High Court Addresses Costs Awards and CPR Part 36 Offers in Morton v Morton Case

Citation: [2023] EWHC 3223 (Ch)
Judgment on

Introduction

The High Court of Justice Business and Property Courts in Manchester delivered a critical judgment in the case of Julie Anne Morton v Simon Nigel Morton & Anor [2023] EWHC 3223 (Ch). This case involved a dispute regarding the dissolution of a family partnership and the taking of post dissolution partnership accounts. The key legal themes explored include the interpretation of costs awards under Civil Procedure Rules (CPR) Part 44, the implementation of CPR Part 36 offers, and the nuanced requirements of making a judgment in a case where a single party has not achieved unequivocal success.

Key Facts

The partnership in question, involving late Jennifer Ruth Morton, Simon Morton, and Alison Morton, related to farms in Cheshire and Staffordshire. The dispute arose after the dissolution of the partnership during Jennifer’s lifetime and subsequent continued operations of the business by Simon and Alison. Julie Morton, executrix of Jennifer’s estate, asserted claims in that capacity against Simon and Alison, who also counterclaimed.

The trial encompassed issues related to ownership of partnership assets, proprietary estoppel, an option agreement, and the taking of post dissolution partnership accounts. Mixed outcomes from the trial and subsequent proceedings led to both parties obtaining success on different aspects of the case.

During the litigation, both Julie and Simon and Alison made offers under CPR Part 36 to settle the disputes, which significantly impacted the judgment on costs.

The judgment focused on legal principles surrounding CPR Part 44 related to costs awards and CPR Part 36 concerning offers to settle. Key legal principles applied in this case include:

  1. Determining the ‘Successful Party’: The court examined who was the overall successful party, considering the complexities of cases involving mixed outcomes and distinct phases of litigation.

  2. Conduct of the Parties: Under CPR 44.2, the court assessed whether the conduct of the parties warranted specific costs provisions or adjustments, based on how reasonably they pursued or contested various allegations or issues.

  3. Mixed Success in Proceedings: The court considered the implications of both parties achieving success on different fronts and how this affected the costs order.

  4. CPR Part 36 Offers and Consequences: The court considered the validity, timing, and reasonableness of CPR Part 36 offers, and whether the judgment obtained was at least as advantageous as the proposals contained in these offers.

  5. Adjusting Costs Orders: In relation to CPR Part 36 offers, the court evaluated whether it would be unjust to award certain costs consequences mandated by the Rules and the court’s implied discretion, as established in the case law, to adjust such orders.

Outcomes

The court determined that Julie was the successful party overall, due to her primary objectives being achieved, despite mixed success for both parties on different issues. She was thus awarded 50% of her costs up to a specified date and none thereafter.

The court concluded that it would be unjust to apply the cost consequences of CPR 36.17 in favour of Julie for the period where Simon and Alison had no prospect of accepting her CPR Part 36 offer due to its terms. However, for a period post-offer, Julie was entitled to enhanced interest and an additional sum as per CPR 36.17(4) as her success on that issue was not deemed unjust.

Simon and Alison’s late CPR Part 36 offer was determined to be strategically unjust in the context of the case, and consequently, they did not achieve the sought-after cost consequences against Julie.

Conclusion

The judgment in Julie Anne Morton v Simon Nigel Morton & Anor underscores the complexity involved when both parties to a case experience elements of success and defeat. The judgment reinforces that the delineation of costs in such cases meticulously follows the provisions of the CPR but is contingent on the court’s overarching discretion to eschew unjust outcomes. The court’s scrupulous effort to apply and interpret the CPR reflects a legal system concerned with both procedural rigor and equitable justice.