PAYING THE CORRECT COURT FEE: ACTION STAYED: SANITY IS BREAKING OUT

There are several interesting issues arising out of the judgment of Master Clark in Lifestyles Equities C.V. -v- Sportsdirect.Com Retail Limited [2016] EWHC 2092.   In particular the fact that the decision in Richard Lewis & Others -v- Ward Hadaway [2015] EWHC 3503 (Ch) did not feature at all. Rather than applications to strike out for abuse there was a proper and measured application for a stay pending payment of the correct court fee. (However it is probable that the costs of arguing over whether the correct fee had been paid exceeded, by a fair measure, the increased fee itself.)

KEY POINTS

  • An action which claimed an account and inquiry into damages due was an action for damages. A higher court fee was payable than the sum paid by the claimant.
  • The court stayed the action pending payment of the additional court fee.

THE CASE

The claimants issued proceedings for damages.  A fee of £480 was paid. The claim was for “registered trade mark infringement and/or inducement of breach of contract”.  Paragraph 3 of the relief sought claimed “An Order for payment of all sums due by way of an inquiry into damages or at the Claimant’s option an account of profits”.

THE JUDGMENT

The Master set out the key issues, summarised above and then considered the legal framework.

Legal framework
  1. The Court Proceedings Fees Order 2008 (SI2008/1053) (“the Fees Order”) governs the fees payable by parties to court proceedings. These are set out in the table at Schedule 1, the relevant provisions of which are:
Number and description of fee Amount of fee (or manner of calculation)
1 Starting proceedings (High Court and County Court)  
1.1 On starting proceedings … to recover a sum of money where the sum claimed:  
 
(i) exceeds £200,000 or is not limited. £10,000
 
Fee 1.1  
Where the claimant does not identify the value of the claim when starting proceedings to recover a sum of money, the fee payable is the one applicable to a claim where the sum is not limited.  
 
1.5 On starting proceedings for any other remedy …:  
in the High Court £480
 
Fees 1.1 and 1.5 Claims other than recovery of land or goods
Where a claim for money is additional to a non money claim (other than a claim for recovery of land or goods) then fee 1.1 is payable in addition to fee 1.5
 
Where a claim for money is alternative to a non money claim (other than a claim for recovery of land or goods), only fee 1.1 is payable in the High Court  
  1. In Page v Hewetts Solicitors [2013] EWHC 2845 (Ch) Hildyard J had to decide whether a claim for an account was a claim to “recover a sum of money” (para 1.1) or a “non money claim” (para 1.5). The Judge accepted the defendant’s submission (and reasoning) that an account was a non money claim. That reasoning is set out at para 50 of his judgment:
“He [the defendant’s counsel] submitted that an assessment of damages is necessarily ancillary or appendant to a claim for damages; whereas a claim for an account may be (and indeed commonly is) self-standing. He submitted further that an account may be ordered regardless of whether or not sums of money are said to be owing, and the outcome of the account may lead to the assertion of a proprietary remedy rather than a pecuniary one. As he put it, an account is not simply an assessment of loss or a claim for money; it is a procedure: or in other words, as stated in Ultraframe (UK) Ltd v Fielding & Ors [2005] EWHC 1638 (Ch) at paragraph 513:

‘The taking of an account is the means by which a beneficiary requires a trustee to justify his stewardship of trust property.'”

The Judge added his own additional reasoning at para 55:
“a claim for an account is a separate and discretionary equitable remedy, calling for an additional assessment and inquiry by the court and the exercise of an additional and discretionary equitable jurisdiction: there is an analogy, as I see it, with a claim for an injunction, for which an additional fee to that payable for a claim for money would be payable.”
Parties’ submissions and discussion
  1. The Defendants did not seek to argue that I should not follow Page v Hewetts Solicitors (as to which see Coral Reef Ltd v Silverbond Enterprises Ltd [2016] EWHC 874 (Ch)). They put forward three main arguments.
  2. Their first argument was based on the fact that the claimants are, in addition to the trade mark infringement claim in which they claim an account of profits, making a free-standing claim for inducing breach of contract in which they claim an inquiry as to damages. The defendants submitted that, for the purpose of establishing what court fee is payable, there was no basis for distinguishing between a claim for a specified amount of damages, for damages to be assessed by the court and for an inquiry as to damages.
  3. In response to this argument, the Claimants submitted that an inquiry as to damages is, as with an account, a process that calls for an additional assessment and inquiry by the court; and that assessment will not be made until the quantum phase of the claim of the action, in advance of which the Claimants have undertaken to pay the appropriate fee.
  4. In my judgment, the fact that an inquiry requires an assessment by the court as the amount of the damages is not sufficient for it to be a non money claim. A claim for damages is a claim for money; the task undertaken by the court is determining the amount of money payable. I cannot identify a distinction in principle between the three types of claim referred to above.
  5. In this case, therefore, the existence of the claim for an inquiry as to damages for inducing breach of contract is in my judgment fatal to the Claimants’ argument that the whole of their claim is a non money claim. This is sufficient to dispose of the application, but in case I am wrong about this, I turn to the Defendants’ second argument.
  6. This argument indirectly challenges Page v Hewetts Solicitors, by arguing that since an order for an account must include an order for payment of sums found due on the account, even claim for an account is a claim to recover a sum of money. I do not accept this submission. I agree with Hildyard J that an account is not simply an assessment of loss or a claim for money. It is a process by which the court investigates whether the defendant has in fact made any profits from his wrongdoing to which the claimant is entitled. The result of the process may be a finding that the defendant holds no profits and no monies are payable.
  7. The Defendants’ third argument was that even if an account of profits is a non money claim, the claim includes a money claim (damages) as an alternative, so that fee 1.1 is payable. I agree with Hildyard J that the Fees Order is not easy to construe, and the logic operating in the distinctions contained in it can be difficult to discern. I also agree with the claimant’s counsel that it would be anomalous if a claimant with sufficiently early information about the defendant’s activities to enable it to elect for an account of profits in its claim form could pay only the fee 1.5, but a defendant without that information must pay the higher fee. Further, the two forms of relief are not mere alternatives, but are mutually exclusive; and it is not until a claimant elects for an inquiry (which it may not do) that it can be said that its claim is to recover money.
  8. If, therefore, this claim had been only for trade mark infringement, then I would have held that the appropriate fee had been paid.
Conclusion
  1. For the reasons set out above, however, I conclude that the Claimants have not paid the appropriate fee for the claim; and the claim will be stayed until that fee is paid.”

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Court fees

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