The First-tier Tribunal (FTT) wrongly took into account a ‘without prejudice’ offer when deciding on the costs of a case when there was no reason to believe that it was ‘save as to costs’, the Upper Tribunal has ruled.
It is the second case in recent weeks where a judge has made such a mistake.
Penny Jane Gilchrist was successful in one of two objections she had made to C&C Equine Services’ application to be registered as the proprietor to two parcels of land. Permission to appeal was refused by the FTT (Land Registration Chamber) and the Upper Tribunal (Lands Chamber).
The FTT ordered her to pay half of C&C’s costs up to 11 December 2017 and the whole of those costs thereafter because she had refused a settlement offer that the FTT found was made ‘without prejudice save as to costs’, and would have done better had she accepted it than she did eventually.
Judge Elizabeth Cooke found that the offer was not stated to be ‘without prejudice save as to costs’, and did not include any equivalent expression, “or indeed any hint that refusal might have costs consequences”.
She said: “It is difficult to see, therefore, why it was disclosed or why it could be regarded as admissible. The judge stated in his costs decision that ‘in context the offer was made on the footing that it was “without prejudice save as to costs”’, but did not explain what it was about the context that led him to that conclusion.”
C&C argued that the offer should be construed in this way because it referred explicitly to the costs savings that would result from avoiding a site visit and trial, and because it said that if it were accepted the parties would bear their own costs.
It said the obvious implication was that the reverse would be the case if the offer were not accepted.
But the judge said: “That is not an obvious implication. The letter goes no further, and has no other implications, than does any without prejudice offer. There is nothing to indicate that the letter was without prejudice save as to costs.
She remade the order so that Ms Gilchrist had to pay half of all of C&C’s costs.