Claimant obtained foreign currency judgment at least as advantageous as a Part 36 Offer (Old Park Capital Maestro Fund Limited v Old Park Capital Limited and others)

Dispute Resolution analysis: A Claimant who made a US Dollar Part 36 Offer for effectively the entire claim sum was entitled to the CPR r.36.17 consequences when obtaining judgment at trial in the same foreign currency sum.

Old Park Capital Maestro Fund Limited v Old Park Capital Limited [2023] EWHC 3057 (Ch)

What are the practical implications of this case?

This is an interesting judgment on two aspects of the Part 36 jurisdiction. First, it establishes, contrary to what appears to be suggested in the notes to the White Book, that where a Part 36 Offer is made and a judgment sum is awarded both in a foreign currency, the offer and the judgment sum can be compared in the foreign currency. It is neither necessary nor appropriate to convert either into GBP before undertaking an assessment of whether the Offeror has achieved an outcome at trial which is at least as advantageous as the Offer. Second, it has upheld as valid a Part 36 Offer which, if accepted, would have required effectively a complete capitulation on the part of the Offeree. The Court was prepared to compare in minute detail the Offer and the position of the parties at the relevant date to ascertain whether it constitutes a genuine offer to settle. There is no requirement on the part of a Claimant looking to make a Part 36 Offer to offer a form of discount in the Offer compared to the claim sum.

What was the background?

On 27 July 2023, Mr Justice Richards handed down judgment following trial of an action brought by Old Park Capital Maestro Fund Limited (“Fund”) against three Defendants, Old Park Capital Limited (in liquidation), Hugo Van Kuffeler (“HVK”) and Bruno Pannetier (“BP”). At trial judgment was given in favour of Fund. At a consequentials hearing on 10 November 2023, the Judge dealt with most of the consequential matters as between Fund and HVK. However, at that hearing, an argument arose as to whether Fund had beaten a Part 36 Offer which it made to BP. This necessitated a reserved judgment following written submissions. Against BP, Fund was awarded the sum of USD $4,175,182.99. This was reflected in an order dated 1 August 2023. This was precisely the same as the settlement sum specified in the Part 36 Offer made by Fund on 4 April 2023 and which expired on 25 April 2023. Fund argued that the judgment sum was at least as advantageous to it as the settlement sum in the Part 36 Offer and, accordingly, the provisions of CPR r.36.17 applied. BP argued that it was not. He urged a comparison to be made between the GBP equivalents of USD $4,175,182.99 as at 4 April 2023 and 27 July 2023. BP drew support from the White Book notes at 36.17.2 for his arguments.

What did the court decide?

The Court noted that the passage in the White Book on which BP relied referred to cases in which a Part 36 Offer had been made in Sterling GBP and judgment had subsequently been given in a foreign currency. An assessment of whether the latter was at least as advantageous as the former would necessarily require some currency conversion. Those cases simply provide that the conversion take place at date of judgment rather than at the date of the Part 36 Offer. No currency conversion was required here and it was apparent that the judgment sum was at least as advantageous as the Part 36 Offer. The Court noted a fall-back argument of Fund, namely that even if BP’s analysis was correct, the award of pre-judgment interest would mean the Part 36 Offer was beaten. The Court expressed some discomfort with this argument and did not rule upon it, noting that he had been told of the Part 36 Offer without having yet determined the question of pre-judgment interest. This would raise the prospect of whether he would need to recuse himself if BP had been correct as regards the currency conversion question. BP argued that it would be unjust to make the orders specified in CPR r. 36.17(4). He did so first by making various complaints about Fund’s conduct in the litigation. These arguments were shortly rejected by the Court. He argued second that he was justified in defending the proceedings in light of the serious allegations made against him. This too was rejected shortly by the Court. Third, he argued that the Part 36 Offer was not a genuine attempt to settle the proceedings as accepting the Part 36 Offer would have been tantamount to a total capitulation on the part of BP. This argument was also rejected. BP’s stance in the litigation had rendered it in character an all or nothing case. In any event, the Part 36 Offer did involve foregoing at least the opportunity to claim interest. Various orders were accordingly made in Fund’s favour pursuant to CPR r.36.17(4).

Case details

• Court: High Court of Justice, Chancery Division
• Judges: Mr Justice Richards
• Date of judgment: 28 November 2023

Article by Phillip Patterson – first published by LexisNexis