Sampla & Ors v Rushmoor Borough Council & Anor

A Part 36 offer is not rendered incapable of later acceptance merely because it was previously rejected. Nor does the commencement of trial create an implied term preventing acceptance. The court’s permission is required after trial begins, and the discretion is governed by whether changed circumstances make acceptance unjust, consistently with the overriding objective. Material changes in the parties’ assessments of the case and the lateness of the application are important factors. Where the evidence is complete and little time or cost would be saved, permission may properly be refused.

The claimants’ substantive claim concerning damage caused by paving works had settled. The remaining trial concerned contribution between Rushmoor Borough Council and Mr Timothy Crowley. Crowley had made a Part 36 offer under which he would bear 80 per cent of the settlement sum and the claimants’ costs, leaving the Council to bear 20 per cent. The Council expressly rejected the offer, but sought to accept it after two days of evidence in the contribution trial.

The court determined whether rejection prevented later acceptance, whether acceptance after commencement of trial was possible, whether the Council was estopped by convention, and whether permission should be granted under CPR Part 36.

1. Rejection and later acceptance. The rejection of a Part 36 offer did not prevent its subsequent acceptance. Part 36 was silent about rejected offers, permitted acceptance at any time, and expressly contemplated acceptance despite a subsequent counter-offer. The contractual analogy therefore did not operate as an absolute bar. The position had to be assessed case by case, with the offeror’s costs position protected and regard paid to the overriding objective.
2. Acceptance after trial started. There was no implied term that the offer lapsed when the trial commenced. CPR 36.9(3), especially paragraph (d), expressly required permission where trial had started and therefore presupposed that acceptance remained legally possible.
3. Estoppel. The evidence disclosed no common assumption that the offer had lapsed. The Council’s reference to acceptance “out of time” was insufficient to establish an estoppel by convention.
4. Discretion. The relevant question was whether there had been a sufficient change of circumstances making it just to refuse permission, applying the approach summarised in Flynn v Scougall [2004] 1 WLR 3069. The observations concerning very late acceptance in Capital Bank Plc v Stickland [2005] 1 WLR 3914 were applicable with particular force.
5. The parties’ substantially changed assessments of the likely outcome, shown by their materially increased contribution positions, constituted a sufficient change of circumstances. The application was made at the eleventh hour, after the evidence had finished and when only closing submissions and judgment remained. The potential savings were therefore minimal, while allowing acceptance would enable the Council to avoid the consequences of the trial’s changed course.

Permission to accept the Part 36 offer was refused.