"Krysia" Maritime Inc v Intership Ltd

Factual and Procedural Background

The Plaintiff, as the owner of the fast support and intervention vessel "KRYSIA", claimed damages against the Defendant, owners of the dumb barge "EUROPA", arising from an incident on 30th September 2006. The incident involved the fouling of the number 1 port outer propeller of "KRYSIA" by a rope and wire attached to a Yokohama fender secured on "EUROPA".

Following a hearing in June 2008, judgment was handed down in July 2008, finding negligence in the management of "EUROPA" caused the fouling, but also attributing fault to the navigation of "KRYSIA". Liability was apportioned 70% to "EUROPA" and 30% to "KRYSIA". The trial did not address damages, which were to be considered at a future hearing. Subsequently, the Defendant sought to argue that costs should be proportioned according to fault, invoking longstanding Admiralty Court practice, leading to a separate hearing on the issue of costs. The parties later settled the costs issue, but the court proceeded to deliver judgment on the principle raised.

Legal Issues Presented

1. Whether the general rule under CPR Part 44.3(2)(a), that the unsuccessful party pays the costs of the successful party, should apply where the successful party is found partly at fault.
2. Whether longstanding Admiralty Court practice, reflecting apportionment of fault under section 187(1) and (2) of the Merchant Shipping Act 1995, justifies a proportional costs order in collision or analogous cases without counterclaims.
3. The scope of the court's discretion under CPR Part 44.3 in making costs orders that depart from the general rule.

Arguments of the Parties

Defendant's Arguments

• The Defendant accepted the Plaintiff was the successful party on liability but argued the court should not apply the general rule that the unsuccessful party pays all costs.
• They submitted costs should reflect the apportionment of fault, with the Plaintiff responsible for 30% of the blame, consistent with Admiralty Court practice and section 187 of the Merchant Shipping Act 1995.
• They cited numerous pre-CPR collision cases where costs were apportioned according to fault, even absent counterclaims.
• Argued that CPR Part 44.3(5)(b) supports awarding costs proportionate to the extent of success when contributory negligence is found.

Plaintiff's Arguments

• The Plaintiff argued costs in Admiralty cases should be governed by CPR Part 44.3 without special treatment.
• Contended that the cited cases do not establish a principle requiring proportional costs awards where a claimant recovers only part of the claim due to contributory fault.
• Submitted that the Plaintiff was the party that "really won" and thus the general rule should apply.
• Highlighted the Defendant’s conduct, including late change of case, unsatisfactory witness evidence, and failure to make a Part 36 offer, as reinforcing the general rule for costs.
• Referenced multiple CPR cases supporting the propositions that partial success does not automatically reduce costs and that issue-based costs orders require clear justification.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by identifying the Plaintiff as the successful party within the meaning of CPR Part 44.3(2), having "really won" on the issue of liability despite partial fault. The court acknowledged the Defendant’s submission that longstanding Admiralty practice, reflecting apportionment of fault under section 187 of the Merchant Shipping Act 1995, might justify a proportional costs order.

However, the court found that the cited Admiralty cases demonstrate a varied and inconsistent approach to costs apportionment, and no established rule mandates proportional costs where there is no counterclaim. The court noted that recent authoritative decisions and leading texts favor awarding the successful claimant full costs even when contributory negligence reduces damages.

Further, the court emphasized that CPR Part 44.3 grants broad judicial discretion in costs matters, but any departure from the general rule must be justified by relevant factors under CPR 44.3(4) and (5). The court rejected the notion that partial success due to contributory fault alone justifies reducing costs.

In this case, the court found no sufficient reason to depart from the general rule. The Defendant’s conduct, including late change of case, unsatisfactory witness evidence, and failure to make a Part 36 offer, further supported awarding full costs to the Plaintiff. The court also found no basis to make an issue-based costs order.

Holding and Implications

The court's final decision was to ORDER the Defendant to pay the full costs of the Plaintiff incurred in the liability hearing, applying the general rule under CPR Part 44.3(2)(a).

The direct effect is that the Plaintiff will receive a full costs award despite being partly at fault. The court clarified that longstanding Admiralty practice of apportioning costs by fault does not constitute a binding principle in the absence of counterclaims and does not override the CPR framework. No new precedent was established beyond confirming the primacy of CPR discretion in costs and rejecting proportional costs based solely on contributory fault in such circumstances.