Claim rejected due to £24 underpayment of court fee

Court fee: Solicitors underpaid

A judge was right to hold that he did not have jurisdiction to allow a claim to proceed out of time where the claimants underpaid the court fee by £24, the High Court has ruled.

Mr Justice Eyre said the issue could have been avoided had the solicitors not waited until the end of the limitation period to apply and had kept up-to-date with changes in court fees.

The claimants wanted to make an application for an order to enforce an agreement for a new lease under section 48(3) of the Leasehold Reform, Housing & Urban Development Act 1993.

The court declined to issue the application – made two days before the statutory period for making it expired – because the claimants’ solicitors had authorised deduction of a court fee of £308 from their account whereas the fee had changed a few months earlier to £332.

By the time the solicitors had received the court’s letter, the deadline for making the application had passed.

The claimants sought an order under rule 3.10 on the basis that there had been an error of procedure which the court had power to remedy.

The court in Peterson & Anor v Howard De Walden Estates Ltd [2023] EWHC 929 (KB) heard that a representative of the claimants’ solicitors attended the counter of the Central London County Court on 23 March 2022; the application deadline was 25 March.

The counter had been moved from its normal location because of renovation works “and it is apparent that the move was causing some disruption to the normal running of the court counter”, Eyre J recounted.

Staff were only accepting bankruptcy papers at the counter and did not have the equipment to process any payments. They advised that, if the relevant papers were lodged in the court post box by 2pm, they would be treated as having been received that day.

The solicitors lodged the draft claim form for issue together with a covering letter giving authority to deduct the court fee of £308. The court fee had changed in September 2021.

The application under rule 3.10 was dismissed by Recorder Hansen, who concluded that a failure to pay the right fee was not an error of procedure.

There was no failure to comply with a rule or practice direction, he said, and the fact the statutory limitation period was missed was no fault of the court’s.

The recorder added that, even if he were wrong on this, he would not have exercised his discretion to rectify the error as it would cause unfairness or injustice to the defendant.

Doing so would, in effect, “be to extend time and/or dispense with a statutory imitation period in an area of the law where certainty is important and the statutory time limit is absolute”.

At the same time, the recorder said he reached his decision with “no enthusiasm whatever”, regarding it as “something of a nuclear option” in the circumstances.

He said: “I regard the law in this area as ripe for review by the Court of Appeal and would question whether the current state of the law in this area is entirely satisfactory. The mistake in the present case was inadvertent and understandable.”

On appeal, Eyre J agreed that the court did not have jurisdiction under rule 3.10.

He said: “I am satisfied that properly interpreted an error of procedure for the purposes of rule 3.10 is limited to an error in a procedure laid down by the CPR or potentially by an equivalent procedural provision and that it is not concerned with matters occurring before the commencement of proceedings (although it can be used to remedy defects of form in proceedings once commenced).

“In relation to the circumstances of this case, an error of procedure does not include a failure to pay a court fee needed to initiate proceedings where the requirement to pay that fee derives not from the CPR nor from any other rule or direction made by the Civil Procedure Rule Committee but from an order made by the Lord Chancellor exercising powers deriving from the Courts Act 2003.”

Eyre J also held that, in relation to how the recorder would have exercised his discretion, “it cannot be said that his approach was wrong in principle nor that he arrived at a conclusion which was not open to him”.

It was “relevant” that the claimants had left it until right at the end of the two-month window to make the application.

They were entitled to do that but “the difficulties which arose are precisely the kind of matters which will only cause insuperable problems when a party is seeking to make an application at the end of a time period”.

Moreover, the correct court fee was a matter of public record. “One can well understand how the error arose but the position remains that the error was made because the claimants’ solicitors were working on the basis of a fee scale which had been superseded some six months previously.”

Eyre J also questioned the recorder’s comments on the state of the law. Parliament had passed the 1993 Act, balancing the interests of landlords and tenants, and the benefits of certainty.

“That balance having been placed at a particular point, it is not for the courts to say that the result is unsatisfactory.”

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