Errors of procedure & CPR 3.10 – Peterson & Blake v Howard De Walden Estates Limited  EWHC 929 (KB)
A recent High Court judgment considered the court’s refusal to issue a claim as a result of the claimants’ underpayment of the court issue fee.
Peterson & Blake v Howard De Walden Estates Limited  EWHC 929 (KB) held that CPR 3.9 and 3.10 cannot be relied upon to rectify the failure to pay the correct court issue fee resulting in the refusal to issue the claim form prior to the expiry of the statutory limitation period.
Peterson & Blake v Howard De Walden Estates Limited  EWHC 929 (KB) concerned an application for an order under Section 48(3) Leasehold Reform, Housing & Urban Development Act 1993 (‘the 1993 Act’).
The claimants’ solicitors lodged at court a Part 8 claim form and accompanying cover letter on 23 March 2022. The accompanying cover letter referred to, and authorised the court to debit from their PBA account, a court fee of £308. The claimants’ solicitor attended the court on that day to lodge the claim form. The counter had moved location due to renovation works at the court and as a result of those works the counter was unable to process payments (either by PBA account or by debit card) but informed the claimants’ solicitor that the papers would be treated as having been received on that day if they were lodged in the court post box by 2pm. The solicitors followed those instructions and lodged the claim form and covering letter.
Unbeknown to the claimants’ solicitors, the correct court fee payable was £332 as it had recently increased 6 months earlier. Consequently, the court refused to issue the claim form as the solicitors’ accompanying cover letter did not authorise the court to deduct this fee. The claimants’ solicitors were informed of this when they received a letter from the court on 30 March 2022.
The statutory limitation period for making the application under the 1993 Act had expired on 25 March 2022, prior to the claimants’ solicitors being informed of this issue.
Application for Relief from Sanctions
The claimants’ solicitors made an application for relief from sanctions on 30 March 2022, the date on which they were notified by the court that the claim had not been issued. The application for relief was issued the following day.
The application referred to the claimants’ seeking an order under CPR 3.9, but also CPR 3.10, asserting that there had been an error of procedure which the court had power to remedy and requesting that the court exercise its discretion to grant relief from sanctions in the circumstances. The claimants however accepted that the initial application under Section 48(3) of the 1993 Act had not been made before the expiry of the statutory limitation period, hence the need for their application.
The following rules were relevant for the purpose of the application:
- CPR 7.2 which governs the commencement of proceedings. Notwithstanding the initial claim in question being a Part 8 claim, the parties agreed CPR 7.2 remained the applicable rule. The rule provides that (1) proceedings are started when the court issues a claim form at the request of a claimant and (2) a claim form is issued on the date entered on the form by the court.
- CPR 3.9 which gives the court permission to grant relief from sanctions.
- CPR 3.10 which provides that, where there has been an error of procedure such as a failure to comply with a rule of practice direction, (a) the error does not invalidate any step taken in the proceedings unless the court so orders; and (b) the court may make an order to remedy the error.
- Section 92 Senior Courts Act 2003 which grants the Lord Chancellor power to make orders prescribing the court fees payable in relation to county court matters.
At a hearing on 29 July 2022, Recorder Hansen considered the claimants’ application for relief from sanctions under CPR 3.10, within which they asked the court to (a) validate the step taken of presenting the Part 8 claim form in the manner in which it was presented, and (b) to issue that claim form with a deemed date of issue of 23 March 2022.
When considering the scope of CPR 3.10, Recorder Hansen noted that ‘rule 3.10 could not be used to circumvent the requirements of specific provisions in the CPR dealing with the same subject matter’. He further noted that ‘CPR 3.10 should be construed as of wide effect so as to be available to be used beneficially wherever the defect in question has had no prejudicial effect on the other party’. With reference to Steele v Mooney  EWCA Civ 96,  1 WLR 2819, he noted that caution must be taken to ‘ensure that remedying one party’s error will not cause injustice to the other party’ and to ‘ensure that the apparently wide scope of rule 3.10 does not cause unfairness’.
He determined that he did not have jurisdiction under CPR 3.10 to make the order sought by the claimants. He held that the court’s case management powers only come into effect when proceedings are commenced, meaning CPR 3.10 (and CPR 3.9) is only engaged once proceedings are issued, which had not happened in this case. He did not accept that there was an error of procedure under CPR 3.10, concluding that there was no breach of any rule, practice direction or court order, rather the obstacle in the claimants’ way was the expiry of the statutory limitation period.
Recorder Hansen considered that he could not consider the claim to have been issued on any date earlier than it was in fact issued, because the correct court fee had not been tendered. That would prove to be a fatal error unless he considered the difference between the court fee authorised and the relevant court fee applicable to be de minimus, which he did not consider to be the case.
However, Recorder Hansen held that, even if CPR 3.9 and 3.10 were in play, he would not have granted relief from sanctions due to the obvious prejudice against the defendant if he were to do so. The effect of granting relief would be to ‘dispense with a statutory limitation period in an area of the law where certainty is important and the statutory time limit is absolute’.
The claimants’ applications for relief from sanctions were therefore dismissed.
Recorder Hansen did however question the current state of the law in this area, commenting that he regarded ‘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’. He concluded by saying that he reached his conclusion ‘with no enthusiasm whatsoever’ and considered his judgment to be a ‘very harsh result’.
Permission was granted to appeal on 2 grounds; (1) that he had erred in law by defining ‘error of procedure’ too narrowly and by excluding the presentation of the claim form to the court for issue from that definition, and (2) as a consequence he had erred in declining to make an order under CPR 3.10 to correct the claimants’ error.
The claimants appealed on those two grounds, albeit the appeal focused on the first ground. The focus of the appeal (and the application before Recorder Hansen) was an application for an order under CPR 3.10. It was agreed that there was little scope for an order under CPR 3.9 given there was no sanction from which relief was sought.
The appeal came before Mr Justice Eyre who considered the primary question to be addressed to be whether or not the failure to pay the court fee which prevented the claim form from being issued was an error of procedure within the scope of CPR 3.10 and so one which the court had the power to remedy.
The claimants’ case was that Recorder Hansen had erred in law when defining ‘error of procedure’. They considered that CPR 3.10 was to be interpreted widely and that an error of procedure was not limited to post-issue matters and applied to steps taken in the pre-action stage too. They averred that sub-paragraphs (a) and (b) of CPR 3.10 were to be read separately.
The defendant’s case was that, although CPR 3.10 is to be interpreted widely, it cannot be interpreted in a way which would enable the court to set aside matters of substantive law laid down in statute. They averred that the failure to comply with a statutory limitation period is not an error of procedure, it is a matter of substantive law. They considered that that sub-paragraphs (a) and (b) of CPR 3.10 were to be read together.
No detailed consideration was given to whether the claim had been brought for the purpose of the limitation period, as the claimants had accepted that the lodging of the claim form together with the covering letter authorising the deduction of the lower, incorrect, court fee did not constitute the making of an application under Section 48(3) of the 1993 act, hence the need for their application pursuant to CPR 3.9 and 3.10.
Mr Justice Eyre concluded that the claimants’ interpretation of the meaning and effect of CPR 3.10 was rejected. He held that the error was not an error of procedure. He confirmed that CPR 3.10 is to be read widely, but that the rule must be read as whole and in context. Reference was made to Steele v Mooney  EWCA Civ 96,  1 WLR 2819 within which Dyson LJ held that the term ‘error of procedure’ is not to be given an ‘artificially restrictive meaning’ and that ‘procedural errors are not confined to failures to comply with a rule or practice direction’. However, Mr Justice Eyre concluded that he was ‘satisfied that properly interpreted an error of procedure for the purpose of rule 3.10 is limited to an error in procedure laid down by the CPR or potentially an equivalent procedure 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)’. It was held that, in this case, an error of procedure does not include a failure to pay a court issue fee where the requirement to pay that court fee derives from an order made by the Lord Chancellor.
Mr Justice Eyre expanded that, if relief were granted, the effect would be that (a) the claim form would retrospectively be regarded to have been issued on 23 March 2022, (b) the requirements of the Court Fees Order 2008 would retrospectively be regarded as having been satisfied, and (c) the effect of the 1993 Act would be reversed retrospectively.
It was concluded that Recorder Hansen was right in deciding that he did not have jurisdiction to grant relief and to dismiss the claimants’ application, but that if CPR 3.10 does not allow for relief to be granted in this situation then it is ‘immaterial whether the state of the law is or is not satisfactory’.
Mr Justice Eyre determined that ground 1 failed and so did ground 2, being dependent on ground 1. The appeal was dismissed.
This judgment is a stark reminder to practitioners of the issues that can arise when leaving the issuing of a claim form until the last minute. Mr Justice Eyre commented that the issuing of a claim form should not be left until the expiry of the limitation period as ‘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 the time period’. He further reiterated the need for practitioners to carefully check the applicable court fee when issuing proceedings, commenting that ‘the correct court fees are a matter of public record’ and 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’.
Emily Minton, Associate Solicitor at Sternberg Reed LLP.
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