N v N

A settlement offer intended to attract the consequences of Part 36 must be consistent with the rules. A term requiring the offeree to pay the offeror’s costs upon acceptance is inconsistent with an offer to settle and invalidates the proposal as a basis for a costs order. The court retains a discretion to make no order as to costs despite an appellant’s success, having regard to matters including the parties’ financial circumstances and the interests of children. Failure to provide a costs schedule may provide an additional reason not to make a costs order.

This was an appeal from a judgment of His Honour Judge Rylance in Guildford County Court. The respondent sought to rely on a proposed respondent’s notice challenging orders made by District Judge Trigg on 26 May 2005 and District Judge Raeside on 25 February 2010. Those orders did not concern the judgment under appeal. The Court of Appeal then considered the successful appellant’s application for costs, including whether a settlement proposal could have Part 36 consequences when it required the offeree to pay the offeror’s costs upon acceptance.

1. Respondent’s notice. The order made after the earlier hearing was defective because it failed to record that the application was adjourned on notice, with an appeal to follow if permission was granted. The transcript supplied the reliable account. Although court staff had relied on the misleading order, the respondent knew the scope of the hearing from the transcript and correspondence. The intended respondent’s notice concerned earlier orders, not the judgment of His Honour Judge Rylance under review. Nothing further was required on that issue.
2. Settlement proposals and costs. The successful appellant relied on a September Calderbank letter and a later letter dated 31 May 2011. The later proposal purported to have the consequences of Part 36.10 of the Civil Procedure Rules, but stated that acceptance would make the offeree liable for all the offeror’s costs. That rider was inconsistent with an offer to settle and invalidated the proposal. The court therefore rested no costs decision on either letter.
3. Discretionary costs order. Despite the appellant’s success, the Court of Appeal made no order as to costs, as in the court below. It took account of the parties’ respective financial circumstances and the interests of the children. Lord Justice Longmore agreed. Lord Justice Stanley Burnton added that the appellant’s failure to provide a schedule of costs prevented proper consideration of quantum and supplied a further reason for making no order.

Application granted; appeal allowed.

• Court of Appeal (Civil Division): In [2011] EWCA Civ 979, the application was granted and the appeal allowed. No order was made as to costs.
• Guildford County Court: Appeal from the judgment of His Honour Judge Rylance. The judgment records that no order as to costs had been made below.