Jopling v Leavesley & anr [2013] EWCA Civ 1605

Analysis

Mr Jopling was the executor of the will of Kenneth Smith. On 6 January 2012 Mr Jopling issued proceedings against the deceased’s stepdaughter Mrs Leavesley and his niece, Mrs Thompson alleging that they had each obtained a cheque for £25,000 drawn on Mr Smith’s bank account and they between them had drawn £14,750 from ATMs by using his debit card. He alleged that these moneys had been obtained by undue influence and the estate was entitled to recover them.

In May 2012 via his solicitors he made a Part 36 offer to each of the two defendants offering to settle for £25,000 from each of them plus interest together with his legal costs to be assessed if not agreed.

In December 2012 the defendant’s solicitor accepted the offer. However, they then later disputed that costs were payable. At first instance the judge took the view that there had been no agreement as to the ATM costs and if the matter had gone to trial the claimant would have succeeded on the undue influence claim but lost on the ATM claim and therefore he apportioned costs.

The claimant appealed.

Held (allowing the appeal):

1. 1) The court will only interfere with the exercise of a judge’s discretion when he has misdirected himself or left relevant factors out of account or took irrelevant factors into account or that he reached a decision that no reasonable judge properly directed could have reached.
2. 2) There are four flaws in the judge’s exercise of discretion. He left out of account the express terms of the Part 36 offer. The offer expressly related to the whole of the claimant’s claim and stated expressly that the defendants would pay the claimant’s costs which had to be for the whole claim. When the offer was accepted this was done on the basis of accepting the entire offer including the term about costs.
3. 3) The judge assumed the defendants would succeed at trial on the ATM claim. There was no reason to make that assumption and it was unjustified. It was because he made that assumption that he concluded it was unfair that the defendants should pay all of the costs.
4. 4) The judge’s judgment meant that the defendants were better off in delaying their acceptance of the Part 36 offer which undermines one of the purposes of Part 36.
5. 5) The judge gave no weight to the Part 36 offer. The point of a Part 36 offer is to transfer the costs risk from the offeror to the offeree.
6. 6) The four flaws entitle the court to exercise that discretion afresh. The defendants should pay the whole of the claimant’s costs down to the date of acceptance.

JUDGMENT LEWISON LJ: [1] Mr Jopling is the executor of the late Kenneth Smith. On 6 January 2012 he issued proceedings against Mr Smith’s stepdaughter, Mrs Leavesley and his niece, Mrs Thompson. In his particulars of claim he alleged that each of them had obtained a cheque for £25,000 drawn on Mr Smith’s bank account …

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