Stuart Wells v Paul Hornshaw & Ors

The petitioner brought an unfair prejudice petition under section 994 of the Companies Act 2006. The central issue was whether a Part 36 offer made by the respondents on 4 August 2023 remained open for acceptance when the petitioner attempted to accept it on 22 April 2024. The court analysed CPR rule 36.12, read with the definitions in rule 36.3, and concluded that the case had been "decided" for the purposes of the rules because the trial had resolved the substantive issues and final relief (a fresh valuation by an expert and consequential transfer/payment provisions) had been ordered. As a result the Part 36 offer could no longer be accepted and the petitioner’s application to accept it was dismissed.

The court noted the consequences for costs depending on whether the offer was capable of acceptance, and observed that the definitions in CPR r36.3 (in particular r36.3(e) and the meaning of "trial") determine whether a matter is "decided" even in split-trial proceedings. The court rejected submissions that the continuing valuation process or the court's limited supervisory jurisdiction over experts meant the case was not decided.

Background and parties:

• The petitioner, Mr Wells, is a minority shareholder in Transwaste Recycling and Aggregates Limited and brought an unfair prejudice petition under s.994 Companies Act 2006 against the majority shareholders, Paul and Mark Hornshaw, who counterclaimed. DJ Jackson earlier made directions contemplating a first trial of substantive issues and possibly a further trial to determine price and terms.

Procedural posture and relief sought:

• The Part 36 offer from the respondents dated 4 August 2023 proposed a full and final settlement including a specified settlement sum for the petitioner’s shares and costs, and specified a 21-day Relevant Period. The petitioner sought to accept that offer on 22 April 2024, following judgment on the substantive trial in February 2024 and consequent directions for a fresh expert valuation in an order of 15 April 2024. The immediate application was for a declaration that the Part 36 offer remained open for acceptance.

Issues framed by the court:

1. Whether the Part 36 offer was still capable of acceptance on 22 April 2024, having regard to CPR r36.12 (Acceptance of a Part 36 offer in a split-trial case) and the definitions in CPR r36.3 (meaning of "decided" and "trial").
2. Whether the ongoing expert valuation, liberty to apply for directions or the court’s supervisory jurisdiction over expert determinations meant the case had not been "decided".

Court’s reasoning:

• The court read rule 36.12 together with the definitions in rule 36.3. Rule 36.3(e) provides that a case is "decided" when all issues in the case have been decided, whether at one or more trials; "trial" includes trials of liability, quantum or other issues. If the case is "decided" as so defined, any Part 36 offer relating only to already-decided issues can no longer be accepted (r36.12(2)), and offers otherwise are subject to the 7-day withdrawal window after judgment (r36.12(3)).
• The court concluded that the substantive issues between the parties had been finally determined by the February 2024 judgment and the consequential 15 April 2024 order which set out the final form of relief (a fresh valuation and implementation steps triggered by the expert’s report). No further trial of the Petition or Counterclaim was required and the remedy could be implemented without further judicial determination of those issues.
• The court rejected the petitioner’s contentions that the ongoing valuation, the possibility of future procedural applications under the liberty to apply, or speculative challenges to the expert’s determination meant the case was not "decided". Those possibilities did not amount to outstanding issues within the meaning of rule 36.3(e); any future dispute about the expert’s report would amount to a new claim, not continuation of the original decided issues.
• The court also rejected the petitioner’s policy argument that fairness required treating the matter as a split-trial case allowing a 7-day window: the proper construction of the rules, and the policy that offers preventing judicial determination should cease to be acceptible once the court has determined the issues, dictated the outcome.

Disposition: The petitioner’s application to accept the Part 36 offer was dismissed. The court invited the parties to address consequential matters if they cannot agree.

The petitioner’s application is dismissed. The court held that, for the purposes of CPR r36.12 read with r36.3, the case had been "decided" when judgment and consequential orders were made resolving the substantive issues and providing final relief (a fresh expert valuation and directions for implementation). Consequently the Part 36 offer was no longer open for acceptance on 22 April 2024.