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C v D, High Court Chancery Division, 16 November 2010

1 December 2010
The issues

Part 36 – validity of Part 36 offer – validity of time limited offer – whether Rules of offer and acceptance applied – whether Gibbon v Manchester City Council applied.

The facts

The Claimant brought an Application seeking a declaration that an offer to settle an action that the Claimant had made in a letter dated 10th December 2009 and expressed to be made for the purposes of CPR Part 36 was no longer open for acceptance and had not been accepted.

The action related to a claim for damages in respect of breach of contract in relation to a sale of land. It was headed “Offer to settle under CPR Part 36″. Throughout it there were many references to Part 36. The letter contained a reference to the offer being open for 21 days from the date of the letter and a reference to its intention to have the consequences set out in Part 36 of the Civil Procedure Rules. The letter went on to state that if the offer was not accepted and the Claimant obtained an equal or more advantageous Judgment, that the Claimant would then rely on CPR 36.14 to seek an Order for costs, including an Order for costs on the indemnity basis, with interest at up to 10% above base rate.

The offer was not accepted within the 21 days mentioned. Almost a year later, and 3 weeks before Trial, the Claimant purported to accept the offer. The Claimant submitted that a time limited offer was not capable of being a Part 36 offer.

The decision

A time limited offer was not capable of being a Part 36 offer. The structure of Part 36 in general and the provisions of Rule 36.2(2) and Rule 36.14(6) established that an offer had to be capable of acceptance unless and until withdrawn by service of a Notice within Rule 36.9(2). The offer letter failed to distinguish between the time for acceptance of an offer and the time which needed to be specified for the purposes of Rule 36.2(2)(c) (“A Part 36 offer must…specify a period of not less than 21 days within which the Defendant will be liable for the Claimant’s costs in accordance with Rule 36.10 if the offer is accepted…”). This was a time limited offer therefore and not capable of acceptance.

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