Monjasa Ltd & Anor v Vessel "Astoria" & Anor

Costs following discontinuance are ordinarily payable by the discontinuing claimant. The court identifies the successful party by considering the proceedings as a whole, applying substance, reality and common sense rather than isolating a particular issue. The presumption may be displaced after considering all the parties’ conduct and the circumstances under CPR Part 44.2.

An arresting claimant remains responsible under its undertakings for the Admiralty Marshal’s properly incurred expenses where it procures release of the vessel. Harbour charges are not automatically the owner’s responsibility as part of the Marshal’s costs. Questions about such charges should ordinarily be referred to the Admiralty Registrar or Admiralty Judge. Where conduct takes the case out of the norm, costs may be assessed on the indemnity basis.

The claimants arrested the vessel in an in rem claim for unpaid bunker supplies. They later sought release of the vessel, permission to discontinue, and directions concerning undertakings given to the Admiralty Marshal under Forms ADM 4 and ADM 12.

The parties agreed that the claimants would pay the first defendant’s costs, except for costs relating to the port charges issue. The claimants sought their own costs on the basis that the defendant’s correspondence had caused satellite litigation concerning harbour dues. The court had to determine liability for the disputed costs, whether any departure from the usual discontinuance rule was justified, and the appropriate basis of assessment.

1. Outcome. The claimants were not entitled to recover any of their costs. The first defendant was entitled to all costs of the claim up to discontinuance, together with the costs of preparing written submissions. Those costs were assessed at £41,055.36 on the indemnity basis.
2. Applicable costs principles. Under CPR Part 44.2, costs are discretionary and must be determined judicially and fairly. The court applied the staged approach described in Straker v Tudor Rose: decide whether a costs order is appropriate, identify the successful party, apply the general rule, and then consider whether the circumstances justify departure.
3. Successful party. The relevant success was assessed by reference to the proceedings as a whole, applying substance, reality and common sense. The claimants had commenced an impermissible in rem claim after the demise charter had ended, persisted with the arrest despite information undermining jurisdiction, and then discontinued. They were therefore the unsuccessful party. The costs were not confined to the arrest but extended to defending the claim until discontinuance.
4. Port charges. The defendant’s email stating that it would not pay harbour dues falling within the classification of Admiralty Marshal’s costs was unobjectionable. It did not raise a claim for contribution. Any issue concerning the Marshal’s liability was between the claimants and the Marshal. Consistently with the guidance in The Queen of the South, the Marshal should not pay such charges without the sanction of the Admiralty Registrar or Admiralty Judge.
5. Wasted costs. The claimants had not made the required application under CPR Part 46.8. In any event, the evidence did not show improper, unreasonable or negligent conduct causing unnecessary costs by the defendant or its solicitors.
6. Assessment. The claimants’ conduct, including commencing and maintaining an unfounded claim and advancing an untenable costs case, took the matter out of the norm. The court therefore assessed the defendant’s costs on the indemnity basis, although the basis did not materially alter the reasonable sums claimed.