By Justin Crossley
Wells v Wood and Nottingham County Council CC (Lincoln) 09/12/2016
This is another case in which the court considered a Defendant’s application that a claim was statute barred following the payment of an incorrect court fee on issue. Zenith Chamber’s Gordon Exall acted for the successful Claimant.
The Claimant had been injured in an RTA in September 2012. He issued a claim just on the cusp of limitation against the driver and the highway authority. The Claim Form limited the claim to £15,000. The correct fee was £675 but the Claimant paid £455. Particulars of Claim were not served until December 2015 which then pleaded that damages were expected to exceed £25,000.
In its Defence the First Defendant pleaded that the failure to pay the correct fee resulted in the claim not being properly brought and was therefore statute barred. The Claimant had obtained permission to amend the Claim Form to increase its value to £25,000 with effect from the 24th April 2016, paying the increased court fee.
The matter came before His Honour Judge Godsmark QC to consider the failure to pay the fee as a preliminary issue. The issues for the court to determine were:
- Whether the failure to pay the correct fee resulted in the claim being statute barred;
- Whether, in the event of the claim being statute barred the court should exercise its discretion to allow the claim to proceed.
It was the Defendant’s contention that if the correct fee was not paid, then the claim has not been brought in time, such as to stop time running in respect of limitation. They argued there was no difference whether the mistake in relation to the payment of the issue fee was accidental or deliberate.
Within his judgment, the Judge carried out a review of the existing case law relating to court fees and limitation. This included the Ward Hadaway case which had previously sent a shudder through Claimant solicitors’ firms up and down the country.
The Judge determined that the starting point was that a Claim Form issued by a court was effective in stopping limitation from running, irrespective of whether a correct or incorrect fee was paid. This position in that respect was not undermined by the recent case law. The judge rejected the Defendant’s submission that “bringing” a claim was separate to “starting” a claim. In this case the claim form was issued within limitation and with that step the claim had been “brought” and started.
However, the Judge did recognise that a claim may be struck out as an abuse of process if there was a deliberate decision to avoid paying the appropriate issue fee. However he went on to say that the finding of such an abuse of process and the court’s discretionary approach to such an application is quite separate from the limitation status of the claim.
In relation to the question of payment of the wrong fee – which had clearly happened in this case, the Judge went on to hold:
60 “In my judgment, questions of payment of court fees are primarily between the paying party and HMCTS. Such matters may become of interest to other parties where it is alleged that there is abuse of process or in the particular circumstances of investigating whether a party has done all in its power to set the wheels of justice in motion so as to have brought the claim before issue. It may be that having a shortfall in payment brought to his/her attention, the Judge will stay a claim pending payment of the correct sum but that will be a judicial decision. Otherwise non-payment of the correct fee may well attract the operation of CPR 3.7 and 3.7A with notices being sent giving them opportunity to pay before being struck out.”
The Judge went on to consider what his approach would have been if he had been required to consider applying his discretion for the purposes of Section 33 of the Limitation Act 1980. He found that the most important of all of the circumstances was that the claim had been issued within the limitation period. He found that a letter of claim had been sent seven months after the accident which led to the issue of proceedings within time. Further, that the delay in payment of the correct court fee had not caused any prejudice to the Defendant. There had been no substantial effect on the cogency of the evidence and therefore if required the court would have exercised its equitable jurisdiction and applied Section 33, thereby allowing the claim to proceed.
The Defendant’s arguments were therefore rejected and the preliminary issue determined in favour of the Claimant.
The decision is extremely helpful in establishing that where a claim form has been issued and sealed by a court it is effective in stopping time from running for the purpose of the Limitation Act 1980, even when an incorrect fee has been paid. It does, however, very much leave alive the potential for a claim to be struck out as an abuse of process if a Claimant has deliberately paid an incorrect court fee in effort to avoid a higher fee.