Christine Mary Laverty & Ors v Greensill Bank AG & Anor

CPR Part 36 can apply to insolvency directions proceedings where the substance is hostile litigation involving adverse claims. The procedural form of an application does not determine its character. There is no blanket exemption for officeholder applications, although the flexibility of Part 36 may accommodate genuinely non-adversarial cases. An offer expressed to operate if Part 36 applies is not necessarily conditional on a prior court determination of applicability. Offers and acceptances are construed objectively. A difference in the parties’ subjective understanding does not create a mismatch where the acceptance is unqualified.

Administrators of Greensill Capital (UK) Limited sought directions concerning ownership of funds arising from foreign exchange transactions. Greensill Bank AG asserted a competing proprietary claim. AG made an alternative offer described as a claimant’s offer under CPR Part 36. The English administrators purported to accept it after the relevant period, and AG later withdrew it.

The applications concerned whether Part 36 applied to the proceedings, whether the offer was conditional on a court ruling that Part 36 applied, and whether there was a mismatch between offer and acceptance concerning interest. The court also left issues of mistake and the rule in Ex Parte James for later determination.

1. Applicability of Part 36. Part 36 was capable of applying to insolvency directions proceedings through Insolvency Rule 12.1. Insolvency Rule 12.4(1), which deals with costs following the intervention of insolvency proceedings, was not inconsistent with that conclusion. The incorporation of provisions of Part 44 referring to Part 36 reinforced the analysis.
2. The substance of the proceedings, rather than the form of the application, was decisive. Although the administrators’ application was framed as a request for directions, the parties asserted competing claims to the funds. It was therefore hostile litigation in which a claim existed for Part 36 purposes. The court rejected any blanket exemption for officeholder applications. In genuinely non-adversarial cases, it might be difficult to formulate an effective Part 36 offer, but the flexibility of Part 36 could address inappropriate consequences.
3. Construction of the offer. Applying ordinary principles of construction and asking how the offer would be understood by a reasonable solicitor, the wording referring to a court determining that Part 36 applied did not create a condition precedent. The offer expressly contemplated acceptance within the relevant period and provided for the consequences of acceptance. A prior determination could not realistically have been intended.
4. Offer and acceptance. Part 36 is a self-contained code, but ordinary principles concerning offer and acceptance may apply where appropriate. There was no operative mismatch. The offer was construed objectively, and the acceptance was unqualified. Any subjective difference in the parties’ intentions was irrelevant. The offer was therefore accepted before withdrawal and AG was bound by it, subject to the issues reserved for later determination.