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Cite as: [2013] EWHC 2845 (Ch)

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Neutral Citation Number: [2013] EWHC 2845 (Ch)
Case No: HC09C00480

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL
20 September 2013

B e f o r e :

THE HON MR JUSTICE HILDYARD
____________________

Between:
(1) ANTHONY JOHN PAGE
(2) TERENCE ALBERT PAGE
(as Administrators of the estates of Annie Harriet Page and Aubrey Wilfrid Page)


Claimants
- and -

(1) HEWETTS SOLICITORS
(2) CHRISTOPHER ROBERT FULLER

Defendants

____________________

Graham Platford (instructed by Cavershams Solicitors Limited) for the Claimants
Dan Stacey (instructed by Hewetts Solicitors for the First Defendant and by Henmans LLP
for the Second Defendant)

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

    Mr Justice Hildyard :

    Scope of preliminary issue, and its direction by the Court of Appeal

  1. The principal events to which the claims in this action relate took place in early 1999. The claims are for 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 in and about the sale of the principal asset of the estate of which the Claimants are administrators ("the common law claims"); and for dishonestly procuring or assisting in an innocent breach of trust by the First Claimant in advising him to sell that asset (his deceased parent's home at 262 Kidmore Road, Caversham, Reading, Berkshire, "262") at an undervalue to an entity associated with the Second Defendant ("the secret profits claim").
  2. Unsurprisingly, issues have arisen as to whether the claims are barred by the Limitation Acts. These issues have already travelled to the Court of Appeal. In consequence the common law claims originally advanced have been struck out: it was held at every level (by the Master, by Ms Susan Prevezer QC, sitting as a Deputy High Court Judge, and in the Court of Appeal) that the Claimants' common law causes of action (if any) accrued on the date of the sale of 262 on 12 March 1999, alternatively (and at latest on about 23 November 2000) by which time (at latest) the material facts giving rise to the claim were known to the Claimants and thus became statute-barred well before the claim was brought. Only the secret profits claims remain.
  3. The secret profit claims themselves give rise to a variety of issues as regards the Limitation Act 1980:
  4. (1) whether the claims were brought within 6 years of the last date on which the Claimants can have obtained sufficient knowledge of the material facts giving rise to the claims;
    (2) whether, if not, any secret profit received by the Defendants was trust property, such that by virtue of section 21(l)(b) of the Limitation Act 1980 no statutory limitation period applies.
  5. In the context of an application either for summary judgment or to strike out the claims, both the Master and Ms Prevezer QC answered both questions in the negative and concluded accordingly that the claims were barred and fell to be dismissed.
  6. There being no appeal against the factual finding that the Claimants knew sufficient about the sale at an undervalue to start time running in November 2000, the Court of Appeal concluded that the common law claims were time-barred and must be struck out.
  7. However, they reversed the decision of Ms Sue Prevezer QC (and Master Bragge before her) so far as it related to the secret profit claim. They did so on the basis that in that context, and although there was no challenge to the finding below that time began to run on the secret profits claim on 6 February 2003, the resolution of the first question required a factual analysis as to whether the claim had been "brought" within six years after that date, which could not be done summarily and required a trial.
  8. On that basis, the Court of Appeal preferred not to consider the second question unless and until it became necessary to do so: if, as a matter of fact, the secret profit claim had been "brought" within those six years, the second question (which raises difficult issues of characterisation, and the boundary between personal and proprietary bases of claim) would not arise, since no resort to section 21 of the Limitation Act 1980 would be necessary.
  9. Accordingly, the Court of Appeal adjourned consideration of the second question and directed a trial of a preliminary issue in a form calculated to answer the first question, namely:
  10. "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."
  11. If the answer to that preliminary issue is 'yes' then it will be unnecessary for the Court of Appeal to consider the application of section 21; if the answer is 'no' then (subject to one point later addressed) the matter will have to be remitted back to the Court of Appeal.
  12. Summary of conclusion

  13. In my judgment, the answer is 'no.' The purpose of this judgment is to explain that conclusion, reached after a one-day trial of the preliminary issue (which extended to cross-examination of the witnesses called at that trial).
  14. Relevant facts

  15. I do not think it necessary or appropriate to recite the background facts (or more accurately, the facts as they have been assumed to be for the purposes of the previous hearings). Those facts have been set out in paragraphs 2 to 8 of the judgment of Lewison LJ (with which the other members of the Court of Appeal, namely Smith and Laws LJJ agreed). The focus of the factual inquiry for the purposes of the preliminary issue is more limited:
  16. (1) when were the documents relied on by the Claimants as constituting their request to the court for the issue of their Claim Form actually received by the court?
    (2) were the documents received in good order for issue and accompanied by the appropriate fee?

    Many of the facts relating to these specific questions have already been addressed previously too. Furthermore, many are not contested. But I turn to address each of these matters in turn, having now had the benefit of further written evidence and also oral evidence and cross-examination on the limited areas of disputed fact (which those who have dealt with these issues in the past had not). It is also necessary to address certain matters not previously relied on by the Claimants, as identified below.

  17. The facts relied on by the Claimants in this context are set out in four witness statements of Robert Arthur Charles Last ("Mr Last"), the senior solicitor in the firm of Cavershams who has had the conduct of this matter for the Claimants since February 2007.
  18. Those witness statements seek to explain the difficulties in the conduct of the administration (including delay in arranging the retirement of the Claimants' predecessor as Administrator, a Mr Robert Watsham) which caused the Claimants (in the words of Mr Last) "to run perilously close to a possible limitation date, in December 2008"
  19. More particularly, Mr Last has there explained that it was not until 3 December 2008 that the Claim Form and Particulars of Claim were completed and (according to that evidence) then sent the same day in four bundles to Court by DX, with a cheque in the sum of 990 (that amount being of relevance in the context of the second question adumbrated above, to which I later return).
  20. Mr Last exhibited a copy of his covering letter to the Court Manager at the Royal Courts of Justice (dated 3 December 2008). That letter contained a request that the Claim Form be issued but not served, and returned to Cavershams so that they could effect service themselves in due course. This latter request (in capital letters) was made because at that stage Mr Robert Watsham was still in office and he was not willing for proceedings to be brought in his name: Cavershams therefore needed a bit more time to regularise that position, having (so they thought) protected the position as regards any limitation bar: the four months before service was required seemed necessary and sufficient.
  21. The court, for its part, has no record of having received any of those documents (including the cheque).
  22. Since the first crucial factual question that I must determine is whether that letter and its attachments were indeed ever received by the court (and, if so, when) it assists to set out Mr Last's evidence as to the steps taken in this case and, more generally, the procedure in his office for the sending of such documents in his own words:
  23. "7 I did not personally take the documents to the DX box and my firm keeps no positive record of committal to the DX but, if the documents had not been committed to the DX, they would have remained in the firm's offices: and they did not
    8. The experience in my firm is that papers committed to the DX before the close of business on any working day almost invariably arrive in the addressee's DX box the following morning. Accordingly, I believe that the claim form and letter of request was most probably received in the court office on Thursday 4th December 2008 and certainly no later than Friday 5th. We heard nothing from the court in the immediate future, but that did not surprise us because previous dealings in the Chancery Division, both enquiries made in this matter before issuing, and in other matters, was that one did experience very considerable delays. For example I telephoned the Chancery Division with a query on 1st May 2008, and followed up with a letter the next day (and again on 27th May, the Court having lost the first letter) and it was not until 23rd October, some five months later, that I received a substantive reply.
    9. However, by mid-January 2009, I felt I should enquire of the court where the sealed copies were, and the answer was that the court had no trace of them. A check with our accounts department confirmed that our cheque had never been presented, so we then cancelled that and issued a fresh cheque along with a further four bundles of documents. Those documents were copies of the documents sent on 3rd December 2008. Eventually the court sealed and issued this Claim on 17th February 2009. None of the missing documents has ever been returned to us, and normally documents not delivered by the DX system are returned within very few days."
  24. By a further witness statement (his third, dated 2nd April 2013) Mr Last confirmed that as at that date still no documents that he believes were sent to court on 3 December 2008 had been returned, and stood by his evidence that normally documents returned by the DX are returned very quickly (days not weeks).
  25. In his third witness statement (made after the hearing in the Court of Appeal, although entitled as if made in the context of the appeal) Mr Last elaborated on the arrangements within his firm at the relevant time for committing correspondence to the DX. Again, I think it assists to set out the salient parts in his own words:
  26. "2. Not only are we a small firm in terms of numbers employed (around 12 partners and employees), but at that stage we were also extremely compact in terms of the space occupied and the office layout We have now moved to larger premises, but at our old address, those three solicitors whose work entailed communication with the Court all worked within about 10 yards of 'the post tray'. This tray was kept behind our receptionist's desk, and solicitors would place their outgoing post in this tray once they had signed it. The same tray was used for Document Exchange letters and Royal Mail letters. Everyone knew that the official deadline for DX mail was 4.45pm in order to be in the DX box by their contractual deadline of 5.00pm. Normally collection was much later than that.
    3. At periods throughout the day, the receptionist would place correspondence in envelopes, checking that enclosures to go with a letter were in fact attached, and that nothing was attached which should not be. At this stage the receptionist would separate Royal Mail post and Document Exchange post into two separate piles. The Royal Mail post would then be fed through the franking machine, and the Document Exchange post rubber- stamped with the required identification.
    4. Our firm had the tremendous advantage of the DX box being in the same building as our offices. The walk from the receptionist's desk to the DX box consisted of around four yards through the office, down one flight of stairs, and then around a further 15 yards round the edge of our car-park to the room where the DX box was kept. There is and was no formality or paperwork connected with posting DX letters - the receptionist simply placed them in the one large box, along with correspondence from the other DX users of the Caversham exchange.
    5. Our receptionist could even see the arrival of the DX van if it came before we closed at 5.30pm. - but normally it came nearer 7.00pm. Our DX mail was always posted by the 5.00pm deadline, and on the two occasions when the van left before the correct time (5.00pm), I phoned the DX Head Office and insisted that he returned, which he did. Thus not only was the journey from the receptionist's desk to the DX box one of seconds rather than minutes, but because it was so close, and entirely within premises over which we had control, if by mischance something was dropped, it would be immediately obvious not only to the receptionist on retracing her steps, but to any of her colleagues going in and out of the building.
    6. My own office was the furthest from the posting tray, at around 10 yards, but nevertheless I was normally the one to lock up, and the locking-up routine included walking through the reception area. After this length of time I clearly cannot state that I checked the postal tray, but had I seen a DX letter which had not been committed to the Document Exchange, the likelihood is that I would have delivered it to the box myself "
  27. Mr Last also referred to a second supporting statement from his co-director, a Mr Minaar Badenhorst, another senior solicitor, who he said had had "identical problems with the Chancery Division" except that in that case the court did clear the cheque before apparently losing the papers, thus providing proof of initial receipt.
  28. In addition, Mr Last pointed out that his firm had moved offices in July 2012, and that
  29. "this was an extremely major occurrence for a firm of our size, and what it did mean was that papers which might perhaps have lain undisturbed somewhere would, in all likelihood, have been found and dealt with. The letter of 3rd December and the Claim Forms [sic] were most certainly not found on that occasion."
  30. In a witness statement also dated 2 April 2013, Ms Susan Lorraine Nutley ("Ms Nutley"), who was the receptionist for Cavershams from August 2005 until she retired from paid work in October 2010, confirmed the accuracy of Mr Last's description of the postal system as she had operated it when at Cavershams. She added:
  31. I have no doubt whatsoever that, if the letter and contents were put in the posting tray, I would have placed them in the correct sized envelope, sealed the enveloped [sic] and stamped it with our identification stamp, as is required by the Document Exchange system. Had I been aware of any communication being returned, either by the DX system or the Royal Mail, I would give that item back to the solicitor who had produced it."
  32. In answer, the Defendants filed evidence in the form of two witness statements made by Mr Oliver James Kew ("Mr Kew"), one on 20 April 2010 and the second (which was handed to me at the hearing before me) on 19 April 2013. At the time of his first statement Mr Kew was a trainee; by the time of his second statement Mr Kew had become an assistant Solicitor. Mr Kew's evidence was almost entirely based on his description of discussions with administrative personnel within the court system.
  33. The principal features of the system operated within the Chancery Division Registry of which he gave this hearsay evidence in his first witness statement were as follows:
  34. "4. On 26 March 2010, I telephoned the Chancery Division of the High Court of Justice Registry Office to enquire as to exactly how they sort and log incoming post. I was told the following. All post, DX and faxes are handled in the same way. Occasionally there is a one-day backlog, but regularly all incoming correspondence is dealt with on the day of arrival. All correspondence letters are placed directly onto the computer records at the Office within the Courts [sic] computerised case management system. All documents (such as application forms) are logged in a daily logbook before being sent to the relevant department for actioning, where they are then also added to the computer records. All cheques are logged in a separate daily logbook before being sent to another department to be cashed.
    5. Therefore, I believe that the very first action the Chancery Registry takes on receipt of either a cheque of document is to log it in a daily logbook."
  35. He also reported a subsequent conversation with "Helen" in the Chancery Registry confirming that (as he had requested) she had looked through the logbooks dated December 2008 for confirmation of receipt of either the Claim Form or the accompanying cheque and had found no record of either. He further stated that she had confirmed that the first document on the computer records was of a Claim Form being received in early February, with what she apparently described as an incorrect figure on the accompanying cheque; and that thereafter, following further correspondence, the correct fee was paid, whereupon the Claim Form was sealed and issued.
  36. In addition, Mr Kew stated that he had later spoken to another person at the Chancery Registry, "June", who checked the logbooks for both December 2008 and January 2009, and confirmed there was no record of receipt. By letter to Cavershams dated 1 April 2010, Miss June Stewart, Section Manager at the Chancery Registry, confirmed that she had checked "our fees records from 3rd December 2008 and can confirm that no documents or cheque were received by the Chancery Registry in the above matter during the month of December 2008".
  37. In his second witness statement (dated 19 April 2013) Mr Kew updated his evidence as follows:
  38. "4. On 15th April 2013 I spoke with Mr David Lomax, who works as an administration officer in the File Management Department of the Chancery Section of the Royal Courts of Justice. I discussed with him the Court's procedure generally, as well as the specific Court records of this particular claim, and was told the following.
    5. Mr Lomax had retrieved the paper file for this matter from the Chancery records department. The file revealed that the first time the Registry received a claim form in this matter was 6th February 2009. There was a shortfall of 400 on the accompanying fee. On the 10th February 2009 someone from the Issue Department phoned Cavershams Solicitors and informed them of the shortfall. This shortfall was then received on 17th February 2009, and it was on that date that they sealed and issued the claim.
    6. The Court's current computer file contains less information, it merely states that the appropriate fee was received on 17th February 2009, and the claim issued on that date.
    7. I was told that if the Registry receives a faulty' claim (I.e. the claim form is incorrect, the particulars are incorrect, or the appropriate fee is not enclosed) then normally the entire application is returned to the potential claimant with a letter explaining the nature of the defect. In this instance and Mr Lomax was not able to discern the reason why from the file - the Registry instead had elected simply to call Cavershams Solicitors to inform them of the problem.
    8. Mr Lomax confirmed to me that the first date on which the claim I was capable of being issued was the 17lh February 2013."
  39. The last instalment of the parties' written evidence that I should mention is Mr Last's fourth witness statement made on 22 April 2013, in which he sought to explain his approach in calculating the appropriate fee to be 990. This was based on his belief that there was a single claim for the recovery of a single, albeit unquantified, sum of money, which he limited to 200,000 based on the information which he had at that stage. He sent the same sum (of 990) when he sent in the duplicate set of papers on 4 February 2009. He explains that, when Mr Lomax telephoned to say that the correct fee was 400, he did not argue, for fear of further delay.
  40. Lastly, as to the evidence, I should also, for comprehensiveness, record the text of a note from the Chancery Operations Manager provided to Master Bragge (and also recorded in his judgment at paragraph 48) describing the following aspects of internal procedure (stated to be current at the relevant time and still current as at February 2011):
  41. "All post is delivered in the post room and then is sorted out by the post room staff for the area that it should go to i.e. we receive our post bag via post room and is then opened by our team. The post openers open the post and if they come across any fee paid documents for eg a claim form, the fee will be logged on the Chancery Registry fee sheet, and the document would be stamped with the amount received, then hand delivered to Chancery Registry for issuing."
  42. Such was the state of the written evidence (apart from exhibits comprising correspondence, none of which I need further cite). Each of those who provided witness statements, except Mr Badenhorst (who was not required to attend since his evidence was accepted), was called and was cross-examined.
  43. I have to say that, to my mind, and however necessary, the process did not elucidate matters materially, still less provide anything approaching a conclusive answer to the factual issue raised. The witnesses did their best honestly to assist me; but Mr Last and Miss Nuttley were unable to say more than what they believe they would usually have done, and were unable to remember with any conviction or clarity what in fact they did do in the specific, isolated incident (unsurprisingly perhaps in view of the lapse of time); and Mr Kew's evidence was, as noted above, based on what he had been told: he had no personal experience of the workings in the Chancery Division Registry, and his own practice was largely in County Courts.
  44. At most, in my view, the process confirmed, and to some extent gave greater prominence to, omissions or shortcomings in the procedures at Cavershams both in general and in the specific case, in such a way as to tend further to undermine confidence that what was meant to happen had happened. More particularly, and as highlighted in the cross-examination of Mr Last, there remained gaps, including the failure to adduce any evidence as to who printed out the letter and Claim Forms; the apparent omission on the part of Mr Last and his colleagues to undertake a full and specific search once it became plain that the documents had gone astray; the failure at the time to make any enquiries of the DX; and (perhaps most notably) the apparent absence of any log or record within Cavershams for documents (however important) put into the DX.
  45. Against that, it is only realistic to note, as did Lewison LJ in his judgment in this matter (at paragraph 25), that "it is, alas, not unknown for the court to fail to follow the systems that should have been followed; and to mislay important documents".
  46. Analysis and resolution of factual issues

  47. All this adds to the difficulty of resolving a factual dispute as to what happened to a bundle of documents said to have been sent via DX some four years ago. The task of establishing where a slip occurred, as between (a) a solicitors' firm (b) the DX and (c) the Court Registry, is not only invidious but in truth unachievable, and in great danger of being dislocated by some particular, but possibly unrepresentative, experience or prejudice. But since the court is never to be confounded I set out my approach and conclusions below.
  48. It is made plain in the judgment of Lewison LJ in the Court of Appeal (see especially paragraph 38) that it was, at this full trial of the preliminary issue, for the Claimants to establish, on the balance of probabilities, that they had done all that was required of them in terms of delivering to the court office the Claim Form, accompanied by a request for issue and the appropriate fee. Upon proof of that to the requisite standard, any delay should not rebound to the disadvantage of the litigant. But the burden was and is on the Claimants to show that they had indeed done what was required of them.
  49. The risk of non-persuasion, in other words, lay on the Claimants or in reality their solicitors. Had Cavershams a record of posting or delivery, or firm proof of delivery into the DX of the particular documents, this risk would have been overcome. Without such a record, and having regard to the gaps and frailties of the evidence, and the uncertainties inherent in the passage of time when there is no contemporaneous documentary record, the risk is real and uncovered.
  50. In my judgment, the Claimants have not discharged the burden upon them: they have not persuaded me that it is more likely than not that the documents claimed to have been sent on 3 December 2008 arrived at the court and went astray there. Put shortly, Cavershams had no system to record sending; the court does have a system of recording receipt, and none is shown. Nothing the witnesses have said is such as to displace these basic points, I note in passing (though it has not influenced my own approach) that both Master Bragge and Miss Prevezer QC came to the same factual conclusion. I conclude and hold that this matter must be resolved on the basis that the required documents were not received, and the Claims cannot be said to have been brought, before (at the earliest) the 5th or 6th February 2009.
  51. Claimants' reliance on documents sent on 4th February 2009

  52. I turn next to consider the question whether the documents which it is common ground were received by the Registry of the Chancery Division on 6 February 2009 (the evidence of Mr Kew to this effect having been accepted by the Claimants) were filed in time.
  53. The Claimants contend that the documents were thus received, and the secret profit claims were thus "brought" in time. They submit that if (as appears to have been accepted at all previous stages) time began to run for the secret profit claim on 6 February 2003 (see, for example, paragraph 18 of Lewison LJ's judgment) receipt on the 6 February 2009 was in time; and that in point of fact the required documents may have been received at court on 5 February 2009, since it is likely to have taken some time for them to be sorted and delivered on to the Chancery Registry.
  54. It is right to record at the outset of this explanation of my views on this issue that this point was first advanced by the Claimants in their Skeleton Argument dated 20 April 2013, after receipt of Mr Kew's second witness statement. Until then, the Claimants had based their case on (a) receipt of the 3 December 2008 documents and (b) the proposition that they could rely on the "lost" Claim Form as bringing forward the date on which the action was brought, even though the Claim Form was only issued after and because of the documents received on 6 February 2009 (see, for example, paragraph 28 of Lewison LJ's judgment). Counsel for the Defendants submitted that this sudden change of tack was opportunistic and "genuinely prejudicial" since the Defendants had not previously had any reason to argue in support of a date for deemed knowledge of the secret profit claim earlier than 6 February 2003, and would have had strong factual support for an earlier date had it been perceived to be important. Counsel pressed me to exclude this new way of putting the case, at least without affording the opportunity of an adjournment. Given the late notice of the point, and the fact that the trial slot had been reserved and the witnesses were ready, I decided to proceed on the basis of 6 February 2003 being the start date, but to allow further argument if the point became a deciding one.
  55. I note as to this that the Defendants would have an uphill task in persuading the court to re-open this aspect of the matter: the premise of the Court of Appeal's approach in directing the preliminary issue was the assumption that the relevant date was indeed 6 February 2003, and that this was not contradicted or challenged by the Defendants (see paragraph 18 of Lewison LJ's judgment). But equally the Claimants would have difficulties in arguing for any date of receipt earlier than 6 February 2009, for analogous reasons.
  56. Were the February 2003 documents received in time?

  57. On that basis, the real issue for present purposes is whether receipt by the court of the relevant documents and appropriate fee on 6 February 2009 was in time. The Claimants rely in this regard on Pritam v S. Russell & Sons [1973] 1 QB 336 (CA) at 337F, 348C-F, 350C and 365F, approving Marren v Dawson Bentley & Co Ltd [1961] 2 QB 135, for the proposition that the first day after the event is not counted, so that time expired at the end of 6 February 2009. Counsel for the Defendants did not really have any answer to this; and I would be disposed to accept it as correct.
  58. Accordingly, subject to the question of costs, the matter would fall to be resolved by reference to the Claimants' new case, and, if the documents received on 6 February 2009 were complete, in the Claimants' favour despite their failure on the points they had run previously and by reference to which the Court of Appeal directed this preliminary issue. As indicated above, if that were the deciding point, I would be disposed to invite further argument on the Defendants' real desired response, which would be that in point of fact, time should be treated as having started to run earlier.
  59. Were the documents accompanied by the appropriate fee?

  60. However, and as is implicit above, there is a further point to consider: that is, whether the documents received were complete, and in particular whether they were accompanied by the appropriate fee. Inclusion of the appropriate fee (or, it seems, a solicitors' cheque in the right amount) was identified by the Court of Appeal as being an essential requirement (see, for example, paragraph 38 of Lewison LJ's judgment).
  61. Was 990 (which Cavershams sent with each set of bundles) the appropriate fee? Or was the appropriate fee 1390 (as the Chancery Registry considered, and as eventually paid by Cavershams on or about 17 February 2009)?
  62. This turns on the construction of the Civil Procedure Fees Order 2008/1053 as in force in November 2008 and February 2009 ("the Civil Fees Order 2008"). In particular, it depends on whether the Claim Form is to be treated as a claim to recover a sum of money where the sum claimed "exceeds 150,000 but does not exceed 200,000" (thus falling within paragraph 1.1(k) only of the Civil Fees Order 2008) or whether the inclusion of a claim for an account of profits also brings it within paragraph 1.4 of that Order as "proceedings for any other remedy."
  63. It will be recalled that when the Claim Form was issued it comprised claims both under the common law (for damages for breach of a contractual retainer and negligence) and in equity (the secret profit claims). The prayer for relief seeks damages (presumably in respect of the common law claims), equitable compensation (for breach of fiduciary duty and/or dishonestly assisting in a breach of trust) and an account of profits (perhaps oddly described, since really the claim must be for profit from the sale of 262) as profits made by the Defendants from and as a result of their retainer in about early 1998.
  64. The question can, I think, therefore be recast as whether the claims in equity, and especially the claim for an account, are to be described simply as claims to "recover a sum of money" (paragraph 1.1(k) of the Costs Fees Order 2008) or constitute "a non money claim" (paragraph 1.5).
  65. Counsel for the Claimants submitted that the claims for enquiries and accounts are not properly characterised as additional non money claims, but merely "some of the means by which Cs sought to recover a sum of money, just as assessment of damages was a means of recovering a sum of money". He prayed in aid section 21(1) of the Limitations Act 1980: "No period of limitation prescribed in this Act shall apply to an action by a beneficiary under a trust, being an action.. .(b) to recover from the trustee trust property or the proceeds of trust property"; he submitted that this demonstrated that a claim under a trust to recover trust property or its proceeds is nonetheless a claim to recover a sum of money. Counsel also submitted that it would be odd (and cannot have been intended) that a claim for common law damages should cost 990, whereas an equitable claim should cost 1390, just because a claim for an account is pleaded.
  66. Counsel for the Defendants rejected this analysis, and the description of an account as merely the equitable counterpart of the common law assessment of damages, as false and simplistic. He submitted that an assessment of damages is necessarily ancillary or appendant to a claim for damages; whereas a claim for an account may be (and indeed commonly is) self-standing. He submitted further that an account may be ordered regardless of whether or not sums of money are said to be owing, and the outcome of the account may lead to the assertion of a proprietary remedy rather than a pecuniary one. As he put it, an account is not simply an assessment of loss or a claim for money; it is a procedure: or in other words, as stated in Ultraframe (UK) Ltd v Fielding & Ors [2005] EWHC 1638 (Ch) at paragraph 513:
  67. "The taking of an account is the means by which a beneficiary requires a trustee to justify his stewardship of trust property."
  68. Counsel for the Defendants additionally prayed in aid a predecessor Fees Order, the Supreme Court Fees Order 1980 (which was replaced by the Supreme Court Fees Order 1999, which was then replaced by the present Civil Fees Order 2004) which expressly provided for the payment of an additional amount (30) where a hearing took place for an inquiry or assessment of damages.
  69. Finally, Counsel for the Defendants emphasised that it was indeed the present practice of the Chancery Registry (as exemplified in the present case) to require the additional fee where a claim for an account is claimed in addition to a money claim or claim for damages: and this provided a welcome, and indeed appropriate and necessary, "bright line rule".
  70. I have not found the Civil Fees Order 2004 easy to construe; and, for example, the provision for such a marked distinction between a case where a claim for money is additional to a non money claim (for which fees under both paragraph 1.1 and 1.5 are payable) and, on the other hand, a case where a claim for money is alternative to a non money claim (for which the fee payable in the High Court is only that prescribed by paragraph 1.1 and not 1.5, though in the County Court whichever is the greater is payable) is, to my mind, quite difficult to follow.
  71. However, in agreement with the Defendants, I have concluded that in this case the Claim Form included both a claim for money (by way of damages or equitable compensation) and an additional non money claim (for an account of profits), so that the Chancery Registry was correct in its view that the fee accompanying the request for the issue of the Claim Form was insufficient by 400.
  72. Although not persuaded by his reference to the Supreme Court Fees Order 1980, I accept and agree with the reasons provided by Counsel for the Defendants as above adumbrated. I would add that a claim for an account is a separate and discretionary equitable remedy, calling for an additional assessment and inquiry by the court and the exercise of an additional and discretionary equitable jurisdiction: there is an analogy, as I see it, with a claim for an injunction, for which an additional fee to that payable for a claim for money would be payable.
  73. It is, in a way, concerning that the fate of a claim should depend upon the miscalculation by such a relatively small amount of a court fee. I have considered whether it is so de minimis that the Court should not take it into account, or make some exception or allowance.
  74. However, as I read Lewison LJs judgment in the Court of Appeal, the rationale of treating the receipt by the court of the required documents as sufficient and as transferring to the court the risk of loss or delay thereafter (see paragraph 31 of Lewison LJ's judgment) is that it is unfair to visit such risk on a claimant after he has done all that he reasonably could do to bring the matter before the court for its process to follow. Lewison LJ expressly described what had to be established by the Claimants: that the claim form was (a) delivered in due time to the court office, accompanied by (b) a request to issue and (c) the appropriate fee. In my judgment, the failure to offer the appropriate fee meant that the Claimants had not done all that was required of them; and they had left it too late to correct the error, which was a risk they unilaterally undertook.
  75. Disposition

  76. Accordingly, I have concluded in the round that the claim was not "brought" within the time period permitted, unless section 21 of the Limitation Act 1980 applies.
  77. That (the question, if it arose, as to the application of section 21), of course, is the matter reserved by and presumably to be remitted to the Court of Appeal.
  78. In such circumstances, and so that if the matter must travel once more to that court all points on limitation can be dealt with at the same time, I shall hear argument and seek to determine whether the Defendants should have been permitted to re-open the question as to the date on which the Claimants first obtained sufficient knowledge of the secret profits claim (presently assumed to be 6 February 2003). That should enable the Court of Appeal finally to dispose of these issues under the Limitation Act 1980. I shall give directions through my clerk for such matters as exchange of Skeleton Arguments, as well as the determination of costs.
  79. In the meantime, I note from the Claimants' Skeleton Argument for the preliminary issue that there had been agreement for mediation. The costs of these arguments in the foothills of the case, and before the main climb, must already be considerable. I urge all parties to re-consider a negotiated solution, prompted by mediation, as the means of saving disproportionate costs.


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URL: http://www.bailii.org/ew/cases/EWHC/Ch/2013/2845.html