FEDERAL COURT OF AUSTRALIA

Programmed Total Marine Services Pty Ltd v Ships “Hako Endeavour”, “Hako Excel” and “Hako Esteem” (No 2) [2014] FCAFC 169

THE COURT ORDERS THAT:

1.    The appeal be allowed.

2.    The cross-appeal be dismissed.

3.    The orders of the primary judge made on 13 December 2013 be set aside, and in lieu thereof the following be ordered:

(a)    The Plaintiff have leave:

(i)    to amend its writ in accordance with the draft amended writ which is annexure “A” to the Plaintiff’s amended interlocutory application dated 16 September 2013; and

(ii)    to amend its statement of claim in accordance with the draft amended statement of claim which is annexure “B” to the Plaintiff’s amended interlocutory application dated 16 September 2013,

    to the extent that they plead a quantum meruit claim; and

(iii)    to amend its reply in accordance with the draft amended reply which is annexure “C” to the Plaintiff’s amended interlocutory application dated 16 September 2013.

(b)    The Plaintiff file and serve its amended writ, amended statement of claim and amended reply in the form for which it has obtained leave in accordance with order 3(a) above within 7 days of this order.

(c)    The Defendant file and serve its defence to the amended statement of claim (in the form of its proposed defence in the Appeal Book, Part A Tab 7, other than to the extent that that proposed Defence pleads to those of the Plaintiff’s proposed amended claims for which leave to amend was not granted) within 7 days of being served with the Plaintiff’s amended writ, amended statement of claim and amended reply pursuant to order 3(b) above.

(d)    There be (in addition to the Partial Judgment Sum referred to in paragraph 1 of the orders made on 9 August 2013 by Rares J and entered 16 August 2013) a further judgment for the Plaintiff against the Defendant in an amount equal to the sum of AU$1,757,655.54 (calculated as at 14 October 2014) comprising the following:

    (i)    AU$184,514.34 (being pre-judgment interest payable on the Partial Judgment Sum pursuant to s 51A(1) of the Federal Court of Australia Act 1976 (Cth) (the “FCA Act”));

    (ii)    AU$2,102.11 (being post-judgment interest payable on the Partial Judgment Sum pursuant to s 52 of the FCA Act);

    (iii)    AU$1,383,481.85 (being the amount of those costs and expenses claimed by the Plaintiff which were disputed by the Defendant at the hearing before Jagot J (the “Further Judgment Sum”));

    (iv)    AU$157,876.39 (being pre-judgment interest payable on the Further Judgment Sum pursuant to s 51A(1) of the FCA Act as at 13 December 2013);

    (v)    AU$29,680.85 (being pre-judgment interest payable on the unpaid proportion of the Further Judgment Sum (being AU$543,373.43) pursuant to s 51A(1) of the FCA Act as at 14 October 2014),

    plus pre-judgment interest of AU$96.77 per day payable on the unpaid proportion of the Further Judgment Sum pursuant to s 51A(1) of the FCA Act from 14 October 2014 until the date of these orders.

(e)    The Defendant jointly and severally with Eagle 3 Pte Ltd (the Defendant ship owner) pay the Plaintiff’s costs of the proceedings, as assessed or agreed.

4.    The Respondent jointly and severally with Eagle 3 Pte Ltd (the Respondent ship owner) pay 70% of the Appellant’s costs of the appeal.

5.    The Respondent jointly and severally with Eagle 3 Pte Ltd (the Respondent ship owner) pay the Appellant’s costs of the cross-appeal.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA

THE COURT ORDERS THAT:

1.    The appeal be allowed.

2.    The cross-appeal be dismissed.

3.    The orders of the primary judge made on 13 December 2013 be set aside, and in lieu thereof the following be ordered:

(a)    The Plaintiff have leave:

(i)    to amend its writ in accordance with the draft amended writ which is annexure “A” to the Plaintiff’s amended interlocutory application dated 16 September 2013; and

(ii)    to amend its statement of claim in accordance with the draft amended statement of claim which is annexure “B” to the Plaintiff’s amended interlocutory application dated 16 September 2013,

    to the extent that they plead a quantum meruit claim; and

(iii)    to amend its reply in accordance with the draft amended reply which is annexure “C” to the Plaintiff’s amended interlocutory application dated 16 September 2013.

(b)    The Plaintiff file and serve its amended writ, amended statement of claim and amended reply in the form for which it has obtained leave in accordance with order 3(a) above within 7 days of this order.

(c)    The Defendant file and serve its defence to the amended statement of claim (in the form of its proposed defence in the Appeal Book, Part A Tab 7, other than to the extent that that proposed Defence pleads to those of the Plaintiff’s proposed amended claims for which leave to amend was not granted) within 7 days of being served with the Plaintiff’s amended writ, amended statement of claim and amended reply pursuant to order 3(b) above.

(d)    There be (in addition to the Partial Judgment Sum referred to in paragraph 1 of the orders made on 9 August 2013 by Rares J and entered 16 August 2013) a further judgment for the Plaintiff against the Defendant in an amount equal to the sum of AU$1,764,627.60 (calculated as at 14 October 2014) comprising the following:

    (i)    AU$196,742.55 (being pre-judgment interest payable on the Partial Judgment Sum pursuant to s 51A(1) of the Federal Court of Australia Act 1976 (Cth) (the “FCA Act”));

    (ii)    AU$2,260.88 (being post-judgment interest payable on the Partial Judgment Sum pursuant to s 52 of the FCA Act);

    (iii)    AU$1,380,122.41 (being the amount of those costs and expenses claimed by the Plaintiff which were disputed by the Defendant at the hearing before Jagot J (the “Further Judgment Sum”));

    (iv)    AU$157,936.27 (being pre-judgment interest payable on the Further Judgment Sum pursuant to s 51A(1) of the FCA Act as at 13 December 2013);

    (v)    AU$27,565.49 (being pre-judgment interest payable on the unpaid proportion of the Further Judgment Sum (being AU$504,647.32) pursuant to s 51A(1) of the FCA Act as at 14 October 2014),

    plus pre-judgment interest of AU$89.87 per day payable on the unpaid proportion of the Further Judgment Sum pursuant to s 51A(1) of the FCA Act from 14 October 2014 until the date of these orders.

(e)    The Defendant jointly and severally with Eagle 2 Pte Ltd (the Defendant ship owner) pay the Plaintiff’s costs of the proceedings, as assessed or agreed.

4.    The Respondent jointly and severally with Eagle 2 Pte Ltd (the Respondent ship owner) pay 70% of the Appellant’s costs of the appeal.

5.    The Respondent jointly and severally with Eagle 2 Pte Ltd (the Respondent ship owner) pay the Appellant’s costs of the cross-appeal.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA

THE COURT ORDERS THAT:

1.    The appeal be allowed.

2.    The cross-appeal be dismissed.

3.    The orders of the primary judge made on 13 December 2013 be set aside, and in lieu thereof the following be ordered:

(a)    The Plaintiff have leave:

(i)    to amend its writ in accordance with the draft amended writ which is annexure “A” to the Plaintiff’s amended interlocutory application dated 16 September 2013; and

(ii)    to amend its statement of claim in accordance with the draft amended statement of claim which is annexure “B” to the Plaintiff’s amended interlocutory application dated 16 September 2013,

    to the extent that they plead a quantum meruit claim; and

(iii)    to amend its reply in accordance with the draft amended reply which is annexure “C” to the Plaintiff’s amended interlocutory application dated 16 September 2013.

(b)    The Plaintiff file and serve its amended writ, amended statement of claim and amended reply in the form for which it has obtained leave in accordance with order 3(a) above within 7 days of this order.

(c)    The Defendant file and serve its defence to the amended statement of claim (in the form of its proposed defence in the Appeal Book, Part A Tab 7, other than to the extent that that proposed Defence pleads to those of the Plaintiff’s proposed amended claims for which leave to amend was not granted) within 7 days of being served with the Plaintiff’s amended writ, amended statement of claim and amended reply pursuant to order 3(b) above.

(d)    There be (in addition to the Partial Judgment Sum referred to in paragraph 1 of the orders made on 9 August 2013 by Rares J and entered 16 August 2013) a further judgment for the Plaintiff against the Defendant in an amount equal to the sum of AU$1,713,177.16 (calculated as at 14 October 2014) comprising the following:

    (i)    AU$187,358.30 (being pre-judgment interest payable on the Partial Judgment Sum pursuant to s 51A(1) of the Federal Court of Australia Act 1976 (Cth) (the “FCA Act”));

    (ii)    AU$2,151.73 (being post-judgment interest payable on the Partial Judgment Sum pursuant to s 52 of the FCA Act);

    (iii)    AU$1,341,510.85 (being the amount of those costs and expenses claimed by the Plaintiff which were disputed by the Defendant at the hearing before Jagot J (the “Further Judgment Sum”));

    (iv)    AU$153,216.08 (being pre-judgment interest payable on the Further Judgment Sum pursuant to s 51A(1) of the FCA Act as at 13 December 2013);

    (v)    AU$28,940.19 (being pre-judgment interest payable on the unpaid proportion of the Further Judgment Sum (being AU$529,814.06) pursuant to s 51A(1) of the FCA Act as at 14 October 2014),

    plus pre-judgment interest of AU$94.35 per day payable on the unpaid proportion of the Further Judgment Sum pursuant to s 51A(1) of the FCA Act from 14 October 2014 until the date of these orders.

(e)    The Defendant jointly and severally with Eagle 1 Pte Ltd (the Defendant ship owner) pay the Plaintiff’s costs of the proceedings, as assessed or agreed.

4.    The Respondent jointly and severally with Eagle 1 Pte Ltd (the Respondent ship owner) pay 70% of the Appellant’s costs of the appeal.

5.    The Respondent jointly and severally with Eagle 1 Pte Ltd (the Respondent ship owner) pay the Appellant’s costs of the cross-appeal.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA

ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA

ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA

REASONS FOR JUDGMENT

THE COURT

1    The Court heard three appeals and cross-appeals and delivered reasons on 14 October 2014: Programmed Total Marine Services Pty Ltd v Ships “Hako Endeavour”, “Hako Excel” and “Hako Esteem” [2014] FCAFC 134. The Court directed the appellant and cross-respondent to file draft minutes of order reflecting the conclusions expressed in the reasons of the Court. Initially, there was a dispute between the parties about a number of matters in the appellant’s and cross-respondent’s draft minutes of order but, after a directions hearing before a member of the Court and further consideration by the parties, all matters except for two were resolved. The two matters which remain in dispute between the parties are the costs of the appeal and the costs of the cross-appeal. These reasons should be read with our earlier reasons.

2    The appellant seeks its costs of the appeals. The respondents acknowledge that the appellant was successful on the appeals, but they submit that the appellant should be awarded only half of its costs because the appellant was unsuccessful with respect to a number of arguments which it pursued. The respondents identified the appellant’s unsuccessful argument that it was entitled to its costs and charges under the Deed and its unsuccessful arguments based on implied contract and clause 16 of the Deed.

3    In our opinion, the appellant’s unsuccessful argument that it was entitled to recover its costs and charges under the Deed occupied significant time and resources, and the appellant’s lack of success with respect to that argument should be reflected in the order for costs. It is difficult to be precise, but we think an order that the respondents pay 70% of the appellant’s costs of the appeals fairly reflects the justice of the situation.

4    The cross-appeals were unsuccessful and the cross-appellants accept that they must pay the cross-respondent’s costs. However, the cross-respondent seeks an order that the cross-appellants pay its costs of the cross-appeals assessed on an indemnity basis. The cross-respondent relies on clause 16 of the Deed. The relevant terms of clause 16 of the Deed are set out in our earlier reasons (at [65]) and it provides that one of the items of loss which may be recovered under the clause is “legal expenses on a full indemnity basis”.

5    We do not think at this stage that this substantive argument should be entertained. The time for deploying this argument about the substantive operation of a clause in the Deed was the hearing of the appeal, when counsels’ and the Court’s attention was focused on the whole Deed. In any event, if the argument were to be dealt with, the claim must be rejected. This is because clause 16 is not engaged in relation to the costs of the cross-appeals. Whilst the respondents may be liable in relation to liabilities Hako has incurred under the Deed, they are not directly liable under the Deed. Hako itself could not be liable under the Deed for the costs of the cross-appeals because it was not a party to the proceeding, let alone the cross-appellant. The cross-respondent is entitled to its costs with respect to the cross-appeals and those costs should be assessed on a party and party basis.

6    The Court will make orders accordingly.

Associate:

Dated:    12 December 2014