RSM Bentley Jennison (A Firm) & Ors v Ayton

The common-law defence of tender before claim is unavailable for unliquidated damages. The Civil Procedure Rules, including their glossary, regulate practice and procedure and cannot amend that substantive rule. A glossary definition cannot expand the defence merely by referring to an offer sufficient to satisfy an unquantified claim. The appeal was therefore dismissed.

The claimant alleged that the defendants had induced him to make a fraudulent or negligent investment. Before proceedings, the defendants tendered the amount claimed in the pre-action letter, excluding legal costs. The claimant rejected the tender and later issued proceedings claiming additional losses. The defendants pleaded tender before claim and sought strike-out or summary judgment.

Master Eastman dismissed the application. His Honour Judge Robert Owen QC dismissed the defendants’ appeal. Permission to appeal to the Court of Appeal was granted only on whether tender before claim was available for a claim for an unliquidated sum.

The appeal was dismissed. Lord Justice Underhill gave the judgment, with Lord Dyson MR and Dame Janet Smith agreeing.

1. Common-law rule. The defence of tender before action, now called tender before claim, is a substantive common-law defence. It is unavailable in answer to a claim for unliquidated damages. That position was established in Davys v Richardson (1888) 21 QBD 202 and reaffirmed, with the relevant qualification, in John Laing Construction Ltd v Dastur [1987] 1 WLR 686.
2. Effect of procedural rules. Rules of court govern practice and procedure. They cannot amend substantive law. The statutory powers in section 75(2) of the County Courts Act 1984 and section 1(1) of the Civil Procedure Act 1997 were therefore insufficient to validate an otherwise ineffective tender. John Laing decided that point as part of its ratio.
3. Glossary definition. Although the glossary to the Civil Procedure Rules appeared intended to extend tender before claim to damages claims, that indirect amendment was ineffective. Rule 2.2(2) also created a textual difficulty because the glossary could not give an expression a meaning it did not have in law generally. The court did not reach a concluded view on that additional point.
4. Further observations. The Court of Appeal disapproved the suggestion in Smith v Springer [1987] 1 WLR 1720 that a differently drafted procedural rule might make tender available. It observed that an unquantified claim presents a further difficulty: deciding whether an amount is sufficient would require an assessment of damages, whereas tender depends on a demonstrable correspondence between claim and demand.
5. Disposition. The Master and the judge were right to reject the defence. The appeal was dismissed.

• Court of Appeal (Civil Division): dismissed the appeal on 3 November 2015. The court held that tender before claim was unavailable for an unliquidated damages claim.
• Queen’s Bench Division: His Honour Judge Robert Owen QC dismissed the defendants’ appeal from Master Eastman.
• Master Eastman: dismissed the defendants’ application for strike-out or summary judgment.