> Any were they informed that the re-submission (not a 'new' application)
> would be incurring a fee? Were details supplied stating their application
> would not proceed before payment? Were payment details given to them?

You missed one..

Did the reply received after registering the domain (both the one from the
web page and the one in email) have on the bottom of it :

There is no charge for this registration service.
Thank you

  Scott.
  Hunterlink