Seeff & Anor v Ho & Anor

An offer under Part 36 remains compliant where it requires repayment of money paid on account of costs within a specified period, particularly where the recipient is invited to identify any defect and subsequently treats it as a Part 36 offer. Part 36 sanctions apply even in low-value disputes where costs exceed the sums at stake; harsh consequences alone do not justify withholding them. A successful appeal may nevertheless attract a percentage reduction for issues on which the successful party failed. Here, 75% of the appeal costs were awarded on the indemnity basis, with interest, and were summarily assessed.

The appellants appealed from a final decision of HH Judge Copley in the Willesden County Court dated 12 April 2010. Following the Court of Appeal’s substantive judgment, handed down on 24 February 2011, the court received separate submissions on costs. The appellants had made an offer under Part 36, while the respondents made a counter-offer and later accepted that the Part 36 costs consequences applied. The issues were whether the appellants’ offer was compliant, whether Part 36 sanctions should apply despite the modest sums involved, and the appropriate basis, proportion and assessment of the appeal costs.

The court gave a further judgment on costs following the appellants’ successful appeal.

1. Compliance with Part 36. The appellants’ offer was compliant with Part 36. The requirement that the respondents repay £15,000 paid on account of costs within 14 days did not invalidate the offer. In any event, the offer invited the respondents to identify any defect, and their subsequent correspondence showed that they treated and accepted it as a Part 36 offer.
2. Application of sanctions. Part 36 sanctions applied even though the dispute involved very small sums and the costs exceeded the amount in issue. The desirability of settling such disputes justified applying the sanctions, notwithstanding the hardship their consequences might cause the respondents. The appellants were therefore entitled to costs on the indemnity basis with interest.
3. Extent of recovery. The appellants had succeeded overall but had failed on a number of points. They were accordingly entitled to recover 75% of their appeal costs. The earlier order that each party bear its own costs below remained applicable, including the costs of the 12 April 2010 hearing.
4. Assessment and payment. Because the appeal had been heard within an afternoon, summary assessment was appropriate. The claimed £32,740 was adjusted to £32,000, of which 75% was £24,000. A further £750 was allowed for dealing with costs, making £24,750 payable with interest at 6%. The respondents were given until 23 May 2011 to pay. They were also ordered to repay the £15,000 paid on account of costs, with interest at 2.5% from 25 April 2010, by 28 April 2011.

• Court of Appeal (Civil Division): Following the substantive judgment handed down on 24 February 2011, the court determined the parties’ costs and awarded the appellants 75% of their appeal costs on the indemnity basis.
• Willesden County Court: HH Judge Copley gave the final decision on 12 April 2010. The Court of Appeal confirmed that each party should bear its own costs below.