The Owners and/or Demise Charterers of the Ship or Vessel “TS Singapore” v. The Owners and/or Demise Charterers of the Ship or Vessel “Xin Nan Tai 77” AND ANOTHER

HCAJ 48/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY ACTION NO 48 OF 2011

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HCAJ 158/2012 and HCAJ 49/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY ACTION NOS 158 OF 2012 AND 49 OF 2013

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DECISION ON COSTS

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Introduction

1.  On 2 June 2017, this court handed down a judgment (“Judgment”) after trial of liability in respect of two almost simultaneous collisions near the termination of the East Lamma Channel Traffic Separation Scheme, Hong Kong, at around 3:37am (“1^st Collision”) and 3:40am (“2^nd Collision”) on 14 May 2011 among three container vessels viz “Xin Nan Tai 77” (“Xin Nan Tai”), “MCC Jakarta” (“Jakarta”) and “TS Singapore” (“Singapore”). The 1^st Collision was between Xin Nan Tai and Jakarta. This was followed by the 2^nd Collision between Jakarta and Singapore. All three vessels suffered hull damage to various extent. While Xin Nan Tai and Singapore did not come into physical contact, it is Singapore’s allegation that Xin Nan Tai’s negligent navigation was causative of the 2^nd Collision.

2.  Shortly prior to the commencement of this trial, Singapore settled liability with each of Jakarta and Xin Nan Tai on inter alia the following terms:

(1) Singapore are 5% to blame for the 2^nd Collision;

(2) Jakarta and Xin Nan Tai are between them 95% to blame for the 2^nd Collision;

(3) Jakarta’s and Xin Nan Tai’s individual liability (out of the 95%) is to be determined at the trial, unless agreed; and

(4) Singapore are not to blame for and bear no liability in respect of the 1^st Collision.

3.  In the Judgment, this court found the parties’ respective liabilities for the collisions were as follows:

(1) 1^st Collision

Jakarta	20% to blame
Xin Nan Tai	80% to blame

(2) 2^nd Collision

Singapore	5% to blame
Jakarta	19% to blame
Xin Nan Tai	76% to blame

4.  At paragraph 88 of the Judgment, this court directed that:

“In the absence of agreement on costs within 21 days, the parties shall file and serve their written submissions on costs, to be dealt with by this court on paper."

5.  By a Consent Order dated 25 July 2017 in the Consolidated Action of HCAJ 158/2012 and HCAJ 49/2013, Xin Nan Tai’s counterclaim for declarations of indemnity against Singapore was dismissed and that submissions as to the costs of the said counterclaim were to be filed and served as part of the submissions in respect of the liability trial in the Action.

Costs between Singapore and Jakarta

1^st Collision

6.  Jakarta never made a claim against Singapore in respect of the 1^st Collision.  There are thus no costs issue between the two concerning the 1^st Collision.

2^nd Collision

7.  As between them, this court was informed by Singapore’s solicitors that they had reached an agreement as follows:

(1) For costs incurred up to and including 6 January 2016:

(a) Singapore will pay 5% of Jakarta’s costs of determining liability for the 2^nd Collision, such costs to be taxed on the party/party basis if not agreed; and

(b) Jakarta will pay 19% of Singapore’s costs of determining liability for the 2^nd Collision, such costs to be taxed on the party/party basis if not agreed.

(2) No order as between Jakarta and Singapore for the costs of determining liability for the 2^nd Collision after 6 January 2016.

8.  At paragraph 8 of Jakarta’s written submissions, the same costs order as stated above was put forward by Jakarta’s solicitors as the combined effect of an Interim Agreement to settle liability dated 6 January 2016 and the Judgment in which liability for the 2^nd Collision was apportioned.

9.  Since Singapore and Jakarta are ad idem as to the terms of the costs order between them, this court will make an order on costs accordingly.

Costs between Xin Nan Tai and Jakarta

10.  As there is no agreement on costs between the two, this court will proceed to deliberate on their submissions.

1^st Collision

11.  In his written submissions, Mr Luxton accepted that, as a general principle, costs in relation to determination of liability in a collision action are to be apportioned to the same degree in which the respective vessels are found to be at fault: Marsden & Gault on Collisions at Sea 14^th ed para 21–016.

12.  On that basis, in relation to the costs of determining liability for the 1^st Collision, Mr Luxton submitted that:

(1) Jakarta is entitled to 80% of its costs from Xin Nan Tai, to be taxed on the party/party basis if not agreed; and

(2) Xin Nan Tai is entitled to 20% of its costs from Jakarta, to be taxed on the party/party basis if not agreed.

13.  Solicitors for Jakarta, on the other hand, submitted that, in relation to the costs of determining liability for the 1^st Collision, the general principle should be departed from in the present case by reason of two sanctioned offers made under RHC O 22 to Xin Nan Tai.

14.  First, on 16 December 2013, Jakarta made a sanctioned offer to Xin Nan Tai (“1^st Jakarta Offer”) to agree liability for the 1^st Collision on the basis that Xin Nan Tai was 2/3 to blame and Jakarta was 1/3 to blame.  The 1^st Jakarta Offer was not accepted by Xin Nan Tai.

15.  Second, on 26 April 2016, Jakarta made another sanctioned offer to Xin Nan Tai (“2^nd Jakarta Offer”) to agree liability for the 1^st Collision on the basis that Xin Nan Tai was 60% to blame and Jakarta was 40% to blame.  The 2^nd Jakarta Offer was even more favourable to Xin Nan Tai but still not accepted.

16.  Solicitors for Jakarta submitted that the 1^st Jakarta Offer met all the requirements as to form and content of RHC O 22 r 5 and was an effective sanctioned offer.  They further submitted that Xin Nan Tai has done worse after trial than the 1^st Jakarta Offer — the 1^st Jakarta Offer provided for Xin Nan Tai to bear only 2/3 of the liability for the 1^st Collision whereas Xin Nan Tai was ultimately found to be 80% liable.  Hence, the situation falls squarely within RHC O 22 r 24(1)(b), the costs consequences of which are those set out in RHC O 22 r 24(3) and (4).

17.  RHC O 22 r 24(1)(b), (3), (4) and (5) provide that:

“(1) This rule applies where —

…

(b) the judgment against a defendant is more advantageous to the plaintiff than the proposals contained in a plaintiff’s sanctioned offer.

…

(3) The Court may also order that the plaintiff is entitled to—

(a) his costs on the indemnity basis after the latest date on which the defendant could have accepted the offer without requiring the leave of the Court; and

(b) interest on those costs at a rate not exceeding 10% above judgment rate.

(4) Where this rule applies, the Court shall make the orders referred to in paragraphs (2) and (3) unless it considers it unjust to do so.

(5) In considering whether it would be unjust to make the orders referred to in paragraphs (2) and (3), the Court shall take into account all the circumstances of the case including —

(a) the terms of any sanctioned offer;

(b) the stage in the proceedings at which any sanctioned offer was made;

(c) the information available to the parties at the time when the sanctioned offer was made; and

(d) the conduct of the parties with regard to the giving or refusing to give information for the purposes of enabling the offer to be made or evaluated.”

18.  Solicitors for Jakarta submitted that this is a paradigm example of a party not accepting an offer and then doing significantly worse at trial and is therefore exactly the sort of scenario which the sanctioned offers scheme under RHC O 22 is directed at.  They therefore asked for costs on an indemnity basis after 13 January 2014 being the latest date on which Xin Nan Tai could have accepted the 1^st Jakarta Offer without leave of the court (“Cut‑OffDate”) as well as interest on those costs.  They suggested that the appropriate costs order should be as follows:

(1) Xin Nan Tai to pay 80% of Jakarta’s costs of determining liability for the 1^st Collision, to be taxed if not agreed on the party/party basis up until 13 January 2014, and thereafter on the indemnity basis.

(2) Xin Nan Tai to pay interest on Jakarta’s costs after 13 January 2014 at the rate of 10% above the judgment rate.

(3) Jakarta to pay 20% of Xin Nan Tai’s costs of determining liability for the 1^st Collision, to be taxed if not agreed on the party/party basis.

19.  Lastly, solicitors for Jakarta submitted that, if the 1^st Jakarta Offer is, for whatever reason, considered ineffective, they will rely on the 2^nd Jakarta Offer which was also not accepted and which Xin Nan Tai had failed to beat.  The Cut‑Off Date for the 2^nd Jakarta Offer was 24 May 2016.  They submitted that the appropriate costs order should be the same as those set out in the preceding paragraph, save that “13 January 2014” be substituted by “24 May 2016”.

20.  In response, Mr Luxton first argued that the 1^st Jakarta Offer had included an offer that costs incurred in determining liability be paid in the same proportion as liability itself ie Xin Nan Tai was 2/3 responsible while Jakarta was 1/3 responsible.  He said the inclusion of an offer as to costs was inconsistent with RHC O 22 and therefore the 1^st Jakarta Offer was ineffective as a sanctioned offer and did not attract the costs consequences prescribed in RHC O 22 r 24.  Mr Luxton further submitted that the 2^nd Jakarta Offer suffered from the same defect and was equally ineffective (“1^st Xin Nan Tai Argument”).

21.  Before turning to the authorities, this court would like to make two observations.

22.  First, in accordance with the long‑established practice in collision actions, trial of liability comes first before the Admiralty Judge, to be followed, if so required, by a reference to the Admiralty Registrar for assessment of damages: Calandra Shipping Co Ltd v Noor Maritime Ltd [2014] 2 HKLRD 242.  The sole purpose of a collision liability trial is to determine and apportion blame for a collision among two or more vessels on a percentage basis.  Hence, an offer to settle on liability does not purport to settle the whole or part of a claim within the meaning of RHC O 22 r 3 or r 4 — it is only an offer to settle “an issue arising from the claim”.  Nor does it purport to take into account any counterclaim or setoff since quantum of the claim, counterclaim or setoff will only come into picture later.

23.  Second, it is perfectly sensible for Jakarta to have made an offer of settlement of liability and costs in the same proportion, since this is in line with the established principle in collision cases that apportionment of costs should generally mirror the apportionment of liability: The Rockabill [1937] P 93; The Pencarrow (1948) 81 L1 L Rep 225; The Spyros [1953] 1 Lloyd’s Rep 501.  Offering Xin Nan Tai to pay less costs than its share of liability for the collision is illogical.  Requiring Xin Nan Tai to pay more costs than its share of liability is unfair and hence unattractive to Xin Nan Tai and defeats the purpose of making an offer to settle.

24.  This court now turns to the authorities under RHC O 22.

25.  In support of his submission that a valid sanctioned offer under RHC O 22 cannot include a term as to costs, Mr Luxton principally relied on Wong Yim Man Anthea v Wong Ho Ming Felix [2016] 4 HKC 243, a decision of DHCJ Kent Yee.

26.  In Wong Yim Man Anthea v Wong Ho Ming Felix, the court dismissed the plaintiff’s claim after trial but ordered her, on a nisi basis, to pay 40% of the defendant’s costs.  The defendant then applied to vary the costs order nisi and sought indemnity costs and enhanced interest on costs pursuant to RHC O 22 r 23 on the strength of a purported sanctioned offer.  The terms of the offer were for the plaintiff to withdraw her claim with no order as to costs.  The learned Deputy Judge held that the offer did not fit in the RHC O 22 mechanism due to its inclusion of a term as to costs.  His reasons were as follows:

“9. O 22 r 1 defines a “sanctioned offer” in the following terms: “sanctioned offer” means an offer made (otherwise than by way of a payment into court) in accordance with this Order.

10. O 22 r 3 provides that an offer by a defendant to settle the whole or part of a claim or an issue arising from the claim does not have the consequences specified in O 22 unless it is made by way of a sanctioned offer or a sanctioned payment or both.

…

15. O 22 r 20 provides that where a defendant’s sanctioned offer or sanctioned payment to settle the whole claim is accepted without requiring the leave of the court, the plaintiff is entitled to his costs of the proceedings up to the date of serving notice of acceptance, unless the court otherwise orders. It is remarkable that this rule is not made subject to any costs provision in the sanctioned offer accepted by the plaintiff.

16. It is thus clear that if a sanctioned offer made in good time by a defendant (28 days before the commencement of the trial), a plaintiff can accept the sanctioned offer within 28 days from the date of its making without leave of the court and any further agreement on the liability for costs, the consequences specified in O 22, to be precise, r 20 will automatically flow from the acceptance of the sanctioned offer.

…

18. In my view, the Offer does not fit in the O 22 mechanism due to its inclusion of a term as to costs. Its proposed costs order (no order as to costs) effectively prevents the specified cost consequences upon its acceptance by Madam Wong under O 22 r 20. It is not in dispute that the Offer was made more than 28 days before the commencement of the trial. If Madam Wong had accepted it within 28 days thereafter, she would have been completely deprived of her entitlement to her costs of the proceedings up to the date of serving her notice of acceptance under O 22 r 20.

…

34. Ms Lau helpfully draws my attention to Leung Lai Kwan v Lo Kai Wing and Anor (unreported, HCMP 1554/2015, 20.8.2015). There, the Court of Appeal consisting of Lam VP and Barma JA dealt with the plaintiff’s application for leave to appeal against the costs order made by DHCJ Saunders.

35. The deputy judge’s costs order was made after the defendants’ application to vary the costs order nisi in his judgment ([2015] 3 HKLRD 152) whereby the plaintiff’s claim was dismissed. The variations sought by the defendants were based on three separate offers made on three different dates prior to the trial. The deputy judge made three different costs orders in light of the three offers which he held not to be qualified as sanctioned offers. The last costs order he made was that the plaintiff should pay costs to the defendants on indemnity basis from 18 July 2014 to the end of the trial. The plaintiff only sought leave to appeal against this order and not the other two.

…

38. Lam JA explained why the offers of the three offers could not have been made by way of sanctioned offers (and hence the court might take them into account under O 62 r 5(1)(d)) in the following terms at §7:

“The offers to settle are not simply payment of money by the Defendants to the Plaintiff.  They involved the Plaintiff agreeing that she had no interest in the property (under the offer of 12 Sept 2013) or she agreeing to sell the property within 6 months (under the offer of 19 June 2014) or she co‑operating in the valuation process and agreement to accept her interest being limited to half of the assessed value or $1,550,000.  All the offers were made on the basis of no order as to costs, which cannot be accommodated in the sanctioned payment or sanctioned offer regime in view of O 22 r 20(1), see Wealthy Plus Ltd v Lai Man Ho [2001] 4 HKC 691.  The Judge was clearly right in holding that this is not a case where the Defendants could have protected their position by means of a sanctioned payment, and as such not within the scope of Order 62 rule 5(1)(d).  (emphasis supplied)”

39. It is clear that Lam JA was of the view that any offer made on the basis of no order as to costs cannot be accommodated in the O 22 regime by reason of its irreconcilable conflict with O 22 r 20(1).” (emphasis added)

27.  In Wong Yim Man Anthea v Wong Ho Ming Felix, counsel for the defendant placed heavy emphasis on two earlier Court of Appeal decisions viz Central Management Limited v Light Field Investment Limited and Ors [2011] 2 HKLRD 34 and Chan Kwing Chiu and Anor v Chan Chi Kau, unrep, CACV 209/2012, 3 October 2013 in which a sanctioned offer containing terms as to costs was accepted as valid for the purpose of RHC O 22.  The learned Deputy Judge however decided not to follow them on the ground that the validity of the sanctioned offer was not in issue in the two cases.

28.  In this court’s view, Wong Yim Man Anthea v Wong Ho Ming Felix is not authority for the proposition that a valid sanctioned offer can never include a term as to costs as such.  As can be seen from paragraphs 18 and 39 of DHCJ Kent Yee’s judgment quoted above, it is only if the term as to costs conflicts with the costs consequence prescribed by RHC O 22 r 20 (or some other rules in RHC O 22) that the sanctioned offer will be rendered invalid.

29.  The matter can be tested in this way.  Suppose a defendant’s sanctioned offer to settle the whole of a plaintiff’s claim includes a term as to costs, but that term is identical to what is stated in RHC O 22 r 20(1) ie the plaintiff is entitled to his costs of the proceedings up to the date of service of the notice of acceptance.  Unless the offer falls foul of other specific rules in RHC O 22, for instance, r 5 (concerning form and content), it does come squarely within the definition of “sanctioned offer” in RHC O 22 r 1 in that it is “an offer made in accordance with this Order” even though it includes a term as to costs. In those circumstances, there is no reason or logic to regard the offer as an invalid sanctioned offer.

30.  In the present case, the 1^st Jakarta Offer was made by Jakarta as the Plaintiff in HCAJ 48/2011 to Xin Nan Tai as the Defendant.  Hence, RHC O 22 r 20 is inapplicable since that rule is concerned with a defendant’s sanctioned offer.  Further, the 1^st Jakarta Offer was not an offer to settle the whole claim — rather, it only related to an issue arising from the claim.  Hence, RHC O 22 r 21, which sets out the costs consequences of a defendant’s acceptance of a plaintiff’s sanctioned offer to settle the whole claim, is also inapplicable.  As far as this court can see, the 1^st Jakarta Offer, in particular its offer as to costs, did not conflict with any “mandatory” rules under RHC O 22 as to costs consequences upon acceptance.  The same can be said of the 2^nd Jakarta Offer.

31.  For these reasons, this court rejects Mr Luxton’s 1^st Xin Nan Tai Argument.

32.  Mr Luxton’s next argument was confined to the 1^st Jakarta Offer.  He submitted that the 1^st Jakarta Offer was not properly served on Xin Nan Tai, as required by RHC O 22 r 6(a).  This was because it was sent to TZ & Co Law Firm of Shanghai, PRC whereas, at that time, Xin Nan Tai’s address for service was “Xiamen Nantal Shipping Co Ltd of Dongdu Road 106-4-301, Xiamen, PRC”, as stated in its Notice to Act in Person dated 25 October 2012.  Central to the submission is that the 1^st Jakarta Offer should have been sent to the address in Xiamen, PRC in order for it to be effective (“2^nd Xin Nan Tai Argument”).

33.  Solicitors for Jakarta submitted that the address for service given in Xin Nan Tai’s Notice to Act in Person was not a proper address for service since it was an address outside the jurisdiction.  In support of that submission, this court was referred to Questnet Ltd v Kurt Georg Rocco Rinck, unrep, HCA 1475/2006, 15 June 2007; Chu J (as she then was) at [18] and Dianoor International Ltd v Aiyer Vembu Subramaniam, unrep, HCA 806/2008, 19 November 2010; DHCJ L Chan (as he then was) at [4].  In both cases, the learned Judges held that the address for service given by a defendant’s notice to act in person under RHC O 67 r 4 must be an address within the jurisdiction, by reason of the combined effect of RHC O 12 r 3(2) and O 67 r 4.

34.  RHC O 12 r 3(2) provides that:

“(2) An acknowledgment of service must specify —

(a) in the case of a defendant acknowledging service in person, the address of his place of residence and, if his place of residence is not within the jurisdiction or if he has no place of residence, the address of a place within the jurisdiction at or to which documents for him may be delivered or sent,

…

and where the defendant acknowledges service in person the address within the jurisdiction specified under sub-paragraph (a) shall be his address for service, but otherwise his solicitor’s business address shall be his address for service.” (emphasis added)

35.  In Dianoor International Ltd v Aiyer Vembu Subramaniam at [4], the learned Deputy Judge reasoned as follows:

“The intention of Order 12, rules 3 and 4 is clear. It is to ensure that a defendant contesting a claim here should provide an address within this jurisdiction for service of documents on him. Though Order 67, rule 4 does not expressly say that the address for service has to be within this jurisdiction, I have no doubt that it has to be within this jurisdiction, otherwise Order 12, rules 3 and 4 can easily be defeated by a defendant who acknowledges service by a solicitors and then files a notice of intention to act in person but not giving a local address for service. I do not think Order 12, rules 3 and 4 can be defeated that way. I also refer to the judgment of Chu J, in Questnet Limited v Kurt George Rocco Rink & Anor HCA 1475/2006 (15 June 2007) at paragraph 18 where the learned judge referred to the combined effect of Order 12, rule 3(2)(a) and Order 67, rule 4.” (emphasis added)

36.  This court agrees with solicitors for Jakarta and sees no reason to depart from the two cases cited.  If so, the basic premise of Mr Luxton’s submission ie the 1^st Jakarta Offer should have been sent to the address in Xiamen, PRC falls away.

37.  Furthermore, solicitors for Jakarta have adduced contemporaneous correspondence suggesting that TZ & Co Law Firm was at the material time instructed on behalf of Xin Nan Tai to communicate with them for the purpose of exploring an amicable settlement.  In an email dated 26 September 2012, TZ & Co Law Firm wrote to Ince & Co stating that:

“for the purpose of exploring a quick and amicable solution, Owners of mv Xin Nan Tai 77 now instruct us to render help. In order to push forward the case … we wonder you would be available on 4 or 5 October … and would like together with Owners’ representative Mr. Xia to pay you a visit.”

38.  Similarly, in response to the same argument by Mr Luxton, solicitors for Singapore have also adduced correspondence in 2014 suggesting that TZ & Co Law Firm was at the material time instructed on behalf of Xin Nan Tai to communicate with them as well as Ince & Co for the purpose of exploring an amicable settlement.

39.  This court also put on record that in Mr Luxton’s written submissions, it was not denied that Xin Nan Tai had instructed TZ & Co Law Firm to communicate on its behalf with Jakarta’s or Singapore’s solicitors on the question of settlement.  Nor did Xin Nan Tai dispute having received the 1^st Jakarta Offer.

40.  For these reasons, this court also rejects the 2^nd Xin Nan Tai Argument.

41.  Having decided that the 1^st Jakarta Offer was an effective one made under RHC O 22, this court will now turn to the question of indemnity costs and interest on those costs.

42.  The starting point is RHC O 22 r 24(4) which provides that the court shall make the orders at (3) unless it considers it unjust to do so.

43.  Sanctioned offers are part of the new regime introduced by the CJR to encourage litigants to take settlement offers seriously and to avoid protracted legal proceedings, with all their ramifications on legal costs, the courts’ time and resources, as well as to avoid undue delay.  The powers under the new regime are not penal in nature — the aim is to achieve a fairer result for the “successful” party, in this case the Jakarta, and to redress the perceived unfairness of the fact that it will not be fully compensated for by costs orders on the ordinary basis (whether party and party or indemnity): CEP Ltd v WuxiJiacheng Solar Energy TechnologyCo Ltd [2016] 1 HKLRD 960 at [31].

44.  This court would take the opportunity to add that the purpose of the CJR generally and the underlying objectives of the Rules of the High Court are inter alia to ensure that a case is dealt with as expeditiously as is reasonably practicable, to facilitate the settlement of disputes and to ensure that the resources of the courts are distributed fairly.  Since these are the general and underlying purpose and objectives of the Rules, there is no reason why RHC O 22 r 24 should be treated differently.  Hence, while achieving a fairer result for the “successful” party is important, it is equally important that the power under that rule should be so exercised that the courts’ time and resources will not be unnecessarily spent and incurred by the rejection of a serious sanctioned offer which the other party eventually fails to beat.

45.  In this court’s view, there is nothing unjust to award costs on indemnity basis after the Cut‑Off Date, and none has been shown by Mr Luxton.

46.  In OMV Petrom SA v Glencore International AG [2017] EWCA Civ 195, Sir Geoffrey Vos, Chancellor of the High Court, observed at [38] and [39]:

“38. In my judgment, the use of the word “penal” to describe the award of enhanced interest under CPR r 36.14(3)(a) is probably unhelpful. The court undoubtedly has a discretion to include a non-compensatory element to the award as I have already explained, but the level of interest awarded must be proportionate to the circumstances of the case … All cases will be different. Just as the court is required to have regard to “all the circumstances of the case” in deciding whether it would be unjust to make all or any of the four possible orders in the first place, it must have regard to all the circumstances of the case in deciding what rate of interest to award under rule 36.14(3)(a). As Lord Woolf MR said in the Petrotrade case, and Chadwick LJ repeated in the McPhilemy case, this power is one intended to achieve a fairer result for the claimant. That does not, however, imply that the rate of interest can only be compensatory. In some cases, a proportionate rate will have to be greater than purely compensatory to provide the appropriate incentive to defendants to engage in reasonable settlement discussions and mediation aimed at achieving a compromise, to settle litigation at a reasonable level and at a reasonable time, and to mark the court’s disapproval of any unreasonable or improper conduct, as Briggs LJ put the matter, pour encourager les autres.

39. The culture of litigation has changed even since the Woolf reforms. Parties are no longer entitled to litigate forever simply because they can afford to do so. The rights of other court users must be taken into account. The parties are obliged to make reasonable efforts to settle, and to respond properly to Part 36 offers made by the other side. The regime of sanctions and rewards has been introduced to incentivise parties to behave reasonably, and if they do not, the court’s powers can be expected to be used to their disadvantage. The parties are obliged to conduct litigation collaboratively and to engage constructively in a settlement process.” (emphasis added)

47.  Although the above observation was made in the context of enhanced rate of interest on the award itself, it seems to this court the same rationale and sentiment applies in relation to enhanced rate of interest on costs.

48.  With regard to enhanced interest on costs, it is not in dispute that 10% over judgment rate is the upper limit.  As such, the upper limit should be reserved for the worst type of cases such as OMV Petrom SA v. Glencore International AG [2017] EWCA Civ 195 in which the Court of Appeal awarded the maximum rate of enhanced interest on costs in view of inter alia the fact that costs were largely incurred in advancing a dishonest and unreasonable defence: OMV Petrom SA v. Glencore International AG at [44].  Such a factor is not present here.  Although Xin Nan Tai has failed to beat the 1^st Jakarta Offer, this court does not consider their conduct at the trial as anywhere close to being “dishonest” or “unreasonable”.

49.  Having considered all the circumstances of the case, including the matters set out in RHC O 22 r 24(5) as well as Xin Nan Tai’s conduct at the trial, in this court’s view, there is nothing unjust to award interest on costs incurred after the Cut‑Off Date at an enhanced rate, and none has been shown by Mr Luxton.  In view of the low interest rate environment worldwide for the last decade or so, this court respectfully agrees with Lam J (as he then was) in Golden Eagle International (Group) Ltd v GR Investment Holdings Ltd [2010] 3 HKLRD 273 where he suggested that 4% over prime rate would generally represent a generous assessment of the cost of money.

50.  Lastly, to avoid the necessity of calculating the precise amount of interest on each item of costs incurred, this court will respectfully adopt the approach of the Court of Appeal in Antwerp Diamond Bank NV v Brink’s Incorporated (no 2) [2015] 4 HKLRD 628 at [27]:

“27. As for whether the rate of interest should be enhanced, and if so to what level, it seems to us that the mere fact that the Plaintiff is a bank is not something that can render it unjust to make an order for the payment of interest on costs at an enhanced rate. That being so, such an order should be made (see Order 22 rule 24(4)). We also see no reason to depart from the approach of Lam J (as Lam VP then was) in Golden Eagle International (Group) Ltd v GR Investment Holdings Ltd [2010] 3 HKLRD 273, where he suggested that 4% over prime rate would generally represent a generous assessment of the cost of money. We would therefore order that interest on costs be paid at half of 4% over prime rate on the whole of the costs to avoid the necessity of calculating the precise amount of interest on each item of costs incurred.” (emphasis added)

51.  To conclude, this court is of the view that the appropriate costs order with regard to the 1^st Collision should be as follows:

(1)   Xin Nan Tai to pay 80% of Jakarta’s costs of determining liability for the 1^st Collision, to be taxed if not agreed on the party/party basis up until 13 January 2014, and thereafter on the indemnity basis.

(2)   Xin Nan Tai to pay interest on Jakarta’s such costs after 13 January 2014 at the rate of half of 4% over prime rate.

(3)   Jakarta to pay 20% of Xin Nan Tai’s costs of determining liability for the 1^st Collision, to be taxed if not agreed on the party/party basis.

2^nd Collision

52.  In relation to costs of determining liability for the 2^nd Collision, Mr Luxton submitted that the general principle is applicable so that:

(1)   Jakarta is entitled to 76% of its costs from Xin Nan Tai, to be taxed on the party/party basis if not agreed;

(2)   Xin Nan Tai is entitled to 19% of its costs from Jakarta, to be taxed on the party/party basis if not agreed.

53.  Solicitors for Jakarta again submitted that the general principle should be departed from in the present case by reason of a sanctioned offer made under RHC O 22 to Singapore and Xin Nan Tai on 6 January 2014 (“3^rd Jakarta Offer”).  In this offer, Jakarta proposed to agree liability for the 2^nd Collision on the basis that Singapore was 10% to blame, Jakarta was 30% to blame and Xin Nan Tai was 60% to blame, with costs to be paid in the same proportions.  The 3^rd Jakarta Offer was not accepted by either Singapore or Xin Nan Tai.

54.  Solicitors for Jakarta submitted that since Xin Nan Tai had done much worse than the offer of 60% to blame, the costs consequences set out in RHC O 22 r 24 should be engaged. 

55.  Mr Luxton, for Xin Nan Tai, submitted that the 3^rd Jakarta Offer did not comply with the requirements of RHC O 22 and therefore did not attract the costs consequences specified in O 22 r 24.  In essence, he repeated his 1^st Xin Nan Tai Argument ie the offer contained a specific provision for apportionment of costs, and 2^nd Xin Nan Tai Argument ie the offer was addressed to TZ & Co Law Firm whereas Xin Nan Tai’s address for service at that time was in Xiamen, PRC, as stated in its acknowledgment of service dated 3 December 2013.  For the same reasons already set out earlier in this Decision, this court rejects the 1^st and 2^nd Xin Nan Tai Arguments with regard to this offer.

56.  Mr Luxton further argued that the 3^rd Jakarta Offer could not have been accepted by Xin Nan Tai alone as it was addressed to both Singapore and Xin Nan Tai.  Since Singapore did not accept the offer that it was 10% to blame for the 2^nd Collision, there could not have been a final settlement even if Xin Nan Tai accepted it was 60% to blame (“3^rd Xin Nan Tai Argument”).

57.  In this court’s view, the difficulty of treating the 3^rd Jakarta Offer as a valid sanctioned offer under RHC O 22 is not so much that it required the acceptance of both Singapore and Xin Nan Tai in order to achieve a final settlement and avoid the necessity of a trial.  While the 3^rd Jakarta Offer was addressed to both Singapore and Xin Nan Tai, it was up to Xin Nan Tai to protect its own costs position by accepting it was 60% to blame and settled with Jakarta on that basis.  Hence, this court also rejects the 3^rd Xin Nan Tai Argument.

58.  Rather, the difficulty, as recognized by Jakarta’s solicitors in paragraph 11 of their written submissions, is that the terminology as well as the structure of RHC O 22 are not entirely apt to cover the present situation.  Having considered RHC O 22 in its entirety, it appears to this court that the scheme under it contemplates a relatively straightforward settlement offer made either by a plaintiff[1] or by a defendant[2].  Depending on its terms, the acceptance of such an offer will settle the entire claim, part of a claim or an issue arising from it, with specified costs consequences under r 20, 21 or 22, while the non‑acceptance of it, depending on the outcome of the action, may attract the costs consequences under r 23 or 24.

59.  While Jakarta’s solicitors submitted that, for the present purpose, Jakarta ought to be regarded as the Plaintiff and Xin Nan Tai regarded as the Defendant, they have not proceeded to explain, and it is not easy to see, why that should be so.  No authorities, direct or otherwise, have been cited to this court to support their contention. In the Consolidated Action of HCAJ 158/2012 and HCAJ 49/2013, both Jakarta and Xin Nan Tai were Defendants.  There are no express provisions in RHC O 22 which cater for the making of sanctioned offers by one defendant to another or specify the costs consequences of such offers.  In particular, RHC O 22 rr 23 and 24 only envisage two scenarios: (1) a plaintiff fails to “do better” than a defendant’s sanctioned payment or offer; and (2) a plaintiff “does better” than his sanctioned offer. Neither scenario is applicable to the present case.

60.  It seems to this court the better analysis of the situation is to treat the 3^rd Jakarta Offer as an open offer, as Jakarta’s solicitors submitted in the alternative.  In this regard, RHC O 22 r 2(4) provides that:

“Nothing in this Order prevents a party from making an offer to settle in whatever way he chooses, but if that offer is not made in accordance with this Order, it does not have the consequences specified in this Order, unless the Court so orders.”

61.  The mechanism of open offers and their costs consequences in collision actions are set out in Marsden & Gault on Collisions at Sea 14^th ed at para 21–018:

“In a collision action, it has always been the practice of the Admiralty Court that offers to settle before trial were treated as analogous to payment into court. If the offeree did less well at the trial than the offer he would have to pay the offeror’s costs from about the date of the offer … The party to whom the offer was made would be allowed some time to consider it but the date of a rejection might be taken as the cut‑off point. Costs remained at the discretion of the judge and he might choose to disregard the offer made.”

62.  Since Xin Nan Tai did worse at the trial than the offer of 60% to blame for the 2^nd Collision, it should have to bear Jakarta’s costs after a certain cut‑off point.  In the 3^rd Jakarta Offer, it was stated that the offer was open for acceptance for 28 days.  It seems to this court that should be enough time for Xin Nan Tai to consider accepting the offer or not.  

63.  Hence, the appropriate order as to the costs should be:

(1)   Xin Nan Tai be liable for 76% of Jakarta’s costs of determining liability for the 2^nd Collision, to be taxed if not agreed on the party/party basis up to 3 February 2014[3].

(2)   Jakarta be liable for 19% of Xin Nan Tai’s costs of determining liability for the 2^nd Collision, to be taxed if not agreed on the party/party basis up to 3 February 2014.

(3)   Xin Nan Tai be liable for all of Jakarta’s costs of determining liability for the 2^nd Collision after 3 February 2014, to be taxed if not agreed on the party/party basis.

(4)   Jakarta is not liable for Xin Nan Tai’s costs of determining liability for the 2^nd Collision after 3 February 2014.

64.  At paragraph 34 of his written submissions, Mr Luxton has very sensibly accepted that if the court is minded to take into account the 3^rd Jakarta Offer, then Jakarta would be entitled to its costs in full on the party/party basis after the offer expired on 3 February 2014.

65.  However, Mr Luxton also submitted that since Singapore is, by agreement with Jakarta, liable for 5% of Jakarta’s costs in relation to the 2^nd Collision up until 6 January 2016, there is a potential problem of double recovery by Jakarta of its costs after 3 February 2014 until 6 January 2016.  He suggested that for that period, Jakarta is only entitled to recover 95% of its costs from Xin Nan Tai - the remaining 5% of its costs should come from Singapore.

66.  This court agrees that Jakarta cannot have double recovery of its costs from both Singapore and Xin Nan Tai incurred between 4 February 2014 and 6 January 2016, but does not agree that the proper order for costs between Jakarta and Xin Nan Tai should be revised in the way suggested by Mr Luxton, which represents a windfall for Xin Nan Tai to the extent of the 5% which Singapore agreed to pay. So long as there is no double recovery, it is up to Jakarta to pursue Singapore and/or Xin Nan Tai for its costs to the extent the two are legally liable.

Costs between Xin Nan Tai and Singapore

67.  Again, as there is no agreement on costs between the two, this court will proceed to deliberate on their submissions.

1^st Collision

68.  With regard to Xin Nan Tai’s counterclaim in HCAJ 158/2012 against Singapore for a declaration that Singapore is liable to indemnify it for any damages payable to Jakarta^[4], Mr Luxton accepted that Singapore is entitled to its costs from Xin Nan Tai, to be taxed on the party/party basis if not agreed^[5].

69.  While the terms of the declaration sought by Xin Nan Tai in HCAJ 158/2012 are not entirely clear on this, it would appear from Mr Luxton’s written submissions that he accepted the declaration covered damages arising from the 1^st Collision. That is certainly the understanding of Singapore’s solicitors.^[6]  Singapore’s solicitors submitted that by reason of (1) Xin Nan Tai being the only party to blame Singapore for the 1^st Collision, (2) the Judgment that Singapore was not to blame for the 1^st Collision and (3) the subsequent dismissal of Xin Nan Tai’s counterclaim, Xin Nan Tai should bear all of Singapore’s costs of determining liability for the 1^st Collision and this should be spelt out clearly in the costs order as follows:

“Xin Nan Tai to pay Singapore’s costs of determining liability for the 1^st Collision, to be taxed on a [party/party] / [indemnity] basis if not agreed.”[7]

70.  This court accepts that Singapore’s formulation of the costs order is more preferable by virtue of its clarity.  However, as submitted by Mr Luxton, since Singapore and Xin Nan Tai finally reached an agreement on liability for the 1^st Collision on 15 July 2016, Singapore should not be entitled to costs in relation to the 1^st Collision from Xin Nan Tai after that date.  There is force in that submission.

71.  As for Singapore’s claim to costs on the indemnity basis, this is premised on the validity of the two purported sanctioned offers referred to below.

72.  With regard to the 1^st Singapore Offer, this can be disregarded for the simple reason that, as it did not deal with the 1^st Collision at all[8], it had no effect on the costs relating to the 1^st Collision. 

73.  With regard to the 2^nd Singapore Offer, for reasons which shall become apparent, this court does not consider it to be a valid sanctioned offer.  Nor can this court take it into account as a Calderbank offer.  

74.  In these circumstances, the proper order for costs shall be:

(1)   Xin Nan Tai to pay Singapore’s costs of determining liability for the 1^st Collision up to and including 15 July 2016, to be taxed on the party/party basis if not agreed.

(2)   No order as between Xin Nan Tai and Singapore for the costs of determining liability for the 1^st Collision after 15 July 2016.

2^nd Collision

75.  On the basis of the general principle referred to in paragraph 11 above, in relation to the costs of determining liability for the 2^nd Collision, Mr Luxton submitted that:

(1)   Singapore is entitled to recover 76% of its costs from Xin Nan Tai, to be taxed on the party/party basis if not agreed;

(2)   Xin Nan Tai is entitled to recover 5% of its costs from Singapore, to be taxed on the party/party basis if not agreed.

76.  Singapore submitted that, in relation to the costs of determining the liability for the 2^nd Collision, it had made sanctioned offers under RHC O 22 to Xin Nan Tai which had a significant impact on costs.

77.  First, on 10 February 2014, Singapore made a sanctioned offer to Xin Nan Tai and Jakarta (“1^st Singapore Offer”) to agree liability for the 2^nd Collision as follows:

“Singapore 5% to blame; Xin Nan Tai and Jakarta jointly and severally 95% to blame, while costs shall be paid on the same basis and in the same proportion.”

78.  Second, on 20 October 2014, Singapore made another sanctioned offer to Xin Nan Tai and Jakarta (“2^nd Singapore Offer”) to agree liability as follows[9]:

(1)   1^st Collision — Singapore 0% to blame.

(2)   2^nd Collision — Singapore 5% to blame; Xin Nan Tai and Jakarta 95% to blame (in proportion to their respective blameworthiness as agreed or held by the Court).

79.  Xin Nan Tai did not accept either offer.

80.  It was not until 15 July 2016 that Singapore and Xin Nan Tai were able to reach an agreement on liability:

(1)   1^st Collision — Singapore 0% to blame.

(2)   2^nd Collision — Singapore 5% to blame; Xin Nan Tai and Jakarta 95% to blame (their liability to be apportioned at trial if not agreed).

81.  Mr Luxton submitted that the 1^st Singapore Offer did not comply with the requirements of RHC O 22 and hence was invalid as a sanctioned offer.  Essentially, he repeated the substance of the 1^st Xin Nan Tai Argument (inclusion of an offer as to costs), the 2^nd Xin Nan Tai Argument (no proper service) and the 3^rd Xin Nan Tai Argument (the offer could not have been accepted by Xin Nan Tai alone).  For reasons already set out earlier in this Decision, this court does not accept any of the three arguments.  But that is not the end of the matter.

82.  It seems to this court the reason why the 1^st Singapore Offer can be disregarded is this.  Its term was that Xin Nan Tai and Jakarta should be jointly and severally 95% to blame for the 2^nd Collision. Whereas, at the trial, Xin Nan Tai was found to be only 76% to blame for the 2^nd Collision. In other words, Xin Nan Tai was not held liable for more than Singapore’s 1^st offer and so the costs consequences set out in RHC O 22 r 24 are not applicable.

83.  In relation to the 2^nd Singapore Offer, Mr Luxton repeated the 1^st Xin Nan Tai Argument and 3^rd Xin Nan Tai Argument and submitted that it did not comply with the requirements of RHC O 22.  For reasons already stated, this court does not accept either argument.

84.  Further, he submitted that the 2^nd Singapore Offer failed to comply with the mandatory requirement set out in RHC O 22 r 5(7) in that it failed to specify that after 28 days from the date when the offer was made, the offeree could only accept the offer if the parties agreed on the liability for costs or the Court granted leave to accept it.  As such, it was not a proper sanctioned offer within the meaning of RHC O 22.

85.  RHC O 22 r 5(7) provides:

“A sanctioned offer made not less than 28 days before the commencement of the trial must provide that after the expiry of 28 days from the date the sanctioned offer is made, the offeree may only accept it if —

(a) the parties agree on the liability for costs; or

(b) the Court grants leave to accept it.” (emphasis added)

86.  In the absence of authorities, this court would have thought that the submission is highly technical and devoid of merits.  But the submission is in fact supported by direct authorities.

87.  In Kwok Chin Wing v 21 Holdings Limited & Anor [2011] 3 HKC 542, Saunders J held that where an offer, although expressed as a sanctioned offer, did not comply with the provisions of RHC O 22 r 5(7) for failing to set out the required circumstances enabling acceptance of it after the expiry of 28 days, it was not a valid sanctioned offer.  As a result, a plaintiff who had made the offer could not rely on it in order to invoke the costs and other consequences set out in RHC O 22 r 24.  

88.  Kwok Chin Wing v 21 Holdings Limited & Anor was followed in Montrio Ltd v Tse Ping Shun David [2012] 2 HKC 392.  The purported sanctioned offer in that case also failed to stipulate the circumstances enabling acceptance of the offer after the expiry of 28 days as required by RHC O 22 r 5(7). At [9] and [10] of the judgment, Poon J (as he then was) observed:

“9. Sanctioned offers are part of the new regime introduced by CJR to encourage litigants to take positive settlement seriously and avoid unproductive and expensive prolongation of the proceedings. Such offers enable a plaintiff to make an offer for settlement of his claims, wholly or partially. Serious consequences may follow from the sanctioned offer. If the defendant rejects it and the plaintiff does better at trial, he may have to pay indemnity costs and enhanced interest of the sum awarded. Since it is the plaintiff who seeks to invoke the new rules to protect his position, he must strictly comply with all the mandatory requirements when he purports to make a sanctioned offer. It does not lie in his mouth to say that his failure to do so is only a technical slip or the defendant is legally represented and hence must know what the requirements are. The plaintiff has a positive duty to fully comply with the rules in the first place in order to make his offer a valid sanctioned offer. I therefore rule that the Offer is not a sanctioned offer within the meaning of Order 22.

10. It follows that the plaintiffs are not entitled to rely on Order 22, rule 24 for their respective application for enhanced interest on the judgment sum, and indemnity costs with enhanced interest…” (emphasis added)

89.  In light of the two direct local authorities which this court sees no reason to depart from, this court accepts Mr Luxton’s submission and rules that the 2^nd Singapore Offer is not a valid sanctioned offer for the purpose of RHC O 22.

90.  While the 2^nd Singapore Offer is not a valid sanctioned offer, the next question is whether this court can nevertheless take it into account as a Calderbank offer, as submitted by Singapore’s solicitors.  After all, the 2^nd Singapore Offer was marked “Without Prejudice save as to costs”.  In this regard, the potential hurdle for Singapore lies in RHC O 62 r 5(1)(d) which provides:

“(1) The Court in exercising its discretion as to costs shall, to such extent, if any, as may be appropriate in the circumstances, take into account —

(d) any written offer which is expressed to be “without prejudice save as to costs” and which relates to any issue in the proceedings, but the court may not take the offer into account, if, at the time it is made, the party making it could have protected his position as to costs by means of a sanctioned payment or sanctioned offer under Order 22.” (emphasis added)

91.  The issue is therefore whether Singapore could have protected its position as to costs by means of a sanctioned offer under RHC O 22.  If yes, the court may not take it into account, and vice versa.

92.  It seems to this court the answer should be yes.  In the present case, the only reason why the 2^nd Singapore Offer was not valid was because it failed to comply with RHC O 22 r 5(7). If Singapore had complied with it, the 2^nd Singapore Offer would have been valid as a sanctioned offer.  In the present case, there can be no suggestion that Singapore would have had difficulty in making a sanctioned offer which complied with RHC O 22 r 5(7).  There is none.

93.  If such a sanctioned offer was not accepted, Singapore’s position as to costs would be protected as long as its liability for the 2^nd Collision was held to be 5% or less, with the remaining 95% to be borne by Xin Nan Tai and Jakarta, which was what eventually happened.  Although the express wording of RHC O 22 r 24 does not cover a case where a defendant’s liability exactly equals a plaintiff’s sanctioned offer, this court was referred to Read v Edmed [2004] EWHC 3274 which held that the costs consequences would be the same ie the plaintiff should be entitled to indemnity costs after the expiry of the offer and interest on those costs.

94.  To conclude, since Singapore could have protected its position as to costs by means of a sanctioned offer under RHC O 22, this court is precluded from taking the 2^nd Singapore Offer into account in considering costs.

95.  In the circumstances, this court rules that the appropriate costs order should be:

(1)   Singapore is entitled to recover 76% of its costs of determining liability for the 2^nd Collision from Xin Nan Tai up to and including 15 July 2016, to be taxed on the party/party basis if not agreed;

(2)   Xin Nan Tai is entitled to recover 5% of its costs of determining liability for the 2^nd Collision from Singapore up to and including 15 July 2016, to be taxed on the party/party basis if not agreed;

(3)   No order as between Xin Nan Tai and Singapore for the costs of determining liability for the 2^nd Collision after 15 July 2016.

Apportionment of Costs between 1^st Collision and 2^nd Collision

96.  Strictly speaking, this is a matter for taxation. Nevertheless, Singapore’s solicitors submitted that, given the proximity of the two collisions, both factually and causally, it is an artificial exercise to attempt to distinguish how the parties allocated time between the two.  Rather, the likelihood is that the time spent by the parties (and hence costs) between the 1^st and 2^nd Collisions would approximately be equal.  Hence, they proposed this court to give a direction that for the purpose of taxation, each party’s liability for costs be split evenly between the 1^st and 2^nd Collisions.

97.  The proposal has the appeal of simplicity which in turn is likely to save costs as well as the taxing master’s time and resources. But in order to justify the direction sought, the factual basis for the proposal ie the time spent by the parties (and hence costs) between the 1^st and 2^nd Collisions was approximately equal, must also be sound.  In this regard, Mr Luxton submitted that the division of legal costs between the 1^st Collision and the 2^nd Collision for Jakarta and Xin Nan Tai on the one hand and Singapore on the other, was likely to be different.  This was because the focus of the trial was the 1^st Collision involving only Xin Nan Tai and Jakarta.  As for Singapore, its main focus was obviously in relation to the 2^nd Collision.

98.  There is force in Mr Luxton’s submission. In these circumstances, the better course to take is to leave it to the good sense of the parties’ legal advisers to try to agree some sort of apportionment of costs between the 1^st and 2^nd Collisions, failing which the matter will be left to taxation.

Disposition

99.  There shall be Orders for costs

(1)   between Singapore and Jakarta: as set out in paragraph 7 above;

(2)nbsp;  between Xin Nan Tai and Jakarta: as set out in paragraphs 51 and 63 above;

(3)   between Xin Nan Tai and Singapore: as set out in paragraphs 74 and 95 above.

100.  Liberty to apply.

Written Submissions by Ince & Co., for the plaintiffs in HCAJ 48/2011 and the 2^nd defendants in HCAJ 158/2012 and HCAJ 49/2013

Written Submissions by Mr Nick Luxton, instructed by Howse Williams Bowers, for the defendants in HCAJ 48/2011 and the 1^st defendants in HCAJ 158/2012 and HCAJ 49/2013

Written Submissions by Reed Smith Richards Butler, for the plaintiffs in HCAJ 158/2012 and HCAJ 49/2013

HCAJ158/2012 and HCAJ49/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY ACTION NOS 158 OF 2012 AND 49 OF 2013

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HCAJ 48/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY ACTION NO 48 OF 2011

_________________

_________________

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J U D G M E N T

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I. Introduction

1.  This is the trial of liability in respect of two almost simultaneous collisions near the termination of the East Lamma Channel Traffic Separation Scheme (“Lamma Scheme”), Hong Kong^[1], at around 3:37am (“1^st Collision”) and 3:40am (“2^nd Collision”) on 14 May 2011 among three container vessels viz “Xin Nan Tai 77” (“Xin Nan Tai”), “MCC Jakarta” (“Jakarta”) and “TS Singapore” (“Singapore”).  The 1^st Collision was between Xin Nan Tai and Jakarta.  This was followed by the 2^nd Collision between Jakarta and Singapore.  All three vessels suffered hull damage to various extent.  While Xin Nan Tai and Singapore did not come into physical contact, it is Singapore’s allegation that Xin Nan Tai’s negligent navigation was causative of the 2^nd Collision. 

2.  In accordance with the long‑established practice in collision actions, trial of liability comes first before the Admiralty Judge, to be followed, if so required, by a reference to the Admiralty Registrar for assessment of damages: Calandra Shipping Co Ltd v Noor Maritime Ltd [2014] 2 HKLRD 242.

3.  Shortly prior to the commencement of this trial, Singapore settled liability with each of Jakarta and Xin Nan Tai on inter alia the following terms:

(1)   Singapore are 5% to blame for the 2^nd Collision;

(2)   Jakarta and Xin Nan Tai are between them 95% to blame for the 2^nd Collision;

(3)   Jakarta’s and Xin Nan Tai’s individual liability (out of the 95%) is to be determined at the trial, unless agreed; and

(4)   Singapore are not to blame for and bear no liability in respect of the 1^st Collision.

4.  As a result of the settlement, the core issues of the trial are the respective fault, if any, of Jakarta and Xin Nan Tai for the 1^st and 2^nd Collisions and, if both are at fault, the apportionment of their liabilities.

II.   Background / Common Ground

5.  Xin Nan Tai is a container vessel of 114.3 metres in length and 16 metres in breadth.  Her gross tonnage is 4,394 tonnes.  The vessel is powered by a marine diesel engine and fitted with a conventional engine telegraph on the bridge.  The engine, if on bridge control mode, can be controlled directly from the bridge.  As far as navigational aids are concerned, the vessel is fitted with, inter alia, 2 radars, both with ARPA^[2]. Her maximum speed at the material time was 8.5 knots.

6.  Jakarta is a container vessel of 207.4 metres in length and 29.87 metres in breadth.  Her tonnages are 25,407 gross and 12,733 net.  Her main engine is a Wartsila Italia S.p.a. 7RTA 72U–B oil engine giving a rated speed of 14 knots when new.  The main engine can be controlled from the bridge.  At the main control console on the bridge, there are 2 radars both fitted with ARPA.

7.  Singapore is a container vessel of 208.90 metres in length and 29.80 metres in breadth.  Her tonnages are 26,358 gross and 12,990 net.  She is fitted with a single MAN B&W 6K 80ME–C two‑stroke marine diesel engine producing a maximum speed of 22 knots.  Main engine propulsion is controlled remotely from the wheelhouse and bridge wings.  The vessel is fitted with 2 radars, both with ARPA.

8.  The collisions took place in the early morning of 14 May 2011.  The weather was generally fine.  There is a factual dispute as to the visibility prior to the collisions.  Xin Nan Tai’s master Hung Ying Kuen (“Captain Hung”) said it was between 2 to 3 nautical miles.  Jakarta’s master Igor Mlikota (“Captain Mlikota”) said it was up to 8 nautical miles.  The statement of Singapore’s master, at paragraph 28, supported Captain Mlikota’s testimony of 8 nautical miles.  The issue is not of critical significance to the question of fault of the two vessels. However, for good measure, this court will record its finding towards the end of this section.

9.  Prior to the collisions, both Jakarta and Singapore were outbound from Hong Kong, navigating in the outbound traffic lane of the Lamma Scheme on a south‑easterly course.  Captain Mlikota said, and this court has no reason to doubt, he first spotted Singapore at or shortly after 3:00am.  At that time, Singapore was proceeding ahead of Jakarta. At around 3:20am, Captain Mlikota said he decided to overtake Singapore as the latter was slowing down.  As stated in Captain Mlikota’s supplemental statement and shown in the Plot referred to in paragraph 25 below, Jakarta began passing Singapore at about 3:33am.  At that time, Singapore was navigating on Jakarta’s port side.  Xin Nan Tai, on the other hand, was navigating along the Dangan Shuidao Traffic Separation Scheme (“Dangan Scheme”), steering a westerly course.

10.  It is common ground between Jakarta and Xin Nan Tai that at some point of time prior to the 1^st Collision, they were in a “crossing situation”, with Xin Nan Tai being the “give‑way” and Jakarta being the “stand‑on” vessel.  When vessels are in a crossing situation, the appropriate actions that each should take and the responsibilities of each vessel are defined, in general terms, in the International Regulations for Preventing Collisions at Sea 1972 as amended by Resolution A464(XII) of the Inter‑governmental Maritime Consultative Organization and Resolutions A626(15), A678(16) and A736(18) of the International Maritime Organization (“COLREGS”).  COLREGS are incorporated into Hong Kong law and set out in the Schedule to the Merchant Shipping (Safety) (Signals of Distress and Prevention of Collisions) Regulations, Cap 369N. 

11.  In Marsden and Gault on Collisions at Sea 14^th Ed, the learned authors describe the purpose of COLREGS at para 5–01 as follows:

“The object of the International Regulations for Preventing Collisions at Sea 1972 is to prevent collisions and to minimise their effect. The rules are made not merely for the sake of the vessel which has to observe them but for the sake of other vessels which may be approaching or manoeuvring at close quarters, and which have every right and reason to suppose the rules will be observed, and none to suppose they will be broken.”

12.  While various breaches of COLREGS have been alleged by Jakarta and Xin Nan Tai against each other, at this juncture, it is sufficient for this court to set out the three rules which are directly relevant to a crossing situation:

“RULE 15

Crossing situation

When 2 power‑driven vessels are crossing so as to involve risk of collision, the vessel which has the other on her own starboard side shall keep out of the way and shall, if the circumstances of the case admit, avoid crossing ahead of the other vessel.

RULE 16

Action by give‑way vessel

Every vessel which is directed to keep out of the way of another vessel shall, so far as possible, take early and substantial action to keep well clear.

RULE 17

Action by stand‑on vessel

(a) (i) Where one of 2 vessels is to keep out of the way the other shall keep her course and speed.

(ii) The latter vessel may however take action to avoid collision by her manoeuvre alone, as soon as it becomes apparent to her that the vessel required to keep out of the way is not taking appropriate action in compliance with these Rules.

(b) When, from any cause, the vessel required to keep her course and speed finds herself so close that collision cannot be avoided by the action of the give‑way vessel alone, she shall take such action as will best aid to avoid collision.

(c) A power‑driven vessel which takes action in a crossing situation in accordance with paragraph (a)(ii) of this Rule to avoid collision with another power‑driven vessel shall, if the circumstances of the case admit, not alter course to port for a vessel on her own port side.

(d) This Rule does not relieve the give‑way vessel of her obligation to keep out of the way.”

13.  The vital importance of complying with the crossing rules has been stressed again and again and the disregard of those rules can only be regarded as a very serious fault of navigation:  The “Toni” [1973] 1 Lloyd’s Rep 79 at 85 per Brandon J.

14.  In accordance with rr 15 and 16, Xin Nan Tai, as the give‑way vessel, was obliged to take early and substantial action to keep well clear of Jakarta while Jakarta should keep her course and speed in accordance with r 17.

15.  In the morning of Day 2, Mr Luxton, in answer to a query raised by Mr Chain, submitted that Xin Nan Tai was not a give‑way vessel with respect to Singapore within the meaning of COLREGS.  The reason given was that Xin Nan Tai would pass clear ahead of Singapore so that there was no risk of collision.  In the course of cross‑examination in the afternoon of Day 3, Captain Hung also said he was confident he could safely pass the bow of Singapore and did not think Xin Nan Tai was a give‑way vessel.  Nevertheless, in the morning of Day 4, this court asked and Captain Hung accepted that he considered Xin Nan Tai and Singapore were also in a crossing situation by 3:31am in which case Xin Nan Tai should also have given way to Singapore instead of trying to cross ahead of her.

16.  Lastly, general visibility in the early morning of 14 May 2011.  Although this issue is not of critical significance, it does go to the credibility of Captain Hung since this court rejects his testimony in this regard and finds that, on balance of probabilities, visibility was close to 8 nautical miles.  The chief reason for rejecting Captain Hung’s testimony was that it was contradictory to Xin Nan Tai’s own deck log book which recorded that, at 2:00am, visibility was in the range of 5–11 nautical miles, while it dropped to the 2–5 nautical miles range only at 4:00 am ie after the collisions.  Captain Hung was questioned on this, in particular, on the deck log book, at the beginning of his cross‑examination. His initial response was to maintain that visibility was only between 2 and 3 nautical miles but later reluctantly accepted what was recorded in the deck log book.  Nevertheless, when it was formally put to him that visibility was about 8 nautical miles, he disagreed again.  This part of Captain Hung’s testimony does, in this court’s view, considerably dent his credibility.

III.   The Witnesses and Other Available Evidence

17.  Each of Xin Nan Tai and Jakarta called one witness to testify at the trial viz Captain Hung and Captain Mlikota respectively.  Further, the witness statement of Singapore’s master was agreed to be adduced as hearsay statement. 

18.  Apart from the oral and hearsay evidence of the three masters, the parties have adduced in evidence several items of “real time” evidence which are of considerable assistance to the court.

19.  First, the Hong Kong Marine Department’s Vessel Traffic Services system recording of the collisions between 3:28am and 3:42am on 14 May 2011 (“VTS recording”).  The VTS recording contains radar records of the position, speed and course of each of the three vessels, together with audio records of VHF radio transmissions.  Hard‑copy screenshots of the radar records (at minute interval) from 3:28am to 3:42am have also been adduced in evidence.  The VTS recording provides very good evidence of the actions of the vessels in the minutes before the collisions.

20.  Second, the Hong Kong Marine Department Data Printout from 3:28am to 3:46am on 14 May 2011 (“Track Data”).  This is a computer printout of information specifying the position, course and speed of each of the vessels at 3‑second intervals contained in the VTS recording. In the Track Data, Jakarta is described as ‘C–dMCC JK’, Singapore is described as ‘C–dTS–SGP’ and Xin Nan Tai is described as ‘505’.  It is the parties’ understanding that the Track Data is obtained from the Marine Department’s computer analysis of high definition radar images.  The Track Data also provides very good evidence of the position, speed and course of each of the three vessels, as long as its margin of difference from the actual situation, which is minor, is understood.

21.  To quote from an agreed statement supplied by Xin Nan Tai and Jakarta to the court:

“Courses and speeds

The [Marine Department’s] VTC computer compares the position of a particular target echo on every radar sweep (believed to be approximately every 3 seconds or so).  From a comparison of these positions, the VTC computer calculates the course and speed of the target ship.  This is the course and speed which the target ship made good over the ground during this very short time interval.  A target ship’s course and speed over the ground takes into account the effects of current and leeway.  The ship’s actual course and speed, as in course being steered, or heading, and its speed through the water can be different.  The extent of any difference depends on the strength of any currents and/or wind conditions.”

22.  Hence, for example, when a vessel alters her course, her heading has to change first before her course over the ground can start to change, then detected by the Marine Department’s radar and then analysed by its computer.  There is thus a short delay, potentially a few seconds, between the actual alteration of course by a vessel and her alteration of course shown in the Track Data. 

23.  Third, the audio track of Jakarta’s VDR^[3] recording between 3:28am and 3:42am on 14 May 2011 (“Jakarta audio track”). The track recorded discussions between the Master and crew members on the bridge of Jakarta and VHF radio communications with others.  A transcript of the audio recording has been helpfully agreed by the parties.

24.  Fourth, the screenshots of radar from Jakarta’s VDR recording between 3:30am and 3:36am (“Jakarta Radar Screenshots”).  They show the relative positions and plots of the three vessels and others in the vicinity during that period.  They also record the heading, speed and course of Jakarta at the times in question.

25.  Last but not least, a minute‑interval collision reconstruction plot of the three vessels in question from 3:16am to 3:40am prepared by Jakarta (“Plot”).  On Day 1, the parties confirmed that the Plot was agreed to be used at the trial subject to submission, if any, by Xin Nan Tai on inter alia its accuracy.  In the end, it does not appear that Xin Nan Tai seriously disputes the accuracy of the Plot.  The Plot gives a bird’s eye view of the course taken by the three vessels during the period as well as their distances from one another.

26.  This court has carefully considered the testimony of the witnesses and assessed it against the “real time” and other documentary evidence and the known and undisputed surrounding circumstances of this case.  This court has also considered the inherent probabilities or otherwise of their testimony and assessed their credibility accordingly in order to resolve, in so far as the same is necessary, the handful of factual disputes between the parties.

IV.   Navigation of Jakarta 

27.  As stated earlier, prior to the collisions, Jakarta was navigating in the outbound traffic lane of the Lamma Scheme on a south‑easterly course.  The final leg of the Lamma Scheme runs south‑eastwards between LCS No 2 buoy and LCS No 1 buoy, before reaching the No 2 precautionary zone.  Singapore was navigating in the same direction ahead of Jakarta.

28.  At about 3:10am, Captain Mlikota said he noticed that Singapore had started to reduce her speed.  Captain Mlikota also said a short while later, he decided to pass Singapore to starboard (so that Singapore would pass down Jakarta’s port side).

29.  At around 3:20am, Jakarta started her action to overtake the Singapore by altering course slightly to starboard.

30.  At about 3:29am, Jakarta slightly altered her course back to port.  At about 3:33am, Jakarta began passing Singapore.  At that time, Jakarta’s speed was around 12.5 knots, which was full ahead manoeuvring speed, while Singapore’s was around 4.5–5 knots.

31.  At around 3:34am, Jakarta entered the No 2 precautionary zone.  Her speed remained at around 12.5 knots.

32.  At about 3:34:39am, Captain Mlikota ordered the helm to be put to port 10.  The Track Data shows that between 3:35:12am to 3:35:33am, Jakarta altered her course from 144 degrees to 133 degrees.

33.  At about 3:35:54am, Captain Mlikota ordered the helm to be put hard to port.  The Track Data shows that between 3:36am and 3:37am ie 1^st Collision, Jakarta significantly altered her course from 124 degrees to around 70 degrees.

34.  The 1^st Collision took place at about 3:37am when the port bow of Xin Nan Tai collided with Jakarta’s starboard bow.  At that time, Singapore was on Jakarta’s port side at a distance of about 0.3 nautical mile.

35.  After the 1^st Collision, Jakarta did not stop immediately but continued to “swing” to her port side and collided with Singapore at about 3:40am.  The Track Data shows that between 3:37:12am and 3:40:03am, Jakarta’s course moved from 70 degrees to 0 degrees while her speed dropped from 9 knots to around 5 knots.

V.   Navigation of Xin Nan Tai

36.  In the morning of 14 May 2011, Xin Nan Tai was on a voyage from Taicang, Jiangsu Province bound for Guangzhou, Guangdong Province.  Upon approaching Hong Kong, Captain Hung took over navigation at 2:40am.  At that time, Xin Nan Tai was on bridge control mode, allowing the main engine to be controlled directly from the bridge via the bridge telegraph.  Prior to the 1^st Collision, Xin Nan Tai was sailing in a westerly direction in the westbound lane of the Dangan Scheme. The Dangan Scheme is to the south of the Lamma Scheme. 

37.  At around 3:08am, Captain Hung ordered Xin Nan Tai’s course to be altered to starboard to steer a course of 269 degrees.  Captain Hung said he acquired both Singapore and Jakarta by radar from 3:15am (Singapore) and from 3:17am (Jakarta) and observed them both on radar (with their speed and course indicated) and visually. 

38.  With respect to Singapore, Captain Hung did not consider Xin Nan Tai to be a give‑way vessel as he was confident he could safely pass her bow.  He said in his statement the ARPA indicated that Singapore’s CPA ie closest point of approach to Xin Nan Tai was around 2.5 cables and was shaping to pass astern of Xin Nan Tai.  Hence, he said Singapore did not pose any danger.  As a matter of fact, Xin Nan Tai did not alter her course to give way.

39.  However, in the morning of Day 4, this court asked and Captain Hung accepted that he considered Xin Nan Tai and Singapore were in a crossing situation by 3:31am.  In that case, Xin Nan Tai should also have given way to Singapore instead of trying to cross ahead of her. She did not.

40.  As far as Jakarta is concerned, Captain Hung said he acquired her on the port radar at a range of around 4 nautical miles.  According to the Plot, the two vessels were at a range of 4 nautical miles only at 3:25am, instead of 3:17am as he claimed.  Captain Hung also said the ARPA indicated that Jakarta’s CPA to Xin Nan Tai was around 1 cable ie 180 metres.  He continued to monitor Jakarta.  When Jakarta was at a distance of around 2 nautical miles, Captain Hung still maintained the course and speed of Xin Nan Tai.  According to the Plot, when the two vessels were at a distance of around 2 nautical miles, the time should be between 3:31am and 3:32am.

41.  At around 3:33am/3:34am, Xin Nan Tai altered course 10 degrees to starboard — Captain Hung said this was in order for her to pass astern of Jakarta.

42.  Subsequently, Captain Hung observed Jakarta was turning to port.  He ordered Xin Nan Tai to go hard to starboard at around 3:35am.  While Jakarta continued to turn to port, Xin Nan Tai continued to turn to starboard and both vessels reduced speed.  At around 3:37am, the two vessels collided.

VI.   Fault of Xin Nan Tai re 1^st Collision

43.  Mr Chain, for Jakarta, submitted that there were two principal causes^[4] of the 1^st Collision.

44.  First, Xin Nan Tai, as the give‑way vessel, failed to take early and substantial action to give way to Jakarta (as well as Singapore), from around 3:22am when she had entered the precautionary zone to around 3:30am at the latest.  Instead, Captain Hung decided to maintain his course and speed and to cross ahead of Singapore which Xin Nan Tai did, albeit barely so.  By deciding to cross ahead of Singapore, Xin Nan Tai was in breach of the clear terms of COLREGS r 15: The “Toni” [1973] 1 Lloyd’s Rep 79, 84 per Brandon J.

45.  According to the Plot, at 3:22am, Xin Nan Tai and Jakarta were 4.9 nautical miles apart, while at 3:30am, they were still 2.5 nautical miles apart.  What Xin Nan Tai should have done was to make a large alteration of course to starboard when there was still the opportunity to avoid the 1^st Collision.  This failure, Mr Chain submitted, also involved failure on the part of Xin Nan Tai to keep a proper lookout in breach of COLREGS r 5, failure to properly evaluate the risk of collision in breach of COLREGS r 7 and failure to take avoiding action in breach of COLREGS r 8.

46.  In this regard, Mr Chain invited this court to take into consideration what another vessel, the so‑called “Model Vessel”, had done.  She was navigating in the same direction as Xin Nan Tai, approaching the Jakarta and the Singapore in the same crossing situation.  At around 3:30am/3:31am, the Model Vessel made an early and substantial alteration of course to starboard and uneventfully passed clear and astern of both Singapore and Jakarta.

47.  It is common ground between Jakarta and Xin Nan Tai that shortly prior to the 1^st Collision, they were in a “crossing situation”, with Xin Nan Tai being the give‑way vessel.  During cross‑examination in the afternoon of Day 3, Captain Hung said he considered the minimum distance to take give‑way action was between 2 to 3 nautical miles.  According to the Plot, the two vessels were at a distance of 3.1 nautical miles at around 3:28am, and at a distance of 2.1 nautical miles at around 3:31am. In other words, even on Captain Hung’s own testimony, 3:28am was the point of time when Xin Nan Tai should have taken action to give way to Jakarta while 3:31am was the latest point of time when she should have done so.

48.  Second, Xin Nan Tai maintained her course and speed until around 3:33am/3:34am when she altered course of 10 degrees to starboard.  Mr Chain submitted that at that time, Xin Nan Tai was left with 2 poor choices — kept going forward to try and cross ahead of Jakarta or swung hard to starboard and try to navigate through the gap between Jakarta and Singapore.  According to paragraph 27 of Captain Hung’s witness statement, he chose the latter and shortly afterwards, at around 3:35am, made a hard alteration to starboard which ended up in the 1^st Collision.  Mr Chain submitted that such a manoeuvre was completely unexpected.  By then, Jakarta had already taken action ie turning to port in response to Xin Nan Tai’s earlier breaches of the crossing rule.  The responsive action taken by Jakarta was premised on Xin Nan Tai having demonstrated an intention to pass ahead of Jakarta.  Mr Chain submitted that Xin Nan Tai should have maintained course and speed — a hard turn to starboard at that late stage only increased the risk of collision.

49.  This court asked the Nautical Assessor inter alia the following questions with regard to Xin Nan Tai’s fault regarding the 1^st Collision.  His views are these:

“2. Given that Xin Nan Tai was the give‑way vessel in a “crossing situation” with the Jakarta, what action should Xin Nan Tai have taken to avoid the 1^st Collision with Jakarta and when such action should have been taken?

Answer to Question 2

During the cross examination the Xin Nan Tai Master stated he considered the minimum distance to give way was 2 or 3nm, this is a distance I would agree with considering the available sea room.  Yet he allowed a situation to arise where he would be created a close quarters situation which resulted in a collision with Jakarta.

The Xin Nan Tai Master should have altered his course to starboard at around 03:30 (latest) to pass around the stern of the Jakarta.  Such an alteration of her course to starboard should be a minimum of 30^o so as to be readily apparent to Jakarta either visually or by radar.

The only thing the Xin Nan Tai Master had to be aware of during this alteration course to starboard was that he did not put the BBKP2[5] in a situation that required her to take action to avoid Xin Nan Tai, as required by Rule 8(f).  If this was a possibility, then he could also have considered a reduction in speed at that time.

3. Whether there were reasons to consider Xin Nan Tai was in breach of any of COLREGS in altering course of 10 degree to starboard at around 03:34?

Answer to Question 3

At 03:33:20 to 03:34:30 the Xin Nan Tai Master altered course to starboard by 10^o (271^oT to 281^oT), by 03:34:30 Jakarta was only 0.88nm from Xin Nan Tai.  I am of the view that the Xin Nan Tai Master believed the 10^o alteration of course was enough to pass around the stern of the Jakarta, an assumption based on data received from his ARPA radar only. Such a small alteration of course would not have been readily apparent visually or by radar aboard the Jakarta and therefore the Xin Nan Tai Master was in breach of Rule 8 (Action to avoid collision) (a) to (f) (i) and (ii), Rule 15 (Crossing Situation) and Rule 16 (Action by give way vessel).”

50.  This court fully agrees with the views of the Nautical Assessor.  

51.  Given Captain Hung himself also accepted Xin Nan Tai was the give‑way vessel, there was really no excuse for him not to take early and substantial action to keep well clear of Jakarta.  In this regard, there were two possible scenarios.

52.  If Captain Hung had kept a proper lookout and acquired on radar and/or observed Jakarta well before 3:30am but did nothing until around 3:33am/3:34am, then Xin Nan Tai would have failed to take action to avoid collision in general under r 8 of COLREGS and, in particular, failed to act as a give‑way vessel under rr 15 and 16 of COLREGS.

53.  If, on the other hand, the reason why Captain Hung did not take any action until around 3:33am/3:34am was because (i) he failed to acquire on radar or observe Jakarta much earlier or (ii) if Jakarta had been acquired on radar much earlier, he failed to pay attention to her and, consequently, failed to properly assess the risk of collision with Jakarta, then Xin Nan Tai would have failed to keep a proper lookout in breach of r 5 of COLREGS and/or failed to determine if risk of collision existed in breach of r 7 of COLREGS. In this regard, the view of the Nautical Assessor, which this court accepts, is instructive.

“1. Whether there were reasons to consider Xin Nan Tai was not maintaining a proper lookout, specifically in failing to acquire or observe Jakarta in good time prior to the 1^st Collision?

Answer to Question 1

I would have expected the Master to have been plotting targets within the south bound East Lamma Channel as early as possible. According to the Xin Nan Tai Master’s statement, paragraph 23, he first observed the Jakarta on the port radar at a distance of 4nm. At the time he thought this was around 03:17. In fact, according to the distance table within the plot the actual time was 03:25. He then claimed that he acquired the target on the starboard radar. I already know from paragraph 21 of his statement that this was on the 3nm range, therefore if you refer to the distance table within the plot, the earliest time he could have commenced plotting was around 03:28.

To commence plotting of Jakarta at 03:28 was far too late and therefore the Master was not maintaining a proper lookout.”

54.  Either way, Xin Nan Tai was at fault.

55.  Further, Xin Nan Tai’s 10‑degree alteration of course to starboard at around 3:33am/3:34am can only be described as “too little too late”.  “Too little” because such a small alteration of course would not have been apparent to Jakarta — she should have made a bold alteration of course to starboard so as to shut out her starboard green side light and allowed her port red side light to be seen.  “Too late” is self‑explanatory.

56.  Rr 15 and 16 of COLREGS have been set out earlier in this Judgment.  For ease of reference, this court also set out the terms of rr 5, 7 and 8 of COLREGS:

“RULE 5

Look‑out

Every vessel shall at all times maintain a proper look‑out by sight and hearing as well as by all available means appropriate in the prevailing circumstances and conditions so as to make a full appraisal of the situation and of the risk of collision.

RULE 7

Risk of Collision

(a) Every vessel shall use all available means appropriate to the prevailing circumstances and conditions to determine if risk of collision exists. If there is any doubt such risk shall be deemed to exist.

(b) Proper use shall be made of radar equipment if fitted and operational, including long-range scanning to obtain early warning of risk of collision and radar plotting or equivalent systematic observation of detected objects.

(c) Assumptions shall not be made on the basis of scanty information, especially scanty radar information.

(d) In determining if risk of collision exists the following considerations shall be among those taken into account:

(i) such risk shall be deemed to exist if the compass bearing of an approaching vessel does not appreciably change;

(ii) such risk may sometimes exist even when an appreciable bearing change is evident, particularly when approaching a very large vessel or a tow or when approaching a vessel at close range.

RULE 8

Action to avoid collision

(a) Any action to avoid collision shall be taken in accordance with the rules of this Part and, if the circumstances of the case admit, be positive, made in ample time and with due regard to the observance of good seamanship.

(b) Any alteration of course and/or speed to avoid collision shall, if the circumstances of the case admit, be large enough to be readily apparent to another vessel observing visually or by radar; a succession of small alterations of course and/or speed should be avoided.

(c) If there is sufficient sea room, alteration of course alone may be the most effective action to avoid a close‑quarters situation provided that it is made in good time, is substantial and does not result in another close‑quarters situation.

(d) Action taken to avoid collision with another vessel shall be such as to result in passing at a safe distance.  The effectiveness of the action shall be carefully checked until the other vessel is finally past and clear…”

57.  To conclude, for the above reasons, this court has no doubt that Xin Nan Tai was at fault for failing to comply with the aforementioned rules of COLREGS and such failure was a significant cause of the 1^st Collision.

VII.   Fault of Jakarta re 1^st Collision

58.  As stated in Mr Luxton’s opening submissions, it is Xin Nan Tai’s case that the primary cause of the 1^st Collision was Jakarta’s fault in that:

a.   Jakarta failed to maintain a proper lookout prior to 3:35am, so that she failed to observe Xin Nan Tai adequately or at all, including Xin Nan Tai’s alteration of course to starboard at around 3:33am/3:34am, in contravention of rr 5, 7(a), 7(b) and 10(f) of COLREGS.  This was particularly dangerous because Jakarta was approaching the end of a traffic separation scheme at a speed of 12.5 knots.

b.   Jakarta turned 10 degrees to port at around 3:35am and made a subsequent further turn hard to port, in contravention of rr 7(c), 8(c), 8(d), 17(a)(i)&(ii), 17(c) and 34(d) of COLREGS.  It was a clear breach of COLREGS for Jakarta to turn to port when Xin Nan Tai was on her port side.

59.  In his closing submissions, Mr Luxton further elaborated on Jakarta’s fault:

a.   It was the obligation of Jakarta to navigate near the termination of the Lamma Scheme with particular caution: r 10(f) of COLREGS.  Jakarta breached this obligation by increasing speed to 12.5 knots at 3:30am and maintaining it.  By comparison, Singapore had taken a sensible precaution by reducing speed — between 3:28am and 3:36am, Singapore was sailing at a speed of only 4–5 knots.

b.   Jakarta had failed to keep a proper lookout — she either had not seen Xin Nan Tai at all prior to 3:34am or, even if Jakarta had acquired Xin Nan Tai on her radar, Jakarta was not paying adequate attention to her.  As a result of Jakarta’s inadequate lookout, Captain Mlikota did not see Xin Nan Tai had altered course 10 degrees to starboard between 3:33:30am and 3:34:30am, onto a course of 281 degrees.  Captain Mlikota confirmed he did not see this alteration of course visually or on the radar and it was his impression throughout that Xin Nan Tai’s course was steady and intending to cross ahead of Jakarta.

c.   Between 3:29am and 3:33am, pursuant to a series of helm orders, Jakarta gradually altered course to port.  At 3:29am, Jakarta was on a course over the ground of 163 degrees.  By 3:33am, Jakarta was on a course over the ground of 144 degrees.  Jakarta then remained on this course until 3:34:39am when Captain Mlikota ordered ‘port 10’, resulting in Jakarta turning further to port from around 3:35am.  Jakarta’s gradual alterations of course to port had put her on a collision course with Xin Nan Tai.  It would appear that Captain Mlikota had made an improper assumption about Xin Nan Tai’s intended course — he had assumed that Xin Nan Tai would not alter course to starboard to go astern of Jakarta when in fact she did at around 3:33am.  The proper course for Jakarta to take was to turn starboard at around 3:34am.

d.   Captain Mlikota ordered ‘hard to port’ at 3:35:54am while a hard turn to starboard could have been performed quickly, safely and without restriction.

60.  In light of Xin Nan Tai’s elaborated complaints of Jakarta’s fault, this court invited the Nautical Assessor to express his views.

“4. Whether there were reasons to consider Jakarta was not maintaining a proper lookout, specifically in failing to acquire or observe Xin Nan Tai in good time prior to the 1^st Collision?

Answer to Question 4

Within the Jakarta Master’s Supplementary Statement, paragraph 6, he claimed he was passing TS Singapore at around 03:33. In paragraph 19 of his 1^st Statement he stated “he was also aware now on radar of a crossing vessel moving westwards through the westbound lane of the Traffic Separation Scheme, although I cannot recall her exact speed and heading as my attention was presently focussed on safely overtaking the TS Singapore at this time”. At this time Jakarta was 1.4nm from the Xin Nan Tai.

Within the transcript of the Jakarta VDR recording MARDEP informed the Jakarta at 03:34:16 “the vessel on your port bow, no information, please keep an eye on her”. Such a comment must be based on the VTC screen showing a potential collision between the 2 vessels (vectors had gone from white to red). At 03:34:26 the Master states “Ah, I can see her” (XNT), at 03:34:39 the Master orders port 10^o. At 03:34:42 he then states “Un‑f*****g believable, okay… What they say, no information?” I am therefore of the view it was at this time the Master moved his focus of attention from TS Singapore to Xin Nan Tai. This late assessment of the situation is in breach of Rule 5 (Lookout) and Rule 7 (Risk of collision) (a), (b) and (d) (i).

5. Whether there were reasons to consider Jakarta had failed to observe Xin Nan Tai’s change of course of 10 degree to starboard (from 271° to 281°) between 03:33 and 03:34?

Answer to Question 5

Jakarta Master did fail to observe Xin Nan Tai 10^o alteration of course to starboard, however this was not his fault. Such an alteration was not large enough to be readily apparent to Jakarta observing visually or by radar.

6. Whether there were reasons to consider Jakarta was sailing at an unsafe speed at any time before or after it had left the East Lamma Traffic Separation Scheme and entered the precautionary zone?

Answer to Question 6

At 03:16, calculated from the plot, Jakarta was steaming at around 11.5 knots. The Master had full control of his engine and therefore could reduce speed according to the prevailing circumstances and conditions.

Within Jakarta’s Passage plan the speed considered for this part was 8 knots. I have assumed this speed would be dependent on weather conditions, visibility and traffic. The Passage plan is a guidance document which must allow for amendments and contingences etc.

In paragraph 9 of the Master’s Supplementary Statement he states that he acquired the Xin Nan Tai on the ARPA at 03:25. However at that time he was focusing on overtaking TS Singapore and not Xin Nan Tai. It was only at 03:33 when the Jakarta Master focused on Xin Nan Tai who was only 1.4nm. At this point the Jakarta Master realised the Xin Nan Tai had failed to alter course to starboard as required by Xin Nan Tai as the “give way” vessel. I am therefore of the view that at 03:33 Jakarta was now steaming at an unsafe speed. The Jakarta Master should have reduced the speed as much as possible whilst still maintaining steerage.

7. Whether there were reasons to consider Jakarta was in breach of any of COLREGS (i) in gradually altering course to port prior to 03:34 (ii) by the ‘port 10’ order at around 03:34:39; and (iii) by the “hard to port” order at around 03:35:54?

Answer to Question 7

(i) - According to the transcript the Jakarta Master started to adjust his course to port gradually commencing at 03:28:25 (Co. 155^oT) to 03:33:21 Co. 140^oT). This gradual alteration would not have been apparent visually or by radar to the Xin Nan Tai. These small alterations of course were navigational and not considered for collision avoidance by the Master. On completion of these course adjustments Xin Nan Tai was around 3nm away. The Jakarta Master at this time was not fully aware of the developing situation. Therefore, the Master was in breach of Rule 5 (Look‑out), Rule 7 (Risk of collision) (a) and (b).

(ii) - By 03:34 the Jakarta was starting to draw past TS Singapore and Xin Nan Tai bearing around 25^o to port at a distance of 1.1nm. The Jakarta Master at this time believed Xin Nan Tai had made no alteration of course or speed and therefore at 03:34:39 orders Port 10, instead of going to starboard. This is in breach of Rule 17 (Action by stand‑on vessel) (c), Rule 8 (Action to avoid collision) (a) to (e) and Rule 10 (Traffic Separation Schemes) (f). He is also at the same time overtaking TS Singapore and therefore by altering course to port, towards the TS Singapore, he is in breach of Rule 13 (Overtaking) (a) and (d).

(iii)   - At 03:35:54 both vessels were only 0.4nm apart.  TS Singapore was 0.3nm from Jakarta and 0.5nm from Xin Nan Tai.  The Master said under cross examination the collision was inevitable at this time.  However, the order Hard to Port was in breach of Rule 17 (Action by stand‑on vessel) (c), Rule 8 (Action to avoid collision) (a) to (e) and Rule 10 (Traffic Separation Schemes) (f).  The Master was further in breach of Rule 13 (Overtaking) (a) and (d).”

61.  This court largely accepts the views of the Nautical Assessor.

62.  First, this court agrees that by 3:33am at the latest, Jakarta was sailing too fast at 12.5 knots which was full ahead manoeuvre speed.  Although r 17(a)(i) of COLREGS mandates the stand‑on vessel ie Jakarta to maintain her course and speed, there would come a point of time when it became apparent that the give‑way vessel ie Xin Nan Tai was not taking the appropriate action, in which event, the stand‑on vessel should take action to avoid collision: rr 17(a)(ii) and 17(b) of COLREGS.  One of the actions which Jakarta could easily have taken was of course to reduce her speed.  Nevertheless, for a vessel of the size of Jakarta travelling at full ahead manoeuvre speed, it would have taken time for the engine to stop then reverse in order to reduce speed.  Hence, even if Jakarta should have reduced speed at 3:33am, this failure would not have been causative of the 1^st Collision. This is the point taken by Mr Chain in his Further Submissions and will be dealt with later when apportioning liability.

63.  Second, as far as proper lookout is concerned, Captain Mlikota’s evidence is conflicting as to when he first acquired or observed Xin Nan Tai.  At paragraph 19 of his first statement dated 15 May 2011, he said he was aware on the radar of a crossing vessel at a range of 3 miles which he found out later to be Xin Nan Tai.  If so, according to the Plot, the time should be around 3:28am.  He also said his attention was then focused on safely overtaking Singapore, which is perfectly understandable.  At paragraph 9 of his second statement dated 3 September 2014, he said “I had earlier acquired her [Xin Nan Tai’s] target on the ARPA at about 0325 and I recall observing her target data on the starboard radar.  This observation was at about 0330.”  Yet, on Day 2, Captain Mlikota testified in court that he first observed Xin Nan Tai and plotted her at around 3:20am ie a full 10 minutes earlier than he said in his second statement.

64.  Given Captain Mlikota’s admission in court that he did not have a record and given the passage of time, it is not expected that his memory would improve while testifying in August 2016 compared to the time when he made his witness statements in 2011 and 2014.  This court therefore rejects his testimony that he first observed Xin Nan Tai and plotted her at around 3:20am.  Instead, this court finds, on balance of probabilities, Captain Mlikota only moved his focus of attention from safely overtaking Singapore to the crossing situation with Xin Nan Tai shortly after 3:33:55am.  This was the time when the ARPA collision alarm rang.  This finding of fact is consistent with Captain Mlikota’s reaction at around 3:34am after he had been notified by the Marine Department on VHF radio of the existence of Xin Nan Tai.  According to the transcript of Jakarta audio track, his reaction to the notification was “Ah, I can see her”.  If Captain Mlikota or his crew had been observing and paying attention to Xin Nan Tai as from 3:20am or even 3:30am, his reaction would have been quite different.  It would have been something like “Thank you.  We have already acquired her on radar” or “We having been watching her closely”.  This finding of fact does not depend on the Nautical Assessor’s view on the matter — this is a finding of fact by this court on its own.  In this court’s view, Jakarta’s failure to pay sufficient attention to Xin Nan Tai earlier than 3:33am was in breach of rr 5 and 7 of COLREGS.  By that time, the two vessels were only 1.4 nautical miles apart and clearly in a crossing situation.

65.  Third, the gradual alterations to port by Jakarta cumulating in the “port 10” order at 3:34:39am and the “hard to port” order at around 3:35:54am.  This court agrees with the Nautical Assessor that the “Port 10” and the “Hard to Port” orders were in breach of COLREGS.

66.  This court is sympathetic to Captain Mlikota in that he was faced with a very difficult crossing situation.  As he said in court, as the stand‑on vessel, Jakarta was only left with “bad choices”.  By the time of the “port 10” order, the two vessels were less than 1 nautical mile apart.  Through no fault on his part, for the reason stated by the Nautical Assessor’s answer to Question 5 which this court accepts, Captain Mlikota admittedly did not observe Xin Nan Tai’s 10‑degree alteration of course to starboard. Nevertheless, it is difficult to see what good it would have done for Jakarta to turn to port, whether by 10 degrees or hard to port.  In his Further Submissions, Mr Chain argued that as at 3:33am, Captain Mlikota was entitled to take the best action to avoid collision which he considered to be the “port 10” order.  Captain Mlikota, at paragraph 10 of his second statement, alleged, without elaboration, this was done in order to increase the CPA with Xin Nan Tai.  He therefore gave that order at 3:34:39am.  Accepting that Jakarta was entitled to take the best action to avoid collision, Mr Chain had not explained how or why turning to port would best avoid collision with Xin Nan Tai — he just asserted it.

67.  Nor has Mr Chain explained to this court why the circumstances were such that Jakarta could not have turned starboard instead.  As testified by Captain Mlikota under cross‑examination, there was no physical restriction on Jakarta turning starboard at 3:34am.  According to r 17(c) of COLREGS, the stand‑on vessel shall, if the circumstances of the case admit, not alter course to port.  Furthermore, Singapore was on her port side.  In turning towards Singapore after overtaking her, Jakarta was also in breach of r 13(a) of COLREGS.  For the same reasons, the subsequent hard to port order was also in breach of rr 13(a) and 17(c) of COLREGS.

68.  To conclude, this court finds that Jakarta was at fault for failing to comply with the aforementioned rules of COLREGS and such failure was also a cause of the 1^st Collision.

VIII.   Apportionment of liability for 1^st Collision

69.  Since this court finds both vessels were at fault for causing the 1^st Collision, it is necessary to apportion their liability for it.

70.  This court should first remind itself of the law which, for the present purpose, can be summarised into the following propositions.

71.  First, the structure of COLREGS is designed to ensure that, whenever possible, ships will not reach a close‑quarters situation in which there is risk of collision and in which decisions have to be taken without time for proper thought.  Manoeuvres taken to avoid a close‑quarters situation should be such as to be readily apparent to the other ship.  The errors of navigation which are the most serious are those errors made by an officer who has time to think.  At such a time there is no excuse for failure to comply with COLREGS: The “Majola II” [1993] 1 Lloyd’s Rep 48, 50–51 (Sheen J).

72.  Second, one of the most important principles underlying good seamanship and COLREGS is to avoid, so far as possible, close‑quarters situations: The “Sanwa” [1998] 1 Lloyd’s Rep 283, 299 (Clarke J).

73.  Third, as a matter of law, there is no higher duty on the give‑way vessel to keep out of the way of the stand‑on vessel than there is on the part of the stand‑on vessel to maintain course and speed.  In any particular case, the need for the give‑way vessel to take helm or engine action may assume greater or less importance than the need for the stand‑on vessel not to embarrass the give‑way vessel by altering course or speed: The “Savina” [1975] 2 Lloyd’s Rep 141, 145 (Cairns LJ); affirmed on appeal [1976] 2 Lloyd’s Rep 123, 132 (Lord Simon of Glaisdale).

74.  Fourth, in The “Samco Europe and MSC Prestige” [2011] 2 Lloyd’s Rep 579, the court summarised the task of apportionment of liability in this way:

“81. Apportionment of responsibility for a collision depends upon an assessment of the blameworthiness and causative potency of both vessels: see The British Aviator [1965] 1 Lloyd’s Rep 271 at page 277 per Willmer LJ. The assessment is of the relative degree of responsibility of each vessel: see The Mineral Dampier [2001] 2 Lloyd’s Rep 419 at para 39. For that reason Admiralty judges often consider, where one ship is more to blame than the other, how many more times to blame one vessel is than the other: see, for example, The Angelic Spirit [1994] 2 Lloyd’s Rep 595 at page 608 per Clarke J and The Mineral Dampier at para 52 per Lord Phillips MR.”

75.  Fifth, certain broad lines of approach can be used when apportioning liability.  As stated by Teare J in The “Nordlake” and The “Seaeagle” [2016] 1 Lloyd’s Rep 656 at [149], they are:

(i)   The number of faults on one side or the other is not decisive.  It is the nature and quality of a ship’s faults, rather than their number, that matter.

(ii)   Breaches of the obligations imposed on ships in certain defined situations by the Collision Regulations will usually be regarded as seriously culpable…

(iii)   Causative potency has two aspects.  The first is the extent to which the fault contributed to the fact that the collision occurred.  The second is the extent to which the fault contributed to the damage resulting from the casualty.

(iv)   In most cases though not all it will be right to treat the fault of a ship that creates a situation of difficulty or danger as greater than that of the ship that fails to react properly to such situation after it has been created.

(v)   The fact that a fault consists of a deliberate act or omission may in certain circumstances justify the court in treating it as more culpable than a fault which consists of omission only.

76.  Applying these principles to the findings of fault on the part of Xin Nan Tai and Jakarta, this court is of the firm view that Xin Nan Tai must bear the majority of the responsibility for the 1^st Collision.

77.  To start with, it was Xin Nan Tai which created the danger and difficulty inherent in a close‑quarters situation.  Had she taken early and substantial action to give way, while Jakarta was maintaining her course and speed, there would not have been the 1^st Collision at all.  Jakarta, while technically in breach of COLREGS for sailing too fast and for failing to pay adequate attention to Xin Nan Tai as opined by the Nautical Assessor and as found by this court, did not create the close‑quarters situation.  Even if Jakarta had reduced speed at 3:33am, her failure would not have been causative of the 1^st Collision.

78.  Captain Mlikota’s “port 10” and “hard to port” orders were made in response to the close‑quarters situation created by Xin Nan Tai.  These orders were made at a time when he had little or no time to think and when he was left with only “bad choices”.  Xin Nan Tai, on the other hand, had plenty of time to give way: the two vessels were at a distance of 3.1 nautical miles at around 3:28am, and at a distance of 2.1 nautical miles at around 3:31am.  During those few minutes, Xin Nan Tai could easily have made a large alteration of course to starboard to avoid both Singapore and Jakarta, just like the Model Vessel.

79.  It seems to this court that in terms of their nature and quality, Xin Nan Tai’s faults were much more serious and much more causatively potent than Jakarta’s.  Having given the matter careful consideration, in this court’s judgment, a fair apportionment of liability should be 80:20 in favour of Jakarta and will so hold.

IX.   Apportionment of liability for 2^nd Collision

80.  Mr Chain submitted nothing could have been done by Jakarta between the 1^st and 2^nd Collisions so that the appropriate apportionment of liability for the 2^nd Collision should reflect and correspond to that for the 1^st Collision.  As expected, Mr Luxton submitted otherwise.  He submitted that Jakarta’s alterations to port were in breach of r 13(a) of COLREGS and created a risk of collision with Singapore.  He further submitted that Jakarta failed to take the necessary action to stop her engines or go astern after the 1^st Collision, in order to avoid the 2^nd Collision with Singapore.  Such failure to take action was in breach of r 8(e) of COLREGS, requiring Jakarta to slacken her speed or take all way off by stopping or reversing means of propulsion, in order to avoid the 2^nd Collision. 

81.  Jakarta’s faults prior to and her responsibility for the 1^st Collision are already reflected in the apportionment of 80:20 as aforesaid.  As far as her failure to further reduce speed after the 1^st Collision is concerned, the view of the Nautical Assessor is as follows.

“8. Whether there were actions which could have been taken by Jakarta after the 1^st Collision in order to avoid the 2^nd Collision?

Answer to question 8

At the time of the collision between Jakarta and Xin Nan Tai (03:37:12), Jakarta was still moving forward at a speed of 9knots (Mardep print out page 32). The speed was starting to fall away but not fast enough. At the time of the 2^nd collision the Jakarta was still moving forward at 3.5knots. Jakarta was also continuing to swing to port, towards the TS Singapore, from 073^oT to 006^oT, her heading on impact.

According to the transcript the Master stopped the engine and put it to full astern at 03:35:54. Unfortunately it will take some time before the engine is capable of going astern. It would appear that at 03:38:45 the engine finally started to go astern. The Master ordered the helm Hard to Starboard a few seconds later. These actions were too late to avoid the collision with TS Singapore.

In reality there was no further action the Jakarta Master could have done after the 1^st collision in order to avoid the 2^nd collision."

82.  This court accepts the view of the Nautical Assessor.  Given the size of Jakarta and her speed prior to the 1^st Collision, it would have taken time for the engine to stop and then reverse in order to reduce speed.  On the evidence, this court is not satisfied that anything more could have been done by Jakarta to avoid the 2^nd Collision after the 1^st Collision.  This court therefore agrees that the apportionment of liability for the 2^nd Collision should reflect and correspond to that for the 1^st Collision ie 80:20 in favour of Jakarta and shall so rule.

83.  In view of the agreement that Xin Nan Tai and Jakarta are between them 95% to blame for the 2^nd Collision, the parties can do the simple arithmetic themselves and come up with an agreed figure for the purpose of apportionment of liability for the 2^nd Collision.

X.   Disposition and Costs

84.  In the circumstances, this court hereby makes the following determination and orders.

85.  Singapore are 5% to blame for the 2^nd Collision and are not to blame for and bear no liability in respect of the 1^st Collision.

86.  Xin Nan Tai’s and Jakarta’s liabilities for the 1^st Collision are as stated in paragraph 79 above.

87.  Xin Nan Tai and Jakarta are between them 95% to blame for the 2^nd Collision.  Their individual liabilities out of the 95% are as stated in paragraphs 82 and 83 above.

88.  In the absence of agreement on costs within 21 days, the parties shall file and serve their written submissions on costs, to be dealt with by this court on paper.  

XI.   Postcript — The Nautical Assessor

89.  By Order dated 15 January 2016, this court directed the 3 actions be tried by the Admiralty Judge, assisted by a nautical assessor.  Subsequently, the parties have jointly appointed Captain Paul Walton, Director and Master Mariner in the employ of London Offshore Consultants (Hong Kong) Limited, as the Nautical Assessor.

90.  This court would take the opportunity to make a number of observations on the role of nautical assessors for future reference.

91.  First, the function of nautical assessors is to provide expert assistance to the court on matters within their expertise, namely, issues of navigation and seamanship.  They are not part of the court. Their advice has the status of expert evidence on all issues of fact about seamanship.  As with any other expert, their advice is not conclusive, but merely evidence which the judge may accept or reject as he sees fit: The Australia [1927] AC 145, 152; Marsden and Gault Collisions at Sea 14^th Ed para 20–188.

92.  Second, the precise way of soliciting the assistance of assessors must rest in the decision of each court.  The court has a wide discretion in this regard — it depends on what fairness requires: The Australia [1927] AC 145, 152; Ahmed v Governing Body of the University of Oxford [2003] 1 WLR 995; Chevalier (Construction) Company Ltd v Tak Cheong Engineer Development Ltd [2011] 2 HKLRD 463 at [13]–[15]. 

93.  Third, in admiralty practice, nautical assessors are technical advisers, albeit they can also be sources of evidence on facts: The Australia [1927] AC 145, 152.

94.  Fourth, where assessors have an evidential function, the normal rule is disclosure of their evidence to the parties.  Where assessors perform a function more involved in assisting the evaluation of evidence, disclosure to the parties will not be the normal rule and will only occur if fairness demands it: Chevalier (Construction) Company Ltd v Tak Cheong Engineer Development Ltd [2011] 2 HKLRD 463 at [13]–[15].

95.  Fifth, in relation to the court’s decision making process, there is no general duty to disclose what assistance the judge is obtaining in that role during the hearing: Ahmed v Governing Body of the University of Oxford, supra at [65].  Having said that, in accordance with the parties’ right to a fair and public hearing as enshrined in Art 10 of the Hong Kong Bill of Rights, the court needs to know, before it reaches a conclusion, what the parties have to say about the issues and the evidence which goes to them.  Specifically, in collision cases, because the judge is not bound to accept the advice he receives from nautical assessors: Admiralty Comrs v SS Ausonia (Owners) (1920) 2 Ll L Rep 123, 124, the parties should normally be given an opportunity to contend that the court should or should not follow the advice: Bow Spring (Owners) v Manzanillo II (Owners) [2005] 1 WLR 144 at [59]; The “Global Mariner” and “Atlantic Crusader” [2005] 1 Lloyd’s Rep 699 at [14(iv)] and [14(v)].

96.  Sixth, in England, an elaborate procedure was set out by Gross J (as he then was) in The “Global Mariner” and “Atlantic Crusader”, supra at [14] and treated as “the proper practice in all collision cases” at [15].  This court considers the English Admiralty practice as valuable guidance but ultimately, the aim is to strike the right and proportionate balance between the desirable goal of transparency on the one hand and the need to curb the costs and delay inherent in the “ping pong” of post‑hearing exchanges on the other: The “Global Mariner” and “Atlantic Crusader”, supra at [16].

97.  In line with its duty to actively manage cases in order to further the underlying objectives of the Rules of the High Court, the court must decide its own practice and procedure best suited to further those objectives in the local environment.  In this court’s view, the proper procedure to be adopted in a particular case should have a healthy degree of flexibility, best left to the discretion of the judge trying the case.

98.  Seventh, the court should record in the judgment the advice sought by the court from the assessor together with the assessor’s answers: Ahmed v Governing Body of the University of Oxford, supra; The “Global Mariner” and “Atlantic Crusader”, supra at [14(v)].

99.  In light of the above, the parties were content to accept and this court gave the following directions to them on the first day of trial:

“Subject to further directions of the court,

(a) The joint list of particulars of negligence filed on 3 August 2016 in the concurrent action ie HCAJ 48/2011 shall be the parameters of the advice to be sought by the court from the Nautical Assessor.

(b) The advice ultimately sought by the court from the Nautical Assessor and the Nautical Assessor’s advice to the court be disclosed to Counsel.

(c)   Leave to Counsel to file and serve further^[6] written submissions as to whether the advice given by the Nautical Assessor should be accepted.”

100.  For the benefit of the parties of future collision actions, these directions will be the usual directions of this court.

101.  This court thanks counsel for their assistance.

102.  Last but not least, this court thanks Captain Walton for his helpful assistance.

ANNEX

Questions FROM THE COURT TO the nautical assessor

1.   Whether there were reasons to consider Xin Nan Tai was not maintaining a proper lookout, specifically in failing to acquire or observe Jakarta in good time prior to the 1^st Collision?

Answer to Question 1

I would have expected the Master to have been plotting targets within the south bound East Lamma Channel as early as possible. According to the Xin Nan Tai Master’s statement, paragraph 23, he first observed the Jakarta on the port radar at a distance of 4nm. At the time he thought this was around 03:17. In fact, according to the distance table within the plot the actual time was 03:25. He then claimed that he acquired the target on the starboard radar. I already know from paragraph 21 of his statement that this was on the 3nm range, therefore if you refer to the distance table within the plot, the earliest time he could have commenced plotting was around 03:28.

To commence plotting of Jakarta at 03:28 was far too late and therefore the Master was not maintaining a proper lookout.

2.   Given that Xin Nan Tai was the give-way vessel in a “crossing situation” with the Jakarta, what action should Xin Nan Tai have taken to avoid the 1^st Collision with Jakarta and when such action should have been taken?

Answer to Question 2

During the cross examination the Xin Nan Tai Master stated he considered the minimum distance to give way was 2 or 3nm, this is a distance I would agree with considering the available sea room. Yet he allowed a situation to arise where he would be created a close quarters situation which resulted in a collision with Jakarta.

The Xin Nan Tai Master should have altered his course to starboard at around 03:30 (latest) to pass around the stern of the Jakarta. Such an alteration of her course to starboard should be a minimum of 30^o so as to be readily apparent to Jakarta either visually or by radar.

The only thing the Xin Nan Tai Master had to be aware of during this alteration course to starboard was that he did not put the BBKP2 in a situation that required her to take action to avoid Xin Nan Tai, as required by Rule 8 (f). If this was a possibility, then he could also have considered a reduction in speed at that time.

3.   Whether there were reasons to consider Xin Nan Tai was in breach of any of COLREGS in altering course of 10 degree to starboard at around 03:34?

Answer to Question 3

At 03:33:20 to 03:34:30 the Xin Nan Tai Master altered course to starboard by 10^o (271^oT to 281^oT), by 03:34:30 Jakarta was only 0.88nm from Xin Nan Tai. I am of the view that the Xin Nan Tai Master believed the 10^o alteration of course was enough to pass around the stern of the Jakarta, an assumption based on data received from his ARPA radar only. Such a small alteration of course would not have been readily apparent visually or by radar aboard the Jakarta and therefore the Xin Nan Tai Master was in breach of Rule 8 (Action to avoid collision) (a) to (f) (i) and (ii), Rule 15 (Crossing Situation) and Rule 16 (Action by give way vessel).

4.   Whether there were reasons to consider Jakarta was not maintaining a proper lookout, specifically in failing to acquire or observe Xin Nan Tai in good time prior to the 1^st Collision?

Answer to Question 4

Within the Jakarta Master’s Supplementary Statement, paragraph 6, he claimed he was passing TS Singapore at around 03:33. In paragraph 19 of his 1^st Statement he stated “he was also aware now on radar of a crossing vessel moving westwards through the westbound lane of the Traffic Separation Scheme, although I cannot recall her exact speed and heading as my attention was presently focussed on safely overtaking the TS Singapore at this time”. At this time Jakarta was 1.4nm from the Xin Nan Tai.

Within the transcript of the Jakarta VDR recording MARDEP informed the Jakarta at 03:34:16 “the vessel on your port bow, no information, please keep an eye on her”. Such a comment must be based on the VTC screen showing a potential collision between the 2 vessels (vectors had gone from white to red). At 03:34:26 the Master states “Ah, I can see her” (XNT), at 03:34:39 the Master orders port 10^o. At 03:34:42 he then states “Un-f*****g believable, okay… What they say, no information?” I am therefore of the view it was at this time the Master moved his focus of attention from TS Singapore to Xin Nan Tai. This late assessment of the situation is in breach of Rule 5 (Lookout) and Rule 7 (Risk of collision) (a), (b) and (d) (i).

5.   Whether there were reasons to consider Jakarta had failed to observe Xin Nan Tai’s change of course of 10 degree to starboard (from 271° to 281°) between 03:33 and 03:34?

Answer to Question 5

Jakarta Master did fail to observe Xin Nan Tai 10^o alteration of course to starboard, however this was not his fault. Such an alteration was not large enough to be readily apparent to Jakarta observing visually or by radar.

6.   Whether there were reasons to consider Jakarta was sailing at an unsafe speed at any time before or after it had left the East Lamma Traffic Separation Scheme and entered the precautionary zone?

Answer to Question 6

At 03:16, calculated from the plot, Jakarta was steaming at around 11.5knots. The Master had full control of his engine and therefore could reduce speed according to the prevailing circumstances and conditions.

Within Jakarta’s Passage plan the speed considered for this part was 8 knots. I have assumed this speed would be dependent on weather conditions, visibility and traffic. The Passage plan is a guidance document which must allow for amendments and contingences etc.

In paragraph 9 of the Master’s Supplementary Statement he states that he acquired the Xin Nan Tai on the ARPA at 03:25. However at that time he was focusing on overtaking TS Singapore and not Xin Nan Tai. It was only at 03:33 when the Jakarta Master focused on Xin Nan Tai who was only 1.4nm. At this point the Jakarta Master realised the Xin Nan Tai, had failed to alter course to starboard as required by Xin Nan Tai as the “give way” vessel. I am therefore of the view that at 03:33 Jakarta was now steaming at an unsafe speed. The Jakarta Master should have reduced the speed as much as possible whilst still maintaining steerage.  

7.   Whether there were reasons to consider Jakarta was in breach of any of COLREGS (i) in gradually altering course to port prior to 03:34 (ii) by the ‘port 10’ order at around 03:34:39; and (iii) by the “hard to port” order at around 03:35:54?

Answer to Question 7

(i)   - According to the transcript the Jakarta Master started to adjust his course to port gradually commencing at 03:28:25 (Co. 155^oT) to 03:33:21 Co. 140^oT). This gradual alteration would not have been apparent visually or by radar to the Xin Nan Tai. These small alterations of course were navigational and not considered for collision avoidance by the Master. On completion of these course adjustments Xin Nan Tai was around 3nm away. The Jakarta Master at this time was not fully aware of the developing situation. Therefore, the Master was in breach of Rule 5 (Look-out), Rule 7 (Risk of collision) (a) and (b). 

(ii)    - By 03:34 the Jakarta was starting to draw past TS Singapore and Xin Nan Tai bearing around 25^o to port at a distance of 1.1nm. The Jakarta Master at this time believed Xin Nan Tai had made no alteration of course or speed and therefore at 03:34:39 orders Port 10, instead of going to starboard. This is in breach of Rule 17 (Action by stand-on vessel) (c), Rule 8 (Action to avoid collision) (a) to (e) and Rule 10 (Traffic Separation Schemes) (f). He is also at the same time overtaking TS Singapore and therefore by altering course to port, towards the TS Singapore, he is in breach of Rule 13 (Overtaking) (a) and (d).

(iii)   - At 03:35:54 both vessels were only 0.4nm apart. TS Singapore was 0.3nm from Jakarta and 0.5nm from Xin Nan Tai. The Master said under cross examination the collision was inevitable at this time. However, the order Hard to Port was in breach of Rule 17 (Action by stand-on vessel) (c), Rule 8 (Action to avoid collision) (a) to (e) and Rule 10 (Traffic Separation Schemes) (f). The Master was further in breach of Rule 13 (Overtaking) (a) and (d).

8.   Whether there were actions which could have been taken by Jakarta after the 1^st Collision in order to avoid the 2^nd Collision?

Answer to question 8

At the time of the collision between Jakarta and Xin Nan Tai (03:37:12), Jakarta was still moving forward at a speed of 9knots (Mardep print out page 32). The speed was starting to fall away but not fast enough. At the time of the 2^nd collision the Jakarta was still moving forward at 3.5knots. Jakarta was also continuing to swing to port, towards the TS Singapore, from 073^oT to 006^oT, her heading on impact.

According to the transcript the Master stopped the engine and put it to full astern at 03:35:54. Unfortunately it will take some time before the engine is capable of going astern. It would appear that at 03:38:45 the engine finally started to go astern. The Master ordered the helm Hard to Starboard a few seconds later. These actions were too late to avoid the collision with TS Singapore.

In reality there was no further action the Jakarta Master could have done after the 1^st collision in order to avoid the 2^nd collision.

9.   Whether there was a point of time when neither vessel could have done anything to avoid the 1^st Collision ie “the point of no return”? And if yes, when was that point of time?

Answer to Question 9

I am of the view at 03:35:54 both vessels had reached “the point of no return”.