Scottish Court of Session Decisions

Both pursuers submitted Notes of Objection to each of two reports of the taxation of accounts of expenses in this action. At the hearing before me the first named pursuer sought to be allowed to represent his wife, the second named pursuer, with her authority, in her absence. Having heard the first named pursuer and counsel for the defenders, who had no objection, I agreed to that course of action.

The Notes of Objection Nos. 41 and 43 relate to an account of expenses following upon an interlocutor of 20 October 1995. In that interlocutor the first named pursuer was found liable to both the second named pursuer and the defenders in certain expenses. The first named pursuer, however, advanced no argument on behalf of the second named pursuer in respect of this account for obvious reasons.

The first named pursuer also advanced no argument in relation to paragraph 1 of his own Notes of Objection. He did, however, maintain his objections in respect of both parts of paragraph 2 of his Note. I deal with these in turn.

2(i) The first named pursuer gave me a broad history of other litigation between the parties in which the work charged for in this account had been done, charged for and paid for. Without giving me chapter and verse he referred to three actions for recovery of possession of heritable property and one action for payment of debt, all in the sheriff court. He explained that the present action was originally a counterclaim in the sheriff court action for payment, which was transferred to this court. However, it subsequently emerged in his submission that the present action was raised before the sheriff court action was transferred to the Court of Session. At no stage in his submission to me did he provide any specification of the work which he maintained was common to a number of actions, including this one, and should have been apportioned. His submissions were simply a general challenge of the determination by the Auditor, on a matter which it is plainly for the Auditor to determine.

The first named pursuer made a further submission that money had been removed from a bank account of his by the defenders, and that that removal followed on the issue of a fee note in respect of the work covered by this item. He sought, and I allowed him, the opportunity to locate the bank account entry and the fee note. In the course of the first day he assured me he had copies of the items at home. Neither was produced on the second day of the hearing. It is plain the Auditor was addressed on this matter, since he has minuted, in terms identical to my experience above, that the first named pursuer produced no material to show that the work had already been paid for.

2(ii) This objection is quite simply that counsel's fee is excessive. That is a matter for the Auditor to determine. He has given his reasons for approving the charge. There is no basis for me to interfere.

I accordingly repel the objections in the Notes of Objection Nos. 41 and 43.

The other much larger account was the subject of three objections, the third being sub-divided into eight paragraphs. These are set out in No. 42 for the first named pursuer and No. 44 for the second named pursuer in identical terms. The first named pursuer made submissions on behalf of both himself and the second named pursuer in relation to the eight items under paragraph 3. He made no submissions in support of paragraphs 1 and 2.

3(i) This objection is identical to objection 2(i) above. The submission was identical. My determination is identical. There is no basis for me to interfere with the charges.

3(ii) The first named pursuer contended that the charges provided for at the relevant time in paragraph 2 of Chapter 1 of the Table of Fees for copying are a penalty rather than a proper reflection of the expense involved. The charges approved by the Auditor are in keeping with that paragraph of the Table of Fees. However, the first named pursuer maintained that he had not been allowed to see the documents copied on grounds of confidentiality. It was thus submitted that he had not been in a position to satisfy himself that the copying done was reasonably necessary, nor that the "sheets" were as defined by Rule of Court 42.16(2), viz. "a page of 250 or more words or numbers". There is no reference in this objection to the refusal of the Auditor to allow him to see the documents. Counsel for the defenders advised me that no such request or refusal had occurred. Since the matter was not the subject of objection in the Note, I did not consider it appropriate to enquire further into it, except to ask of counsel whether all the sheets copied fell within the above definition, and to be assured that they did. In fairness to the first named pursuer he did acknowledge at the outset of his submission on this point that he was actually challenging the paragraph of the Table itself rather than the Auditor's determination. He made no submission on the strength of which it could be said that the Auditor was not entitled to apply the paragraph as he did.

3(iii) This objection was a challenge to the Auditor's approval of a charge which the pursuers had claimed was excessive and in respect of which the Auditor had sought, and been given, information to explain it. The approval of the charge in these circumstances is a matter for the Auditor and not for me.

3(iv) The submissions made by the first named pursuer in relation to this objection applied also to (v), (vii) and (viii). He, firstly, submitted that these items should be struck out or significantly modified, because he was not, as at 21 February 1998 and thereafter, entitled to proceed with litigation without the authority of the court, there being then in force an interim order under Part VIII of the Insolvency Act 1986 following upon a voluntary arrangement that he had made with his creditors, and to which the defenders were party. In spite of my repeatedly asking him to do so, the first named pursuer failed to draw my attention to any statutory provision which required prior authority of the court for him to proceed with an action, as distinct from provisions preventing action against him in the absence of such authority. In addition he failed to provide any material indicating whether an interim order was in force on 21 February and thereafter, having claimed that counsel for the defenders had misled the court about the situation on 21 February. He maintained that at the third continued diet of taxation the Auditor had struck out a number of items following on 21 February on the basis that they were not justified in these circumstances. The first named pursuer had been unable to attend the fourth diet and understood that, on written representations and subsequent oral submissions made then, the Auditor had restored these items. The account of expenses before me does not bear to have been altered in the way suggested. I accordingly could find no substance in this submission in support of objections 3(iv), (v), (vii) and (viii).

The first named pursuer also submitted that, because it was clear as at 21 February that neither he nor the second named pursuer intended to proceed with the diet of preliminary proof fixed for 28 February, these items 3(iv), (v), (vii) and (viii) were unnecessary or, in some cases, should be modified to reflect the much more limited nature of the work required. On Friday, 25 February their Lordships of the First Division considered his motion for leave to appeal to the House of Lords against their interlocutor of 21 February refusing his reclaiming motion against the Lord Ordinary's refusal of his motion to sist the action. Leave to appeal having been refused, the Lord President made arrangements that a Minute of Abandonment which the first named pursuer had enrolled should be considered that afternoon. The proof was due to take place on Tuesday 28 February. No Lord Ordinary was readily available. An arrangement was made that the motion would be considered on 28 February and the defenders conceded that the first named pursuer would not be prejudiced in respect of expenses as a result thereof. In fact the hearing took up the whole day on 28th, having started late. The Lord Ordinary considered the matter overnight and pronounced his determination on the following morning. The defenders opposed the Minute of Abandonment, which was regarded, in the course of the hearing on 28 February, as presented on behalf of both pursuers. As a result of the pursuers being allowed to abandon the action, the proof did not proceed. Counsel for the defenders advised me that the defenders considered the pursuers were endeavouring to cause disruption to the action, by the first named pursuer enrolling to abandon, and the second named pursuer taking no formal steps to abandon and thus being nominally in the position of proceeding to proof.

There was a dispute between the first named pursuer and counsel for the defenders about whether it was made plain in the course of the week ending 25 February that the second named pursuer was also intending to abandon. Be that as it may, it is plain that the decision on the Minute of Abandonment would not have been made until at least the Monday, if not the Tuesday, even if the hearing had commenced on Friday. The first named pursuer maintained that on these facts it was not necessary for a noting junior counsel to be instructed for a consultation on the Friday nor the proof the following week, and that counsels' fees for the abortive proof should have been considerably modified because no work was necessary after 21 February, or at the latest 25 February. In addition substantial parts of the work of the solicitors was unnecessary.

The Auditor considered all that was said in support of this submission. Subject to what I have to say about the Auditor's reference to the pursuers as "party litigants", I have been unable to identify any error of law in the Auditor's approach. Nor can I identify any material which he failed to take account of or any irrelevant material that he did take into account. In these circumstances it was for the Auditor to assess whether the charges made were appropriate. I can find no basis for intervention on my part in relation to the charges to which these objections relate on the basis of these submissions. There was before the Lord Ordinary a live issue as to whether the pursuers should be allowed to abandon on the basis that their action would be dismissed. The motion was opposed. In the event that the Lord Ordinary had decided otherwise than to allow abandonment on that basis, the proof might yet have proceeded. Had there been little or no substance in the defenders' opposition, then one might have expected an award of expenses against the defenders in respect of their opposition to the Minute. As it is, the Lord Ordinary's interlocutor includes the expenses of the hearing on the Minute.

The first named pursuer submitted one further argument in relation to items 3(vi) and (viii). There is some confusion about whether the first named pursuer submitted an objection No. 3(viii) caused, I think, by the omission in one copy of the Note of Objection of the correct third page and the inclusion of a rogue page from a different document. It is plain, however, from another copy and from the Note of Objection for the second named pursuer and indeed from the way matters proceeded, that objection 3(viii) was part of the first named pursuer's Note of Objection No. 42 of process. So both pursuers challenged the charges referred to in objection 3(vi) and 3(viii) as excessive being charges which included an element to reflect the fact that the pursuers were party litigants. In his original Minutes Nos. 47 and 48 of process, which are in identical terms responding to the Notes of Objection for the pursuers, the Auditor says this:

It is clear the Auditor considered that the fact that this action was conducted by party litigants was a material fact to be taken into account in determining counsel's fee. On the other hand, it was not clear to me that the Auditor had in mind the actual work necessitated by the actual approach taken by the particular party litigants involved in this case rather than the very fact that the opponents in the litigation liable in expenses were party litigants, in other words was considering that to be a material factor whatever the circumstances of the case. In that state of doubt I remitted the account of expenses to the Auditor for further consideration of the charges referred to in these objections and to report on the significance in his report of the fact that the pursuers were party litigants in relation to those matters. The Auditor reported in supplementary reports 51 and 52 of process as follows:

That response made it clear that the Auditor's approach was a general one which he would take in any action involving a party litigant.

In responding to the contention of the first named pursuer that such an approach was erroneous, Mr Nicol submitted that the Auditor's approach was quite correct, since the effect of the involvement of a party litigant tended to be that the case became less "focused" than it would if pled by counsel. I note, however, that, with the exception of a minor amendment allowed at the Summar Roll Hearing, the pursuers' pleadings are those of counsel. Mr Nicol submitted that, if a party produces a "woolly case", then he should be liable for the "padding" that produces in the work required of his opponent. With that I agree. On the other hand, the Auditor has not reported that what he took into account were particular difficulties in this case created by the conduct of the litigation by the pursuers as party litigants. The Auditor does record that he was provided by counsel with a note of his work for a very complex proof set down for six days. It is perfectly understandable that the Auditor should require such a note where a substantial fee is sought for work in connection with procedure which does not take place. If the charges made are, in the opinion of the Auditor, not unreasonable, then they should be allowed. That is obviously the correct approach in any litigation whether conducted by counsel, solicitor or party. In that connection it would be appropriate, in my opinion, for the Auditor to take account of the fact that in the particular case counsel did require to do particular work because of the way in which the case was actually conducted by the party litigant. Reference to the party litigant's conduct of the case in the Auditor's report in that connection would be understandable. However, that is not the context in which the Auditor had regard to the fact that party litigants were involved in this case. In relation to objection 3(vi) to the charge made for the Summar Roll hearing the Auditor reported that he had regard to the amount of preparation necessary to deal with all reasonably possible points which might be raised either by the party litigant "or the Court". In relation to objection 3(viii) his reference to "party litigants" is general. It is easy to see that there will be cases in which a very broadly stated ground of appeal, which is to be argued by a party litigant, or a party litigant's vague pleadings, might leave an opponent in the position that he has to undertake extensive preparation in view of his apprehension that the Court might wish to be addressed on a wide range of identifiable points which he can explain in the note he gives to the Auditor. In this case, however, the pursuers had lodged very detailed grounds of appeal. If these gave rise to the need for very extensive preparation by opposing counsel and the Auditor considered the work done was reasonable, then the charges should be approved. Indeed, in that situation, it is difficult to see what the relevance of the fact that the proceedings are being conducted by a party litigant is to the reasonableness of the charges. In addition, the pleadings were counsel's. The Auditor does not indicate that a particular problem created by the fact that the action was conducted by party litigants was drawn to his attention in relation to either objection 3(vi) or objection 3(viii). The mere fact that the litigants were party litigants was irrelevant to the issue before the Auditor and he ought to have left that fact out of account. He has plainly taken it into account as partial justification for the charges made. It is, in my opinion, the job of counsel to be prepared whenever they appear before any court to deal with any issue that may arise in the case, whether the opponent is represented by the ablest of counsel or the vaguest of party litigants. In each situation the remuneration allowed by the Auditor should be for the work reasonably done.

Since it is on this point alone that I consider that there is merit in the pursuers' objection, and since this point is confined to one aspect of the Auditor's assessment of the particular charges made, and since I do not know the extent to which the figures approved reflect their relevant consideration taken into account by the Auditor, what I shall do is sustain these objections to a limited extent and make an order requiring the Auditor to give effect to that decision.

On the completion of his submissions in relation to the Notes of Objection, the first named pursuer invited me to consider two other matters.

In the first place he invited me to distinguish between his liability and that of the second named pursuer. He explained that their involvement in the pursuit of the action was not identical, and contended that that should be reflected in the taxed account. I note that the Lord Ordinary made an order finding both pursuers jointly and severally liable in expenses in respect of the large account. It is for the work done by and for the defenders that they have that joint and several liability. It is not for the Auditor, or indeed for me at this stage, to try to distinguish the respective responsibilities of the pursuers for the part each played in putting the defenders to expense.

The second ancillary matter raised was a request that I should restrict the period, in respect of which the pursuers were bound to meet the expenses of the defenders in full, to the period after the defenders became fully party to the voluntary arrangement with the creditors of the first named pursuer. He was unable to articulate any reason why I should do this. He drew my attention to no statutory provision that this should be so. If there is any statutory provision that restricts his obligation to pay expenses, then no doubt that will take effect as a matter of law. My concern is simply whether the Auditor has erred in any respect in his approach to the approval of the accounts. I do not have power to order the restriction sought.

I raised one matter ex proprio motu. The Notes of Objection Nos. 42 and 44 relate to an account of expenses following on an interlocutor of 5 March 1997. That interlocutor was pronounced by Lord Osborne in the Outer House. The account includes entries in respect of the procedure on a reclaiming motion which called before the First Division on 14, 18, 19 and 21 February 1997 and was followed on 28 February 1997 by a motion to the Division for leave to appeal to the House of Lords. At that stage, and indeed later, the Inner House made no finding in relation to the expenses of procedure there. Since I had doubts about whether it is competent for the Lord Ordinary to make an award of expenses in respect of procedure in the Inner House, I decided, with the agreement of parties, to report to the Division the question whether a finding of liability in expenses should be made in respect of the procedure there, for the avoidance of doubt. While I considered that it might be possible for the Lord Ordinary to pronounce an interlocutor in terms which oblige a pursuer seeking decree of dismissal on abandonment to make payment of the expenses of procedure in the Inner House in respect of which no finding had been made as a condition of obtaining dismissal, it did seem to me that the interlocutor of Lord Osborne was not to that effect. Be that as it may, following upon my report to the Inner House, their Lordships concluded that the pursuers had decided to abandon the action and to pay "full judicial expenses"; and that in doing so the pursuers clearly believed that that expression included all the expenses, including those incurred in the Inner House. The court considered that it was evident from their behaviour in not raising the matter before the Auditor or before me that that was the case. They considered that I was not faced with an invitation to do something which was fundamentally null and void, but was being asked to give effect to what was, for all practical purposes, an agreement by all the parties as to what items fell properly to be included in the account of expenses. Since the issue of competence was not raised in the Note of Objection, I was not required to deal with it. The case was accordingly remitted to me to deal with the Notes of Objection on the basis that no party is submitting that the expression "full judicial expenses" is not apt to include the Inner House expenses. There is accordingly no issue before me in relation to whether expenses in the Inner House are properly included in the account.

I shall accordingly repel the objections contained in Notes of Objection Nos. 42 and 44, paragraphs 1, 2 and 3(i), (ii), (iii), (iv) (v) and (vii). I shall sustain the objections 3(vi) and (viii) in so far as they relate to the Auditor having taken into account general considerations flowing from the fact that the pursuers were party litigants, and I shall ordain the Auditor to amend his report No. 39 to give effect to that decision by reconsidering the items to which these two objections relate, leaving out of account the general considerations flowing from the fact that the pursuers were party litigants previously taken into account by him.