Poralu Marine Australia Pty Ltd v MV Dijksgracht

Federal Court of Australia|2022-10-05|Before: Stewart J

The plaintiff pay the defendants' costs of the separate questions. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Introduction 1 This judgment concerns the costs of deciding the separate questions in the two proceedings as dealt with in my reasons for judgment published as: Poralu Marine Australia Pty Ltd v MV Dijksgracht [2022] FCA 1038. 2 The essential outcome on the separate questions is that the defendants to the proceedings are entitled to limit any liability that they may have to the plaintiff to the lowest level contended for by them, namely £100 to per package. That outcome is entirely in the defendants' favour in the sense that they established limitation at its lowest possible level and that it is available in answer to the claims on the contract of carriage as well as in bailment and tort. That means that the owner of the vessel, which is not a party to the contract, can also rely on the limitation defence by operation of the Himalaya clause. 3 Following the usual rule that the costs follow the event, the defendants would be entitled to their costs of the determination of the separate questions. That is the approach that the defendants embrace. 4 The plaintiff, Poralu, makes two submissions against that approach. First, it submits that the most appropriate order is that the defendants pay Poralu's costs up until the time of the amendment of their defence on 10 February 2022, and that Poralu pay the defendants' costs thereafter. In the alternative, Poralu submits that it ought to pay only 50% of the defendants' costs "as a reflection of the unique circumstances of the proceedings and reflecting the relevant success of the parties, at discreet and meaningful points in this particular litigation". I will address each argument in turn.

The amended defence on 10 February 2022 5 Poralu's essential submission is that since the defendants did not raise the defence that the booking note contract was a "charterparty" within the meaning of Art 10(6) of the Australian Hague Rules until relatively late in the piece, and that that defence was determinative insofar as the level of limitation is concerned, the defendants should pay Poralu's costs prior to that defence having been raised. 6 The principal difficulty with Poralu's submission is that even when the charterparty defence was raised, it was not accepted by Poralu. If it had been accepted by Poralu, then it would have been open to Poralu to contend that all that had occurred prior to that time was wasted by the charterparty defence having been raised late, and for that reason the defendants should pay the costs up until then. But since the merits of the charterparty defence were contested by Poralu right to the end, the fact of that defence only having been raised relatively late in the piece has no bearing on the question of costs. All other issues that were raised, both before and after the charterparty defence, still had to be dealt with, both in evidence and in argument. 7 Also, although it is true that the charterparty defence was determinative in the sense that had the issue been decided the other way, ie, that the booking note contract was not a charterparty, the outcome would have been different, there are also other issues that were determinative. Those include that Ireland is not a Contracting State of the Hague-Visby Rules and that those rules therefore did not apply to the contract of carriage under Dutch law, and, insofar as the claims against the shipowner are concerned, that the charterer was authorised to contract for its protection with the result that it too enjoyed the contractual package limitation. 8 I am therefore not persuaded that the point of introduction of the charterparty defence has any relevant bearing on the question of costs.

Splitting the costs 9 Poralu bases its alternative submission that it should pay only 50% of the defendants' costs on the basis that Poralu was successful on some issues. The principal issue on which Poralu was successful, but which ultimately made no difference to the outcome, was that, subject to Art 10(6), the Australian Hague Rules applied under Art 10(2). That was not a substantial issue in the case and did not rely on any significant or discrete evidence. I note that it occupied 20 paragraphs of a 278-paragraph judgment. 10 In short, I am not persuaded that this case justifies departure from the usual rule on the basis that the party that lost overall was nevertheless successful on some costs-significant discrete points in the case.

Conclusion 11 In my view, there is no reason to depart from the usual rule that the costs follow the event. The plaintiff in each proceeding should therefore pay the costs of the defendant, or defendants, as the case may be. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Stewart.

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