FEDERAL COURT OF AUSTRALIA
DATE OF ORDER:
THE COURT ORDERS THAT:
(a) in the amount of $36,673.84;
(b) pre-judgment interest up to and including 21 July 2017 of $4,955.87; and
(c) interest accruing at the rate of $5.22 per day from 22 July 2017 until entry of judgment.
2. Within 14 days from the date of these orders, the Registrar do pay to the plaintiff/cross-defendant or as it may direct in writing the judgment amount and interest referred to in order 1 from the security paid into Court pursuant to order 1 of the orders made in this proceeding on 26 November 2015.
3. TKL Holdings Pty Ltd and Moreton Bay Whalewatching Tours Pty Ltd pay the plaintiff/cross-defendant’s costs of these proceedings on a party and party basis.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
1 In Delaware North Marine Experience Pty Ltd v The Ship “Eye-Spy”  FCA 708 (Eye Spy 1) the plaintiff enjoyed substantial success. The defendants, as therein defined, succeeded only to a very modest cross-claim to the extent of $1,200. The proportion of the trial spent on this success was minimal. These reasons should be read against the background of and in accordance with the definitions in Eye Spy 1.
2 In the ordinary course of events, but for the matters raised in several exchanges on costs, costs would follow the event. The plaintiff made certain offers from which time it says it should have costs on an indemnity basis. For reasons that follow, I consider there are difficulties with the offers which take the situation outside the norm and restore costs to a party and party basis.
3 The defendants also claim costs in relation to various interlocutory proceedings concerning the reduction of the security for costs on which they succeeded. As the plaintiff has had clear overall success and for the reasons set out below, I do not think that there should be different orders on the interlocutory application.
4 For the reasons which follow, in my view, the defendant should pay the plaintiff’s costs on a party and party basis.
THE APPLICATIONS RELATING TO SECURITY
5 In addition to a submission that the outcome of the costs in the main trial should be affected by the defendants’ modest success on the excessive security point, the defendants also say they should be entitled to certain costs in relation to the interlocutory applications concerning security.
6 The defendants make the following submission.
Applications relating to security
7 The defendants had to “extract the relevant documents one by one” from the Plaintiff, as occurred in The “Moschanthy”  1 Lloyds Rep 37 per Brandon J (at 47). Those documents were not voluntarily produced by the plaintiff, despite multiple requests by the defendants. The defendants ultimately obtained the relevant documents by Court orders made on 5 February 2016. Although those orders were made by consent, the plaintiff did not produce all those documents in accordance with the order. It was only upon the threat of bringing the matter before the Court that the relevant documents were finally produced.
8 Having obtained the relevant documents, the defendants assessed the plaintiff’s “best case” as being $85,000 and sought the release of security accordingly from the plaintiff. The plaintiff refused, and the defendants filed and served an application to vary the security in favour of the defendants. The plaintiff contended its revised claim was for $120,379.61. The plaintiff retained senior counsel to oppose the defendant’s application to vary the security, whilst seeking additional security for its own costs. On 1 April 2016, the Court ordered the release of $100,000.00 to the defendants. Those costs were necessarily incurred by the defendants to have excess security released.
9 The defendants submit, consistent with the defendants having proven the plaintiff demanded excessive security, that the Court should apply r 40.04 of the Federal Court Rules 2011 (Cth) (FCR), and order that the plaintiff pay the defendants’ costs, on an indemnity basis, or alternatively a party-party basis, of and incidental to:
(a) the application to release the vessel for security of $316,000 (plus interest and costs);
(b) the orders made 5 February 2016; and
(c) the application to vary the security heard on 1 April 2016.
Lack of forensic analysis leading to excessive security being demanded
10 The defendants say that the plaintiff’s solicitor must have appreciated that only the plaintiff had knowledge of the value of the invoices upon which they relied to assert a quantum of $316,000, and that the plaintiff had to prove entitlement to each of the individual claims that formed the claim of $316,000. The forensic analysis ought to have been undertaken by the solicitor, using his experience and expertise as a maritime lawyer, and as the deponent of the affidavit supporting the arrest. The defendants say that the Court has found that no forensic analysis was undertaken at that time.
11 Beyond the general conduct of the matter and preparation for mediation, interlocutory applications and trial, the defendants say there were four additional key times when the plaintiff was called upon to re-examine the realistic value of its claim, and inform the Court and the defendants, as part of its duty under s 37N of the Federal Court of Australia Act 1976 (Cth) and its obligation to properly particularise its claim and any abandoned component of that claim, namely:
(a) at the time the invoices were produced in response to the 5 February 2016 orders;
(b) at the time of the interlocutory application for variation of security in preparation for and at the hearing on 1 April 2016. The defendants note that the plaintiff briefed senior counsel to appear. The defendants do not know whether the ambit of his brief included assessing the quantum of the plaintiff’s claim;
(c) at the time of preparing the opening submissions. Those submissions made no express reference to the actual dollar value of the quantum claimed; and
(d) in its closing submissions. By that time significant travel costs (for both parties) and expert costs had been incurred, and the resources of the Court expended.
12 The defendants infer therefore that the necessary forensic analysis was only undertaken by the plaintiff:
(a) after opening submissions but before closing submissions; and/or
(b) prior to the trial, but the plaintiff elected to openly state the value of its claim after the trial had concluded for strategic reasons.
13 By reference to in The “Moschanthy”, the defendants observe that Brandon J said that the power to extract security in support of a claim in rem is a very strong power and it must not be used oppressively. Where there is a genuine dispute or discussion about the appropriate amount of security, the plaintiff ought to put its cards fairly on the table and explain to the defendant, or its solicitors, the grounds upon which the plaintiff claimed to exercise this strong power. In that case, his Honour was not satisfied that the plaintiff or its solicitors put their cards on the table with regard to the amount in dispute, which in that case, had to be extracted one by one from the plaintiff’s counsel during the hearing of the motion. For those reasons, Brandon J made orders that the defendants pay half of the plaintiff’s costs. The same cost orders were made by Lord Denning MR, Shaw and Templeton LJJ in Compania Financiera “Soleada” SA & Ors v Hamoor Tanker Corporation Inc  WLR 274 (The “Borag”) where the Court of Appeal considered the extent of the ship manager’s liability for wrongful arrest.
14 It follows, the defendants argue, that:
(a) the failure by the plaintiff to undertake the forensic analysis at the time of the arrest or at any time (possibly) until the close of the trial, was a failure by the plaintiff to put all its cards on the table, when it had a duty to do so. The extraction of the quantum took from 26 November 2015 to December 2016;
(b) for these reasons, the Court should be persuaded by the English authorities on unlawful arrest at common law and order the defendants to pay one half of the plaintiff’s costs and disbursements; and
(c) the Court is not prohibited from making such an order as to costs by r 40.08 FCR. The grounds for seeking an order that the costs and disbursements is not because the plaintiff’s claim was for less than $100,000 or because any other Court could have heard the admiralty claim. The grounds for seeking such an order is because the failure to undertake the forensic analysis at the outset resulted in an overstatement of security of about 80%, which happened to result in a claim of less than $100,000.
Consideration – the security argument
15 I am not persuaded by the defendants’ contentions.
16 The defendants rely on The “Moschanthy” where there had been a failure by the plaintiff to “put its cards on the table”. That case was distinguishable. The “Moschanthy” addressed a substantially broader application. It was an application in which the defendant had sought to set aside the proceedings for want of jurisdiction and to stay the proceedings on the grounds that they were vexatious by reason of the plaintiff having also simultaneously prosecuted proceedings in a foreign court for related relief. These two features took it well beyond the present case. Additionally to those matters, there was a contention that the security was excessive and should be reduced. The plaintiff succeeded on the jurisdiction and the security issues, but the defendant succeeded on the question of whether or not the proceedings were vexatious.
17 Given the mixed success on jurisdictional matters, Brandon J held (at 46-47):
… For that reason alone I would not think it right to give the plaintiff the whole of his costs, but the matter does not stop there.
It seems to me that the plaintiff has brought some of the trouble upon himself in two ways. First of all, by using as evidence of title in support of his claim in Lebanon a c. & f. invoice which, it is now admitted, is a bogus document. That document is misleading and has misled the defendant in this case; in particular, it has led them to seek to set aside the proceedings which I do not think otherwise they would have attempted, although they might still have asked for a stay.
The other matter is this, it seems to me that the power to exact security in support of a claim in rem is a very strong power and it must not be used oppressively.
Where there is a genuine dispute or discussion about the appropriate amount of security in a case, the plaintiff ought to put his cards fairly on the table and explain to the defendant or his solicitors the grounds upon which he claims to exercise this strong power. In this case I am not satisfied that the plaintiff or his solicitors did put their cards on the table with regard to amount. Indeed, I felt that they had to be extracted one by one from his counsel during the hearing of the motion.
In those circumstances it seems to me that the court ought not to give the plaintiff the whole of his costs, and the order will be that the defendant pays half the plaintiff’s costs on the motion including half the cost of the application before the Registrar on July 17, 1970.
18 The adjustment made was a reduction in the plaintiff’s costs, not an award to the defendant.
19 In the present instance, however, the plaintiff did retain a significant amount, indeed, perhaps the majority of the security provided for the costs of the cross-claim; although I note that the plaintiff has not expressly resisted the “cards on the table” complaint.
20 In the following circumstances, in my view, the costs order for the security application should be part of the overall costs of the cause in the event as:
(a) there is no question that the vessel was validly, that is, lawfully arrested on 26 November 2015. Importantly, the defendant abandoned its claim that the arrest was wrongful. Security had to be provided in order to release the vessel, given there was a valid arrest. The costs of the necessary release application were reserved by the Court, without any other order being made in respect of those reserved costs. Normally, pursuant to r 40.03 FCR, costs of such an application would “follow the event”. As the plaintiff has been successful generally in the proceedings, the costs of the application, which were necessary in any event, should form part of the plaintiff’s recoverable costs;
(b) the fact that certain consent orders were made on 5 February 2016 is neutral on the question of costs; and
(c) there was an application by the defendants to vary the security. That was heard on 1 April 2016, pursuant to an application filed on 17 March 2016, after rejection of the plaintiff’s offer of 16 February 2016 to reduce the security to $315,000. On 1 April 2016, the Court ordered that the security be reduced by $100,000 from $366,000 to $266,000. The Court made no order in relation to costs of the application. The absence of a costs order would suggest that neither party clearly enjoyed complete success, but at least on one view, the sum ordered by the Court ($266,000) was closer to the amount offered by the plaintiff, $315,000, than the sum sought by the defendant of $145,000.
21 It cannot be suggested, and was certainly not contemplated by The “Moschanthy”, that any finding on security would affect the overall costs orders in the later trial.
22 The outcome of this trial was firmly in favour of the plaintiff. The extent to which the defendants succeeded on the security point (by an award of $1,200) was a small factor in the overall resolution of the dispute.
23 I consider that these interlocutory costs should form part of the overall costs of the trial.
THE PLAINTIFF’S OFFERS OF SETTLEMENT
24 The plaintiff relies on a solicitor’s affidavit sworn on 18 July 2017, attaching three offers of compromise made pursuant to r 25.01 FCR on 2 March 2016 and 12 April 2016. The first of those offers was to the effect that the plaintiff would accept the sum of $15,000 to resolve the entire claim, including interest and costs. In the second and third offers, on 12 April 2016, the plaintiff offered to pay the defendant the sum of $46,500, inclusive of costs in respect of all claims in the proceedings, other than the claims made in “paragraph 4 of the cross-claim”. The plaintiff was working on the assumption that “paragraph 4” was the claim for unjustified arrest/excessive security. Secondly, it offered to pay the defendant $3,500, plus costs in respect of the claims made in “paragraph 4 of the cross-claim”. The plaintiff says that, in essence, the combined offers of compromise were equivalent to an offer to pay the defendant $50,000 on the cross-claim in respect of which the defendant ultimately only succeeded to an extent of $1,200.
25 The plaintiff argues that the judgment of the Court is more favourable than all of these offers in the terms discussed in r 25.14(3) FCR. That provision is subject to the same statutory presumption that indemnity costs were appropriate, absent exceptional circumstances where the plaintiff has exceeded an offer made in the accordance with the FCR.
26 There is helpful Full Court guidance on the relevant principles in Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd (No 2)  FCAFC 141, per Gilmour, Jagot and Nicholas JJ, from which I extract and follow the passages below (at -):
14 As will be apparent from Rule 25.14(2) above, the new Rules expressly deal with the situation where a respondent makes an offer to an applicant (which is not accepted) and the applicant’s proceeding is dismissed. In that event, the presumption that an order for indemnity costs will be made applies if (but only if) the applicant “unreasonably” failed to accept the offer. We use the term “presumption” here because Rule 1.35 of the new Rules provides that the “Court may make an order that is inconsistent with these Rules and in that event the order will prevail”, which is equivalent to the “otherwise orders” provision that appeared in O 23 r 11(6) of the old Rules.
15 It should also be noted that, although the old Rules did not expressly deal with the situation where a respondent makes an offer to an applicant (which is not accepted) and the applicant’s proceeding is dismissed, Rule 25.14(2) of the new Rules largely reflects the principles which had been developed under the old Rules and in accordance with which the discretion as to costs was to be exercised. For example, in Coshott v Learoyd  FCA 276 at  Wilcox J noted that:
Where an applicant makes an offer which is not accepted by the respondent and the applicant obtains a judgment not less favourable than the terms of the offer, the applicant is prima facie entitled to have costs on an indemnity basis as from the date of the offer. Where a respondent makes an offer that is not accepted and the applicant obtains a judgment not more favourable than the terms of the offer, the applicant is prima facie entitled to party-party costs until the day after the offer and the respondent to party-party costs thereafter. However, rule 11 does not cover the situation that occurred in this case, where a respondent’s offer is rejected and the applicant is wholly unsuccessful. […]
16 Following a review of relevant decisions, Wilcox J at  observed that:
Everybody agrees there can be no fixed rule; a proposition established for this Court by the terms of s 43 of the Federal Court of Australia Act 1976 conferring on the Court a discretionary jurisdiction in relation to costs. Everybody also agrees that, while the ordinary practice is to award costs on a party-party basis, it is sometimes appropriate to take a different course, including ordering indemnity costs against a party who has acted unreasonably.
17 More recently, in McDonald v Parnell Laboratories (Aust) (No 2) (2007) 165 FCR 591;  FCA 2086 Buchanan J dealt with another case in which a respondent had made an offer of compromise which was not accepted and the applicant ultimately failed entirely in its claims. He also reviewed the relevant decisions and at  concluded in these terms:
If an offer is made under O 23 and an applicant is partially successful, although falling short of the offer, there is a presumptive right in the respondent to indemnity costs (see O 23 r 11(5)). In the present case the offer was a substantial one. Had Ms McDonald had a good measure of success, but not achieved a result exceeding the offer, the respondent’s presumptive right would have been enlivened. The absence of some provision accommodating the circumstance that an applicant fails altogether is anomalous (see also Seven Network v News Limited  FCA 1489] at -). Like Sackville J in Seven Network, I regard myself as bound by Dukemaster Pty Ltd v Bluehive Pty Ltd  FCAFC 1] not to approach the matter on the basis of a presumption, despite the anomaly. Nevertheless, I do not regard it as inconsistent with authority to follow the approach indicated by Wilcox J in Coshott v Learoyd  FCA 276] which was also referred to with apparent approval in Dukemaster. The respondents therefore have a ‘good start’ but I must also consider whether Ms McDonald was imprudent or (plainly) unreasonable to reject the offer at the time it was made.
18 If there is any material difference between the effect of the old and new Rules, it is that the new Rules make clear that the presumption of indemnity costs is not enlivened in these circumstances unless an applicant has “unreasonably” failed to accept a respondent’s offer of compromise. As we consider this to be effectively the same position as prevailed under the old Rules (despite the concern of some that this might be anomalous), we do not propose to make any order under Rule 1.04(3) displacing any part of the new Rules. Accordingly, the relevant question – at least insofar as the offer of compromise under O 23 is concerned – is whether, having regard to all the circumstances, Primus unreasonably failed to accept Kooee’s offer. As a matter of principle, the same criterion of unreasonableness governs the question whether rejection of the Calderbank offer should result in an order for indemnity costs against an unsuccessful party.
19 In the present case, three circumstances indicate to us that it was not unreasonable for Primus to fail to accept Kooee’s offers of 21 January and 4 March 2008. …
27 Also in Granitigard Pty Ltd v Termicide Pest Control Pty Ltd (2011) 281 ALR 1, Kenny, Lander and Reeves JJ said (at ):
In coming to this conclusion, the learned trial judge, first, noted that he had a wide discretion under s 43 of the Federal Court of Australia Act 1976 (Cth) to order costs, but that discretion had to be exercised judicially: see Granitigard (No 6) at . He reviewed a number of relevant authorities and rejected the “genuine offer” approach saying that it carried with it an “unnecessarily pejorative quality”: see Granitigard (No 6) at . Instead, he considered that a party: “may displace the ‘presumptive entitlement’ or ‘prima facie’ position or ‘rebuttable presumption’ created by O 23 r 11(6) … by showing that the offer truly was so derisory that, even having regard to the risks of litigation, it effectively gave nothing away such that the Court should ‘otherwise order’”: see Granitigard (No 6) at .
28 I accept that the plaintiff should have its costs of the proceedings, but I think there are difficulties with the offers, partly at a technical level, but more importantly on the question of whether or not their rejection was “unreasonable”.
29 The first of the offers dated 2 March 2016 (said to be an offer to compromise all claims in the proceeding) by the plaintiff accepting the sum of $15,000, comprised of its claim, interest of $850 and costs. The offer was open for 14 days after service. It was made pursuant to Form 45, r 25.01(1) FCR. On its face, the plaintiff did better than that offer.
30 The defendants complain that the true offer was not readily identifiable because it was capable of different forms of interpretation. I am unable to accept this submission. The defendants say that further difficulty was that, by its silence, this offer required the defendants to pay $15,000 within 28 days, but did not address how the security of $366,000 was to be dealt with; specifically, was the $15,000 to be paid from that security and the balance released to TKL Holdings Pty Ltd or its nominee, or was it to be paid over and above the security? The defendants argue that the offer was not clear and capable of acceptance on its face as it should have addressed the issue of security, but failed to do so. It was, therefore, defective in formality, this particularly in circumstances where the defendants successfully prosecuted their excessive security claim at trial and at that point had incurred substantial costs in relation to the aspect on which they ultimately succeeded.
31 The defendants also argue that at 2 March 2016, and for the 14 day period during which the offer was open for acceptance under the FCR, the scope of the pleaded unseaworthiness of the vessel at or before delivery against the defendants was that pleaded in para 17 and subjoined particulars in the plaintiff’s statement of claim filed on 21 December 2015. The defendants make the point that the plaintiff did not pursue its claim as identified by particulars (i)-(iv) of para 17 at trial. No evidence was led and none of the defendants’ witnesses were cross-examined about such matters. In that sense, the defendants argue, they were successful in the defence of those particulars. The defendants, therefore, had a reasonable case for defending the claim as it stood on 2 March 2016 and acted reasonably in rejecting the first offer of compromise.
32 In my view, the point is finely balanced. There was such an abundance of activity ensuing at this stage in relation to the arrest, the security for the release, the reduction of the security and costs concerning those applications that it is difficult to form a view that the defendants acted unreasonably in rejecting this offer. From the defendants’ perspective, they had been required to pay too much security and had to work hard to achieve a reduction. That perspective turned out to be correct, albeit, that at the end of the day, the ultimate consequence in terms of damages as a result of that overpayment was significantly less than that for which the defendants may have hoped. It is interesting also that the first offer was replaced promptly with other offers, which at one level, were certainly more favourable to the defendants, but for reasons which I will identify, also contain their own difficulties. Added to all of this is the defendants’ complaint that matters could have been quite satisfactorily resolved in pursuit of the matter in the extant proceedings in the District Court of Queensland, rather than in light of those already existing proceedings, the more extreme step of arresting a working leisure vessel – an approach which accorded with legal rights but also was calculated to exert maximum pressure on the defendants; an outcome later reflected in the sorry and expensive saga that became this unfortunate litigation. In my view, it is not possible, in all the circumstances surrounding these untidy events and difficult claims and counterclaims, to conclude that the defendants’ failure to accept the first offer at that point was unreasonable.
33 As to the second and third offers to compromise dated 12 April 2016, the second offer (as noted) was for the plaintiff to pay the defendants $46,500 inclusive of costs in respect of all claims, other than para 4 of the notice of cross-claim filed on 17 February 2016. The third offer was for the plaintiff to pay the defendants $3,500 plus costs relating to para 4 of the notice of cross-claim. The defendants say that contrary to the plaintiff’s submissions, the references to para 4 of the notice of cross-claim in the second and third offers relates to the cost of navigational maps supplied by the defendants for the delivery voyage and not for the claim for unjustified arrest/excessive security. However, it appears to me that the defendants have confused the references in the plaintiff’s second and third offers to the “notice of cross-claim” with the “statement of cross-claim” which were both filed on 17 February 2016. Consequently, the defendants’ argument that no offer was made in respect of the excessive security claim, on which the defendants succeeded, falls away. Nonetheless, the offer was (regrettably) not particularly specific by reference to the actual topic of excessive security.
34 However, more importantly, the second offer contemplated a payment of $46,500, which included costs. I have no evidence before me in relation to what costs had been incurred by this date, but judging by the volume of material and focus on activity at this time and taking into account the following events, I can fully accept the defendants’ submission that by 12 April 2016, significant costs had already been incurred by the defendants in litigation:
(a) the application to release the vessel on 26 November 2015;
(b) two days of mediation (one in December 2015 and the second on 26 February 2016);
(c) the review of the plaintiff’s statement of claim of 21 December 2015;
(d) the drafting of the defendant’s defence and cross-claim, filed 18 February 2016;
(e) a directions hearing on 3 March 2016 involving orders for the production of documents from the plaintiff to justify its claim for security of $316,000 because the plaintiff had refused to otherwise produce them; and
(f) the defendants having incurred the costs of their application to vary the security filed on 9 March 2016, supported by a reasonably extensive affidavit of Mr David Flint, sworn on 9 March 2016, which became exhibit 25 at trial, once those documents had been obtained.
35 The defendants argue that by reason of the defendants’ significant costs as at 12 April 2016, the offer of $46,500 inclusive was in fact a nominal or negative offer only of the actual claim made by the defendants and, as such, there was no real element of compromise offered. The defendants say they did not act unreasonably in not accepting the second offer, as, if they had been successful, all their costs would have been significantly more than $46,500, even at that stage. As I say, while there is no evidence on this point, I can well envisage this possibility.
36 The defendants also argue that a significant proportion of their costs incurred at this stage was predominantly related to the defendants’ claim for reduction of the plaintiff’s demand for excessive security. As at that stage, they were successful in reducing the security and would be entitled to reasonably expect that if a costs order had been made at that point, they would succeed. In my view, there is something to be said for this point. It is important to judge the question of reasonableness as at the particular time.
37 Once again, it is difficult to form a view against that background that the defendants’ rejection at this point was unreasonable. There is a further point made by the defendants that the second and third offers of compromise were made eight days after the plaintiff had filed and served its amended statement of claim on 4 April 2016. The pleadings in this matter were quite complex. As the defendants observe, the amendments to the particulars to para 17 expanded the plaintiff’s claim that the vessel was unseaworthy to include particulars (v) and (vi). While particulars (i)-(iv) remain live, particulars (i)-(v) concerned observable defects and particular (vi) introduced the concept of latent defect to the plaintiff’s claim for the first time. For the 14 day period that the second offer was open for acceptance, the defendants had a reasonable case for defending the claim and acted reasonably in rejecting the second offer of compromise for the same reasons as the first offer of compromise based on the scope of the pleading and the known evidence at the time.
38 There was no evidence, expert or lay, whether produced under discovery or otherwise at that time that explained how the vessel could have sailed to Gladstone on the delivery voyage of 11 hours, sailing at 25 knots in difficult sea conditions, if the valve tap was closed, as pleaded in particular (vi) of para 17. On that further basis, and in the absence of any scientific or technical evidence to explain the position, it was not unreasonable, the defendants say, to not accept the second offer.
39 The real question is whether there is some feature of this claim and the offer made which warrants departing from the presumption about indemnity costs. In my view, it is a most unusual case and I do think that certain of its circumstances warrant a departure from the usual presumption. There is no doubt in my mind that the defendants firmly believed that the only possible cause of the damage to the vessel was intervention by the plaintiff in the way very actively explored at trial. Ultimately, I rejected this cause on hearing the evidence of those who were called for the plaintiff and who were cross-examined on the issue. While it would be fair to say that in all cases, the actual outcome of credit issues is by no means easy to anticipate, there was, in this instance, more upon which the defendants were relying than a simple belief. They point to the technical evidence. Indeed, they ultimately obtained expert evidence supportive of their belief.
40 I do not consider that the plaintiff should be penalised, having made an apparently reasonable attempt to compromise the proceeding, but I am not satisfied that the conduct of the defendants in not accepting the offer was unreasonable in the circumstances prevailing at the time. I believe that appropriate compensation for the plaintiff will be an order for party and party costs.
41 Helpfully, on this point, the parties have agreed the calculation of damages on both the plaintiff’s claim and the cross-claim, namely, that there should be judgment for the plaintiff:
(1) $36,673.85, being $34,900 (the costs of the plaintiff hiring in replacement vessels), plus $5,436.30 (mooring charges incurred by the plaintiff), less $4,462.45 (being the agreed amount payable by the plaintiff to the defendant for fuel on redelivery at Gladstone), and less $1,200 (damages awarded to the defendant pursuant to s 34 of the Admiralty Act 1988 (Cth) in respect of the excessive security claimed); plus
(2) pre-judgment interest in respect of which the payments were agreed that up to and including 21 July 2017 the amount to be included is $4,955.87 and accruing at the rate of $5.22 per day from 22 July 2017 until the date that judgment is entered.
42 Accordingly, the following orders are made:
(1) Judgment for the plaintiff/cross-defendant against TKL Holdings Pty Ltd and Moreton Bay Whalewatching Tours Pty Ltd:
(a) in the amount of $36,673.84;
(b) pre-judgment interest up to and including 21 July 2017 of $4,955.87; and
(c) interest accruing at the rate of $5.22 per day from 22 July 2017 until entry of judgment.
(2) Within 14 days from the date of these orders, the Registrar do pay to the plaintiff/cross-defendant or as it may direct in writing the judgment amount and interest referred to in order 1 from the security paid into Court pursuant to order 1 of the orders made in this proceeding on 26 November 2015.
(3) TKL Holdings Pty Ltd and Moreton Bay Whalewatching Tours Pty Ltd pay the plaintiff/cross-defendant's costs of these proceedings on a party and party basis.