HT-2023-000321 - [2025] EWHC 1764 (TCC)

The KML Counterclaim as pleaded is calculated on the basis of an average day rate for the vessel and support vessel spread, personnel costs and expenses, multiplied by the number of days’ delay, including waiting on weather, claimed to be the responsibility of Pharos. The overall claimed day rate (ex VAT) originally pleaded amounted to £21,820.35. The pleaded claim was calculated, for reasons not explained, on a VAT added rate. On the basis that KML is capable of recovering VAT paid, its losses should be calculated on an ex-VAT basis.

The figures originally pleaded were amended pursuant to an application advanced of the first day of trial, and ultimately acceded to, with the new figures set out day by day at Tab 4 of the Master Spreadsheet. These figures were, in Closing, brought forward into the quantum calculation within the Counterfactual. The average spread cost per day claimed by KML taken from the Master Spreadsheet, Tab 4, column H, is £21,217.21. Assuming 8 days’ culpable delay caused by Pharos, this amounts to £169,737.68. An extract from the Master Spreadsheet, Tab 4, for 20 June 2022 (by way of example) showing the categories of cost and the ex-VAT GBP converted costs claimed by way of example is set out below:

At the same time as amending the figures within the pleading, KML sought to rely upon a new extract from its SAGE software system, said to show the attribution of various internal expenses and costs to the Viking project, from which the sums claimed for KML Personnel (in the last 4 rows) were claimed.

As Mr Woolgar noted in both his written oral closing submissions, and as candidly accepted by Mr Macey-Dare KC in his submissions, KML adduced no witness evidence whatsoever in support of these claimed costs. Mr Scullion’s brief evidence in chief relating to the replacement SAGE document did not add substantively to the quantum related factual witness evidence. Neither side has called a quantum expert to interrogate or audit, whether in support of or to undermine, the claimed costs. KML is therefore relying upon the documents disclosed in support of the costs as proof on their face of the quantum of the counterclaim. Each document upon which reliance is sought to be placed is set out in the Master Spreadsheet, Tab 4.

Mr Woolgar submitted that the documents do not speak for themselves. In a schedule produced to accompany his oral closing, he summarised the difficulties each claimed category of cost faced. Mr Woolgar reminded the Court of the well known dicta from Lord Goddard in Bonham Carter v Hyde Park Hotel (1948) 64 TLR 177 in which the Court observed:

“Plaintiffs must understand that, if they bring actions for damages it is for them to prove their damage; it is not enough to write down particulars, and, so to speak, throw them at the head of the court, saying: ' This is what I have lost; I ask you to give me these damages.' They have to prove it."

Nevertheless, it is to be remembered that notwithstanding this statement, Lord Goddard in fact found it possible to arrive at a conclusion despite, in that case, the extremely unsatisfactory evidence as to damages, as noted by Edmund Davies LJ in Ashcroft v Curtin [1971] 1 WLR 1731.

In relation to the Suzanne A charter hire, steward and personnel allowance (non-crew), the submission boiled down to an acceptance by Mr Woolgar of substantiation of the rates claimed, on the basis of the production of the underlying Supplytime charter, but an argument that in the absence of proof of payment, the claim should fail. I do not accept this. The production of the invoices and underlying agreement are sufficient to establish the relevant liability and, on balance of probabilities, likely loss sustained on a daily basis by delay to the work.

It was claimed that the document provided to support the bunker rate was incorrect, but this was, as clarified, a typographical error, and the actual invoice does support the €1,055 day rate.

There is a claim for €100 per day for ‘USBL Pole’. As Mr Woolgar submits, there is no explanation of what this is or why. In the absence of evidence, this cost fails.

In respect of harbour fees, the sums claimed for the preceding period are, as Mr Woolgar submits, peculiarly variable and there is no explanation of how they have been calculated. Perhaps more importantly, no costs are claimed for the relevant period (9 August 2022 onwards). It is not clear, therefore, that additional harbour fees were incurred in the period of culpable delay. These sums should not be part of the daily average cost for the relevant period of delay.

In respect of the Clyde Adventurer, the document relied upon for the period 10 June to 22 June standby and operational rates is just a Purchase Order. Whilst this in itself may be insufficient, it is clear that the respective daily rates generally remain the same in the later periods for which there are invoices evidencing KML’s liability. Although Mr Woolgar submits there is no substantiation of the application of the discounted rate claimed for a period, the invoice relied upon clearly identifies, by way of note in red, the charter rate discount given. Moreover, this is a reduction from the rate otherwise payable and therefore works in favour of reducing the costs payable (and the overall average rate obtained). The Clyde Adventurer costs are satisfactorily proved, save in respect of crew change and accommodation. I accept Mr Woolgar’s submission that there is no evidence explaining how or why a liability arose for the Clyde Adventurer accommodation, or Travel for Crew Change which appear from 1 July onwards or the basis upon which this was agreed. I also accept that the documentary and factual substantiation for a KML Rib Charter throughout the period is unsatisfactory.

There is no explanation for the application of £730 a day for the entire period for the hire of the 60-tonne trailer winch on the basis of a single invoice which is dated 17 April 2022, i.e. before the relevant works. This should not be included.

As for the Aequorea positioning device rates now claimed, the Amended Defence was pleaded on the basis of 50% of the rates claimed, not the full rates, and there is no evidence or submission as to why the originally claimed, reduced amount (accompanied by a statement of truth) is incorrect. The rates are substantiated, but the application of the rate should be as per the pleading, at 50%. This should also apply to the Aequorea Down Manned Rate (which did not feature at all in the original pleading), in the absence of any explanation as to why the same approach would not be correct. The only point taken for Aequorea personnel is proof of payment for the August 2022, and for the reasons I have set out above, reliance upon the invoice is sufficient to establish liability and, on balance of probabilities, loss. There is no explanation for the introduction of claimed Aequorea expenses, which did not form part of the original pleaded average rate, and these are to be excluded.

The combined £5,233.53 day rate for KML personnel (food, accommodation, travel/flights and wages) relies upon the newly produced SAGE document. This document simply provides a long list of entries of costs, and a daily average cost calculated for each category: £133.66 for food, £722.31 for accommodation, £893.22 for flights and £3,484.34 for wages.

The food category is simply a list of entries. There is no basis upon which to validate the connection between these entries and the relevant project, or relevantly, any particular time period within the overall project. The same applies to accommodation. KML have called no witness to support the claims and has not been possible for Pharos (or the Court) on the scant information provided properly to interrogate the information. The appropriateness of the rate claimed has not been established on the balance of probabilities.

As for flights, there is no evidence, or submission focused on the Sage entries, that the 8 day delay caused any specific additional flights to be taken. There are lots of heads of travel related cost which bear no obvious relationship with loss caused by the culpable delay KML have established. KML have not established the reliability of the costs claimed under this head. It is not possible on the basis of this information reliably to interrogate the average obtained and the appropriateness of its applicability to the period of delay.

Finally, the ‘wages’ category contains lots of entries the basis of which is simply not intelligible. The personnel are usually not identified, so there is no way for a third party to interrogate whether the personnel were linked with the project and there is no evidence, or even submission, which assists in validating this head of cost. It is not possible to arrive at a reliable figure on the basis of the information provided, and KML’s expenses claim in this respect fails.

When these adjustments are made to each of the days throughout the project, the average recoverable rate is calculated as £14,151.83. This is set out in Appendix B (Revised Master Spreadsheet Tab 4) to this judgment. Applied to a culpable delay of 8 days, the quantum of KML’s claim is £113,214.63.