FAILURE TO COMPLY WITH CIVIL PROCEDURE RULES AND PAY CORRECT COURT FEE CAN (BUT DIDN’T) LEAD TO AN ACTION BEING STRUCK OUT
In Udeshi & Ors v Sieratzki [2021] EWHC 213 (Ch) Master Kaye considered an argument that a failure to pay the correct fee, and other breaches of the CPR, should lead to an action being struck out. Given that the errors did not amount to deliberate wrongdoing the Master was doubtful whether this, alone, could lead to the action being struck out.
“I agree with Mr Lloyd that the incorrect fee has been paid. The balance of authority weighs in favour of payment of the wrong issue fee alone not invalidating proceedings in the absence of deliberate wrongdoing. I am not persuaded there was deliberate wrongdoing given Mrs Udeshi’s explanation. If the proceedings were to be allowed to proceed the additional fee would, however, have to be paid.”
THE CASE
The defendants applied to strike out an action brought by the claimants. The action was struck out on several grounds. The Master considered the Defendant’s argument that the action should be struck out because of a breach of the Civil Procedure Rules. An application on this basis alone would not have succeeded.
THE JUDGMENT ON BREACHES OF THE CPR
Failure to comply with the CPR
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For completeness I consider Mr Lloyd’s submissions in relation to what are said to be breaches of the CPR. A failure to comply with the CPR can also be a basis for striking out in its own right in some circumstances or can be an additional factor in considering an application under CPR3.4(2)(b). It would form part of the consideration of all the circumstances in the exercise of the court’s discretion.
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Mr Lloyd reminded me that the Claimants had served the claim on the Saturday before the claim form expired without any pre-action correspondence or a response pack. The Defendant believed this was deliberate in the hope that he would not respond in time. However, service was in time and the Defendant did respond. The Claimants took a risk serving so late, but they were not out of time. The absence of a response pack though an omission was not fatal to service of claim.
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Mr Lloyd did identify the failure to pay the correct issue fee. The Claimants paid an issue fee of £528.00. Mr Lloyd argued that the fee paid by the Claimants was deliberately too low and the correct fee was £10,000. This had not been addressed by Mr and Mrs Udeshi prior to the hearing even though it has been raised in the Defendant’s first application dated 11 August 2019.
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Mrs Udeshi explained that when issuing the claim she paid what she understood to be the correct issue fee. She explained that when she was told that the claim attracted the higher fee, she contacted Mr Hodgkin who spoke to the issue clerk after which Mrs Udeshi was told that if she deleted the damages claim on the claim form, an issue fee of only £528 would be payable. She therefore deleted the damages claim to avoid the higher £10,000 court fee which she candidly explained she could not pay.
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Where it can be shown that a party has deliberately sought to pay the wrong issue fee that can properly be a basis for considering the strike out of a claim. Here however, in light of Mrs Udeshi’s explanation it appears clear that the failure to pay the £10,000, though deliberate, was not intended to avoid payment of the correct issue fee. In those circumstances I am not satisfied that the failure to pay the £10,000 can be said to be deliberate in a culpable sense that would attract the sanction of strike out.
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I will therefore dispose of this point shortly. I agree with Mr Lloyd that the incorrect fee has been paid. The balance of authority weighs in favour of payment of the wrong issue fee alone not invalidating proceedings in the absence of deliberate wrongdoing. I am not persuaded there was deliberate wrongdoing given Mrs Udeshi’s explanation. If the proceedings were to be allowed to proceed the additional fee would, however, have to be paid.
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