Scottish Court of Session Decisions

(See Mair v. Rio Grande Rubber Estates, Limited, 1913 S.C. 183, 50 S.L.R. 125, 1913 S.C. (H.L.) 74, 50 S.L.R. 876.)

William Adam, clerk, 128 Oxford Street, Glasgow, pursuer and reclaimer, brought an action of reduction against the Rio Grande Rubber Estates, Limited, 30 George Square, Glasgow, defenders and respondents, which was one of a series of 121 actions brought by shareholders against the Company to obtain a recision of their agreements to take shares in the Company, the actions being all based on the same allegation that the prospectus of the company contained false and fraudulent statements.

The actions were settled by letters between the parties' agents, dated 30th March 1914 and 2nd April 1914, in the following terms:—

“29 Queen Street,

Edinburgh, 30 th March 1914.

Messrs Mitchells, Johnston & Co.,

Solicitors, Glasgow.

Dear Sirs,

Rio Grande Rubber Estates Ltd.

in Liquidation.

Referring to your letter of 12th inst., and the meetings and correspondence which have taken place between Mr Rankin and Mr MacLeod, we now beg to confirm the settlement of this case on the footing that your clients pay our clients full judicial expenses in all the actions, together with a contribution of £250 towards the extrajudicial expenses, and that no further claims are made against any of our clients in respect of calls on the shares of the Company held by them. Our clients on the other hand to waive all claim to participate in any surplus assets which may remain after payment of the creditors of the Company. This settlement is, of course, subject to the approval of the Court being obtained, and to our obtaining the approval of our clients individually.

We are calling a meeting for this purpose within the next few days,—Yours faithfully, St Clair Swanson & Manson.

P.S.—Of course it is understood that the expenses paid to your agent on 16th January 1913 under the Court of Session decree are repaid.— St. C. S. & M.”

“2 nd April 1914.

Messrs St Clair Swanson & Manson, W.S.,

29 Queen Street, Edinburgh.

Dear Sirs,

Rio Grande Rubber Estates Ltd.

in Liquidation.

We were duly favoured with your letter of the 30th ulto. confirming the settlement herein on the terms arranged, subject to the approval of the Court being obtained and to your obtaining the approval of your clients individually. It is of course understood that the expenses paid to Mr Stuart Macdonald on 16th January 1913 under the Court of Session decree shall be repaid,—We are, yours faithfully,

Mitchells, Johnston, & Co.”

In accordance with the said settlement the Lord Ordinary ( Hunter) on 14th July 1914 pronounced the following interlocutor:—“… Finds the defenders liable to the pursuer in expenses and remits the account thereof when lodged to the Auditor to tax and to report, with the direction that in fixing the amount of said expenses he shall take into consideration that the action is one of a series of 121 actions raised by different pursuers against the same defenders on the same grounds, the pursuers in all the actions being represented by the same counsel and agents.”

The account of the pursuer's expenses as taxed by the Auditor was as follows:—

“ Feby. 1912. Taking instructions		£0 13 4	£0 10 0
Framing summons (fresh matter, say 2 shs.)		0 12 0	0 4 0
Instructing counsel to revise	£0 6 8I/x	0 6 8
Paid him fee and clerk	1 3 6I/x	1 3 6
	£1 10 2
Instg. printer to print		0 3 4	0 3 1
Paid him (proportion)		0 2 3
Revising proof print (7 pp.)		0 10 0	0 8 6
Attce. signetting
Paid dues		0 2 6
Serving on defenders and posts		0 3 9
Making up process and lodging
Writing duplicate inventory		0 1 6	0 1 6
Paid dues		0 10 0
Borrowing defences		0 3 0	0 2 6
Making up papers for printer		0 6 8	0 5 8
	Carry forward,	£4 18 6	£1 15 3
	Page: 366↓ Brought forward,	£4 18 6	£1 15 3
Framing title page and index		0 3 0	0 2 6
Instg, printer to print		0 3 4	0 3 1
Paid him (one-half)		0 6 9
Revising proof print of open record		0 10 0	0 9 0
Attce. lodging prints and intg.		0 5 0	0 4 0
Returning process		0 1 6	0 0 3
May 1912. Case out in adjustment roll—going over process and preparing for adjustment		0 13 4	0 13 4
Framing inventory of productions and copy		0 4 6	0 4 6
Attce.lodging		0 3 4	0 3 4
Paid dues		0 2 6	0 2 6
Instg. counsel to attend		0 6 8	0 6 2
Paid him fee and clerk		1 3 6 1 2	1 3 6 1 2 0
Attce. with defenders' agent arranging that one case shall be taken as a test case and the others sisted		0 2 6	0 2 3
Attce. in Court—productions held satisfied and cases sisted		0 6 8	0 5 8
Procuring interlocutor and booking		0 4 10	0 4 4
Copy for client		0 1 6	0 0 3
fany. 7, 1913. Defenders having intimated motion to have sist recalled, instructing counsel to attend and oppose	£0 6 82/x	0 6 8
Paid him fee and clerk	1 3 62/x	1 3 6
fany. 8, 1913. Attce. in Court—motion dropped	0 6 82/x	0 6 8
fany. 13, 1913. Attce. in Court—motion again renewed and refused	—0 6 82/x	0 6 8
fany. 27, 1913. Attce. in Court—motion again renewed and refused	0 6 82/x	0 6 8
Feby. 19, 1913. Attce. in Court—motion again renewed and refused	0 6 82/x	0 6 8
July 1914. Meetings and correspondence arranging settlement	£0 5 03/x	0 5 0
Instg. Mr Sandeman for consultation and as to same	0 6 83/x	0 6 8
Paid him fee and clerk	2 7 03/x	2 7 0
Instg. Mr Christie	0 6 83/x	0 6 8
Paid him fee and clerk	1 3 63/x	1 3 6
Arranging consultation	0 5 03/X	0 5 0
Attendance at same	0 6 83/x	0 6 8
Case having been settled and having failed to adjust joint minute— Framing minute (2 shs.)	£0 6 04/x	0 12 0	0 6 0
Extending same (2 shs.)	0 1 64/x	0 3 0	0 1 6
attce-. lodging	0 1 04/x	0 3 4
Paid dues	0 2 64/x	0 2 6	0 2 4
	£0 11 0
Attce. in Court on defenders' enrolment when their motion dropped, as they had not sisted themselves	£0 6 85/x	0 6 8
Enrolling for Tuesday	0 3 45/x	0 3 4
Instg. senior counsel to attend	0 6 85/x	0 6 8
Paid him fee and clerk	2 7 05/x	2 7 0
Instg. junior counsel to attend	0 6 85/x	0 6 8
Paid him fee and clerk	1 3 65/x	1 3 6
Attce. in Court—decree pronounced	0 6 85/x	0 6 8
Procuring interlocutor and booking	0 4 105/x	0 4 10
	£5 5 4
Borrowing process	£0 3 06/x	0 3 0
Framing account of expenses (4 shs.)	0 8 06/x	0 8 0
Copy to lodge (4 shs.)	0 8 06/x	0 8 0
Copy to intimate (4 shs.)	0 4 06/x	0 4 0
Attce. lodging, fixing diet, and intimating	0 6 86/x	0 6 8
Paid dues	0 12 66/x	0 12 6
Attce. at taxation	0 6 86/x	0 6 8
Returning process	0 1 66/x	0 1 6
	£2 10 4
Borrowing productions		0 3 0	0 3 0
	Carry forward,	£26 14 3	£6 12 3
	Brought forward,	£26 14 3	£6 12 3
Enrolling for approval and intimating		0 3 4	0 2 10
Attce. in Court—report approved		0 6 8	0 5 8
Procuring interlocutor and hooking		0 4 10	0 4 4
Copy for extractor		0 1 6	0 0 3
Ordering and procuring extract		0 10 0	0 9 0
Session fee		0 10 6	0 8 0
Posts, &c.		0 2 6	0 1 6
		£28 13 7	£8 2 10
	Less	8 2 10
		£20 10 9”

The Auditor appended the following report:—

“ Edinburgh, 20 th November 1914.—In obedience to a remit by Lord Hunter, the Auditor has examined the foregoing account and taxed the same in presence of the agents for the parties at the sum of twenty pounds ten shillings and ninepence (£20, 10s. 9d.) sterling.

J. Smith Clark.”

Note.—“The Auditor has in the first place taxed the foregoing account as directed by the Lord Ordinary.

As the account is one of a series of 121 it would obviously lead to absurdity if full charges were to be allowed in each case. For example, a single half-hour's attendance in Court would entitle the agent to 6s. 8d. x 121 = £40, 6s. 8d. A similar result would follow in the case of other fees of the agent and of counsel.

The Auditor has done his best to fix a quantum meruit as to each fee, and this in his opinion may be allowed in this and each of the other 120 cases subject to the following qualifications:—

1. Fees marked thus—1/x, £1, 10s. 2d. Counsel having been allowed a full fee in Mair's case and a modified fee in this case for revising the summons, the Auditor is of opinion that it was unnecessary to have the summons revised by counsel in the remaining cases. If the Court should allow revisal in each case the above £1, 10s. 2d. should be restricted to 2s. 6d., which multiplied by 121 would yield £15, 2s. 6d. instead of the said £1, 10s. 2d.

2. Fees marked thus—2/x, £2, 16s. 10d. Here the defenders contend that only one case was enrolled and moved, and that there is no reason for allowing these fees in the 120 cases in which no motion was made. The pursuer contends that all the cases were moved. The Auditor after hearing parties adopt the defenders' view.

3. Fees marked thus—3/x, £5, 0s. 6d. The Auditor has allowed full fees to the agents and counsel for settling in Mair's case and in this case. He sees no reason why these fees should be repeated in the remaining cases. If he had formed a different view he would have allowed a modified sum in this and each remaining case of 3s., i.e., £18, 3s. 0d., instead of the above £5, 0s. 6d.

4. Items marked 4/x, 11s. The defenders maintain that no minute will be necessary in the other cases. That is a question for the Court to determine, and the 11s. in each case will follow the result.

5 and 6. Items marked 5/x and 6/x, £5, 5s. 4d. and £2, 10s. 4d. These expenses obviously need not be incurred in the other cases. There will be an enrolment and one attendance for decree and also for decree for costs, and this has been allowed.

Page: 367↓

Assuming that the foregoing views should be approved of by the Court, the expenses falling to be awarded in each of the other cases would be as follows:—

Taxed amount of the foregoing

account		£20 10 9
Deduct items l/x	£1 10 2
do. 2/x	2 16 10
do. 3/x	5 0 6
do. 5/x	5 5 4
do. 6/x	2 10 4
		17 3 2
Sum to be awarded		£3 7 7

But subject to the determination of the Court as to the items 4/x, 11s.”

The pursuer having lodged a note of objections to the Auditor's report on his account of expenses, the Lord Ordinary on 2nd December 1914 pronounced the following interlocutor—“The Lord Ordinary having heard counsel on the note of objections by the pursuer to the Auditor's report on his account of expenses, repels said objections, approves of said report, and decerns against the defenders for payment to the pursuer of the sum of £3, 10s. 6d., being the taxed amount of the account incurred by the pursuer William Adam as an individual pursuer, amounting to £3, 7s. 7d., plus the sum of two shillings and ninepence, being his proportion of the expenses jointly incurred by the pursuers in the one hundred and twenty-one actions applicable to the present action.”

Opinion.—“The situation in which this objection to the Auditor's taxation of the account remitted to him in the case of Adam v. Rio Grande Rubber Estates, Limited, is altogether a novel and exceptional situation. A number of shareholders of a company were dissatisfied with purchases of shares which they had made, and brought actions of reduction against the company upon the ground that they had been induced by fraudulent misrepresentation on the part of representatives of the company to take the shares. Only one action was discussed—that was the action at the instance of Mr Mair—and the other actions, over 120 in number, were sisted before the records were closed. In the case of Mair I took the view that no relevant case had been stated against the defenders, and that view was affirmed in the Inner House. On the case going before the House of Lords a different view was taken, and it was held that the pursuer was entitled to a proof of his averments. Following upon the judgment of the House of Lords the company went into liquidation, and a settlement was effected of the different actions brought by the different shareholders.

In terms of the settlement approved of by the Court the pursuers were to get their judicial expenses and £250 to cover extrajudicial expenses. A motion was then made in Adam's case to have the sist recalled and the pursuer found entitled to expenses. It was understood that the one case was to govern all the others. Looking to the very exceptional circumstances of the case, I thought that the proper method to deal with the matter was to remit the account to the Auditor with a special instruction, justified, as it appeared to me, by the altogether unusual position in which the litigation was. That instruction which I gave the Auditor in the case of Adam was that in fixing the amount of expenses he should take into consideration the fact that the account was one of a series of 121 actions raised by different pursuers against the same defenders on the same grounds, the pursuers in all the actions being represented by the same counsel and agents. It may be that such a direction has not been given before, but I considered that it was my duty to give the direction, and accordingly I gave it. The Auditor in taxing the account has dealt with the matter thus. Full expenses have been given to the pursuer in the case of Mair, which was the case that was first taxed before the Auditor. In the case of Adam the Auditor has also given full expenses. He has then added a note concerning the 120 remaining actions, and expressed the opinion that a sum of between three and four pounds should be awarded in each case. This amount is a portion of the account in Adam's case. Technically what the Auditor has done may not be within the terms of my interlocutor, but in effect he has carried out the direction which I have given him. In my opinion the result he arrives at is sound.

The real objection taken by the pursuer was not upon the technical ground that there should be a remit to the Auditor in the other actions, which, of course, would result in nothing if in effect I take the same view as the Auditor; but that, as there was a settlement on the footing of the pursuers receiving judicial expenses, it was not within the power of the Court to pronounce such a direction as I gave in the interlocutor remitting Adam's account. I might take up the position that I cannot review what I have done; but even if I were reconsidering the matter I should not take a different view, because I think the course followed was in the circumstances justified.

As regards the objections in detail which were taken, these were really all matters purely of taxation. I cannot say that the Auditor, who is the proper person to deal with such matters, has erred. I therefore repel the objections stated for the pursuer.

In dealing with Adam's case separately I think the proper way to give effect to my direction and the Auditor's taxation is to take the amount of the account which the Auditor has taken as falling to each of the 121 pursuers and to add to that the balance divided by 121. This will give the pursuer a sum of £3, 10s. 6d., or, if the whole cases are looked at, the pursuers, in addition to recovering full expenses in Mair's case, will receive a sum of about £420 as judicial expenses in actions the records in which were never closed and the grounds of action were identical.”

The pursuer reclaimed to the First Division of the Court of Session, and argued—To give effect to the agreement between the parties the Lord Ordinary should have awarded to the pursuer as full expenses as if the action had stood alone. In the “ Gunford” Ship Company, Limited v. Thames and Mersey Marine Insurance Company, Limited,

Page: 368↓

1910 S.C. 1072, 47 S.L.R. 860; 1911 S.C. (H.L.) 84, 48 S.L.R. 796, where the action was one of thirteen similar actions, full expenses had been awarded. The Auditor had here in fact modified instead of taxing the account of expenses, which the direction of the Lord Ordinary had not entitled him to do— Karrman v. Crosbie, June 3, 1898, 25 R. 931, Lord Trayner at 933, 35 S.L.R. 725; C.A.S., K, iv.

Argued for the (defenders) respondents—The litigation had in fact been conducted by a committee of the pursuers, who were the clients of the agents, except in so far as they were not empowered to settle the actions. On consideration of the settlement the intention of the parties was perfectly clear. “This case “referred to Mair's case alone.” Full judicial expenses” simply meant such expenses as the Court awarded. The interlocutor of the Lord Ordinary of July 14 was final on the merits of the case, and could not be opened up by later interlocutors. The remit to the Auditor was therefore past criticism— Duncan, &c. v. Salmond, &c., March 17, 1874, 1 R. 839, 11 S.L.R. 169.

At advising—