Grizzly Business Ltd v Stena Drilling Ltd & Anor

An appellate court should not overturn a trial judge’s factual findings merely because it would have reached a different view. Intervention is justified only where a critical finding lacks evidential support or the conclusion was one no reasonable judge could reach. The trial judge’s ability to assess the whole body of evidence and the atmosphere of the trial remains important.

In exercising costs discretion, the court may make a co-defendant bear costs incurred in pursuing an associated company where it controlled and funded the litigation for that company’s benefit. Impropriety is unnecessary. The overriding question is whether the order is just on the facts.

Grizzly Business Ltd claimed a success fee of 0.25% of revenue from the charter of the STENA ICEMAX to Shell. It alleged that the fee had been agreed orally in a telephone call between Mr Devine and Mr Welo.

Teare J held that the agreement was made, but with Stena Drillmax 1 Ltd rather than Stena Drilling Ltd. He ordered the defendants to pay 90% of the claimant’s costs. Stena Drilling and Stena Drillmax appealed both the finding that an oral success-fee agreement had been concluded and the costs order.

The central issues were whether the trial judge’s factual inferences could properly be disturbed, and whether Stena Drilling could fairly be made liable for costs incurred in pursuing the claim against Drillmax.

1. Both appeals were dismissed. The court held that Teare J’s findings on the alleged oral agreement could not properly be set aside. The applicable appellate restraint required more than a different view of the evidence. A critical factual finding must be unsupported by evidence, or the decision must be one which no reasonable judge could have reached. That threshold was not met.

2. The judge was entitled to find that Shell had not walked away from the negotiations by the time of the telephone call. He was also entitled to find that the call was concerned and urgent, rather than so angry that it was inconceivable for Mr Devine to raise a success fee. The contemporaneous material and the continuing need for Mr Devine’s assistance supported those conclusions.

3. The judge was further entitled to accept the explanation for the absence of an immediate confirmatory email. The prior transactions did not establish an invariable practice of recording by email an agreement for a percentage of future revenue. The trial judge had assessed both witnesses and the documentary record in detail; the appellate court could not recreate that exercise.

4. On costs, CPR 44.2 permitted a departure from the usual order. Stena Drilling had run and funded the contract and repudiation defences for Drillmax, which had no independent role in the litigation. It controlled the proceedings and enabled Drillmax to advance defences while knowing that Drillmax could not meet all adverse costs. Direct financial benefit, parent-company status and impropriety were not necessary conditions for an order based on the analogy with non-party costs jurisdiction.

5. The costs judge had made no error of principle. The contracting-party issue on which Stena Drilling succeeded was limited and justified the 10% reduction. No further reduction was required for issues whose resolution substantially overlapped with the successful claim. The appellants were ordered to pay the respondent’s appeal costs on the standard basis.

• Court of Appeal (Civil Division): dismissed the appeals from Teare J’s judgments of 13 June 2014 and 30 July 2014: [2017] EWCA Civ 94.
• High Court, Queen’s Bench Division, Commercial Court: Teare J held that the success-fee agreement was made with Stena Drillmax 1 Ltd and ordered the defendants to pay 90% of the claimant’s costs.