Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION [2011] CSOH NUMBER187
Aa611/09	OPINION OF LADY SMITH in the cause MRS PATRICIA ANDERSON Pursuer; against (FIRST) SHETLAND ISLANDS COUNCIL , AND (SECOND) SCOTTISH WATER , DEFENDERS Defenders: ­­­­­­­­­­­­­­­­­________________

Pursuer: O'Carroll, advocate; Bonar McKenzie W.S.

First Defenders: Gale QC; Ledingham Chalmers LLP

Second Defenders: MacDougall, solicitor-advocate; HBM Sayers

Mr R. A. Anderson; Bovey QC; Simpson & Marwick WS

15 November 2011

Introduction

[1] The pursuer, who is aged 93 years, owns a house called "Sea Chest", in Shetland. In this action it is alleged on her behalf that the stability of her property has been undermined by an increase in surface run off water emanating from land above Sea Chest. That increase is said to have been due to road improvement works carried out by the first defenders and also to housing development works permitted by them; the drainage provided for in the course of these works is said to be inadequate. The second defenders are said also to be responsible for the provision of adequate drainage in the area. The case called before me on the motion roll, on 2 November 2011.

[2] Negligence and nuisance are both mentioned in the pleadings, as is malice (on the part of the first defenders) but the precise legal basis for the pursuer's claim is not entirely clear.

[3] This action was raised in August 2009. The Record closed on 28 April 2010. The case was sent to the procedure roll on 12 May 2010 and a hearing was fixed for 15 February 2011. On that date, the procedure roll hearing was discharged on the motion of the pursuer and parties were appointed, by Lord Drummond Young, to "seek to reach agreement on the terms of a remit to a man of skill and the identification of an appropriate man of skill" who was to report on the drainage of water from the road and ditch above Sea Chest and on any damage caused to the property by that drainage.

[4] Agreement on a remit to a man of skill was not able to be reached.

[5] The pursuer presented a minute of amendment on 19 April 2011, which was answered and there was further adjustment of the pleadings, until 20 September 2011.

[6] On 19 July 2011, the pursuer sought, unsuccessfully, to sist the action.

Background: Motion Roll of 30 September 2011

[7] The case called before me on the motion roll, on 30 September 2011. There were two motions for the pursuer: one to allow a further 6 weeks on the adjustment roll and the other to grant a commission and diligence in respect of a lengthy specification of documents. The first defenders had enrolled for an order, in terms of s.1(1) of the Administration of Justice (Scotland) Act 1972, that certain persons be allowed onto Sea Chest to carry out specified investigations and inspections of the property, having regard to the allegations regarding surface water run off and its cause.

[8] Mr Anderson advanced a wholly inadequate justification for the motion to continue the cause on the adjustment roll, based on a supposed need to identify who owned a piece of land between Sea Chest and the sea, the relevance of which was not possible to identify. So far as the motion for a commission and diligence was concerned, the specification of documents on which it was based was largely irrelevant, it failed to specify the time periods over which he sought recovery, sought disclosure of the names of individual employees of the first defenders without any apparent thought having been given to their rights under article 8 ECHR and, in many respects, was unintelligible. It was, in short, a woeful document and certainly not apt for approval for the purposes of a grant of commission and diligence. Both his motions were, accordingly, refused.

[9] As regards the first defenders' motion, I had no difficulty granting it. It was plain that the first defenders are, responsibly, seeking to advance matters in this litigation by having an appropriate expert inspect Sea Chest to report on what actually is the state of affairs regarding surface water run off and its apparent cause. The experts proposed, Messrs Cadogans, are consulting engineers and their brochure (7/25 of process) shows that they have carried out reports in respect of water related damage in the past. On the face of matters, it is appropriate to instruct them in respect of the issues in this case. It was evident that Mr Anderson had been obstructive regarding earlier attempts on the part of the first defenders' solicitor to reach agreement regarding inspection by Cadogans. He could advance no cogent reason for refusing to allow them onto the property for the purposes set out in the motion. He cast unfounded aspersions on Cadogans' financial standing and made a bald assertion that they were not independent. He suggested that parties should have a further attempt to agree a joint remit to a man of skill. It was, however, evident from the draft remits prepared following Lord Drummond - Young's interlocutor that Mr Anderson had been insisting that it proceed on the basis of a hypothesis of fact and causation with which the defenders could not agree and, further, that it went beyond the issues in the case. Given the history, I could not see that there was any hope of agreement being reached on a joint remit. The first defenders were not asking for a joint remit. His suggestion was not, in the circumstances, an answer to their motion.

[10] At the end of the hearing on Friday 30 September, which was late in the day, Mr Gale and Mr MacDougall intimated that they were moving for Mr Anderson to be found liable in expenses. That motion was continued to 2 November 2011.

Background: Representation for the pursuer

[11] At the hearing on 30 September 2011, Mr R A Anderson, advocate, appeared (in wig and gown) for the pursuer. She is his mother. Mr Gale QC, who appeared for the first defenders, raised the following concerns. It had come to the attention of the solicitors instructing him that the solicitor acting for the pursuer was being instructed not by her but by Mr Anderson. They were concerned that there was no proper separation between Mr Anderson and his mother such as would reflect and preserve the independence that ought to be maintained between counsel and client.

[12] I made enquiries at that hearing of Mr Anderson as to what was the position regarding the circumstances in which he came to appear before me as counsel for his mother. He advised me that he had been conveying his mother's wishes to the solicitor on matters of principle, that she had occasionally given instructions to the solicitor by letter and the inference seemed to be that on other occasions he was giving instructions to the solicitor himself. That was perhaps under a Power of Attorney that his mother had granted in his favour but as at the time of the hearing on 30 September, matters were not entirely clear.

[13] I raised with Mr Anderson the possibility that paragraph 8.3.11 of the Code of Conduct of the Faculty of Advocates might apply in respect that he might be viewed as having at least an indirect interest in the litigation and ought, accordingly, to have consulted with the Dean of Faculty prior to accepting instructions to act. He had not, at that stage, done so. He said "obviously I do have an indirect interest in the case" and assured me that he would consult the Dean. He did so thereafter and was instructed by the Dean that he could not continue to act for his mother, pursuant to paragraph 7.2 of the Faculty's Code of Conduct.

Background: Power of Attorney

[14] By deed dated 16 July 2003, the pursuer granted a continuing power of attorney in favour of her son, Mr Anderson. She was and is of full capacity. The purpose of the power of attorney is for the management of her financial affairs and personal welfare. It confers on Mr Anderson powers which include the power to manage her property matters as he thinks fit (General Powers, paragraph 1), and to sue for property or rights due to her, manage her heritable property, raise or compromise any actions or other judicial proceedings so far as he considered necessary or expedient, and employ solicitors (Particular Powers, paragraphs 1, 8, 10, and 12). The solicitors acting for the pursuer advised the first defenders' solicitors, in the course of email correspondence in June this year, that Mr Anderson was instructing them under that power of attorney.

Hearing on 2 November: Continued Motion for Expenses

[15] At the hearing on 2 November, Mr Anderson was not present. The pursuer was represented by Mr O'Carroll, advocate. Mr Anderson was separately represented by Mr Bovey QC.

[16] Mr Gale moved a motion, with which Mr MacDougall concurred, that Mr Anderson should be found personally liable in his capacity as attorney for the pursuer, to both defenders in the expenses preparatory to and occasioned by the motions heard on 30 September.

[17] At this hearing, it was common ground that Mr Anderson had, at the relevant time, been acting under the power of attorney and that he had been solely responsible for directing and controlling the case. Mr Gale submitted that it appeared evident that Mr Anderson had instructed the solicitors for the pursuer and his instructions included that they instruct him as counsel. Further, it was, he submitted, evident that the way matters had worked was that the solicitor was not acting as a professional filter and no independent judgment or critical appraisal had been exercised by them, no doubt because of the nature of their instructions. Mr O' Carroll did not take issue with those submissions. Nor did Mr Bovey.

[18] Mr Gale's submissions rested on the proposition that Mr Anderson was dominus litis. He submitted that Mr Anderson may not have been party to the action but he had been the person giving all the instructions - instructions which were manifestly unreasonable, as discussed at the hearing on 30 September. Further, he had plainly not exercised the judgment as to what was necessary or expedient in the litigation such as could be expected of an attorney acting under the power of attorney which empowered him. Mr Anderson was, he submitted, in these circumstances, dominus litis. That was demonstrated by his being the person who controlled the litigation. Mr Gale recognised that the relevant authorities refer to there being two features of a dominus litis namely interest in the litigation and control of it: Court of Session Practice, Division L, MacLaren: Court of Session Practice , Sheriff Court Practice, Eastford Ltd v Gillespie and Airdrie North Ltd 2010 CSIH 12. As to his interest in the litigation, Mr Anderson plainly had an interest, according to Mr Gale. His interest was, he submitted, as holder of the power of attorney; through that he gave all the instructions for the conduct of the case. No-one else was giving instructions and that showed that he had an interest in the litigation. It was not necessary that his interest be a patrimonial one to demonstrate that he was dominus litis.

[19] In the course of submissions, Mr Gale also referred to the case of Jassals Exrx v Jassal 1987 SLT 371, where an executrix pursuer was found personally liable in expenses where delay had been caused through certain failures on her part, but he did not suggest that it was supportive of his proposition that Mr Anderson was dominus litis, albeit it was an example of circumstances where the court departed from the normal rule that the pursuer's liability would have been qua executrix.

[20] Mr Gale explained that the first defenders were concerned that, since the pursuer was legally aided, if expenses were simply awarded against her, that would mean that they would be borne by the public purse which did not, in the circumstances, seem to be at all appropriate.

[21] Mr Gale very frankly accepted that he had not been able to identify any authority to show that the holder of a power of attorney who directed a litigation could be found personally liable for expenses on that basis alone. Mr MacDougall adopted Mr Gale's submissions.

[22] For Mr Anderson, Mr Bovey submitted that the circumstances did not show that Mr Anderson was dominus litis. The matter was settled by the Inner House in the case of Cairns v McGregor 1931 SC 84 and that had recently been applied by the Inner House in the case of Eastford Ltd. There were two ingredients required, namely interest in the subject matter of the litigation and control of it. It was not disputed that Mr Anderson had control of the litigation. It had not, however, been demonstrated that he had an interest in it. Sentimental interest would not be enough. The fact that he had the power to compromise the action was not demonstrative of interest because it simply flowed from the legal structure under which he was operating, namely, the power of attorney. If the pursuer was found liable in expenses because of his failures in the duties he owed her under that power of attorney, it would be open to her to look to him to reimburse her but that was a matter between principal and attorney, not a reason to find the attorney personally liable in expenses. If the defenders were right in their submission that control of the action was sufficient to expose a person acting under a power of attorney to personal liability for expenses, that could have far reaching and unintended consequences.

[23] Mr O'Carroll submitted that if expenses were not to be awarded against Mr Anderson, they should be reserved. There were, he submitted, five reasons for doing so. First, sanction had been granted for the obtaining of an opinion from senior counsel, which would now be instructed. That sanction had been in place since February 2011. Mr Anderson had approached one senior counsel to ask for assistance but that individual was not able to assist with any degree of expedition at that time. No other efforts had been made to instruct senior counsel thereafter. Secondly, insofar as Mr Anderson's conduct of the litigation had been a difficulty, that had now been overcome. Thirdly, the granting of the first defender's motion for inspection of the property was a welcome step which should aid progress in the case. Fourthly, the pursuer's solicitor would undertake to seek sanction from the Scottish Legal Aid Board to travel to Shetland to obtain instructions directly from the pursuer. Fifthly, when the case called before Lord Drummond - Young, he had reserved expenses. As undernoted, Mr O' Carroll provided documents relating to the legal aid application that was made in this case. He did not, however, move that if I were to find the pursuer liable in expenses, I should do so on the basis that she was an assisted person.

Legal Aid

[24] After the close of the hearing on 30 September, I examined the document that had been lodged in process purporting to be the pursuer's legal aid certificate. It was not a legal aid certificate; it was a certificate endorsement showing that a pre-existing grant of legal aid had been transferred to a new solicitor. It did not disclose the identity of the assisted person. My clerk, thereafter, asked the pursuer's agents to lodge the legal aid certificate, which they did. It shows that the assisted person is "Richard Anderson - Guardian on behalf of Patricia Anderson". The cause to which it relates names Patricia Irvine Anderson as the pursuer. In the course of the hearing on 2 November, I was shown documentation in relation to the application for legal aid which has been signed by Mr Anderson but indicates that he is applying for legal aid as his mother's attorney acting under a power of attorney, not that he is her guardian. I was not, however, shown any documentation that explains how or why the legal aid certificate specifies the assisted person in the above terms which, on the face of matters, does not provide legal aid cover to the pursuer (or Mr Anderson).

Discussion and Decision

[25] It will be apparent from the observations I have already made that I am satisfied that Mr Anderson's conduct in relation to the motions that were before me on 30 September was unreasonable and obstructive. It is surprising, to say the least, that he thought it appropriate to act for his mother in the circumstances which I have outlined. Further, having proposed to do so, it was, under the Code of Conduct of the Faculty of Advocates, incumbent on him to consult with the Dean of Faculty and it is as surprising that that requirement had not occurred to him prior to 30 September. As a result, as Mr Gale commented, appropriate professional independence on the part of counsel has not been maintained and proper critical independent appraisal of the case does not appear to have taken place. It seems inconceivable that, if it had, the pursuer's two motions of 30 September would have been enrolled, that there would have been any need for the first defenders to have to enrol their motion at all or, if they had done, that it would have been opposed.

[26] There is, thus, no doubt that the defenders should be entitled to an award of expenses. More difficult is the proposition that I should hold Mr Anderson, as his mother's attorney, personally liable for those expenses.

[27] A dominus litis is a person who has an interest in the subject matter of the litigation and, through that interest, controls and directs it. Because of that, even although he is not a party to the action, it is competent to find him liable in expenses. The earliest authoritative statement regarding the matter appears to be that of Lord Rutherford in Mathieson v Thomson (1853) 16D 19 at 23:

"There may be some difficulty in defining exactly what is a dominus litis; but I confess that I very much agree with what has been laid down by your Lordship, and with the definition quoted from the civil law by Lord Ivory, that he is a party who has an interest in the subject matter of the suit; and through that interest, a proper control of the proceedings in the action. Now it will not make a person liable in the expenses of the action that he instigated the suit, or told a man that he had a good cause of action, and that he would be a fool if he did not prosecute it, or though he promoted it by more substantial assistance. It will not make him liable in the expenses of the suit that, while he does both of these things, he shall have some ultimate consequent benefit in the issue of that suit. But when you go a step further, and find a party with a direct interest in the subject matter of the litigation and through that interest master of the litigation itself, having the control and direction of the suit, with power to retard it, or push it on, or put an end to it altogether, then you have a proper character of a dominus litis; and, though another name may be substituted, the party behind is answerable for the expenses."

[28] That passage was referred to and relied on by Lord Justice Clerk Alness in Cairns v McGregor where, at p.89, he said:

"The interest of the alleged dominus litis in the subject - matter of the suit, in the sense of that passage, must be so direct and dominant as to yield control of the suit. It would seem to follow that an inconsiderable interest would not serve."

[29] Those passages were, in turn relied on and approved in the recent decision of the Inner House in the case of Eastford Ltd v Thomas Gillespie and other where the question of the nature and extent of the interest required for the dominus litis principle to apply was considered. In that case, whilst two directors who were controlling and directing the litigation had an interest in the litigation, it was not the entire interest - they owned only half of the shares in the pursuer and the company itself had the primary interest. The court relied on McCuaig v McCuaig 1909 SC 355 per Lord President Dunedin at p.357:

"But it must be shown that the party who is to be brought into this suit has the true interest in the cause and by the true interest I mean the entire interest, using that term not in an absolute sense but as denoting the whole interest for all practical purposes."

[30] They were not, accordingly, satisfied that either of the two directors were dominus litis. Whilst their decision was also influenced by the specialty of company law that directors, in any event, always control litigation in the name of the company it is clear that they were satisfied not only that the principle of dominus litis involves two elements - interest and control/direction - but that the nature of the interest requires to be as Lord President Dunedin described it.

[31] It is, in the light of these authorities, plain that the concept of dominus litis involves two elements: (i) interest in the subject matter of the litigation and (ii) control and direction of it. Both are required. The ability to control and direct a litigation does not, of itself, demonstrate that the person who does so is the dominus litis. If that were so, anyone acting under a power of attorney would be vulnerable in the matter of expenses.

[32] In the light of these authorities, it is not open to me to find that Mr Anderson was dominus litis unless he was not only controlling or directing the action but also, for all practical purposes, was the person with the real interest in it. It is clear that a sentimental or familial interest would not be enough for these purposes albeit that it may well be sufficient for the invocation of paragraph 8.3.11 of the Code of Conduct of the Faculty of Advocates which covers all circumstances where members of Faculty have a personal interest in a litigation whether direct or indirect or non - patrimonial. Thus, Mr Anderson's acceptance that he had an indirect interest in the litigation is not demonstrative of him having a relevant interest for dominus litis purposes. At one point in his submissions, Mr Gale suggested that it was different if the attorney had failed in the duties he owed to the party in question. Regrettable and perhaps reprehensible as such a failure may be, it does not demonstrate that the person has an interest in the litigation. Nor do I accept - as was Mr Gale's ultimate position - that the fact of acting under a power of attorney amounts to a relevant interest so far as demonstrating that a person is dominus litis is concerned. In these circumstances, it is not open to me hold Mr Anderson personally liable in expenses; whilst he was, until a date after the hearing on 30 September, the only person directing and controlling the litigation, it has not been demonstrated that he has an interest such as renders him dominus litis.

[33] Turning to the motions of the defenders for expenses, I am not persuaded that I should reserve expenses. Whilst the reasons advanced for doing so point towards some hope on the part of the pursuer that proper, efficient and effective progress will now be achieved in this litigation, they are not such as to show that it is reasonable to deprive the defenders of the benefit of the general rule that expenses should follow success. I consider that this is a case where that general rule should be applied. The defenders are plainly entitled to awards in respect of all expenses of and occasioned by the motions heard on 30 September. They were wholly successful in their opposition to the pursuer's unfounded motions and the pursuer, through Mr O'Carroll, now recognises that the inspection that is to be carried out as a result of the first defender's motion is a welcome step. The point is, however, that they should not have had to go to the lengths of enrolling the motion at all.

[34] I will, accordingly, find the first defenders entitled to their expenses in respect of all three motions and the second defenders entitled to their expenses in respect of the pursuer's two motions.