Case: Chipperfield v. Streatfield

P was D's tenant. He claimed he was constructively evicted. In July 1996, P issued a county court default summons against D for unliqidated damages arising out of breach of a tenancy agreement and nuisance. In the particulars given in the summons, P claimed the return of £320 deposit, damages (aggravated and exemplary), interest and costs. By ticking the appropriate box on the summons, P indicated that his claim was not worth over £5,000. But he did not go on to indicate whether he would like his case decided by trial or arbitration in the event of his claim being over £1,000 (which was the small claims limit at the time of issue). However, he claimed £65 by way of court fee, and that was the fee appropriate for claims between £600 and £1,000.

Throughout, it seems that both P and D assumed that the claim would be referred automatically to arbitration under CCR, Ord. 19, r. 3. However, court officials took the view that, as P had not limited his claim to the arbitration limit, the claim should be tried by a circuit judge. On an ex parte hearing before the judge P sought arbitration but this was refused. In the event the case was tried by a Recorder who gave judgment for P, awarding him £630 in damages (including the return of deposit) and £200 for overpaid rent and for sundry other small items.

In addition, he ordered D to pay P's costs to be taxed on the standard basis on scale 1. D applied for leave to appeal to the Court of Appeal against the order for costs. On the application, it was contended on D's behalf that her liability for costs should have been limited to any costs which would have been recoverable by P had the claim been dealt with by arbitration (see Ord. 19, r. 4). It was said that the decision (contrary to the wishes of both parties) that the claim should go to trial was the court's decision and it was unfair to D that she should thereby be exposed to greater liability in costs.

The application was unsuccessful. Hirst L.J. said that the summons and particulars of claim, looked at overall, indicated that P's claim was limited to under £1,000 (and, perhaps, should have been treated by the court as such). The case was distinguishable from AfzaI V. Ford Motor Co. [1994] 4 All ER. 720, CA (see also Smith V. Vauxhall Motors Ltd [1997] P.I.Q.R 19, CA) as this was not a case in which P had intentionally overstated his claim in order to avoid arbitration.

Further, he never misused the process by claiming excessive damages. Furthermore, it is not the law that a claimant making an unliquidated demand should be denied costs merely because he could not reasonably have expected to get judgment for a sum in excess of the small claims limit. In the exercise of his discretion as to costs the recorder had acted fully in accordance with principle.

His Lordship concluded by saying that the application for leave to appeal had "an air of artificiality" about it. Ord. 19, r. 4(2)(c) provides that, in a small claims arbitration, further costs may be allowed to a claimant "where there has been unreasonable conduct on the part of the opposite party in relation to the proceedings or the claim therein". In this case, there was a strong conflict of evidence on which D "was universally disbelieved". In the circumstances, this could have been regarded as "unreasonable conduct" on her part.

Sucessful claimant's solicitor: Mark Norris, McMillan Williams.

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