No fee, no win: risk of last minute claims (Page v Hewetts)

No fee, no win: risk of last minute claims (Page v Hewetts)

DR analysis: The High Court ruled that the claimants failed to do all that was required to commence proceedings before the limitation period expired. The onus is on the claimants to ensure that documents to be filed at court are properly delivered and correct. The claimants’ papers went astray and were not received by the court. Absence of proof of delivery and the incorrect fee delayed the commencement of proceedings such that the limitation period expired, subject to the application of s 21 of the Limitation Act which remains (in this case) to be determined by the Court of Appeal.

Practical implications

This case reminds practitioners to keep adequate records of documents sent out, particularly when issuing proceedings or filing other documents with the court. If not filing documents in person, you ought to check that the documents have been received and recorded by the court in a timely manner, especially where a time limit is approaching. You should also note the importance of including the correct court fee with the relevant papers and, if you are unsure, confirm the required fee with the court.

Court details

• Court: High Court, Chancery Division
• Judge: Mr Justice Hildyard
• Judgment date: 20 September 2013


Facts of the underlying case:

The Claimants were the sons and administrators of their parents estates and principal beneficiaries under their wills. They brought proceedings against Hewetts Solicitors, the First Defendant, and a legal executive employed by Hewetts, the Second Defendant, (the Defendants). The Defendants were retained to advise and act for the Claimants in the administration of their parents' estates; this included selling a property (the Property). Unbeknown to the Claimants the Second Defendant carried on business as a property developer and entered into an agreement with a prospective purchaser whereby he would receive an 'introduction fee' in relation to the development of the property. He subsequently sold the Property on the Claimants' behalf for a sum they believe was below the true market value. The Claimants later discovered the true value and wrote to the Office for the Supervision of Solicitors (the OSS). They later issued proceedings against the Defendants; claims were for an account and payment of profits made by the Defendants as a result of their retainer and compensation for breach of fiduciary duty and for dishonestly assisting a breach of trust.

The claims of this case fell into two categories:

• breach of the duties owed in contract and/or tort by the First Defendant (a firm of solicitors) and the Second Defendant (a legal executive in that firm) when acting on the sale of a property from the estate of which the Claimants are administrators ('the common law claims'), and
• dishonestly procuring or assisting in an innocent breach of trust by the First Claimant in advising him to sell that property at an undervalue to an entity associated with the Second Defendant ('the secret profits claim')

In September 2011, the High Court summarily ruled that the claims were time-barred and ought to be dismissed. In June 2012, the Court of Appeal upheld the High Court’s ruling in relation to the common law claims. However, the Court of Appeal reversed the decision relating to the secret profit claim.

In reaching its decision, the High Court had considered:

• whether the claims were brought within six years of the last date on which the Claimants could have obtained sufficient knowledge of the material facts giving rise to the claims, and
• whether, if not, any secret profit received by the Defendants was trust property, such that by virtue of section 21(1)(b) of the Limitation Act 1980 no statutory limitation period applies.

The Court of Appeal found that to answer the first question required a factual analysis, which could not be determined summarily. Accordingly, the Court of Appeal ordered a trial on the following preliminary issue: ‘on the assumption that the limitation period of six years began to run on or about 6 February 2003, whether the proceedings were brought within the limitation period.’

The instant proceedings therefore focused on the following:

• when were the documents relied on by the Claimants requesting the issue of the claim form actually received by the court?
• were the documents correct and accompanied by the appropriate fee?
The key issue in relation to limitation turned on the whether the documents commencing proceedings sent by the claimants' solicitors were received by the court, together with the correct fee before the limitation period had expired.

Is sending the request for the issue of a claim form sufficient?

No. The claimants purportedly sent the documents to court by DX. The claimants' solicitors had no system to record sending documents and they were not recorded as having been received by the court. The court found the claimants had failed to discharge the burden of proof to show that it was more likely than not that the documents had arrived at the court. The court did have a system of recording receipt and none was shown.

Accordingly, the matter had to be resolved on the basis that the required documents had not been received and the claims could not be said to have been brought until the documents were eventually re-filed.

No fee, no win

The claim form filed in February included both a claim for money and an additional non-money claim. The judge held that the Chancery Registry had correctly determined that the fee accompanying the request for the issue of the claim form had been insufficient by £400. The correct fee was not remitted until 17 February 2009. The failure to pay the appropriate fee meant that the claimants had not satisfied all the requirements to commence proceedings before the limitation period expired.

The claim had therefore not been brought within the time period permitted, unless s 21 of the Limitation Act 1980 applied. This question was a matter reserved by, and to be remitted back to, the Court of Appeal.

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