Hemming (t/a Simply Pleasure Ltd) & Ors v Westminster City Council

Where a claimant’s Part 36 offer is at least as advantageous as the judgment obtained, the consequences under rule 36.14(3) ordinarily follow unless it would be unjust. A defendant cannot avoid those consequences merely because accepting the offer might involve conceding an important legal issue. Acceptance of an offer may instead compromise the particular claim without creating a precedent. The court may order interest on sums payable and indemnity costs from the relevant date. The proper starting date and rate for interest on costs may require further submissions where the rule is silent.

This was a further judgment following the court’s earlier judgment of 16 May 2012. The court considered the form of declaratory and consequential relief, the period allowed to Westminster City Council to recalculate licensing fees, the effect of an earlier Part 36 offer, costs, and interest.

The central issues were whether the normal consequences under rule 36.14(3) would be unjust, whether costs should be assessed on the standard or indemnity basis, and when interest on costs should begin.

1. The declaration proposed in the earlier judgment was appropriate. The relevant years could be subdivided between years in which the 2009 Regulations applied and years in which they did not. Three months was sufficient for the Council to calculate and set the relevant fees.
2. The Council was required to make the further adjustment proposed in the earlier judgment. The existence of a substantial surplus meant that leaving the surplus to be extinguished through nominal future fees would not provide an adequate remedy.
3. The claimants’ Part 36 offer had been at least as advantageous as the judgment. Under rule 36.14(3), the normal consequences therefore applied unless unjust. The Council had not identified any of the specified factors in rule 36.14(4) making those consequences unjust.
4. The offer did not require the Council to concede a general legal principle. It required agreement to a fee for the particular year, calculated without reference to enforcement action against unlicensed traders. Acceptance could be treated as a compromise of that claim without prejudice to the Council’s position in other cases.
5. The Council was ordered to pay interest on the sums covered by the earlier order at the judgment rate, and at 10 per cent above base rate from 18 April 2011. Costs incurred up to that date were payable on the standard basis; costs thereafter were payable on the indemnity basis, with interest at 10 per cent above base rate.
6. The court deferred determination of the starting date and appropriate rate for interest on costs, giving the parties 14 days for further written representations. Any application for permission to appeal was to be notified within seven days, with an appellant’s notice to be filed within 21 days.

This was a further judgment by the High Court following its earlier judgment handed down on 16 May 2012. It was not an appellate decision.