Scottish Court of Session Decisions

The facts in this case have been already reported, ante, vol. xv. pp. 115 and 727,5 R. 161, and in terms of the interlocutor of the Second Division of 17th November 1877 the Auditor reported. The pursuers lodged objections to the report, and the Court on 18th March 1879 pronounced the following interlocutor—“The Lords having heard counsel on the objections to the Auditor's report, before further answer remit to the Auditor to report generally on the principle on which his taxation has proceeded, how far it is affected by the fact that the pursuer has partially failed in the litigation, and the effect, if any, attributed by him to the finding of the Court in regard to modification.”

The Auditor in consequence lodged the following special report:—“Having considered the note of objections for the pursuers to his report of 8th March 1879 on the account of expenses to which they are entitled under the interlocutor of the Lord Ordinary ( Curriehill), of 29th May 1877, and the interlocutors of the Court of 17th November 1877 and 28th February 1879, with the account itself, the proceedings in the case, and the interlocutor of the Court of 18th March 1879 (under which this report is made), the Auditor now reports,—

“ First, That in taxing the account in question he has proceeded in the same manner as if the finding of expenses had been in general terms without mention of modification;

Second, That the taxation has been affected by the fact that the pursuers have partially failed in the litigation only in this respect, that he has disallowed all expenses clearly distinguishable as connected with the portions of the case in which the pursuers have not been successful; and

Third, That in the audit he has not attributed any effect to the finding of the Court in regard to modification.

The grounds on which the Auditor has proceeded in thus dealing with the account may be briefly stated. Under a general finding of expenses, without any qualification whatever, it is the duty of the Auditor to disallow all expenses of unsuccessful litigation. The Act of Sederunt of 15th July 1876 (repeating a provision of the previous Acts) provides (General Regulation 5) ‘that notwithstanding that a party shall be found entitled to expenses generally, yet if on the taxation of the account it shall appear that there is any particular part or branch of the litigation in which such party has proved unsuccessful, or that any part of the expense has been occasioned through his own fault, he shall not be allowed the expense of such parts or branches of the proceedings.’ The Auditor cannot see any reason for disregarding the instruction where expenses are found due subject to modification. It cannot be doubted that where this qualification is attached to the finding it is intended by the Court to give the party entitled to expenses less than under a general finding. The duty of the Auditor (subject to the correction of the Court) is to ascertain and report the amount of expenses properly incurred, exclusive of those connected with unsuccessful litigation. It is for the Court alone to deal with the question of modification, and it is evident that they cannot satisfactorily modify without previous knowledge of the amount of the expenses properly incurred. If such amount be not ascertained in the ordinary way by the Auditor's report, it is difficult to see how it can be arrived at by the Court so as to form a proper basis for modification. It has always been held by the Auditor (and he believes by his predecessors also) that modification is intended, not to interfere with the ordinary rules of taxation, but in some measure to compensate the party found liable in expenses for the costs incurred in resisting the claims in regard to which his opponent has failed. Modification, in a word, as understood by the Auditor, is to some extent a substitute for a cross finding of expenses. This view as to modification is not understood by some agents, and whether for confirmation or correction, an authoritative disposal of it by the Court is not unnecessary.”

The pursuers objected to this report that the modification allowed by the Court referred to the part of the case on which they had been unsuccessful, and that the Auditor was wrong in disallowing the expenses connected with this part of the case, which fell to be dealt with by the Court in allowing a modification.

At advising—