C v D [2011] EWCA Civ 646
(1) A settlement offer which is time-limited is not capable of being a Part 36 offer; (2) in the context of the intention to comply with Part 36, the statement that the offer be 'open for 21 days' did not mean that it was a time-limited offer (rather, it was indicating that it could be withdrawn after 21 days); (3) on the facts, the Part 36 offer had not expired and was capable of acceptance.
Related judgments
ICLR
The ICLR have kindly agreed for their WLR (D) case report to be reproduced below.
Catchwords
COSTS — Discretion of court — Offer of settlement — Offer of settlement expressed to be “open for 21 days” — Whether offer of settlement under Part 36 capable of being time limited — Whether offer withdrawn by expiry of time limit — CPR rr 36.2, 36.3, 36.9, 36.10, 36.14
Headnote
An offer to settle under CPR Part 36 could not be time limited. An offer stated to be “open for 21 days” did not lapse at the end of that period, though it might be withdrawn by the offeror. On the facts, the terms of the offer, and subsequent emails, did not amount to a withdrawal of the offer.
The Court of Appeal so held, allowing an appeal by the defendant, D, from a decision of Warren J on 11 November 2010 in the Chancery Division [2010] EWHC 2940 (Ch)M that offer of settlement “open for 21 days” made by the claimant, C, in a dispute over a contract for sale of development land, lapsed without express withdrawal but was not a Part 36 offer, since such an offer required a written notice of withdrawal. The names of the parties were not made public because of the possibility that the case might come to trial.
RIX LJ said after C had sold development land to D for £12m a dispute arose as to whether a condition precedent of their contract had been fulfilled. C’s solicitors had sent D a letter headed “Offer to settle under CPR Part 36”. It offered a choice of settlement options and said “the offer will be open for 21 days from the date of this letter”. The letter warned that a failure to accept the offer would have consequences in costs, should C succeed at trial. His Lordship considered the terms of CPR Part 36 and the relevant jurisprudence and concluded that the letter did not mean the offer automatically lapsed or was withdrawn after 21 days. To have effect in terms of costs consequences after trial, a Part 36 offer had to remain on the table, not be withdrawn. As a matter of construction, it was entirely feasible and reasonable to read the words “open for 21 days” as meaning that the offer would not be withdrawn within those 21 days, and as a warning that after 21 days a withdrawal was on the cards. In this reading of the phrase, it was effective rather than ineffective. It was important for the security of the Part 36 scheme that it should be clearly understood that if a claimant wished to make a time limited offer, in the sense that the offer was to lapse of its own accord at the end of a stipulated period, then such an offer could not be made as a Part 36 offer; that an offer presented as a Part 36 offer and otherwise complying with its form would not readily be interpreted in a way which would prevent it from being a Part 36 offer; and that if an offeror wished to bring his Part 36 offer to an end, so that it could not be accepted, then he must serve a formal notice of withdrawal.
RIMER and STANLEY BURNTON LJJ delivered concurring judgments.
Other
C v D [2011] EWCA Civ 646B; [2011] WLR (D) 186
CA: Rix, Rimer, Stanley Burnton LJJ: 27 May 2011
Appearances: Sue Carr QC and Jonathan Hough (instructed by Rawlison Butler LLP) for the defendant; Michael Barnes QC (instructed by SJ Berwin) for the claimant.
Other
Hearing: 19/4/11
Judgment: 27/5/11
Before: Rix, Rimer, Stanley Burnton LJJ
Ms Sue Carr QC and Mr Jonathan Hough (instructed by Messrs Rawlison Butler LLP) for the Appellant
Mr Michael Barnes QC (instructed by SJ Berwin) for the Respondent