Butcher v Wolfe and another

Plaintiff and defendants holding farmland as tenants in common in equal shares – Plaintiff seeking order for sale – Defendants issuing Calderbank letter offering to pay plaintiff her share valued on tenanted basis – Plaintiff refusing offer claiming value of her share on untenanted basis – Plaintiff agreeing at trial to accept sum valued on tenanted basis – Whether plaintiff to pay defendants’ costs – High Court ordering plaintiff to pay costs – Appeal dismissed By an originating summons dated November 2 1995 the plaintiff claimed an order that the farmland held by herself and the defendants, her brothers, as beneficial tenants in common in equal shares should be sold and the defendants should serve a notice to quit determining the periodic tenancies of the farmland. The land was subject to a series of tenancies granted to a partnership consisting of the parties and other members of the family. The plaintiff maintained that the farmland should be sold on an untenanted basis. The defendants claimed that there should be no order as to sale or, alternatively, if there was to be an order for sale, it should be on a tenanted basis so as not to endanger the existence of the family business. On October 31 1995 the defendants issued a Calderbank letter, which offered to pay the plaintiff a sum representing the value of her interest in the farmland on a tenanted basis. The letter went on to offer the sum of £200,000 and suggested that if the figure was not acceptable but the tenanted basis of valuation was agreed, then a procedure could be adopted for determining an independent valuation. The offer was made on the basis that each side should bear its own costs. The following day the plaintiff’s solicitor refused the defendants’ offer. Subsequently, by a writ dated January 10 1997, the plaintiff brought proceedings against the defendants in respect of the other matters relating to the farming partnership. At the conclusion of the hearing of the November 2 1995 summons the court made a consent order whereby the plaintiff agreed to accept the defendants’ offer to purchase the plaintiff’s interest at the tenanted value, which had been agreed before the hearing at £295,833. On the question of costs, the judge found that the reason the Calderbank letter had met with a refusal, without any attempt to negotiate, was because the plaintiff had insisted accepting nothing less than a figure representing one-third of the value of the land on an untenanted basis, rather than one-third of the value on the tenanted basis. The judge concluded that, since the plaintiff had subsequently accepted a figure on a tenanted basis, it was appropriate to order her to pay the defendants’ costs of the action. The plaintiff appealed against the costs order, claiming that the Calderbank letter had not been sufficient to protect the defendants against an order for costs because the judgment, although less favourable than she was claiming, was more favourable than the basis proposed by the Calderbank letter. Held The appeal was dismissed. The reason why the Calderbank letter had been refused was not because the plaintiff disliked the idea of independent valuation by experts nor because she was concerned to preserve her claim in the separate partnership proceedings, but because she had refused to accept her share of the farmland being valued on a tenanted basis. Had she been prepared to accept the basis of valuation set out in the letter, the defendants would have readily agreed that she could, none the less, have asserted her claim in the partnership action, had she wished. Therefore, she had obtained nothing from the hearing of the summons that she could not equally have obtained by accepting the Calderbank letter. All that had divided the parties was the basis of valuation. Since that issue had been resolved by the litigation against the plaintiff it was appropriate that the plaintiff should pay the defendants’ costs. Mark Wonnacott (instructed by White & Bowker, of Winchester) appeared for the plaintiff; Ann McAllister (instructed by Blake Lapthorn, of Fareham) appeared for the defendants. Thomas Elliott, barrister