Penfold v Fuller

This case was listed before me today for cause to be shown as to why the case should not be struck out for non-payment of fees. The fees have subsequently been paid, but the parties dispute who is liable for them.

The background is that the person identified in the proceedings as the Claimant, Mrs Louisa Penfold, and the person identified in the proceedings as the Defendant, Mr Tommy Fuller, are brother and sister. They inherited Rose Cottage, Blackness Road, Crowborough, East Sussex from their father, Thomas Fuller. Thomas Fuller died on 28th December 2004 and probate was granted on 12th January 2006. Mrs Penfold and Mr Fuller held the property as joint tenants in equal shares.

Mrs Penfold brought a claim on 1st March 2007 by the Part 8 procedure, seeking an order for the sale of the property. That claim was compromised by the parties through the mechanism of a Tomlin Order of Master Bowles dated 9th January 2008. The Schedule to the Tomlin Order contained an agreement between Mrs Penfold and Mr Fuller whereby Mrs Penfold agreed to purchase Mr Fuller’s interest in the property for the sum of £500,000. In addition, the agreement provided that Mrs Penfold should pay £15,000 towards Mr Fuller’s costs, payable on completion. The agreement incorporated the Standard Conditions of Sale (Third Edition) with two minor variations. The agreement expressly provided that it was in full and final settlement of the proceedings between the parties.

Under the agreement, completion was to take place on 8th July 2008. Mrs Penfold did not complete on that date. On 14th July 2008, Mr Fuller served a Notice to Complete on Mrs Penfold. That notice expired on 28th July 2008. Just after expiry of the notice, Mr Fuller applied by an Application Notice dated 24th July 2008, but actually only issued on 31st July 2008, for an order that the proceedings be restored for the purposes of carrying into effect the terms of the Schedule to the Tomlin Order and for orders amounting to specific performance of the agreement contained in the Schedule to the Tomlin Order.

Subsequently, on 4th December 2008, Master Bowles made directions by consent which recited that the Claimant (i.e. Mrs Penfold) had not completed the purchase of the property and provided that she should serve Points of Claim so as to plead all matters relied upon (a) in opposition to the Defendant’s (i.e. Mr Fuller’s) application, and (b) in support of the Claimant’s claim that the Defendant was in breach of the terms of the order of 9th January 2008. The order also provided for the Defendant to serve Points of Defence, for disclosure, witness statements, a jointly instructed soil expert and for trial to take place between 1st May and 31st July 2009.

The matter was placed in the dismissal list as a consequence of the non-payment of two fees due under the Civil Proceedings Fees Order 2008. Schedule 1 provides for the payment of fee 2.2. in the sum of £100:

“On the claimant filing a pre-trial check list (listing questionnaire); or where the court fixes the trial date or trial week without the need for a pre-trial check list, within 14 days of the date of despatch of the notice (or the date when oral notice is given if no written notice is given) of the trial week or the trial date if no trial week is fixed.

Fee 2.2 is payable by the claimant except where the action is proceeding on the counterclaim alone, when it is payable by the defendant …”

Schedule 1 provides for the payment of fee 2.3 in the sum of £1,000 for a case in the multitrack:

“On the occasion of fee 2.2 becoming payable; …

Fee 2.3 is payable by the claimant except where the action is proceeding on the counterclaim alone, when it is payable by the defendant …”

The Fees Order itself does not define the terms “claimant” and “defendant”. CPR r. 2.3(1) defines the term “claimant” as “a person who makes a claim” and “defendant” as “a person against whom a claim is made”. In my judgment, those definitions are applicable to the interpretation of the Fees Order.

The dispute is as to who, in the present circumstances, is liable to pay fees 2.2 and 2.3 under the Fees Order. Is it Mrs Penfold, who was the original Claimant in the proceedings and is still referred to as such, or is it Mr Fuller, who was the original Defendant in the proceedings but who was the party that initiated the current phase of the litigation? There are two possible interpretations of the Fees Order in a case such as the present, namely that the word “claimant” refers to the person named in the Claim Form or to the person who is making the claim which is presently proceeding before the court.

In my judgment, the correct interpretation is that it is the person making the claim that is presently proceeding before the court. Any other interpretation gives rise to obvious lacunae and difficulties.

That interpretation is confirmed by the provisions of CPR r. 3.7, which provides for sanctions for non-payment of certain fees. Subrule (1) provides:

“This rule applies where –

(a)

an allocation questionnaire or a pre-trial check list (listing questionnaire) is filed without payment of the fee specified by the relevant Fees Order …

(e)

the fee payable for a hearing specified by the relevant Fees Order is not paid.”

Subrule (2) provides:

“The court will serve a notice on the claimant requiring payment of the fee specified in the relevant Fees Order if, at the time the fee is due, the claimant has not paid it or made an application for full or part remission.”

Pausing there, in the present case, the court originally served notice on Mr Fuller, but subsequently served notice on Mrs Penfold. Subrule (4) provides:

“If the claimant does not –

(a)

pay the fee; or

(b)

make an application for full or part remission of the fee, by the date specified in the notice –

(i)

the claim will automatically be struck out without further order of the court; and

(ii)

the claimant will be liable for the costs which the defendant has incurred unless the court orders otherwise.”

In my judgment, r. 3.7(4) confirms that the claimant referred to in the Fees Order is the party making the relevant claim, because it is the claimant who suffers the sanction of the striking out of his or her claim. To my mind, that puts it beyond doubt that it is the party making the substantive claim presently proceeding before the court that is referred to and not the party who may historically have been the party that issued the claim form.

One can test that proposition by reference to the example of a claimant who issues a claim form and at or around the same time applies and obtains an interim injunction. The interim injunction is subject, in the usual way, to a cross-undertaking in damages. Subsequently at trial, the claimant fails and the trial judge directs an inquiry on the cross-undertaking in damages. Subsequently, there are filed statements of case by the parties in which the defendant claims damages under the cross-undertaking in damages and the claimant resists the payment of the sums claimed. In those circumstances, it is plain that the party identified as the “Defendant” is nevertheless the party making the claim that is then proceeding before the court and the party identified as the “Claimant” is the party that is resisting that claim. In such a case, it seems to me to be quite plain that Fees 2.2 and 2.3 would be payable by the “Defendant” as being the party making the claim and, therefore, corresponding to the position of claimant for the purposes of CPR r. 2.3 and the Fees Order. Equally, it would be the “Defendant” who should suffer the sanction for non-payment under CPR r. 3.7.

Turning to the present case, I consider that the party that is the claimant so far as the claim presently proceeding before the court is concerned is Mr Fuller. The underlying claim commenced by Mrs Penfold was settled by the agreement contained in the Schedule to the Tomlin Order. Unless and until Mrs Penfold is successful in setting that agreement aside, that claim is at an end. The party who initiated the present proceedings before the Court, albeit that formally they constitute an extension of the previous proceedings, was Mr Fuller. It was he who issued the Application Notice on 31st July 2008, which has led to the subsequent proceedings. It is Mr Fuller that is making a claim, because it is Mr Fuller who wishes to obtain specific performance of the Tomlin Order and thereby enforce the agreement contained in the Schedule to the Tomlin Order so as to require Mrs Penfold to pay the £515,000 due under that agreement and to accept the conveyance of Mr Fuller’s interest.

It is true that Mrs Penfold continues to be referred to in the proceedings as “the Claimant”. That, to my mind, is a purely historical accident arising out of the fact that in the underlying claim she was the claimant. It is also true that Master Bowles ordered Mrs Penfold to serve a statement of case first and that he ordered that Statement of Case to be identified as Points of Claim. The reason for that is plain, namely that there is no dispute that Mrs Penfold is in breach of the terms of the Schedule to the Tomlin Order. She nevertheless contends that she has a defence to the claim for specific performance and that she has a cross-claim. In those circumstances, it made sense for her to plead first and for Mr Fuller to plead in response to her statement of case. That does not alter the fact that the party making the claim that is presently before the court is Mr Fuller.

That analysis is confirmed by the fact that it was Mr Fuller who paid the fees in order to ensure that the claim was not struck out under CPR r. 3.7(4) even though the court was by then requesting payment from Mrs Penfold.

For all of those reasons, I conclude that the party that is liable to pay fees 2.2 and 2.3 under the Fees Order is Mr Fuller and not Mr Penfold.