Tom Rainsbury on Incorrect Court Fees – Part 3

Doubt has been expressed about the ‘hard-edged’ principle created by Bhatti v Asghar [2016] EWHC 1049.

The case of Dixon v Radley House Partnership [2016] EWHC 2511 involved a contractual dispute involving a property development. Three claims had been submitted to the court shortly before limitation. The defendants applied for permission to amend their defences on the ground that the claimants had failed to proffer the correct court fees and their claims were accordingly statute-barred.

The applications were heard by Stuart-Smith J. in the Technology and Construction Court. They were dismissed as disclosing no reasonable prospects of success.

The key points are as follows:

1. Where a claim form has been delivered to the court office and limitation expires before it is issued by the court, the principle in Page v Hewetts [2012] EWCA Civ 805 applies. The claimant must establish that the claim form was delivered to the court office accompanied by a request to issue and ‘the appropriate fee’. Failure to do so will mean that the claim has not been ‘brought’ for the purpose of the Limitation Act 1980.

2. A fee will be ‘appropriate’ if it is ‘the fee required by the relevant order which is to be determined by reference to the claim or claims articulated in the claim form (and, if issued simultaneously, the Particulars of Claim)‘. It is not to be determined by reference to claims which are articulated later. There may be cases where it is clear that, as a purely mathematical calculation, the fee proffered is not appropriate. However, some claim forms may not identify a liquidated sum, or may identify a liquidated sum but allow for the possibility that the sum may increase.

3. As soon as the court issues the claim form, the clock stops for limitation purposes. This is an axiomatic proposition. It applies even if the claimant has paid the wrong fee (the fact that the Court has issued proceedings should be seen as ‘good fortune’ for the Claimant, although it does not validate the proffered fee or prevent the court from requiring payment of the shortfall either on issue or later). There is no statutory provision which states or implies otherwise. His Lordship declined to follow Bhatti v Ashgar.

In summary, the decision in Dixon limits the scope for challenging a claim on the basis that the claimant has paid the wrong court fee.

It has been followed by HHJ Godsmark QC in Wells v Wood and another (9 December 2016), who referred to the topic as ‘gritty’.

Although such decisions clearly mitigate the effect of Bhatti, it remains important that claimants value their claims as accurately as possible. First, the failure to pay an appropriate fee may result in the claim becoming statute-barred if issued on the ‘cusp’ of limitation. This may happen where there is a delay in issuing the claim (and limitation expires during the intervening period), or where the court simply refuses to issue the claim. Second, it remains open to defendants to argue that the claim – even if not statute-barred – is an abuse of process.