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Cite as: [2005] ScotCS CSIH_1, [2005] CSIH 1, 2005 SLT 548

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Gupta v. Ross [2005] ScotCS CSIH_1 (11 January 2005)

EXTRA DIVISION, INNER HOUSE, COURT OF SESSION

Lord Osborne

Lord Hamilton

Lord Kingarth

[2005] CSIH 1

XA50/03

OPINION OF THE COURT

delivered by LORD OSBORNE

A HEARING ON NOTE OF OBJECTIONS TO THE AUDITOR'S REPORT BY THE PURSUER AND APPELLANT

in the cause

ARUN GUPTA

Pursuer and Appellant;

against

FIONA EMMA ROSS

Defender and Respondent:

_______

Act: Party

Alt: Macpherson, Solicitor Advocate; Simpson and Marwick, W.S.

11 January 2005

[1] In this action, interlocutors were pronounced on 23 April, 23 May and 15 October 2003 in which the pursuer and appellant was found liable to the defender and respondent in certain expenses. In the case of the interlocutor of 23 April 2003, the expenses were those of the appeal to this court; in the case of the interlocutor of 23 May 2003, the expenses were those occasioned by a hearing on that date, the pursuer and appellant having failed to appear, in relation to motions seeking (1) leave to appeal to the House of Lords and (2) a preliminary reference to the European Court of Justice; and, in the case of the interlocutor of 15 October 2003, the expenses were those occasioned by a hearing on that date seeking (1) leave to appeal to the House of Lords and (2) a preliminary reference to the European Court of Justice. The accounts thereof were remitted, when lodged, to the Auditor of Court to tax and to report.

[2] A diet of taxation was fixed to take place on 28 January 2004. By letter, dated 26 January 2004, the pursuer and appellant sent to the Auditor a document, extending to nine pages, said to be:

"The Appellant's Objections to the diet of taxation as well as Objections to the expenses claimed by the respondent."

We take it that that document was intended to be, first, an application to the Auditor for an adjournment of the diet of taxation and, second, an intimation to the Auditor of the specific points of objection maintained by the pursuer and the appellant, in terms of Rule of Court 42.2(1A), although it was not intimated to the Auditor timeously in terms of that Rule. The composite account lodged with the Auditor for taxation was stated in the sum of £2,370.06, to which had to be added Fee Fund Dues of £96.00 making a total of £2,466.06. At the diet of taxation the pursuer and appellant appeared personally. The defender and respondent was represented by an employee of a firm of law accountants. At that diet the pursuer and appellant sought to persuade the Auditor to adjourn the diet of taxation on a number of grounds which are set forth in the document to which we have referred. The Auditor declined to do so. On 9 February 2004 he made a report of his taxation of the expenses concerned, in which it was stated that those expenses were taxed at the sum of £2,466.06. That report was lodged in the process in the present action on 10 February 2004. Thereafter the pursuer and appellant lodged a document, extending to six pages, entitled: "Appellant's Note of Objections to the Auditor's Report", dated 12 March 2004. That document was not lodged timeously in terms of Rule of Court 42.4(1). On 20 April 2004 this court pronounced an interlocutor in the following terms:

"The Lords, having heard the appellant personally, on cause shown allow the Note of Objections to the Report by the Auditor of Court, No. 9 of process, to be received although late; ordain the Auditor of Court, within fourteen days from the date of intimation hereinafter referred to, to lodge a Minute containing his reasons for his decision in relation to the items to which objection is taken in the said Note; appoint the appellant forthwith to intimate a copy of this interlocutor on the said Auditor."

Thereafter the Auditor of Court lodged a Minute, dated 13 May 2004, in which he stated that his reasons for his decision in the taxation to which objections had been taken were that, after considering the information given and submissions made at the diet of taxation, he was of the opinion that the charges, as allowed, were reasonable and proper. In a Note annexed to that Minute the Auditor explained the reasons why he had declined to grant an adjournment of the diet of taxation. He also explained that the account, with which he had dealt, had been prepared under Part VI of chapter 3 of the Table of Fees. Vouchers had been produced for the disbursements and for counsel's fees. The Auditor had satisfied himself that the fees were properly and reasonably charged in terms of the interlocutors already referred to. Counsel's fees were considered to be reasonable. The Auditor stated that he had allowed:

"only such expenses as are reasonable for conducting the cause in a proper manner as set out in Rule of Court 42.10(1)."

[3] We should record that the pursuer and appellant's Note of Objections to the Auditor's report contains a range of criticisms of a number of persons, including the Auditor himself, a member of the Auditor's clerical staff, the representative of the firm of law accountants, who appeared at the diet of taxation on behalf of the defender and respondent, members of the staff of the Court of Session, the advocate who had represented the defender and respondent at the proceedings which resulted in the findings of expenses against the pursuer and appellant, partners of the firm of solicitors who instructed that advocate and other persons. Among these criticisms was an attack on the integrity of the Auditor himself. What the document did not contain was any specification of the items in the account remitted to the Auditor for taxation and taxed by him to which objection was taken.

[4] At the diet of hearing on the Note of Objections, the pursuer and appellant appeared on his own behalf. He entered upon a wide-ranging criticism of the proceedings before the Auditor at the diet of taxation. Once again he raised the issue of the failure of the Auditor to adjourn the diet of taxation; he made criticisms of the Auditor's integrity and raised many points relating to the background to this litigation. However, he did not address himself to any particular items in the account which had been taxed to which objection had been taken. Nor did he insist in his motion that the diet of hearing should be discharged. He did, however, submit that these proceedings should be sisted, pending the determination of certain other actions apparently raised by him, including an action against the Auditor in Edinburgh Sheriff Court.

[5] The solicitor advocate appearing on behalf of the defender and respondent submitted that the Note of Objections before the court had not been relevantly stated in terms of Rule of Court 42.4. No particular items in the accounts which had been taxed were the subject of objection. In connection with this submission reliance was placed on Urquhart v. Ayrshire & Arran Health Board 2000 SLT 829. It was apparent from the material contained in the Note of Objections that the pursuer and appellant was endeavouring to use the hearing for the purposes of mounting a wide-ranging attack upon the Auditor himself and the procedure which had been followed at the diet of taxation. These matters were not appropriate for consideration in such a context.

[6] We have reached the conclusion that the submissions made on behalf of the defender and respondent are well-founded. It appears to us that the terms of Rule of Court 42.2(1A) and 42.4(2) contemplate that, at a diet of taxation, "specific points of objection" will be raised in relation to items in the account under consideration, to use the language of Rule of Court 42.2(1A). We consider that, at the stage of a hearing on a Note of Objections to the Auditor's report, in terms of Rule of Court 42.4, it is contemplated that the hearing will be limited to the reasons of the Auditor for his decisions in relation to the items to which objection has been taken. This appears to be implicit in the provisions of Rule of Court 42.4(2)(b)(ii), which refers to "the reasons for his decision in relation to the items to which objection is taken ... ". In this view, we are confirmed by the decision of Lord Reed in Urquhart v. Ayrshire and Arran Health Board, with which we respectfully agree. Lord Reed held that it was implicit in Rule 42.4 that it was designed to deal with objections to specific items in the Auditor's report. It was not a competent procedure for dealing with objections of a different nature. In paragraph [8] of his judgment Lord Reed stated:

"Rule 42.4 enables a party who has appeared or been represented at the diet of taxation to 'state any objection to the report of the auditor by lodging in process a note of objection'. The party lodging the note of objection is required to apply by motion for an order ordaining the auditor to state by minute the reasons for his decision 'in relation to items to which objection is taken in the note'. I observe at the outset that the matter complained of in the present case is not in reality an objection to the report, but rather a complaint about the procedure followed by the auditor. There are no 'items' to which objection is taken: the report as a whole is challenged because of an alleged fundamental flaw underlying its preparation. Moreover, under the note of objections procedure, there is no provision for the auditor to be represented at the hearing, although in the present case he is accused of a procedural impropriety."

In paragraph [9] of his judgment Lord Reed continues:

"It appears to me to be implicit in Rule 42.4 that it is designed to deal with objections to specific items in the auditor's report. The rule does not envisage that there will be disputed questions of evidence. It does not envisage that the report as a whole will be challenged because of some alleged fundamental irregularity. It does not envisage that the auditor's active participation in the hearing will be necessary. It envisages that the outcome of a successful objection will be the amendment of the report ... ".

[7] It appears to us that the situation with which we are faced closely resembles that with which Lord Reed was dealing in that case. In the Note of Objections on which the hearing before us was held, there was criticism of the Auditor in relation to, first, his failure to adjourn the diet of taxation and, second, his handling of the taxation following his decision that it should not be adjourned. We are of the opinion that these are not matters with which we can deal in the present proceedings. In particular, no material is contained in the Note of Objections of the pursuer and appellant with which we can competently deal in a hearing under Rule of Court 42.4. If the pursuer and appellant wishes to pursue the matters raised in his Note of Objections, then he will require to select a procedure in which they can be the subject of a competent adjudication.

[8] In view of the contents of the pursuer and appellant's Note of Objections, it is perhaps surprising that the court ordained the Auditor to respond to them by lodging a minute in terms of Rule of Court 42.4(2)(b)(ii), in the interlocutor of 20 April 2004. In that connection, however, it is to be noted that the pursuer and appellant's motion for that course to be followed was, for some reason, not opposed. Be that as it may, in our opinion, the order made in that interlocutor cannot have the effect of rendering it competent for us to adjudicate upon the contents of the Note of Objections in this hearing. Nor is there anything competently raised in these proceedings which would justify any sist pending the outcome of other proceedings. Accordingly, we must repel the Note of Objections of the pursuer and appellant.