Julie Mate v Shirley Claire Mate
| Jurisdiction | England & Wales |
| Judge | Mr Andrew Sutcliffe |
| Judgment Date | 05 April 2023 |
| Neutral Citation | [2023] EWHC 806 (Ch) |
| Docket Number | Claim No. PT-2021-LDS-000076 |
| Court | Chancery Division |
| Year | 2023 |
[2023] EWHC 806 (Ch)
Mr Andrew Sutcliffe KC, sitting as a Judge of the High Court
Claim No. PT-2021-LDS-000076
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN LEEDS
PROPERTY, TRUSTS AND PROBATE LIST
Mr Timothy Sherwin (instructed by Charles Russell Speechlys LLP) for the Claimant
Ms Caroline Shea KC and Mr Michael Ranson (instructed by Chadwick Lawrence LLP) for the Second and Third Defendants
The First Defendant did not appear and was not represented
Hearing date: 17 March 2023
(further written submissions on 21 and 23 March 20203)
APPROVED JUDGMENT
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this judgment and that copies of this version is handed down may be treated as authentic.
Mr Andrew Sutcliffe KC:
Introduction
Further to my judgment in the trial of this matter (“ the Main Judgment”), handed down on 10 February 2023 (neutral citation number [2023] EWHC 238 (Ch)), I must now deal with the issue of costs.
In the Main Judgment I dismissed the Claimant ( Julie)'s proprietary estoppel claim and allowed her claim in unjust enrichment, assessing the value of the services she provided as being £652,500. This judgment proceeds on the assumption that its readers will be familiar with the detail of the Main Judgment and the definitions and abbreviations used therein will also be applied here.
I have to decide the following issues:
3.1 Subject to any consequences that may flow from Julie having made a valid offer under CPR Part 36, what is the appropriate costs award in these proceedings? Julie submits that she was the successful party and should therefore be awarded her costs of the claim. Robert and Andrew submit that it is appropriate to make an issues-based costs award with Julie being paid her costs of the successful unjust enrichment claim by all the defendants (i.e. including Shirley) and Julie paying Robert and Andrew's costs of their successful defence of the proprietary estoppel claim.
3.2 If Julie is entitled to be paid her costs, should Shirley be a paying party along with Robert and Andrew?
3.3 Was the offer of £650,000 made by Julie on 12 August 2022 ( Julie's Offer) a valid Part 36 offer?
3.4 If so, was Julie's Offer served in time to engage the provisions of CPR 36.17(4)? If Julie's Offer was not served in time, is it appropriate to abridge time retrospectively under CPR 36.17(7)(c) in order to permit Julie to benefit from the provisions of CPR 36.17(4)?
3.5 If the provisions of CPR 36.17(4) are engaged, what is the effect of those provisions and is it unjust to apply some or all of them?
3.6 If there is to be a payment on account of costs, what should it be?
Before I turn to look in detail at the respective arguments of the parties, I set out certain procedural steps which have some relevance to the cost issues I have to determine. I also provide a brief summary of the law in relation to costs which I need to bear in mind.
Relevant procedural steps
On 16 November 2021, the parties engaged in an unsuccessful mediation. On 1 February 2022, Shirley ceased to instruct solicitors. On 10 May 2022, Robert and Andrew were served with Shirley's witness statement dated 9 May 2022 which indicated that she intended to give evidence for Julie.
On 10 June 2022, Robert and Andrew made an offer under CPR 36.15 to settle Julie's claim for the sum of £300,000. Julie did not accept this offer. The offer was silent with regard to the claim against Shirley. CPR 36.15(3)(b) makes clear that because Julie alleged that the defendants' liability to her was joint and several, had she accepted this offer from Robert and Andrew, it would have been open to her to continue her claim against Shirley. Equally, if Julie had accepted this offer (and whether or not she had continued the claim against Shirley), it would have been open to Robert and Andrew to seek a contribution from Shirley in respect of sums paid to Julie in settlement of her claim and costs.
On 22 June 2022, Shirley formally admitted Julie's claim by serving an amended defence which struck through her original defence and she issued an application seeking permission to amend her defence on the same day. Permission to amend was granted at the PTR on 26 July 2022.
On 24 June 2022 Julie's solicitors sent an offer under CPR Part 36 to Robert and Andrew's solicitors, indicating that she would accept the sum of £1,150,000 in full and final settlement of her claim. This offer was not accepted.
Some 7 weeks later, on Friday 12 August 2022, Julie's Offer was sent by email to Robert and Andrew's solicitors at 17:22 in the afternoon. It stated that “ [t]he Claimant will accept the sum of £650,000 in full and final settlement of her claims under Claim No. PT2021-LDS-00076”. It was in standard form N242A and stipulated that if the offer was accepted within 21 days of service of the notice (referred to in CPR Part 36 as ‘the relevant period’), the defendant would be liable for the claimant's costs in accordance with rule 36.13.
By an email sent at 13:19 on Monday 15 August marked “ without prejudice save as to costs”, Robert and Andrew's solicitors asked Julie's solicitors to give them a rough indication of Julie's costs. Julie's solicitors responded by email at 15:35 the same day indicating that her costs were in the region of £370,000 plus VAT.
There was no further correspondence in relation to Julie's Offer prior to the commencement of the trial. Julie's Offer was not accepted by Robert or Andrew.
On 7 December 2022, after the trial but before judgment was handed down, Robert and Andrew commenced a claim under CPR Part 8 against Shirley. By that claim, Robert and Andrew seek an order that Shirley execute a transfer in favour of Persimmon in order to enable the second tranche of development land to be transferred to Persimmon and the remaining £4.5 million of the purchase price to be paid. It would appear that Shirley has offered to sign the transfer documents on condition that Robert and Andrew agree to hold the monies received from Persimmon subject to undertakings. I am informed that the parties have recently agreed that this claim should continue as a claim under CPR Part 7.
Mr Ranson (who appeared without Ms Shea KC at the consequentials hearing) submitted that since Robert and Andrew had not yet received the second tranche of money due from Persimmon, they should only be required to pay half of the judgment sum of £652,500 by 31 March 2023 with the remaining half of the judgment sum being payable within 21 days of receipt of the second tranche from Persimmon or (if earlier) 31 March 2024. I do not accept that submission. Julie is not a party to Robert and Andrew's dispute with Shirley. The judgment sum can be paid without difficulty from the first tranche of the Persimmon monies. In any event, there is no reason why Robert, Andrew and Shirley should not arrange matters so that the second tranche of Persimmon monies can be paid over and part of it attributed to the judgment sum pending the resolution of their ongoing dispute.
The Law
The court's discretion is a wide one and is regulated by CPR Part 44.2, which is well known and I do not need to set out in full in this judgment. It is common ground that the general rule (in CPR 44.2(2)) is that the unsuccessful party will be ordered to pay the costs of the successful party, but that the court may make a different order.
As Gloster J emphasised in HLB Kidsons v Lloyds Underwriters [2008] 3 Costs LR 427, “ [t]he aim always is to ‘make an order that reflects the overall justice of the case’…”, a point also emphasised by Briggs J in Bank of Tokyo-Mitsubishi UFJ Ltd v Baskan Gida Sanayi Ve Pazarlama AS [2010] 5 Costs LR 657 at [4] by reference to the overriding objective: “ Besides taking due account of the specific provisions of Part 44, the court must in framing an appropriate order for costs bear constantly in mind the need to comply with the overriding objective, that is to deal with cases justly”.
The general rule set out in CPR 44.2(2) was described by Lord Woolf MR in AEI Rediffusion Music Ltd v Phonographic Performance Ltd [1999] 1 WLR 1507 (at 1522–1523) as a “ starting point from which the court can readily depart”. However, whilst the court may depart from the general rule, “ it remains appropriate to give ‘real weight’ to the overall success of the winning party” (per Gloster J in HLB Kidsons at [10]). In addition, I bear in mind that commercial litigation is complex and that, in almost every case, the winner is likely to have failed on some issues. There is no automatic rule requiring reduction of a successful party's costs if he loses on one or more issues (see HLB Kidsons at [11]).
In deciding whether to depart from the general rule, the court must have regard to all the circumstances of the case, including “ (a) the conduct of all the parties; (b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; and (c) any admissible offer to settle which is drawn to the court's attention, and which is not an offer to which costs consequences under Part 36 apply” ( CPR 44.2(4)). Insofar as relevant for the purposes of this judgment, conduct of the parties includes conduct before and during the proceedings, whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue, and the manner in which a party has pursued or defended its case or a particular allegation or issue ( CPR 44.2(5)(a)-(c)).
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