In Richard Lewis & Others -v- Ward Hadaway  EWHC 3503 (Ch) Mr John Male QC summary judgment was given for the defendants on the grounds that a deliberate decision to pay an incorrect court fee on issue meant that proceedings were not properly issued and the actions were statute barred.
“In my judgment, paying “the appropriate fee” does not cover the payment of a fee in circumstances where the act of payment was an abuse of process.”
- A deliberate decision to issue proceedings whilst limiting the claim so as to pay a lower court fee amounts to an abuse of process.
- In the current case the judge held that this abuse of process was not sufficient to warrant striking out the action as an abuse of process.
- However the failure to pay the correct court fee on issue, and to issue as an abuse of process, meant that proceedings were not properly issued. The defendant was granted summary judgment on the grounds that the action was statute barred.
- This was an action against solicitors alleging negligence in failing to warn the claimants of the consequences of “gifted deposits”.
- The letters of claim claimed damages for several hundred thousand pounds. The total value of the claims was put at £9 million.
- Prior to this action being issued there had been a number of cases where claimants, involved in similar actions, had issued proceedings paying a low court fee. Those actions had been struck out by district judges as an abuse of process.
- The claimants were claiming many hundreds of thousands of pounds but issued proceedings stating that the claim was “limited to £15,000” and paying the relevant court fee of £245.
- The claim forms were signed by a partner in the firm representing the claimants with a statement of truth.
- After issue, but before service, the claim forms were amended. Under the heading “value” it was stated that damages were expected to be more than £300,000.
THE DEFENDANT’S ARGUMENTS
- The defendant argued that this amounted to an abuse of process. It was not until after issue and after expiry of the limitation period that the claimants sought to amend their claim forms and pay the balance of the court fees.
- Further this strategy was adopted in circumstances where the claimants’ solicitors knew that, in previous actions, such conduct had been found to be an abuse of process.
THE JUDGE’S DECISION
The judge reviewed four previous decisions in relation to similar conduct. In two of those cases the District Judges had struck out the action as an abuse of process.
ABUSE OF PROCESS
The judge found:
- The claimants deliberately underestimated the value of the claims in order to defer the payment of full and correct fees.
- The claimants always intended to amend their claims at a later stage by considerably increasing the value of the claim.
- There was a public interest in claimants not behaving in this way.
- What the claimants did was to use the Court process for a purpose which was significantly different from the ordinary and proper use of that process.
- This was not a case of mistake or misinterpretation of the rules. District Judges had struck out similar actions as an abuse of process.
- It was difficult for the court to understand how the claimants’ solicitor could have signed the statement of truth.
- This was an abuse of process.
ALTHOUGH THERE WAS AN ABUSE OF PROCESS THE CLAIMS WERE NOT STRUCK OUT ON THESE GROUNDS
The judge found that
“I come back to the approach which I have to apply. In Masood v. Zahoor the Court of Appeal held, relying on Arrow Nominees Inc. v. Blackledge  2 BCLC 167, that “where a claimant [was] guilty of misconduct in relation to proceedings which is so serious that it would be an affront to the Court to permit him to continue to prosecute the claim then the claim may be struck out for that reason.” However, I must bear in mind that, as Vos LJ said in Alpha Rocks Solicitors v. Alade  EWCA Civ 685 at para. 22, “the Court is not easily affronted”.
85. Taking account of all the various factors mentioned by Counsel, and having regard to the overriding objective, I consider that it would be disproportionate to strike out these claims. Applying the approach in Masood, in my judgment it would not be an affront to the Court to permit the Claimants to continue to prosecute their claims. I therefore reject the application to strike out”
SUMMARY JUDGMENT GRANTED FOR THE DEFENDANT BECAUSE THE CORRECT FEE WAS NOT PAID AND THE ACTIONS WERE STATUTE BARRED
“99. For the purposes of this application, it is common ground between the parties that the claim form was delivered in due time to the court office, accompanied by a request to issue. The only question which I have to determine on this application is whether the claim form and the request were accompanied by the “appropriate fee”. In determining that question, bearing in mind what the Court of Appeal said in Page v. Hewetts was the policy underpinning Barnes v. St Helens MBC, and also bearing in mind what the Court of Appeal said in Aly v. Aly, I have to consider whether, in this case, the Claimants did all that was in their power to do to set the wheels of justice in motion according to the procedure that was laid down for the pursuit of the relief which they were seeking. And, as per Hildyard J in Page v. Hewetts, I must also have in mind the underlying rationale, which is whether the Claimants had done all that they reasonably could do to bring the matter before the Court for its process to follow, in order for the Claimants’ risk to cease.
100. Earlier in this judgment, I found that the conduct of the Claimants in the manner in which they paid the fees was an abuse of process. In these circumstances, looking at the underlying policy just mentioned, I consider that the Claimants did not do all that was in their power to do to set the wheels of justice in motion. It was within the power of the Claimants to conduct themselves in a manner which was not an abuse of process. They could have done so by paying at the outset the fees properly due for the claims which they always intended to make. Equally, looking at the underlying rationale just mentioned, I consider that the Claimants did not do all that they could reasonably have done to bring the matter before the Court for its process to follow. Again, the Claimants could have acted in a manner which was not an abuse of process. So, at the outset they could have paid the fees properly due for the claims which they always intended to make. Furthermore, they, or more accurately their Solicitors, could have heeded the words of the District Judges in Modhvadia and Partridge.
101. It is correct, as argued by Mr Evans in his oral submissions that the Claimants paid the fees which were technically due. By this, I mean that, in the case of Mr Lewis and Others, the claim was limited to £15,000 and Robinson Murphy paid the fee shown in the CPFO as payable for this claim, i.e. £245. So, as a strictly technical matter, Robinson Murphy paid the fee technically due. However, in doing so, they engaged in conduct which, I have concluded, was an abuse of process. In my judgment, paying “the appropriate fee” does not cover the payment of a fee in circumstances where the act of payment was an abuse of process.
102. In reaching this conclusion and in addressing Mr Evans’ oral arguments, I consider that I am supported by comparing the result reached by Hildyard J in Page v. Hewetts with the result urged on me by Mr Evans on behalf of the Claimant in this case. In Page, the limitation defence succeeded because the Solicitors had innocently miscalculated the court fee by a relatively small amount. Hildyard J found that to be, in a way, concerning. In this case Mr Evans says that, notwithstanding the abuse of process, the Claimants paid the technically correct fee. So, he says, the limitation defence must fail. To my mind it would be inconsistent and wrong if, in Page, the limitation defence succeeded due to an innocent miscalculation by the claimant, whereas in this case the limitation defence failed due to a deliberate abuse of process by the Claimants. This comparison supports me in my conclusion that the Claimants here failed to pay the appropriate fee
105. In summary therefore, I conclude that, applying what was said in Aly v. Aly, the eleven Claimants did not do all that was in their power to do to set the wheels of justice in motion according to the process laid down. Nor, applying what Hildyard J said in Page, did the eleven Claimants do all that they reasonably could do to bring the matter before the Court for its process to follow. The Claimants could have conducted themselves in a way which was not an abuse of process. They could also have heeded the words of the District Judges in the cases I mentioned earlier. In Page, Hildyard J said of the claims in that case, that the claimants did not do all that was required of them in time; and they left it too late to correct the error, which was a risk they unilaterally undertook. In my judgment, in this case, these eleven Claimants did the same in that they undertook the risk and that risk did not cease due to their conduct in acting in abuse of process. I therefore conclude that the appropriate fee was not paid in time.
106. It is common ground between Counsel, and I agree, that if the appropriate fee was not paid in time the application for summary judgment in these eleven cases must succeed. I will therefore grant summary judgment in those cases”
- The dangers of getting the court fees wrong: if the fees are not right – you haven’t issued.
- For two dollars more: the dangers of not sending the correct court fee