The "Navigator Aries"

• Jurisdiction: Singapore
• Judge: Judith Prakash JCA
• Judgment Date: 21 September 2023
• Neutral Citation: [2023] SGCA 26
• Court: Court of Appeal (Singapore)
• Docket Number: Civil Appeal No 45 of 2022
• Hearing Date: 21 July 2023
• Citation: [2023] SGCA 26
• Year: 2023
• Plaintiff Counsel: Seah Lee Guan Collin, Jonathan Lim Shi Cao, Choi Yee Hang Ian and Tessa Lim (Resource Law LLC)
• Defendant Counsel: Mohamed Goush s/o Marikan (Goush Marikan Law Practice) and Mohd Munir Marican (Marican & Associates)
• Subject Matter: Civil Procedure,Costs
• Published date: 21 September 2023

Steven Chong JCA (delivering the judgment of the court): Introduction

All court actions and applications have costs consequences. Typically, costs awards are not complex and would generally follow the event. However, in cases where the outcome is split between the parties, some adjustments may be made to reflect the parties’ relative success.

Costs orders assume a more challenging dimension where there is a valid offer to settle or a Calderbank offer. In the case before us, both were present. One party made an offer to settle before the trial while the other party made a Calderbank offer prior to the appeal being heard.

This decision will explain how each of these two competing offers would impact on the eventual costs orders. In particular, we will examine whether a Calderbank offer which is “as favourable” as the judgment obtained should be treated any differently from an offer which proves to be “more favourable”. This question arises in relation to the second of the three sets of costs that this judgment addresses: the costs of the consolidated action below, HC/ADM 170/2016 (which was consolidated with HC/ADM 204/2016) (“the trial”); the costs of the appeal therefrom, CA/CA 45/2022 (“CA 45” or “the appeal”); and the costs of the appellant’s application to transfer the appeal from the Appellate Division (“AD”) to the Court of Appeal (“CA”), CA/OA 13/2022 (“OA 13” or “the transfer application”).

Procedural history

The background facts for this dispute are set out in The “Navigator Aries” [2023] SGCA 20 at [8]–[38] (the “Judgment”).

In brief, on 28 June 2015, a collision occurred in the Surabaya Strait between the appellant’s vessel, the Navigator Aries (the “NA”), and the respondent’s vessel, the Leo Perdana (the “LP”).

On 18 August 2016 and 9 September 2016, the appellant and the respondent commenced their respective admiralty actions in the High Court for the apportionment of liability for the collision. The actions were consolidated on 11 November 2016.

On 16 May 2018, the respondent served an offer to settle on the appellant. It proposed apportioning liability at 60:40 in the respondent’s favour, and for the costs of the trial to follow a similar apportionment.

On 13 September 2021, the High Court judge (the “Judge”) delivered an oral judgment and apportioned liability at 70:30 in the respondent’s favour. This meant that the respondent obtained a judgment that was more favourable than its offer to settle. The offer to settle had not been withdrawn at that point.

On 28 September 2021, the Judge made costs orders based on an apportionment similar to the apportionment of liability. These orders were extracted as HC/ORC 5829/2021 (“ORC 5829”):

It is ordered that:

1. The Plaintiffs [ie, the appellant in the appeal] shall pay to the Defendants [ie, the respondent in the appeal] costs to be taxed, if not agreed, as follows: (a) The Plaintiffs shall pay 70% of the Defendants’ costs of the action in Admiralty in Rem No 204 of 2016 (“ADM 204”) on the standard basis from the date of the issue of the writ in ADM 204 on 9 September 2016 to the date when these actions were consolidated on 11 November 2016; (b) The Plaintiffs shall pay 70% of the Defendants’ costs of the Consolidated Action on the standard basis from 12 November 2016 to the date of the service of the Defendants’ Offer to Settle on the Plaintiffs on 16 May 2018; and (c) The Plaintiffs shall pay 70% of the Defendants’ costs of the Consolidated Action on the indemnity basis from 17 May 2018 until the date when [the trial judgment] was delivered in the Consolidated Action on 13 September 2021. 2. The Defendants shall pay to the Plaintiffs costs to be taxed, if not agreed, as follows: (a) The Defendants shall pay 30% of the Plaintiffs’ costs of the action in Admiralty in Rem No 170 of 2016 (“ADM 170”) on the standard basis from the date of the issue of the writ in ADM 170 on 18 August 2016 to the date when these actions were consolidated on 11 November 2016; and (b) The Defendants shall pay 30% of the Plaintiffs’ costs of the Consolidated Action on the standard basis from 12 November 2016 until the date when [the trial judgment] was delivered in the Consolidated Action on 13 September 2021. 3. The Defendants shall not in any event be entitled to any costs of and incidental to the following matters: (a) The defence of inevitable accident; and (b) The Defendants’ submissions and authorities in relation to the “Basis Rule” in respect of expert evidence in the Defendants’ Reply Submissions dated 22 June 2020.

In ORC 5829, the Judge gave effect to O 22A r 9(3) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“ROC (2014 Rev Ed)”), which was the applicable version of the rules at the time, concerning an offer to settle made by a defendant:

Costs (O. 22A, r. 9)

9.— …

(3) Where an offer to settle made by a defendant — (a) is not withdrawn and has not expired before the disposal of the claim in respect of which the offer to settle is made; and (b) is not accepted by the plaintiff, and the plaintiff obtains judgment not more favourable than the terms of the offer to settle,

the plaintiff is entitled to costs on the standard basis to the date the offer was served and the defendant is entitled to costs on the indemnity basis from that date, unless the Court orders otherwise.

At paragraph 3 of ORC 5829, the Judge also accepted the appellant’s submission that the respondent should not be entitled to costs on two issues (the “Excluded Issues”). To provide context: This first issue is the respondent’s pleaded defence of inevitable accident. In its costs submissions below, the appellant had submitted that such an argument was superfluous, because the respondent was already mounting a primary case that the NA was solely to blame for the collision. In any case, the respondent could not avail itself of this defence. The parties did not dispute that the defence of inevitable accident requires the accident to have taken place without any negligence on the defendant’s part. The Judge accordingly rejected the defence on its merits, having found that the LP’s excessive speed contributed to the bow cushion effect (and, in turn, the collision). The second issue relates to an evidential objection raised in the respondent’s reply submissions below. The objection was that the appellant’s navigation expert had no factual basis with respect to certain matters (such as the existence of the anchored crane barge) on which to render an opinion premised on those matters. In its costs submissions below, the appellant submitted that this objection was unfounded, as objective evidence of these facts had clearly been adduced over the course of the trial.

Returning to the case’s procedural history, on 12 October 2021, the appellant filed its appeal against the whole of the Judge’s decision, including his decision on costs, vide AD/CA 109/2021.

On 10 August 2022, the appellant served a Calderbank offer (ie, a letter without prejudice save as to costs) on the respondent. It proposed to settle the issue of liability through a 50:50 apportionment, and to settle the costs of the trial and the appeal.

On 28 September 2022, the appellant applied to transfer the appeal from the AD to the CA, vide OA 13.

On 4 November 2022, OA 13 was granted, as the appeal raised a point of law of public importance and its results would have considerable significance to the shipping industry. The costs of OA 13 were also ordered to be costs in the appeal.

On 29 March 2023, the respondent withdrew its offer to settle.

On 3 April 2023, CA 45 was heard. The appellant’s Calderbank offer had not been accepted by this point in time. On 13 April 2023, it was revoked.

On 7 July 2023, CA 45 was decided. Liability was apportioned at 50:50. The appellant thus obtained a better result in the appeal than the trial, as its share of liability was reduced from 70% to 50%. It also obtained a judgment not less favourable than its Calderbank offer, since both were for a 50:50 apportionment.

In summary, the following figures for the apportionment of liability were proposed or decided (as applicable) in these proceedings:

Stage	Appellant’s % liability	Respondent’s % liability
The respondent’s offer to settle	60	40
Decision at the trial	70	30
The appellant’s Calderbank offer	50	50
Decision on appeal	50	50

The parties’ positions on costs

Three sets of costs fall to be decided: the costs of the trial; the costs of the appeal; and the costs of the transfer application.

Costs of the trial

The parties both submit that the costs of the trial should be apportioned at 50:50, on a standard basis, in light of our decision to apportion liability at 50:50.

The respondent acknowledges that its pre-trial offer to settle (at [7] above) is no longer relevant to determining costs. The appellant has obtained a more favourable judgment on appeal than what was offered – the judgment is for the respondent to bear 50% liability, whereas the offer was only for 40%. In any case, the offer was withdrawn on 29 March 2023.

The respondent has not challenged the Judge’s decision on the Excluded Issues (see [9] and [11] above).

Costs of the appeal

In respect of the appeal, the appellant submits that it is entitled to costs. It advances three alternative positions as to their quantification: Its primary position is for costs to be assessed, if not agreed. The standard basis should apply from the date the appeal was filed to the date its Calderbank offer was served. This is the period of 12 October 2021 to 10 August 2022. The indemnity basis should apply from a day after the Calderbank offer was served to the date the appeal was heard. This is 11 August...