Curtis & Ors v Pulbrook & Anor

Where a claimant betters a Part 36 offer, the court should ordinarily impose the enhanced interest and indemnity-costs consequences unless doing so would be unjust. The court must consider all the circumstances, including the offer’s terms, when it was made, the information available, and the parties’ conduct concerning information. The enhanced-interest power is discretionary: the maximum rate is not automatic, and the appropriate rate depends on the circumstances. A successful party should generally receive a payment on account of costs before detailed assessment, including where the paying party has limited resources, provided the sum represents a reasonable minimum recovery.

The judgment concerned consequential orders following an earlier judgment which set aside a deed for undue influence, ordered Henry Pulbrook to repay sums wrongfully applied from a joint account, and dismissed his counterclaim. The remaining issues were the sums payable and interest, costs, payment on account of costs, and permission to appeal.

The claimants relied on an unaccepted Part 36 offer of £66,000 inclusive of interest. They had recovered a substantially more advantageous result at trial. Henry Pulbrook resisted enhanced costs and interest, relying on the number of claims he had successfully defended, alleged excessive costs, his limited resources, and his inability personally to pay the money. He also sought permission to appeal factual findings concerning indemnity payments.

1. Orders following the earlier judgment. Henry Pulbrook was ordered to pay the claimants £124,195.01, representing sums wrongfully paid away from the joint account. His counterclaim was dismissed. The post-judgment interest provision was to refer to Judgments Act 1838, s 17.
2. Part 36 consequences. The claimants had obtained a result more advantageous than their Part 36 offer. The condition in Civil Procedure Rules 1998, r 36.14(1)(b), was therefore satisfied. The matters identified in r 36.14(4) did not make it unjust to impose the consequences under r 36.14(3). The offer was made sufficiently before trial, relevant information was available, and Henry Pulbrook had failed in his fiduciary obligation to provide accounting information promptly.
3. The claimants were entitled to standard costs up to 20 May 2008 and indemnity costs thereafter, with interest on those costs at 4% above base rate. The court rejected an issue-based reduction. Although the claimants abandoned most claims after receiving information, that result was substantially attributable to Henry Pulbrook’s piecemeal disclosure. The unsuccessful fee-payment claims did not justify a deduction.
4. The enhanced-interest power under r 36.14(3)(a) was discretionary. The maximum rate of 10% above base rate was too high in the circumstances. Applying the guidance in McPhilemy v Times Newpapers Ltd [2002] 1 WLR 934 and considering the nature of the defence and the conduct of the proceedings, the appropriate rate was 6% above base rate from 20 May 2008 to 8 April 2009.
5. A payment on account of costs should generally be ordered. Having regard to the costs incurred, the orders made, and Henry Pulbrook’s limited resources, £70,000 represented the minimum amount the claimants could reasonably hope to recover on detailed assessment. There was no order for costs against Dr Pulbrook. Permission to appeal was refused because the proposed appeal concerned factual findings and had no realistic prospect of success.

Not stated in the judgment.