Civil procedure – Relief from sanctions – Court fees – Appellant claiming damages against respondent in respect of building works – District judge finding in favour of appellant – Circuit judge allowing respondent’s appeal – Appellant appealing – Whether district judge having jurisdiction to try claim following appellant’s failure to pay trial fee – Whether appellant entitled to relief from sanctions – Appeal allowed
The appellant engaged the respondent to carry out building work at two buildings, known as the Gables and the Barn. Following completion of the works, the appellant issued two claims for damages against the respondent.
The claims came before a district judge. In each case, after giving substantive directions, the judge ordered that unless the appellant paid the court the relevant trial fee by a specified time and date, the claim would be struck out without further order and, unless the court ordered otherwise, she would also be liable for the costs which the respondent had incurred. Further, if the claim was struck out, it would no longer exist and the hearing would be vacated.
The order noted that there would be no further correspondence from the court office regarding payment of the fee or warnings as to the consequences of non-payment.
The district judge subsequently tried the claim relating to the Barn and gave judgment for the appellant for damages of £10,920 plus interest. The claim relating to the Gables had still to be tried.
The respondent’s appeal to a circuit judge succeeded on the ground that the district judge did not have jurisdiction to try the claim because it had been struck out for failure to pay the trial fee; and no application for relief against sanctions was before the court. The same applied to the claim relating to the Gables.
The judge accepted that, by CPR rule 3.7A1, if the trial fee notice was not complied with, the claim was ended; and no application had been made for relief from sanctions. The appellant appealed.
Held: The appeal was allowed.
(1) The judge found that nothing had been done which could unpick the effect of rule 3.7A1 because the rule was expressed in absolute terms and imposed an automatic sanction which was only capable of being “unpicked” by judicial order.
The Civil Proceedings Fees Order 2008 provided that where notice of a trial date or trial period was given by the court 36 days or more before the trial date or the Monday of the first week of the notified trial period, the trial fee was payable at least 28 days prior to the trial date or the Monday of the first week of the notified trial period. Where the court gave both a trial date and a trial period, the fee was payable by reference to the Monday of the first week of the notified trial period.
The payment of a court fee was, in essence, a matter between the court and the litigant who was liable to pay the fee. That litigant’s opponent had no real interest in precisely when the fee was to be paid. There was no reason why the court’s power to extend time under CPR rule 3.1(2)(a) could not validly extend time for compliance, thus deferring the operation of the sanction. In the present case, the trial fee notice was effective; and because the appellant failed to pay the fee on time, her claim was struck out automatically.
(2) It was not always necessary for a formal application for relief against sanctions to be made before the court had the power to grant such relief, although a formal application had been made to the county court in the present case following the judgment below; and both parties had filed evidence in support of and in opposition to the application. A three-stage approach was required: (i) Identify and assess the seriousness of the breach; (ii) Consider whether there was a good reason for the breach; and (iii) Consider all the circumstances of the case: Denton v TH White Ltd [2014] EWCA Civ 906, [2014] 1 WLR 3926 applied. Hyslop v 38/41 CHG Residents Co Ltd [2018] EWHC 3893 (QB), Alesco Risk Management Services Ltd v Bishopsgate Insurance Brokers Ltd [2019] EWCA Crim 1552 and Chalfont St Peter Parish Council v Holy Cross Sisters Trustees Inc [2019] EWHC 735 (QB) considered.
(3) In the present case, the appellant had explained that the failure to pay the court fee was inadvertent. The court had not complied with para 1 of Practice Direction PD 3B by notifying the appellant that her claim had been struck out, thus alerting her to the need to apply for relief against sanctions. The appellant said that had such notification been given, an application for relief against sanctions would have been made.
The original trial date had been vacated because of lack of court time, not because of the failure to pay the court fee. As the purpose of the trial fee was to throw onto the litigant part of the cost to the court service of providing the trial then that purpose was not, in the event, compromised.
Non-payment of the trial fee did not disrupt the orderly conduct of the litigation. Nor did non-payment of a trial fee generally have any direct impact on the opposing party. The court itself proceeded to give directions (and thus to cause the parties to continue to incur costs) on the basis that the claim had been reinstated. Both parties complied, more or less, with those directions. Thus, the appellant was led to believe, erroneously, that the claims were still on foot.
(4) Once the appellant was disabused by the judgment below of the belief that the claims had been reinstated, an application for relief against sanctions was made promptly. It would be disproportionate to invalidate the trial of that claim, and either cause both parties to incur further legal costs (some of which might be duplicated) or prevent the appellant from having her claims heard at all if, as seemed likely, both claims would be statute-barred. Moreover, the court would itself have to devote more time and resources to managing any new proceedings, with only partial recovery of the cost of doing so.
Any disadvantage to the respondent could not outweigh the disadvantages to the appellant if the claims were not reinstated. Accordingly, the appeal court had no hesitation in granting relief from sanctions, even though there was no formal application before it.
Navjot Atwal (instructed by W Davies & Son Ltd (t/a W Davies Solicitors), of Woking) appeared for the appellant; Stephen Goodfellow (instructed by Ventura Law Ltd) appeared for the respondent.
Eileen O’Grady, barrister
Click here to read a transcript of Boodia v Yatsyna
