OUTER HOUSE, COURT OF SESSION
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A205/04
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OPINION OF LORD STEWART
in the cause
JOAN PENTLAND-CLARK
Pursuer & Noter;
against
ANNE MELDRUM ALISON MACLEHOSE or CLARK
Fourth Defender and Respondent:
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Pursuer & Noter: Party
Fourth Defender and Respondent: Duthie, Advocate; McGrigors LLP, Solicitors
1 June 2011
[1] On 19 March 2004 Mrs Pentland-Clark,
Pursuer, raised an action against a number of defenders. The Pursuer was
wholly unsuccessful at the first instance and on a reclaiming motion to the
Inner House. By interlocutor of 16 February 2009 the Inner House
found the Pursuer liable to First, Second, Third, Fourth, Fifth and Sixth
Defenders in the expenses of the action insofar as not already awarded and
decerned. The diet of taxation relative to the Fourth Defender's account of
expenses took place before the Auditor of the Court of Session on 10 June 2010. The Auditor's Report
dated 30 July 2010
taxed the account in the sum of £93,178.29.
[2] The
Pursuer lodged a Note of Objections to certain items in the Report. By
interlocutor dated 10 November 2010 the Inner House remitted the Note of Objections to the Outer House
to proceed in the appropriate summary manner. The Auditor lodged a Minute
dated 16 November 2010 in response to the Pursuer's Note of Objections, explaining his
figures.
[3] In the
meantime the Pursuer had presented a Petition in the Outer House for Judicial
Review of the proceedings before the Auditor. The Petition called before me
for a First Hearing on 18 November 2010. The Note of Objections called at the same time. I heard
submissions on the Petition and Answers in the Judicial Review and continued
consideration of the Note of Objections until 2 December pending, as I envisaged,
the determination of the Judicial Review.
[4] When
parties appeared on 2 December I invited them to give consideration to
contacting my Clerk to arrange to make further submissions in the Judicial
Review process specifically in relation to Article 6 ECHR. Neither
did so and I arranged for the Judicial Review to call By Order on 10 January 2011
for parties to make submissions on the Article 6 ECHR case law. On
10 January Mrs Pentland-Clark moved for a continuation, which I granted until 17 January. On
17 January parties presented further submissions and I made avizandum.
[5] In the
meantime the hearing on the Note of Objections was also further continued to 10 January 2011 and then to 17 January.
On 17 January I heard submissions on the Objections and made avizandum.
[6] On 2 March 2011 I issued my Opinion in the
Judicial Review. My conclusion was that the prayer of the Petition should be
granted with the effect of suspending the proceedings before the Auditor. The
Account of Expenses has been remitted to another auditor to tax of new. In the
result the present Note of Objections procedure has been superseded. It is
however appropriate to record the submissions made relative to the Note of
Objections on 17 January 2011.
Submissions for
the Pursuer and Noter
[7] Mrs Pentland-Clark, Pursuer and Noter, objected to the amount
of the outlays charged against her in respect of services provided, for
hearings or discharged hearings on four occasions, by the in-house Solicitor
Advocate acting for the Fourth Defender. The Noter articulated her objections
as errors of law on the part of the Auditor under reference to the test set out
in Wood v Miller 1960 SC 86 at 98 per the
Lord Justice-Clerk with whom the other judges concurred. The Noter confirmed
to me at the hearing on 17 January 2011 that her complaints could be brought under three heads.
[8] First, the Noter had an
objection to the allowance, £7,500, for the Solicitor Advocate's fee for the
Procedure Roll hearing set down for eight days from 14 February 2006. Parties waited at Court until the afternoon of 14 February when
they learned that the hearing would not proceed because no judge was available.
The hearing was re-fixed for 6 June. It is inferred from the Auditor's
Minute that the Auditor has allowed "such fee ... as he would allow counsel for
an equivalent item of work" in terms of Rule of Court 42.16. The Noter
submitted that the rule applies to work done and does not apply to work not
done, particularly because an in-house solicitor with rights of audience can
immediately return to fee-earning as a solicitor in his or her office. The
following paragraphs are also relevant.
[9] Secondly, the Noter
stated objections to the daily rate inclusive of preparation, £3,343.75,
apparently allowed against her for the Solicitor Advocate's fee for the
re-fixed Procedure Roll debate of 6 June 2006. The Noter submitted
that at the material time the absolute maximum in terms of Rule of Court 42.10 (1)
was £3,000. The figure is the (previous) Auditor's benchmark quoted in A v
British Broadcasting Corporation and Another [2009] CSOH 18 at §
7: "A daily rate of £3,000.00 is awarded only in the most complex and valuable
cases." Though the previous Auditor taxed the account, the hearing in A
for which the inclusive fee of £3,000 was allowed actually post-dated the diet
in the Noter's action, so that the difference cannot be attributed to inflation.
[10] The Noter further submitted
that the Auditor was in error in allowing eight days' fees for the
Procedure Roll debate that started on 6 June 2006: although the diet
was set down for eight days it lasted for seven days only. She
submitted that the daily rate that the auditor had in truth allowed for work
done, calculated on a seven-day basis, would be the grossly excessive figure of
£3,821.43. I think this part of the submission was a misunderstanding. My
interpretation of the Auditor's Minute paragraphs 5 and 6 is that, for the
purpose of cross-checking the fees for 14 February, and 6-15 June 2006
(rendered 15 June) the Auditor had rolled up the fees for the two diets,
£7,500 and £19,250 and divided the total, £26,750, by eight, representing one day
in February and seven days in June, to give the notional inclusive daily
rate of £3,343.75. I make no comment on whether this is a sensible approach. The
inclusive daily rate for the seven-day diet in isolation, £19,250 divided by
seven, is £2,750. That this is likely to be the correct understanding is
supported by the fact that the same daily rate, £2,750, was charged by the
Solicitor Advocate in question for an appearance on 19 October 2007
in the related action A1767/03 (which the previous Auditor abated by £500 to
£2,250). This still left open the questions (1) whether it was proper for
the Auditor to impute a notional daily rate of £3,343.75 for the postponed diet
commencing 6 June 2006 when the Solicitor Advocate himself appears to
have charged at the lesser daily rate of £2,750 and (2) whether the
"disappointment" fee for 14 February 2006 was a proper charge on the
party and party account. There was also the general question about the level
of fees referred to in the next two paragraphs.
[11] Thirdly, the Noter
submitted that all the challenged fees were on any reasonable view much too
high. She argued that guidance is provided by the benchmark inclusive daily
rate of £3,000 "awarded only in the most complex and valuable cases" and by the
fact that the previous Auditor abated the inclusive daily rate of the Solicitor
Advocate in question from £2,750 to £2,250 for a hearing in the related action
A1767/03. The charges for the Procedure Roll diets are referred to above. The
notional daily rate inclusive of preparation for the first four-day Summar Roll
hearing was £4,125 abated by the Auditor to £3,750, and for the second four-day
Summar Roll hearing it was £3,750 per day inclusive abated by the Auditor to
£3,375.
[12] The Noter submitted that
the Auditor's allowance was wholly unreasonable. The daily rates in every case
should be abated or further abated by £1,500. There were no particular
complexities or difficulties for the Solicitor Advocate as an experienced court
lawyer in responding to the case presented by the Noter, a party litigant. Anyway,
it was not as if the Solicitor Advocate required to be fully engaged
intellectually throughout the proceedings: three counsels were involved
for the various defenders; and Counsel for the First, Second and Third
Defenders spoke first on all occasions and "did all the heavy lifting". During
the seven day debate in June 2006 the Fourth Defender's Solicitor
Advocate spoke for only four hours in total; and he adopted the
submissions for the First, Second and Third Defenders. The Lord Ordinary
devoted only four paragraphs of her Opinion to the Fourth Defenders'
contribution to the debate. At the re-hearing of the Reclaiming Motion on the
Summar Roll all the Solicitor Advocate had to do was to re-present the
arguments previously presented.
[13] Preparation was lumped in
with the appearance fee. It was not as if this was a proof demanding a lengthy
period of familiarisation with the evidence that might justify a daily rate
towards the higher end of the range. The fee for the "detailed Note of
Argument" was separately charged at £750 abated by the Auditor to £500. How
much more preparation was required? The same arguments were deployed in the
Reclaiming Motion. The Minute of Proceedings for 3 December 2008 recorded that parties advised the Court that the Notes of Argument and Submissions
lodged for the previous Summar Roll were still appropriate.
Submissions for the Fourth
Defender and Respondent
[14] Counsel for the Fourth Defender and Respondent moved for the Note of
Objections to be repelled in its entirety. His secondary position was that if
there were items that required to be revised the Court should revise the
account rather than remitting the account to the Auditor. (The Noter assented
to this way of proceeding.) Counsel estimated that, even if every argument
made by the Noter were accepted, the Noter's liability would still amount to
£72,728 including VAT.
[15] Under
reference to Greens' annotated Rules of the Court of Session (looseleaf),
Vol 2, C330/13, General Note, 42.4.1 and Wood v Miller [supra]
at 98, counsel submitted that the test for sustaining objections to a taxed
account was a judicial review-type test. The Auditor's Minute contained a
useful review of the relevant authorities. On the question of the appropriate
attendance fee for counsel, including preparation, counsel referred to Jarvie
v Greater Glasgow Primary Care NHS Trust [2006] CSOH 42 and in
particular to Lord Carloway's observations at paragraphs 38, 39 and 40.
At paragraph 40, Lord Carloway said:
"...when the stage is reached when it becomes reasonable to charge an element of counsel's fee for a discharged or otherwise cancelled proof in a party and party account, it is not necessary for counsel's preparation to be charged separately from the first day of a proof. That preparation may be subsumed into the fee for the first and subsequent days, having regard to the complexity of the action".
[16] Counsel
submitted that the following propositions are to be derived from the
authorities: great importance is given to the judgement of the Auditor based
on his knowledge and experience; it is for Auditor to decide what charges are
reasonable and proper; the Auditor fulfils his function by applying his
knowledge and experience to the account and supporting vouchers; in general
charges by counsel for attendance at a hearing that does not take place are
appropriate; in this connection there is no distinction to be drawn between a
proof and a procedure roll debate in respect that substantial preparation might
be required for either; and it is not necessary for counsel's fees for
preparation and attendance to be charged separately. In the present case,
counsel submitted, the legal debates were about complex matters of substantive
law.
[17] The
Auditor, counsel continued, had clearly applied his judgement to the account: he
had abated some items and left others untouched. In relation to the first
point of objection, the fee for the Procedure Roll debate of 14 February 2006
which did not take place on that occasion for the reason that no judge was
available, the Noter's apparent objection stated in the Note of Objections to
the allowance for "attendance" (when in no actual appearance in Court was
required) was without substance. It was immaterial that the Auditor in his
Minute at paragraphs 4, 5 and 6 had repeatedly described the hearing set down
for 14 February 2006
as "adjourned". The meaning was clear.
[18] The
second point, namely the objection to the fee for the adjourned Procedure Roll
debate that started on 6 June 2006, was misconceived. The Auditor did not say that he was allowing a
fee for eight days for a diet that took six-and-a-half days. He had
simply looked at matters in the round and allowed what in his judgement was a
reasonable fee. At most there might be a minor error of fact in the Auditor's
presentation, but there was no error of law that would entitle the Court to
interfere.
[19] In
relation to the objection that all the fees allowed were too high when compared
with the maximum suggested by the previous auditor in relation to specific
proceedings, counsel submitted that there must be a range of opinion as to what
constitutes a reasonable fee. Different Auditors are entitled to have
different views. Further it is not necessarily obvious that fees for interim
interdict hearings and for summary decree motions should necessarily be the
same as fees for procedure rolls and proofs. A v British
Broadcasting Corporation was about the account for an interim interdict
hearing; and the account in action A1767/03 was for a motion for summary
decree.
[20] Counsel
continued that, in connection with the question whether "disappointment fees"
are allowable, the Noter's reliance on the decision in Gorrie's Exrx v
Ciba Geigy Ltd, 23 June 1995, Lord Osborne, unreported, cited at page 2 of the Note of
Objections, was erroneous. The observations in Gorrie's Exrx had been
superseded. Counsel referred to Greens' Annotated Rules of the Court of
Session (looseleaf), Vol 2, C 337, and to Practice Note No 5
of 1996, "Counsel's Fees for Settled or Discharged Cases" also Vol 2, C 2036.
Whether a fee that includes a commitment element is appropriate is a matter
for the Auditor's consideration.
[21] Overall,
counsel submitted, the figures arrived at by the Auditor in relation to the
four contested items could not be regarded as Wednesbury unreasonable. It
was a bold submission that the relatively narrow margin of judgement between
the previous Auditor's assessments and the present Auditor's assessment
constituted Wednesbury unreasonableness. No such flaw in the present
Auditor's taxation of the Fourth Defender's account of expenses in this case
having been demonstrated, the Note of Objections should be repelled.
[22] As
stated above I regard these proceedings as having been superseded by the
Judicial Review. The matter having been remitted to another auditor I think it
inappropriate to express any view on the merits of the competing submissions
presented in relation to the Note of Objections. In the circumstances I shall
dismiss the Note of Objections as unnecessary.