Hertsmere Primary Care Trust & Ors v the Estate of Rabindra-Anandh & Anor

A defective Part 36 offer may still attract the enhanced costs and interest consequences of Part 36 where the court so orders. The defect is not necessarily decisive, particularly where it is technical, causes no prejudice and is apparent to legally represented parties. Parties must cooperate in furthering the overriding objective. A party which deliberately withholds information about an obvious defect, thereby denying an opportunity to remedy it, should not benefit from that conduct. Such conduct is also relevant to the exercise of the discretion to award indemnity costs.

The deceased optician’s estate was liable to account for substantial overpayments received for sight tests. Following a Court of Appeal order, Master Bowman took the account and directed payment of the overpayments, interest and costs. The estate sought permission to appeal the account judgment and appealed the master’s later costs judgment.

The renewed permission application challenged the master’s assessment of competing expert evidence. The costs appeal concerned a claimant’s defective Part 36 offer and the master’s order for enhanced interest and indemnity costs after the offer was not accepted.

1. Permission to appeal. The renewed application was refused. Selective extracts from the expert evidence were insufficient to permit a fair appellate assessment of the master’s findings. In any event, the proposed appeal was bound to fail because the master was entitled, for cogent reasons, to prefer the claimant’s expert evidence.
2. Defective Part 36 offer. The offer failed to comply with Part 36.5 because it did not state the applicable position after the 21-day acceptance period. Nevertheless, CPR 36.1(2) permitted the court to give the offer the consequences specified in CPR 36.21. The defect was technical, obvious to the legally represented estate and caused no misleading effect or prejudice.
3. The discretion under CPR 36.21 required consideration of all the circumstances, including the offer’s terms, the stage of proceedings, the information available and the parties’ conduct. The master was entitled to order enhanced interest and indemnity costs. The approach was consistent with Mitchell v James [2002] EWCA Civ 997; [2004] 1 WLR 158.
4. Under CPR 1.1–1.4, parties must assist the court in furthering the overriding objective, including by cooperating. The estate’s lawyers deliberately withheld the specific defect after being asked to identify it. The estate could not rely on that breach to defeat the consequences of the offer, and the conduct independently supported indemnity costs under CPR 44.5.
5. The estate’s remaining arguments, including its financial position, alleged lack of information and a settlement offer raised for the first time on appeal, did not make the order unjust. The costs appeal was dismissed.

• Court of Appeal: Ordered that the claimants were entitled to summary judgment for an account of overpayments.
• High Court (Chancery Division): Refused renewed permission to appeal the account judgment and dismissed the appeal against the costs judgment.