Megan Shirley-Senior Lecturer NTU https://www.ntu.ac.uk/staff-profiles/law/megan-shirley
The Peterson case
On 28 April 2023, Mr Justice Eyre handed down judgment in the case of Peterson & Anor v Howard De Walden Estates Ltd [2023] EWHC 929 (KB). The subject of the appeal was whether the Claimants’ application under the Leasehold Reform, Housing & Urban Development Act 1993 (“the Act”) was made within the relevant statutory time limit.
The Claimants’ solicitors attended the Central London County Court two days before the expiry of the time period specified by the Act in order to issue proceedings. As a result of renovation works taking place at the court, the counter had been moved and the equipment to process card payments was not available. The Claimants’ solicitors therefore delivered a claim form to court with a covering letter permitting the court to deduct a court fee of £308 from the firm’s court account.
Unbeknownst to the Claimants’ solicitors, the relevant court fee had been increased five months earlier to £332. The court wrote to the Claimants’ solicitors to this effect on the following day; the letter explained that the court could not process the new claim with the old fee. Unfortunately, the letter was not received until 5 days later, after the expiry of the time period within the Act. The Claimants’ solicitors therefore made an application seeking relief from sanction under Civil Procedure Rule 3.9 and relief “arising from an inadvertent clerical error” under Civil Procedure Rule 3.10.
There was no real prospect of a successful application under CPR 3.9, so the argument proceeded in relation to Rule 3.10. This rule gives the court power to grant relief in circumstances where there has been “an error of procedure such as a failure to comply with a rule or practice direction”.
Mr Justice Eyre upheld the decision of Recorder Hansen that the court did not have jurisdiction to grant relief under rule 3.10 because the error did not relate to a procedure set out by the CPR or similar procedural provision. The Claimants had failed to comply with the time limit within the Act because they had not issued their claim in time; neither the time limit nor the court fee were set by the Civil Procedure Rules. The Claimants’ claim was therefore out of time and the consequences prescribed by the Act would follow.
Mr Justice Eyre was unable to decide that a claim had been brought in time because:
i) proceedings were not issued by the required date; and
ii) the Claimants could not avail themselves of the “back up” option of proving that they had delivered the claim form to court with the “appropriate fee” by the required date.
This latter option has been the saviour for Claimant lawyers in previous cases where there has been a delay between delivering the claim form to court and the court processing and issuing the claim. That did not help here, because the court identified the inadequate court fee and did not issue until the Claimants had paid the balance due. The date of delivery to court could not be used because the claim form had not been accompanied by “the appropriate fee”.
The Citysprint case
We can contrast this with the case of Citysprint UK Ltd v Barts Health NHS Trust [2021] EWHC 2618 (TCC) where the Claimant’s solicitors used the court’s online filing system to issue a claim on the final day of the limitation period for procurement claims. After the Claimant’s solicitor had answered various questions, the online system calculated the issue fee at £10,000, which was duly paid. The system provided a response that the filing had been “successfully submitted” and an electronic seal was applied to the Claim Form on that same day. The court fee should, in fact, have been £10,528 and this was identified by court staff two days later. The court staff sent an email to the Claimant’s solicitors advising them of the need to make an additional payment and this was duly arranged.
One of the disputes that arose in this case was whether the Claimant had issued the claim in time for limitation purposes; was it issued on the day that the electronic system confirmed submission, despite the underpayment, or two days later when the court staff resolved the underpayment of the court fee (which was then recorded as the Approved Date on the filing portal)?
The Defendant submitted that the underpayment of the court fee should mean that the date of issue was delayed until the error was identified and resolved. However, Mr Justice Fraser described the underpayment of £528 as “clearly an error of procedure (and a minor one at that)”, which did not invalidate the issue of the claim form. The claim was deemed to have been submitted on time and the Claimant was permitted to continue with the action.
Commentary
Why then was an underpayment of £24 in the Peterson case fatal to the Claimants’ position on limitation? At first instance, the Recorder referred to the Claimants’ solicitors mistake as “inadvertent and understandable” with the difference between the court fee paid and payable being “very modest”. He echoed Lord Justice Jackson’s obiter comments in Butters & Anor v Hayes [2021] EWCA Civ 252:
“my provisional view is that there is force in the concerns expressed in a number of the cases about disallowing a claim on limitation grounds merely because of an inadvertent calculation of a court fee.”
The crucial distinction between the Peterson and Citysprint cases is that the court identified the underpayment of the court fee before the claim was issued, rather than after. Had the claim been issued, the current state of the caselaw suggests the underpayment could have been resolved without any impact on the Claimants’ position on limitation.
The error might have been avoided had the court staff been able to process the claim and take payment when the solicitors attended court or if the court staff had communicated with the solicitors by email or telephone, rather than post, on the following day. However, the responsibility for this error ultimately lies with the Claimants’ solicitors and they are unfortunately now likely to be facing a claim against them in respect of the lost claim.
This is another cautionary tale for any Claimant solicitor who issues proceedings towards the expiry of a limitation period.
Further reading
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