Golar LNG Ltd v World Nordic SE

• Jurisdiction: Bermuda
• Judgment Date: 11 January 2012
• Date: 11 January 2012
• Docket Number: Commercial Jurisdiction 2009 No. 163
• Court: Supreme Court (Bermuda)

In The Supreme Court of Bermuda

Commercial Jurisdiction 2009 No. 163

In the Matter of a Compulsory Acquisition Notice under section 103(1) of the Companies Act 1981 dated 8 May 2009 relating to shares in BW Gas Limited

In the Matter of an application for appraisal under section 103(2) of the Companies Act 1981

BETWEEN:

Golar LNG Limited

Applicant

and

World Nordic SE

Respondent

Mr J Garrood for the Applicant

Mr C Luthi for the Respondent

The following cases were referred to in the judgment:

Research in Motion UK Limited v Visto CorporationUNK [2008] EWHC 819 (Pat)

Lownds v Home OfficeUNK [2002] EWCA Civ 365

In re Gibson's Settlement TrustsELR [1981] 1 Ch 179

Abstract:

Taxation of costs - Review of Registrar - Legal research - Disproportionate and excessive pre-trial preparation - Photocopying

TAXATION REVIEW of Ground CJ

Introduction

1. This judgment is given on the parties' cross-applications under RSC Order 62, r. 351 for a review of the Registrar's taxation of the costs of the matter, which were awarded to the respondents following my judgment of 18th February 2011. The taxation was hotly contested and extended over several days (11th May, 30th June, 7th July, 25th July and 28th September 2011). The receiving party's bill of costs2 was in the sum of $739,196.04. The Registrar taxed that down to $516,287.49, a reduction of approximately 30%.

2. The litigation itself concerned an application by Golar LNG Ltd. ('Golar') under section 103 of the Companies Act 1981 ('the Act') for an appraisal of its shares in BW Gas Limited ('the Company'). Both are Bermuda exempted companies. The Company is, via the respondent, a subsidiary of BW Group Limited, which is also the holding company of various other BW denominated shipping and tanker entities. The Company itself is the holding company of the BW Gas group of companies, which is a leading global provider of gas marine transportation services and one of the largest owners and operators of carriers of liquefied petroleum gas ('LPG') and liquefied natural gas ('LNG').

3. The background was that Golar held 234,400 of the common shares in the Company, representing 0.0575% of its issued share capital. On 8 May 2009 the Respondent, World Nordic SE ('World Nordic'), having acquired in excess of 95% of the shares, issued a notice of its intention to acquire the outstanding shares in the company pursuant to section 103 of the Act, ('the 'Notice'). The Notice set an offer price of NOK 21 (about US $3.23) per share. World Nordic was, at the time of the Notice, the owner of 99.37% of the shares in the Company. Under the terms of section 103 (2), minority shareholders had one month to bring an application to appraise the value of the shares to be purchased. Golar exercised its right to do so on 8 June 2009. Golar contended that the Notice significantly undervalued the shares, which it originally said the Court should appraise at a value of NOK 61.5 (or approx. $9.38 per share) that representing its valuer's initial assertion as to the fair value of the shares, although in his evidence his estimate tumbled to a range of NOK 33 - 37.

4. At the end of the hearing I appraised the shares in the Company for the purposes of section 103(2) of the Companies Act 1981 at NOK 21 per share, which is the price offered in the Notice. On that basis I held that the respondent was the clear winner of the litigation, and ordered the applicant to pay the respondent's costs to be taxed if not agreed.

The Paying Party's Points

That the hourly rates allowed were excessive (Ground 1)

5. I was the trial judge, and in my view this was complex, high-value commercial litigation which was important to the respondents. I reject all the arguments to the contrary. On the applicant's contentions, taken at their highest, there was $1,439,216 directly at stake, although that tumbled during trial. However, there was considerably more at stake for the respondents, because if the shares had been revalued they would have had to pay the revalued price to the other shareholders bought out under the statutory mechanism. I also consider that the matter required the resolution of complex issues of both fact and law, most of which were raised by the paying party. The argument that "were it truly complex, the judgment would have been longer" is, I regret to say, mistaken. At the end of the day these were large commercial parties, and a substantial bill of costs was always inevitable.

Size of billable time units (Ground 2)

6. The respondent's attorneys bill in 15 minute increments. Complaint is made that that is too large. I agree. The English practice is to bill routine work in six minute units (i.e. one tenth of an hour): see UK CPR PD 43, para 4.16. I think that that is the appropriate means of doing so, especially where the hourly rate is high. Billing in quarter hour increments is simply too insensitive when a minute is worth upwards of $11 (Counsel with conduct of the matter, Mr Luthi, billed at $710 per hour for much of...