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue”, was the conduct of the First Defendant in raising the ‘port charges issue’ because, so it is averred, it was plain that “there was no basis in law for the assertion that the First Defendant was entitled to a contribution of (£130,000) to its liability to pay port charges to the Port of Tilbury”. The Claimants contend that “the best possible evidence that this is so is provided by i) the complete absence of any attempt by [Hill Dickinson] to explain or justify the First Defendant’s position and ii) the complete abandonment of the claim toa contribution”. Accordingly it is said that the First Defendant should be deprived of its Part 2 costs and the Claimants are entitled to an award of costs in relation to its costs of the port charges issue.

In the further alternative the Claimants contend that, if the court disagrees with the analysis set out above, nonetheless the Claimants should not pay the costs of the MCA detention and that the time spent on documents is excessive. By reference to the First Defendant’s schedule the Claimants contend that their own liability for costs should be restricted to £2,773.50 in respect of ‘communications’ and £3,000 in respect of work on documents, making a total of £5,773.50. The Claimants contend that the balance of Part 3 over the £1,220 allowed (see sub-paragraph (a) above) is not related to discontinuance and therefore is not claimable.

Further the Claimants seek to recover what they claim are their “wasted costs” arising from the additional costs to discontinue caused by the need to deal with the port charges issue which are set out in their Form N260 in the sum of £31,981.50. In this respect the Claimants contend that: “The Claimant had carriage of the application to discontinue, had to seek advice from counsel, and prepared and served evidence on the port charges issue”.

Finally the Claimants submit that they incurred £5,010.50 between 6^th November 2020 and 19^th November 2020 in the preparation of their written submissions making their total claim in costs £36,992.

The Order of the 5^th November 2020 provides that the First Defendant is entitled to its costs of the claim except for the costs of the port charges issue. Those costs amount to £14,424.86, being the costs incurred from 9^th August 2020 to the 15^th September 2020 as set out in Part 1 of the First Defendant’s Schedule of Costs dated the 17^th November 2020. Mr Henderson submits that these should be awarded in full.

Part 2 of the Schedule details the costs incurred by Hill Dickinson from 16^th September 2020 to 17^th November 2020 amounting to £20,285 and Part 3 sets out the estimate for obtaining counsel’s advice as to the liability for costs and preparing the written submissions filed. This amounts to £6,345.

Mr Henderson has submitted that the costs in Part 1 should be awarded in full. As it appears from the Claimants’ submissions that the figure of £14,424.86 is accepted nothing more is of concern.

With respect to the matter as a whole including the so-called port charges issue Mr Henderson has made the following points by way of introduction:

With respect to the ‘port charges issue’ Mr Henderson has submitted:

With respect to the First Defendant’s own costs, Mr Henderson has given an explanation of the schedule of costs. The first part relates to the sum of £14,424.86

In addition Mr Henderson has submitted that the estimate of costs for preparing the written submissions of £6,345 is ‘eminently reasonable’.

With respect to the Claimants’ claim for ‘wasted costs’ Mr Henderson has submitted that the Claimants are not entitled to them but, if the court takes a different view, then it should take the following matters into account:

The Claimants should not recover the costs which would have been incurred in any event, namely the costs of the application for permission to withdraw the claim and, because “Astoria” was one of three ships in the port facing excessive port fees, the work done in respect of the other vessels including the costs of instructing counsel should be apportioned;

By CPR Part 44.2 the award of costs in a case is within the discretion of the court. The discretion is to be exercised judicially and, in accordance with CPR Part 1, with a view to coming to a fair conclusion. How that is to be approached has been the subject of guidance from the Court of Appeal in Straker v Tudor Rose [2007] EWCA Civ 368 referred to in Cook on Costs 2021 Edition which states that the proper approach is (i) to consider whether it is appropriate to make an order for costs, (ii) if it is then the general rule is that the successful party should get its costs, (iii) to identify the successful party, and (iv) consider whether there are reasons for departing from the general rule in whole or in part. The White Book also contains copious notes on these aspects. At 44.2.13 (p. 1386) it states: “As a practical matter r.44.2(2) poses two questions: (1) who is the successful party and (2) when should the general rule be applied? The two questions tend to get conflated and therefore muddled”. The same page also contains reference to the cases where the question of identifying the successful party have been referred to. These indicate that the success is to be regarded in the context of the overall proceedings rather than a particular issue (Kastor Navigation v AGF MAT [2004] EWCA Civ 277) and that the court should seek to ascertain who has won as a matter of ‘substance and reality’ (see Sir Thomas Bingham in Roache v Newsgroup Newspapers Ltd [1998] EMLR

International SA v Ali (1999) 149 NLJ 1734.)

CPR Part 38.2(1) provides that a claimant may discontinue its claim at any time however it must obtain the permission of the court in relation to a claim where any party had given an undertaking to the court. Part 38.6 deals with costs upon discontinuance and provides that the discontinuing party will be liable for costs to the date when the notice of discontinuance is served upon him where permission is not required. The note at 38.5.2 of the White Book indicates that where permission to discontinue is required the order granting permission should indicate when discontinuance takes place. However by CPR Part 38.6 the court may make another order but it is to be noted that there is a strong presumption that the defendant should recover its costs and the burden is upon the claimant to show that there is a good reason for departing from that position, see Nelson’s Yard Management Co. v Eziefula and Ashany v Eco-Bat Technologies Ltd [2018] EWCA Civ 1066, referred to in note 38.6.1 of the White Book.

CPR Part 44.2(4) sets out the matters which the court should consider in exercising itsdiscretion on costs which includes the conduct of all the parties and CPR Part

The Claimants have referred to the lost costs as ‘wasted costs’ on several occasions. The rule relating to wasted costs orders is CPR Part 46.8. In this respect the Court of Appeal has given guidance as to the three stage test to be applied in Ridehalgh v Horsefield [1994] Ch. 205, CA which is, when a wasted costs order is applied for, to consider: (a) whether the legal representative of whom the complaint is made behaved improperly, unreasonably or negligently; (b) if so, did such conduct cause the applicant to incur unnecessary costs; and, (c) if so, would it be reasonable to order the legal representative to compensate the applicant in whole or in part. In general it is to be noted that the rule requires the complaining party to make an application and for the responding party to be given adequate notice and an opportunity to reply.

The Queen of the South. The Claimants referred to this authority in paragraph 17 of their submissions but submitted that there is no scope for such an order. As this case deals with the appropriate approach to harbour dues in cases where there is to be an order for the sale of a vessel it is not strictly on point. Nonetheless the judgment of Brandon J, as he then was, considers the competing interests of a harbour authority, with its lien for mooring fees, and the need for the court to be able to sell a res in an appropriate case. At the end of the judgment he gave helpful guidance to future cases where points involving harbour dues might arise. What clearly stands out from that dictum is that there can be no doubt that in an appropriate case such fees may be considered as part of the Marshal’s costs but that this should be after consultation between the various interests and only after the matter has been referred to the Admiralty Registrar or the Admiralty Judge. This reinforces the principle that although the Admiralty Marshal has custody of an arrested vessel his actions to preserve the property, which may cover a wide variety of scenarios, should only be taken with the sanction of the court itself.

The Straker v Tudor Rose guidance

In this case the Claimants issued proceedings seeking to recover the purchase price of bunkers supplied to the ship. It was an essential feature of the present case that they decided to proceed in rem against the vessel and they caused it to be arrested. As the claim was for bunkers provided to the ship the claim fell within s20(2)(m) of the Senior Courts Act 1981 as being within the jurisdiction of the Admiralty Court. By s.21 of the 1981 Act the jurisdiction may only be invoked in rem, ie against the ship itself, where the ‘relevant person’, namely the person who would be liable in an action in personam at the time when the cause of action arose, was also either the beneficial owner or a demise charterer of the vessel at the time whenthe action was brought, ie. commenced.

When these proceedings were commenced by issuing the claim form on the 7^th August 2020 the Claimants were not aware that the demise charter had been terminated. However on the 17^th August 2020 Hill Dickinson, acting for the Owner of the vessel, wrote to Penningtons and advised them of the position. The relevant person was the demise charterer of the vessel because it was that charterer which had requested the supply of the bunkers which were the subject of the claim however, unfortunately for the Claimants, the charterer had terminated the charter and surrendered the vessel to the Owner before the proceedings were commenced. In these circumstances it was not permissible to exercise the jurisdiction of the court against the vessel. It is also to be noted that on the 18^th August the Admiralty Marshal, who had been copied into the email from Hill Dickinson, sent a message to Penningtons advising them that the original arrest had not been properly served on the vessel and asking whether, in the light of the correspondence from Hill Dickinson, the Claimants wanted him to effect the arrest. Penningtons confirmed that they did and the arrest was effected by the Admiralty Marshal despite having been given the information which should have put them on notice that, if it was correct, must have meant that the jurisdiction of the court could not be invoked by the in rem procedure. As it has transpired that was an unfortunate decision because by committing to the arrest the Claimants made themselves subject to the undertaking contained in ADM4 which lies at the heart of the present dispute.

Thereafter Penningtons firstly advised their clients to release the vessel from arrest and made the appropriate request to the Admiralty Marshal and subsequently made an application to the court for permission to discontinue their claim. It is common ground that this application was necessary by reason of CPR Part 38.2(2). The claim was finally discontinued by the Order of the Court on November 5^th. Having commenced a claim and thereafter discontinued, it follows inexorably that the Claimants were the unsuccessful party in this litigation.

That conclusion is underlined by the fact that the rules applying to discontinuance in CPR Part 38 clearly recognise that it is for the discontinuing party to reimburse the other party for its costs arising from the proceedings and it is clear from the notes to CPR Part 38.6 that there is a presumption in favour of the defendant recovering his costs, particularly where it is plain that if the claim had continued it must have failed, and there is a substantial burden upon the claimant to show that the presumption should be displaced. That the Claimants should pay the First Defendant’s costs in the present case is clearly the proper order because, had the Claimants not discontinued, the First Defendant would have been entitled to apply for and obtain an order dismissing the claim. If that had occurred there would be no doubt that the Claimants would have been liable for all the First Defendant’s costs up to the moment of dismissal most probably to be assessed on the indemnity basis.

As a matter of ‘common sense’, if the general rule is applied, the First Defendant is the successful party and is entitled to its costs from the unsuccessful Claimants. It follows that, as they appear to accept in paragraph 10 of their submissions, the Claimants are liable for costs up to the 5^th November although they appear to seek to restrict this liability to only the costs of the “arrest”. This concentration upon the ‘costs of arrest’ is a thread which runs throughout the Claimants’ reasoning and, in my judgment, is also misconceived. As Hill Dickinson pointed out in correspondence the relevant costs in these circumstances are not only those arising out of the arrest but the costs of defending the claim as a whole. In these circumstances, if the general rule is followed, the Claimants must bear the First Defendant’s costs to the date of discontinuance. However that is subject to the last step of the guidance: whether it is proper, in the circumstances of this case, to depart from the general rule and make a different order and, if so what.

The “Port charges issue”

Defendant subsequently abandoned the claim as appears from Hill Dickinson’s email of the 29^th October 2020. As a result it is contended that a considerable amount of time and expense has been incurred in relation to this issue and that the Claimants are entitled to recover their own costs arising from it and should not be liable to pay those of the First Defendant despite the fact that the claim has been discontinued.

be made which has not been made. Nonetheless the nature of the order they require necessitates considering the same type of matters with respect to Hill Dickinson’s conduct which would have arisen if an application had been made. As stated above it is noteworthy that to obtain a

‘wasted costs’ order the Claimants would need to persuade the court that the First Defendant, by itself or its solicitors, had acted dishonestly or, at least, negligently with respect to its conduct of the case.

Claimants intimated that they disagreed with the contents of Mr Haddon’s email of that date or that they felt constrained to take steps of any sort arising from what Mr Haddon had stated in that email.

Dickinson should send a costs schedule. It is important to note that Mr Moisley’s email did not suggest or even hint that the Claimants were seeking their costs from any issue which they suggested might have arisen from Mr Haddon’s email of the 1^st September. On the contrary it stated that the issue of discontinuance should be resolved save for one point which was: “The reservation alluded to above is this: given the Port of Tilbury has reportedly asked the Admiralty Marshal to pay £129,984.96 as port dues, there is an issue concerning the liability of the Marshal to pay the port dues. That issue is, strictly speaking, an issue which concernsthe Port and the Marshal, neither of whom is party to this claim. However, for the reasons set out in our Application Notice, we consider the most time effective way of resolving this issue is to ask the court to take jurisdiction over it. If the Court agrees to do so, that means the claim will not be discontinued immediately. However that does not mean that your client has to be involved if the terms of the discontinuance are otherwise agreed” (emphasis added).

Marshal, they could be included as part of the Marshal’s expenses. Although there is no evidence which indicates that the Marshal had committed to paying the harbour dues or that he would actually do so there is one email which intimates that he could look to Penningtons for a recovery under the undertakings. However it is important to note that, pursuant to Brandon J’s guidance in The Queen of the South, the Admiralty Marshal will not pay such costs without the sanction of the Admiralty Registrar or the Admiralty Judge and, where a party is concerned about such matters the appropriate means of dealing with those concerns is to ask the Marshal to make an application to the Registrar on notice to themselves for directions as to whether the payment should be made or, in the very unlikely event that, he refused to do so, to make an application to the court themselves. That course apparently accords with the advice given to the Penningtons by counsel. In these circumstances although Penningtons do not appear to have fully engaged with the Marshal on the question of him paying the harbour dues (which would have been the sensible course) they did make an application for the guidance of the court with respect to those dues. Therefore I do not think that Penningtons should be criticised for that per se. However it must be recognised that such an application must have been to consider an apparent difference of views between themselves and the Marshal. The necessity to do so, as Penningtons clearly recognised in their email of the 23^rd September referred to above, had nothing to do with the Owner but was to clarify the Claimants’ own position arising out of their arrest of the vessel. In those circumstances this would simply be a matter arising from the circumstances surrounding the arrest of this particular vessel and there is no reason at all why the Owner should have to face an order for costs with respect to a matter which was not of their making. However that is not to say that the conduct of the Claimants with respect to their handling of this matter overall is without fault and not worthy of criticism as set out below.

The content of Mr Haddon’s email of the 1^st September 2020 was, in itself, unobjectionable,

The First Defendant did not, as the Claimants asserted, ‘raise the port costs issue’ either expressly or by its conduct;

Insofar as there was ‘a port costs issue’ that was a matter which should have been resolved between the Claimants and the Admiralty Marshal;

There is no evidence to support the Claimants’ assertion that they suffered ‘wasted costs’ by reason of the First Defendant’s conduct;

On the contrary there are clear indications that it was the conduct of the Claimants which is questionable and caused the costs incurred in: (i) wrongly commencing proceedings pursuant to s.21 of the Senior Court Act 1981; (ii) persisting with the arrest of the vessel in circumstances where, by the 19^th August, they had information to indicate that the court had no jurisdiction; (iii) persisting with their claim by, in their email of the 31^st August, stating that the Claimants would continue their claims (as to do so was contrary to the provisions of s.21 of the 1981 Act); (iv) not applying to discontinue the claim and agree to pay the First Defendant’s costs of the claim timeously and (v) thereafter presenting a claim for costs against the First Defendant on a ground for which there is no legal basis and was, given the clear statement of the Claimants’ position set out in the email of 23^rd September 2020 referred to above, wholly untenable.

Conclusion

It follows that the Claimants are not entitled to recover any of their costs arising out of this matter but the First Defendant is entitled to all of its costs associated with the claim until the claim was discontinued by the Order of the 5^th November 2020. In addition the First Defendant is entitled to recover its costs of preparing the written submissions to the court.

Assessment of the costs

Neither party has addressed the court as to appropriate basis to be applied in assessing the costs to be recovered. However, even on a summary assessment, it is necessary for the court to indicate upon which basis it is making the assessment. By reference to the cases cited at paragraph 44.3.9 of the White Book, it is appropriate to proceed on an indemnity basis where the conduct of a party or other circumstances of a case take the situation ‘out of the norm’, see Excelsior Commercial and Industrial Holdings Ltd [2002] EWCA Civ 879. In Holding v Apax Partners LLP [2018] EWHC 2732 Hildyard J held that, in a case where proceedings have been discontinued, the provisions of CPR Part 44.9(1) do not fetter the power of the court which should not be reluctant to order costs on an indemnity basis if it considers that the case is ‘out of the norm’. Further it is not the law that an indemnity order will only be made where the unreasonable conduct of the paying party increased the costs recoverable by the receiving party, see Phoenix Finance Ltd v Federation Internationale de L’Automobile [2002] EWHC 1242 (Ch) per Sir Andrew Morritt VC.

In my judgment the conduct of the Claimants in these proceedings does take the case ‘out of the norm, as the Claimants have commenced and persisted in the claim and have also made assertions against the First Defendant which were unfounded as referred to in paragraph 26(e) above. I shall therefore perform the assessment on the indemnity basis, but, having said that, I do not think that applying that basis makes any material difference to the quantum of costs which the First Defendant should recover as I am satisfied that the First Defendant’s costs were properly incurred and were reasonable. The Claimants have not contended that those costs were disproportionate and it is clear that they were not. At least when compared with the costs claimed by the Claimants over a comparable period.

The First Defendant’s schedule of costs is signed and dated the 17^th November 2020. Part 1 set out Hill Dickinson’s costs to the 15^th September 2020 amounting to £14,424.86. Those are the costs until the day before the Claimants issued their application to discontinue. Mr Henderson has submitted that they were reasonably incurred and, in Paragraph 14 of their submissions Penningtons accepted those costs.

In Part 2 the First Defendant claims costs amounting to £20,285.50 for the period between 16^th September and 17^th November. Mr Henderson has informed the court that they do not include costs arising from negotiating and liaising with the Port Authority and having considered the documents schedule I accept that assurance and consider that the work done relates to Hill Dickinson having to deal with the case until it was discontinued and thereafter with regard to the costs claim and was reasonable. In paragraph 30 of their submissions Penningtons have submitted: (i) that the Claimants should not have to pay the First Defendant’s costs of the MCA detention and (ii) that the time spent on documents was excessive in circumstances where it has not provided any documents nor served evidence. The only reference to the MCA in the First Defendant’s document schedule appears in items 3 and 4. Item 3 is for 1.2 hours of time by a junior member of Hill Dickinson for a review of the grounds for MCA detention arising from the ‘Claimants’ allegations in their witness statement”. It also appears that a small part of item 4 may be a reference to some further consideration of this by more senior members of Hill Dickinson which is understandable. It therefore appears that Hill Dickinson’s work regarding the MCA was brief and arose from the contents of the Claimants’ witness statement. It follows that it related to a matter raised by the Claimants, as part of the dispute between the Claimants and the First Defendant and it is therefore recoverable. Aside from that I can find no other reference to work performed by Hill Dickinson relating to the MCA and I do not consider that Pennington’s objection is made good. Further I do not accept Penningtons’ submission that Hill Dickinson spent an excessive amount of time working on the documents. The work performed by Hill Dickinson is set out in their schedule and was, in my view, all work directly related to the matters being raised by the Claimants. Furthermore the time spent by the 2 main members of the Hill Dickinson team, Mr Haddon and Ms Rosie Goncare, was 11.9 and 27.4 hours respectively giving a combined total of 39.3 hours. That compares reasonably with the times put forward by Penningtons team of Mr Moisley and Mr Cheuk of about 23.7 and 22.6 hours respectively, totalling 46.3 hours. It is interesting to note that, the senior member of the Claimants’ team, Mr Moisley, was engaged for about twice the time that Mr Haddon was involved. In my judgment the Claimants’ criticism of Hill Dickinson’s time spent has not been made out, the First Defendant’s costs were reasonably incurred and it should be awarded the full sum of £20,285.50 claimed for Part 2.

Finally in Part 3 Hill Dickinson have put forward an estimated claim of £6,345 for the work done on preparing the costs submissions. For the solicitors most of work was done by Ms Goncare and Mr Martin Rothwell, a costs lawyer. That work apparently included attending upon Mr Henderson, whose fees are put forward as £3,000 for both advising in conference and preparing the costs submissions. When compared with the Claimants’ claim for counsel’s fees of £8,485 for only advising Mr Henderson’s fees appear very reasonable indeed although I accept that he is some 12 years more junior than Claimant’s counsel. I accept that it was proper and reasonable for the First Defendant’s solicitors to have played a part in the preparation of the written submissions and to charge for that work. In my judgment the sum of £6,345 put forward by Hill Dickinson for the preparation of the submissions was reasonable and is recoverable.

In these circumstances I assess that the costs which the First Defendant is entitled to recover from the Claimants in the total sum of £41,055.36. I would be grateful if the parties would agree and order which gives effect to this decision taking account of the matters dealt with in the Order made on the 5^th November 2020.

Dated this 29^th day of January 2021