Lakatamia Shipping Co Ltd v Su

Factual and Procedural Background

This opinion concerns an application for relief from sanctions brought by the Defendant and opposed by the Plaintiff. The relief was sought following a breach consisting of a 15 minute delay in the provision of disclosure. The application resulted in a half day hearing before the court. The Defendant was granted relief from sanctions on the basis that the breach was trivial, applying the guidance from the Mitchell case. The Plaintiff contended that the Defendant should bear all costs related to the application due to the original default, while the Defendant argued it should recover the bulk of its costs because it succeeded and the Plaintiff's opposition was unreasonable.

Legal Issues Presented

1. Whether relief from sanctions should be granted for a trivial breach of procedural rules.
2. How the court should exercise its discretion regarding the allocation of costs arising from an application for relief from sanctions, particularly where the application is opposed.
3. Whether it was reasonable for the Plaintiff to oppose the Defendant’s application for relief from sanctions and the resulting cost consequences.

Arguments of the Parties

Plaintiff's Arguments

• The Defendant’s original default caused the need for the application and all associated costs should be borne by the Defendant.
• The Plaintiff asserted that the "innocent" party is entitled to argue against relief from sanctions and maintain the original sanction.

Defendant's Arguments

• The Defendant succeeded in obtaining relief from sanctions and thus should recover the bulk of its costs.
• The Plaintiff’s vigorous opposition to the application was unreasonable under the circumstances.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by recognizing that the Defendant needed to apply for relief from sanctions and that ordinarily the applicant bears the costs of such an application, including supporting evidence. It was reasonable for the Plaintiff to clarify the procedural history but not to positively oppose the application at the hearing. The court found that the breach was trivial—a 15 minute delay in disclosure—and that relief should be granted under Mitchell. Despite this, the Plaintiff vigorously opposed the application, leading to a contested half day hearing and substantial costs. The court held that this opposition was unreasonable, as the facts clearly warranted relief. The court emphasized the importance of parties conducting litigation reasonably to avoid unnecessary satellite litigation. Accordingly, the court exercised its discretion to allocate costs so that the Defendant pays the costs of the application and witness statements, but the Plaintiff pays the bulk of the costs of the contested hearing due to its unreasonable opposition.

Holding and Implications

The court held that:

• The Defendant should pay the costs of making the application for relief from sanctions and the costs related to witness statements, including those of the Defendant’s witness.
• The Plaintiff should pay the bulk of the costs of the half day hearing, as its opposition was unreasonable and caused unnecessary expense.

The direct effect is a cost order reflecting the reasonableness of the parties’ conduct. No new precedent was established, but the decision reinforces the principle that parties should conduct litigation reasonably and that unreasonable opposition to relief from sanctions can attract adverse cost consequences.