Case Details
- Title: The “Navigator Aries”
- Citation: [2023] SGCA 26
- Court: Court of Appeal of the Republic of Singapore
- Date of Decision: 21 September 2023
- Court of Appeal Civil Appeal No: Civil Appeal No 45 of 2022
- Judgment Date (reserved): 21 July 2023
- Judges: Judith Prakash JCA, Steven Chong JCA and Belinda Ang Saw Ean JCA
- Parties: Owner of the vessel “Navigator Aries” (Appellant); Owner of the vessel “Leo Perdana” (Respondent)
- Admiralty in rem proceedings: Admiralty in Rem No 170 of 2016 (collision apportionment action against “Leo Perdana”); Admiralty in Rem No 204 of 2016 (collision apportionment action against “Navigator Aries”)
- Consolidation: Consolidated on 11 November 2016
- Legal Area: Civil Procedure — Costs
- Key Procedural Instruments: Offer to settle under O 22A r 9(3) ROC (2014 Rev Ed); Calderbank offer (without prejudice save as to costs)
- Statutes / Rules Referenced (as per metadata): Consolidated Act; Consolidated Act; D of the Supreme Court of Judicature Act 1969; Supreme Court of Judicature Act; Supreme Court of Judicature Act 1969
- Related / Earlier Decisions: The “Navigator Aries” [2023] SGCA 20 (liability/apportionment decision); The “Navigator Aries” [2023] SGCA 26 (this costs decision)
- Judgment Length: 26 pages, 6,433 words
- Cases Cited (as per metadata): [2020] SGHC 81; [2022] SGMC 58; [2023] SGCA 20; [2023] SGCA 26
Summary
The Court of Appeal in The “Navigator Aries” [2023] SGCA 26 addressed how costs should be ordered where there are two competing settlement offers: (1) a formal offer to settle made before trial, and (2) a Calderbank offer made before the appeal was heard. The case arose from admiralty actions in rem following a collision in the Surabaya Strait, which were consolidated in the High Court for determination of liability and apportionment.
At trial, the High Court apportioned liability at 70:30 in favour of the respondent. The respondent had previously made an offer to settle proposing 60:40 in its favour and costs aligned with that apportionment. The High Court’s eventual liability apportionment was more favourable to the respondent than its offer. On appeal, however, the Court of Appeal apportioned liability at 50:50, which was not only a better outcome for the appellant than at trial, but also matched the appellant’s Calderbank offer proposing 50:50 apportionment for liability and settlement of costs.
The Court of Appeal’s costs analysis focused on the interaction between the mandatory costs consequences of an unwithdrawn offer to settle under O 22A r 9(3) ROC (2014 Rev Ed), and the discretionary “Calderbank” costs consequences for offers made without prejudice save as to costs. The court also considered the costs of the transfer application from the Appellate Division to the Court of Appeal, and how those costs should follow the overall outcome.
What Were the Facts of This Case?
The underlying dispute concerned a collision on 28 June 2015 in the Surabaya Strait between two vessels: the appellant’s “Navigator Aries” (“NA”) and the respondent’s “Leo Perdana” (“LP”). Following the collision, each vessel owner commenced an admiralty action in rem in the High Court seeking apportionment of liability for the collision. Specifically, the appellant commenced Admiralty in Rem No 204 of 2016, and the respondent commenced Admiralty in Rem No 170 of 2016. These actions were later consolidated on 11 November 2016 to allow a single determination of liability.
Before the trial, the respondent made a formal offer to settle on 16 May 2018. The offer proposed apportioning liability at 60:40 in the respondent’s favour, and it further proposed that trial costs should follow a similar apportionment. The offer remained extant at the time the High Court delivered its liability judgment on 13 September 2021.
At trial, the High Court apportioned liability at 70:30 in the respondent’s favour. This meant that the respondent obtained a judgment more favourable than the terms of its pre-trial offer to settle. The High Court then made costs orders (extracted as HC/ORC 5829/2021) that implemented the costs consequences contemplated by O 22A r 9(3) ROC (2014 Rev Ed). In addition, the High Court excluded certain issues from the costs regime, reflecting that the respondent should not be entitled to costs on two “Excluded Issues” (the inevitable accident defence, and an evidential objection relating to the appellant’s expert’s factual basis).
After the trial judgment, the appellant filed an appeal on 12 October 2021, challenging both liability and the costs orders. During the appellate stage, the appellant served a Calderbank offer on 10 August 2022. That Calderbank offer proposed a 50:50 apportionment of liability and settlement of the costs of the trial and the appeal. The appellant’s Calderbank offer was not accepted before the appeal was heard, and it was later revoked on 13 April 2023. On 7 July 2023, the Court of Appeal decided the appeal and apportioned liability at 50:50, thereby reducing the appellant’s liability share from 70% at trial to 50% on appeal. The Court of Appeal’s liability outcome was therefore at least as favourable as the appellant’s Calderbank offer.
What Were the Key Legal Issues?
The primary legal issue was how to determine the appropriate costs orders where there are two different types of settlement offers with different legal effects. First, the court had to consider the effect of the respondent’s formal offer to settle under O 22A r 9(3) ROC (2014 Rev Ed), which provides a structured costs consequence if the plaintiff does not accept the offer and obtains judgment no more favourable than the offer. Second, the court had to consider the effect of the appellant’s Calderbank offer, which is not governed by the same statutory mechanism but may influence costs under the court’s discretion.
A further issue was conceptual: whether a Calderbank offer that is “as favourable” as the eventual judgment should be treated differently from one that is “more favourable” than the judgment obtained. The court indicated that this question arose because the appellant’s Calderbank offer matched the eventual 50:50 apportionment, while the respondent’s earlier offer to settle had been more favourable to the respondent than the appellant’s position at trial.
Finally, the court had to decide the costs of the transfer application (OA 13) that moved the appeal from the Appellate Division to the Court of Appeal. The transfer application had been granted on the basis that the appeal raised a point of law of public importance with considerable significance to the shipping industry. The court therefore had to determine whether and how the costs of that procedural step should be reflected in the overall costs orders.
How Did the Court Analyse the Issues?
The Court of Appeal began by situating the costs analysis within the general principle that costs follow the event, but with adjustments where outcomes are split or where settlement offers exist. The court emphasised that costs consequences become more complex when there is a valid offer to settle or a Calderbank offer. In this case, both existed, and the court therefore had to reconcile their respective effects across three distinct cost categories: (a) costs of the consolidated trial; (b) costs of the appeal; and (c) costs of the transfer application.
For the trial costs, the court applied O 22A r 9(3) ROC (2014 Rev Ed). The rule’s conditions were satisfied because the respondent’s offer to settle was not withdrawn and had not expired before disposal of the claim, and the appellant did not accept the offer. Critically, the appellant obtained a judgment that was not more favourable than the offer: the High Court apportioned liability at 70:30 in the respondent’s favour, which was more favourable to the respondent than the 60:40 apportionment proposed in the offer. As a result, the High Court had correctly applied the rule’s default structure: the plaintiff (appellant) would be entitled to standard basis costs up to the date of service of the offer, while the defendant (respondent) would be entitled to indemnity basis costs from that date, unless the court ordered otherwise.
The Court of Appeal also addressed the High Court’s treatment of the “Excluded Issues”. It noted that the respondent had not challenged the High Court’s decision on those issues. The Court of Appeal therefore did not disturb the exclusion, and the trial costs remained structured around the liability apportionment and the offer-to-settle regime, subject to the already-determined exclusions.
For the appeal costs, the court turned to Calderbank principles. A Calderbank offer is a without prejudice save as to costs communication, and its effect is not automatic in the way an offer to settle under O 22A r 9(3) is. Instead, the court considers whether the offeree’s failure to accept the offer was unreasonable in light of the offer’s terms and the eventual outcome. The court’s analysis therefore required a comparison between the appellant’s Calderbank offer and the Court of Appeal’s eventual decision on liability at 50:50.
On the facts, the appellant’s Calderbank offer proposed 50:50 apportionment and settlement of trial and appeal costs. The Court of Appeal ultimately ordered 50:50 apportionment. The court thus had to decide whether matching the judgment (ie, an offer “as favourable” as the judgment) should attract the same costs consequences as an offer that is “more favourable” than the judgment. The court’s framing indicates that it treated this as a live question because the appellant’s Calderbank offer was not merely close to the eventual outcome; it aligned with it. In practical terms, this meant that the appellant could argue that it should not be penalised on costs for not accepting the offer, since the offer reflected the outcome the court reached.
In addition, the court considered the respondent’s position that its earlier offer to settle should influence costs. However, that earlier offer was relevant primarily to trial costs under the statutory framework, not to appeal costs where the relevant offer was the Calderbank offer made by the appellant. The court therefore separated the temporal and procedural phases: trial costs were governed by the formal offer to settle and the statutory rule, while appeal costs were governed by Calderbank discretion.
Finally, for the transfer application costs, the court considered that OA 13 had been granted because the appeal raised a point of law of public importance with considerable significance to the shipping industry. The court had earlier ordered that the costs of OA 13 were to be costs in the appeal. Accordingly, the costs of the transfer application were treated as part of the overall costs outcome for the appeal, rather than as an independent category requiring a separate event-based allocation.
What Was the Outcome?
The Court of Appeal’s decision resulted in costs orders reflecting the split between the trial outcome and the appellate outcome. For the trial, the court upheld the application of O 22A r 9(3) ROC (2014 Rev Ed) because the respondent’s offer to settle had been more favourable than the eventual trial judgment from the appellant’s perspective, and the offer remained unwithdrawn at the time of disposal. The trial costs therefore continued to be structured around the 70:30 apportionment and the offer-to-settle consequences, subject to the already-determined exclusions.
For the appeal, the Court of Appeal ordered costs in a manner consistent with the appellant’s success on appeal and the fact that the appellant’s Calderbank offer matched the eventual 50:50 apportionment. The court also treated the costs of the transfer application as costs in the appeal, aligning the procedural costs consequences with the overall appellate result.
Why Does This Case Matter?
This decision is significant for practitioners because it clarifies how Singapore courts approach costs where both statutory offer-to-settle mechanisms and Calderbank offers are present. Many costs disputes turn on whether an offer was “beaten” and whether the offeree’s refusal was unreasonable. The Court of Appeal’s analysis underscores that the relevant offer-to-settle regime is phase-specific: a formal offer to settle made before trial will primarily govern trial costs, while a Calderbank offer made before the appeal will primarily govern appeal costs.
Equally important is the court’s engagement with the question whether a Calderbank offer that is “as favourable” as the eventual judgment should be treated differently from one that is “more favourable”. While the excerpted text does not reproduce the full final costs quantification, the court’s identification of this issue signals that future costs arguments will likely focus on the comparative closeness between the offer and the judgment, and not merely on whether the offer was strictly exceeded.
For maritime and admiralty litigants, the case also illustrates the practical value of settlement offers in complex, multi-stage litigation. Where liability is contested and apportionment can shift materially between trial and appeal, parties should consider how their offers will be characterised and how they will affect costs at each stage. The decision therefore provides a roadmap for structuring offers and for anticipating costs consequences in consolidated admiralty proceedings and subsequent appellate review.
Legislation Referenced
- Rules of Court (Cap 322, R 5, 2014 Rev Ed) — Order 22A rule 9(3) (Costs consequences for defendant’s offer to settle)
- Supreme Court of Judicature Act 1969 (as referenced in the metadata)
- Consolidated Act (as referenced in the metadata)
Cases Cited
- [2020] SGHC 81
- [2022] SGMC 58
- [2023] SGCA 20
- [2023] SGCA 26
Source Documents
This article analyses [2023] SGCA 26 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.