Patience v Tanner & Anor

In exercising the costs discretion, the court must consider the conduct of all parties and any relevant settlement offer. A claimant who unreasonably fails to accept an offer may properly be deprived of later costs. However, it is wrong to order that claimant to pay the opponent’s later costs if the opponent’s unjustified withdrawal of the offer and continued resistance also materially caused the litigation to continue.

An appellate court may intervene in a discretionary costs order where the judge has failed to take account of a material consideration. The appropriate order may be that each party bears its own costs for the relevant period.

The claimant had sold land to the first respondent on terms requiring the grant of rights of way. The land was later transferred to the second respondent, which assumed the obligation to procure the easements. After the easements remained ungranted, the claimant sought specific performance or damages.

The respondents made an open offer in May 2014 to grant the easement. The claimant did not accept it within 21 days. The respondents then withdrew it, but made an identical offer shortly before trial, which the claimant accepted. The County Court treated the claim as settled and ordered the claimant to pay the respondents’ costs after 29 May 2014. The appeal concerned the proper costs consequences of the parties’ conduct after that date.

1. Appeal allowed in part. The court set aside the order requiring the claimant to pay the respondents’ costs after 29 May 2014. It substituted an order that each party bear its own costs after that date.
2. Gross LJ, with whom Black LJ and the President of the Queen’s Bench Division agreed, applied the ordinary appellate standard for costs decisions stated in [2012] EWCA 843. A costs order may be disturbed where it is wrong in principle, omits a relevant matter, takes account of an irrelevant matter, or is plainly unsustainable.
3. The judge was entitled to conclude that the claimant should have accepted the May offer. The identical November offer showed that there was no good reason for the claimant to reject the earlier grant. Giving the May offer effect under Civil Procedure Rules 1998 rule 44.2(4)(c) could therefore justify depriving him of his own costs after 29 May.
4. However, the judge did not adequately take account of the respondents’ conduct after that date. They had no good reason to withdraw the May offer while questions about it remained unanswered, and their subsequent resistance to the claim materially contributed to the case reaching a two-to-three-day hearing. The court rejected the suggestion that the claimant’s further enquiries justified that withdrawal.
5. The omission was material because the order exposed the claimant to approximately £80,000 of the respondents’ costs. Even assuming that the additional “manifest injustice” formulation discussed in [2003] EWCA Civ 939 applied, that threshold was met. The claimant had also obtained costs up to the offer deadline and had therefore bettered the open May offer. The non-Part 36 character of that offer reinforced the conclusion that depriving him of his later costs gave it sufficient effect.
6. The parties’ respective conduct made a no-order outcome just. Remittal was unnecessary; the Court of Appeal substituted its own costs order.

• Court of Appeal (Civil Division) — [2016] EWCA Civ 158. Allowed the appeal to the extent of replacing the respondents’ post-29 May 2014 costs order with no order as to costs for that period.
• County Court at Bristol — HHJ Rutherford, judgment dated 13 November 2014 and order dated 11 February 2015. Ordered the respondents to pay the claimant’s costs up to and including 29 May 2014, and the claimant to pay the respondents’ costs thereafter.