Civil practice and procedure – Issue of proceedings – Limitation – Claimants issuing proceedings against defendants concerning house refurbishment – Defendants applying to amend defences to plead limitation – Whether proposed amendments having real prospect of success – Whether claimants’ failure to pay correct fee when issuing proceedings preventing time from continuing to run for purposes of sections 2 and 5 of the Limitation Act 1980 – Applications dismissed
The claimants owned and lived in a house in Hambledon in Hampshire. From 2007 they wanted to carry out substantial refurbishment works. To that end they engaged the first defendant to act as architect and the second defendant as M&E Consultants. The third defendant was the principal or guiding light of the second defendant. The refurbishment of the house did not go smoothly and the defendants’ appointments ended. On 23 December 2010 solicitors acting for the claimants wrote a pre-action letter of claim to the first defendant, alleging negligent advice that it would be more economical for the first defendant to charge on an hourly basis rather than on the basis of a percentage of the cost of the works. The letter alleged that the difference between the fees the claimants would have had to pay adopting a percentage-based calculation and the fees they actually paid on the hourly basis of calculation was £35,894.78 inclusive of VAT and it claimed that sum as damages for misrepresentation. The letter also made generalised assertions that the defendants had acted in breach of contract and negligently in the performance of its services during the course of its retainer.
The defendants subsequently applied to amend their defences to plead limitation. The central tenet on which the applications were based was that, because the claimants paid insufficient fees to the court, the proceedings that the court issued did not stop time running for the purposes of sections 2 and 5 of the Limitation Act 1980. The effect was that the whole of the claimants’ claim against them, including the misrepresentation claim for which (if taken on its own) the fee paid would have been correct, was statute barred. None of the defendants alleged that the claimants’ behaviour was abusive procedural conduct.
Held: The applications were dismissed.
(1) Assuming that the claimant’s behaviour was not abusive, the fact that the claimant hoped or intended to bring a claim which could not be either articulated or quantified at the time of the issuing of proceedings should not require payment of the fee that would have been payable if it had been articulated or quantified. It was common experience that a claimant would issue a claim form when he was able to articulate and quantify one claim or one aspect of a claim but not others, even though he hoped and intended to bring them when he could. In such a case it was both conventional and proper for the claimant to protect himself by including general words which, he hoped, would be sufficient to be a vehicle for the further claims or quantification if they could subsequently be pleaded. If and when the further claims or quantification could be pleaded, further fees might become properly payable. Accordingly, “the appropriate fee” was the fee required by the relevant order which was to be determined by reference to the claim or claims articulated in the claim form (and, if issued simultaneously, the particulars of claim). In the absence of abusive behaviour, it was not to be determined by reference to claims which were articulated later, whether or not the later claims were ones which the claimant hoped or even intended to bring later at the time of issuing proceedings: Page v Hewetts [2012] EWCA Civ 805 considered.
(2) In a case where it was not alleged that a claimant’s failure to proffer the correct fee was abusive procedural conduct, might be split into two periods: In the period between when the claimant submitted the claim form and proffered the inadequate fee and when the court issued proceedings, the failure to proffer the correct fee would prevent the conclusion that the action has been “brought” for the purposes of the Limitation Act 1980 before the moment that the Court issues the proceedings. However, once the court issued the proceedings, the mere fact that the fee proffered by the claimant and accepted by the court was less than should have been proffered and accepted for the claim identified in the claim form or became so because of a subsequent increase in the quantum of the claim advanced in the proceedings did not prevent the action from being “brought” for the purposes of the Limitation Act 1980 when it was issued by the court: Bhatti v Ashgar [2016] EWHC 1049 (QB) not followed. Lewis v Ward Hadaway (a firm) [2015] EWHC 3503 (Ch); [2016] PLSCS 3 distinguished.
(3) The central tenet of the present applications, that a party which failed to pay the correct fee when issuing proceedings therefore failed to prevent time from continuing to run both before and from the time when proceedings were issued, was without foundation either in the statutory regime requiring the payment of fees to the court or in authority. Subject to the question of abusive conduct, that was so whether or not a claimant knew or ought to have known that the claim it was bringing or would bring in the future was one for which the court could (and under the fees regime should) demand a higher fee. The failure to distinguish between the periods before and from the time when proceedings were issued was wrong in law. Accordingly, the proposed amendments, if allowed, had no real prospect of success.
Tom Owen (BPL Solicitors Ltd) appeared for the claimants; Krista Lee (DWF LLP) appeared for the first defendant; Daniel Goodkin (instructed by Beale & Company Solicitors LLP) appeared for the second and third defendants.
Eileen O’Grady, barrister
Click here to read transcript: Dixon and another v Radley House Partnership (a firm) and others
