Underpayment of Court Fees Revisited

There have been a number of cases in the last few years that have considered the consequences for a claimant when an incorrect court fee has been paid upon the issue of a claim.  In the case of Lewis & Others v Ward Hadaway which was referred to in this publication last year, the Court found that there had been an abuse of process by claimants who had deliberately understated the true value of their claim in order to pay a lower fee.

In Wells v Wood & Another, which was heard last month by the County Court in Lincoln, this issue was once again considered.

In this case, the claimant had issued a claim shortly before the expiry of the limitation period but had paid the wrong court fee for the value of the claim.  The defendants raised the issue of limitation in their defence and the court therefore had to consider whether the claim was statute-barred (i.e. it was brought too late) because the incorrect court fee had been paid when it was issued.  The defendants argued that, without the appropriate fee being paid for the claim, it had not stopped time running out irrespective of whether or not the incorrect payment was an innocent mistake or a deliberate attempt to issue proceedings without paying the appropriate fee.

However, the court disagreed and held that a claim form issued and sealed by the court was effective for limitation purposes regardless of the fee paid and the issuing of the claim form marked the commencement of proceedings.  In the judge’s view, any question regarding the court fee was between the paying party and the court service.

The judge acknowledged that there may be instances where there is an allegation of an abuse of process in the payment of the court fee but he found that was not the position in this case.  Instead the claimant’s solicitors had underpaid the court fee because they had not properly appreciated the true value of the claim until later on and upon discovering that they immediately took steps to remedy the mistake.  There was therefore no suggestion that there had been any abuse of process.  Accordingly, the payment of the wrong court fee had no effect on the validity of the claim form and the stopping of the limitation clock.

This case appears to draw a distinction between the deliberate underpayment of a court fee and an underpayment which has occurred as a result of an innocent mistake; the former will be penalised but not the latter.

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Luke Patel

Luke Patel
Partner
Commercial Dispute Resolution Team
LPatel@LawBlacks.com
0113 227 9316
@LukeLawBlacks

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Special Contribution in Divorce finance cases

Is Ryan Giggs a genius? Anybody who isn’t a Manchester United fan would probably say ‘No’.

Paul McCartney was described as an ‘icon’ in his famous divorce from Heather Mills but how do you compare one of the most influential men in music history with a footballer?

The general question of genius is of course rather subjective and it is particularly pertinent today on the back of two cases in the press.

On the same day on which it has been reported that Ryan Giggs will claim a ‘special contribution’ in his divorce finances case, the US millionaire banker Randy Work has lost his case in the Court of Appeal on a similar argument.

In many cases involving the super-wealthy the family court is being asked to determine whether or not there should be a greater proportion of the assets attributed to one party on the basis of that person making what has historically termed to be a ‘stellar’ contribution.

In the case of Cooper-Hohn v Cooper-Hohn [2014] EWHC 4122 (Fam) the court decided that the husband’s special contribution did merit a greater award and that he could be described as a ‘genius’.

Roberts J stated that, in order to be considered as a genius:

a person must have some exceptional natural capacity or intellectual or creative power or other natural ability which finds reflection in the exercise of an exceptional skill in a  particular area of activity…I take the view that he qualifies as a financial genius in his particular filed of financial investment. If he does not, who could?

Conversely in Randy Work’s case, the judgement of which was upheld today in the Court of Appeal, Holman J the judge deciding the case in the initial judgement was of the opinion that:

A successful claim to a special contribution requires some exceptional and individual quality in the spouse concerned. Being in the right place at the right time or benefiting from a period of boom is not enough”

Rather prophetically on the news regarding Ryan Giggs today, Holman J in the Randy Work case said this:

“It may one day fall for consideration whether a very highly paid footballer, who is very good at his job but may be no more skilful than past greats, such as Stanley Matthews or Bobby Charlton, makes a special contribution or is merely the lucky beneficiary of the colossal payments now made possible by the sale of television rights”

Special contribution cases are difficult to prove and highly facts-specific. Based upon the decision in Work v Gray today Giggs may well struggle. Is he a genius or a beneficiary of a genius manager surrounded by other world class football players? Is he an icon like Sir Paul? Who was more of a genius – Ryan Giggs or Wolfgang Mozart? It would be an interesting conversation in the pub, never mind the family court.

Andrew Smith

Andrew Smith
Associate Solicitor
Family Law Team
AJSmith@lawblacks.com
0113 3222807

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Restrictive Covenants

So, you’ve paid your deposit, collected the keys and moved into your lovely new home. What to do first? Install that white picket fence you’ve always wanted? Maybe buy some chickens to give you some eggs for your Sunday morning soldiers? Or fit a few security cameras around your house to keep an eye on the van parked on your drive? Because, after all, you will be able to park your van on your drive, right? Right?

Perhaps not. Buried in the title deeds could be a list of things that you are not allowed to do – known as restrictive covenants.  Restrictive covenant restricts a property owner from doing certain things, including building on or using the property for particular purposes. It could include any of the activities mentioned above and many others, including parking your van on, or outside, your own property. This was the issue a utility worker in Colchester recently encountered when looking to purchase a new home. Having found a house he wanted, the utility worker realised that the housing developer had put a restrictive covenant on the property banning vans, boats and caravans from being parked either on the driveway to the property or on the road outside the property. Knowing the restrictive covenant existed, the utility worker pulled out of the deal.

While the MP for Colchester, Will Quince, stated that the ban ‘seemed unreasonable’, such restrictive covenants are not particularly rare. Housing developers and property management companies are often keen to enforce covenants on their properties in order to maintain an attractive environment while properties are being sold.

But it’s not just larger developers using restrictive covenants to get their own way. An example in 2004 saw a couple build a second home at the bottom of their garden, move into it and sell their original home. They didn’t want anything blocking their view, which saw them looking down a valley onto a church, so they placed a restrictive covenant on their original home, banning anything that would block that view. While the next owner was made aware of the restrictive covenant, the person who bought the house afterwards, was not. Restrictive covenants do not expire when the original beneficiary sells up and can in fact stick with a property for hundreds of years. In this case, the second owner ended up owning a property that he was unable to extend because to do so would block his neighbours’ view.

Can you be released from a restrictive covenant and, if so, how? The short answer is yes, although it’s not particularly easy. The easiest way to get around a restrictive covenant is simply to speak to the neighbour or developer who has the benefit of the covenant and ask if its terms can be modified. If the neighbour or developer refuses and you need to try a different tact, things might be a bit trickier.  The Upper Tribunal (Lands Chamber) can dismiss or modify restrictive covenants, usually on the grounds that they are obsolete or impede reasonable use or development. Equally, the County Court can discharge or modify a covenant that it believes to be unenforceable.

The best approach is to be sure what, if any, restrictive covenants apply to your prospective property before buying. If the dream is to come home to your washing slowly drying in the breeze on your lawn, or the security provided by the blink of a security camera, or, more simply still, you just want to be able to park your van on your drive, then be sure you can, before you buy.

James Farad

James Farad

James Farad
Trainee Solicitor
Commercial Property
JFarad@LawBlacks.com
0113 2279245
@JamesFLawBlacks

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Do You Have Capacity?

In the case of Fehily v Atkinson which was heard by the High Court at the end of last year, the Court had to consider the issue of whether a person had sufficient mental capacity to enter into a transaction.

In that case, Mrs Fehily was seeking to annul a bankruptcy order which had been made against her following her failure to comply with the terms of an individual voluntary arrangement (IVA) which she had entered into to avoid being made bankrupt by HMRC after her failure to pay a substantial tax liability.  Mrs Fehily argued that she had lacked the necessary mental capacity to enter into the IVA.

The District Judge dismissed Mrs Fehily’s application, rejecting her argument.  The Judge also decided that even if the IVA was ineffective, there would have been little point in annulling the bankruptcy as Mrs Fehily would inevitably have been made bankrupt by HMRC.  Mrs Fehily appealed.

The High Court dismissed Mrs Fehily’s appeal and provided useful guidance on the test to be applied when assessing a person’s mental capacity to enter into a transaction.  The following principles are relevant:

  • The person needs the mental capacity to recognise the issues which must be considered, to obtain, receive, understand and retain relevant information and to weigh the information in the balance in reaching a decision.
  • The person may have capacity for one type of decision but not another.
  • Capacity may vary over time and should be assessed at the specific time when the decision was made.
  • The question to be addressed is whether the person had the ability to understand the transaction and not whether he actually understood it.
  • Although help may be needed to understand the transaction, it did not prevent the person from having the capacity to understand it.

Ultimately, a person requires the insight and understanding to realise that advice is needed, the ability to find and instruct an appropriate adviser and a capacity to understand and make decisions based on that advice.

This case has helped clarify the test for mental capacity, a subject which has been raised from time to time by litigants in order to try to extract themselves from a transaction or contract which they have entered into.

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Luke Patel

Luke Patel
Partner
Commercial Dispute Resolution Team
LPatel@LawBlacks.com
0113 227 9316
@LukeLawBlacks

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No-fault divorce debate – Wife’s appeal against refusal to allow divorce on grounds of unreasonable behaviour dismissed

The judgement in the case of Owens v Owens has been handed down, which has decided that the original judge who refused the wife the right to be granted a divorce, was not wrong in coming to his decision.

The appeal of the wife against that decision has today been dismissed by the Court of Appeal which means that she is not able to petition for divorce without the consent of her husband until a period of five years from their separation has elapsed.

The case rested on whether the wife’s allegations of unreasonable behaviour were ‘enough’ to satisfy the test that the marriage had irretrievably broken down. The original trial judge had held that the allegations were merely part of the normal trials and tribulations of a marriage and did not pass the test of ‘unreasonable behaviour’. Today’s decision confirmed that the judge was not wrong in coming to that decision and had applied the law correctly, hence the failed appeal.

Family lawyers across the country are in shock over the decision, with many calling for the law to change regarding fault-based divorce. Earlier in the year Resolution lobbied the government to change the law on fault-based divorces and Resolution’s national chair Nigel Shepherd said today that: “Owens v Owens must be the spark that ignites a fundamental change in our divorce law”

Interestingly, Sir James Munby, the president of the family decision and one of the judges presiding over the appeal said that the procedures which judges must apply and follow were “based on hypocrisy and lack of intellectual honesty” but that “we cannot ignore the clear words of the statute on the basis we dislike the consequence of applying them”.

In reality cases of defended divorces either successful or unsuccessful are rare and I would think that family lawyers in general will continue to try and deter their clients from attempting to defend a divorce, for want of trying to focus on the ‘bigger picture’. The debate about no-fault divorce will continue as it has done for many years but there is a risk that this recent case will persuade more divorcing couples to try and defend their divorce.

Andrew Smith

Andrew Smith
Associate Solicitor
Family Law Team
AJSmith@lawblacks.com
0113 3222807

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Life in the Digital Era

The Electronic Communications Code governs the siting and operation of communications equipment across the UK and sets out the rights and responsibilities of equipment and land owners alike. In May 2016 the Government proposed a review and updating of the Electronic Communications Code, spurred on by the ever and rapidly changing world of electronic communications.

Efficient and effective electronic communications are a necessity (once a luxury) in both our business and yours and it is good to know that the Government is reacting to our dependence on the same. Given the rural location of many of your holiday and home parks, many of you will also have telecommunication equipment sited on your land. Therefore, it is important to know to what you are entitled in return for the use of your land and also what rights the communication provider has to access your land in order to maintain and upgrade its equipment.

Should the Government’s proposals be accepted, the aim is to ensure that you are better compensated than at present by moving to a ‘no scheme’ basis of valuation regime which will reflect the underlying value of your land. This is similar to the regime currently employed for utility providers and it is intended that electronic communications equipment will henceforth be treated comparably to utility equipment. It will also become easier for communication providers to access your land to carry out the maintenance, repair and upgrading of equipment, with such rights of access being automatic in some circumstances. In additional, there will be changes to the court system so that any disputes in relation to electronic communications equipment can be resolved more efficiently and not obstruct the investment in and development of electronic communications across the UK.

The proposals are relatively fresh and need to be presented to Parliament and go through the legislative process. Time will tell whether and to what extent they actually come into force but they are certainly worth keeping on your (electronic) radar.

Beth Laidler

Beth Laidler
Associate Solicitor
Commercial Property Team
BLaidler@LawBlacks.com
0113 2279209

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The importance of Advance Directives and Lasting Powers of Attorneys

You may have heard of the recent case in the news where a judge ruled that Paul Briggs, who suffered a severe brain injury from a motorcycle crash in 2013, should be allowed to die.  The case was prompted by his wife, Lindsay, who argued that his ‘minimally conscious state’, where he is being kept alive through medical intervention, would have been against his wishes.

Despite his wife protesting that Paul Briggs had previously made clear to her that he did not want his life prolonged if he had no quality of life, the case took a considerable time in court before a verdict was reached.  Even now that a decision has been made by the Court of Protection, the Official Solicitor, whose role it is to act for vulnerable people who lack capacity, is to seek leave to appeal the decision in a higher court.

The best way to avoid a gruelling and emotionally painful court case, such as that suffered by Lindsey Briggs, is to set out your wishes for such a situation in advance at a point at which you are capable of doing so.  There are many ways you can do this.

The Mental Capacity Act 2005 enabled adults with capacity to make legally binding treatment-refusals in the event that they then lose capacity; these were originally called ‘living wills’.  Advance directives or ‘living wills’ allow you to outline a decision to refuse a specific type of treatment if, at some point, you lack the ability to make the decision yourself.  The treatments you wish to refuse must be explicitly named, for example those aimed at keeping you alive, and you must be clear about the circumstances in which you wish to refuse such treatment.  In order to ensure that advance directives are legally binding, you must have had mental capacity to make it, have it written down and signed by you and a witness.

You can also complete a lasting power of attorney (LPA) for health and welfare.  LPA’s have been introduced in recent years to help deal with situations like these.  They give someone you trust the legal authority to make decisions on your behalf in the event that you lack mental capacity in the future.  Unlike previous Enduring Powers of Attorney, these LPAs allow you to choose whether your attorneys can give or refuse consent to life-sustaining treatment on your behalf and you can include preferences on how you should be treated if you lose capacity, for example, if you wish to be on a vegetarian diet.  An LPA can help protect yourself and offer guidance and assistance to your attorneys to help them make the correct decisions on your behalf.

Although situations like that of Paul Briggs and his wife are emotionally traumatic, they can be eased to some extent by advanced planning and putting into writing what you would like to happen in such an eventuality.

Eleanor Eastwood

Eleanor Eastwood
Paralegal
Wills and Probate
EEastwood@LawBlacks.com
0113 227 9392

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