Pursuer and Appellant:  Party

Defender and Respondent:  Dunlop QC;  Simpson & Marwick

30 May 2014

Introduction

[1]        The appellant was unsuccessful in his appeal from the decision of the sheriff at Edinburgh to dismiss the action he had raised against the respondent, for the reasons explained in the opinion of this court dated 21 June 2012, as corrected (in one respect) in its opinion dated 5 February 2013.

[2]        On that latter date, the court also granted the respondent’s motion for the expenses of process, insofar as not already dealt with and, in the usual way, provided for remittal of the relevant account for expenses to the Auditor of the Court of Session, to tax.

[3]        The Auditor’s report has now been lodged.  It is dated 11 April 2014 and taxes at the sum of £25,383. 85, the expenses incurred by the defender and respondent, being the sum brought out in the account lodged with the auditor after his having taxed off the sum of £7494.30.  That is, the Auditor had disallowed more than twenty per cent of the expenses claimed in the account.  In the usual way, the auditor has marked on the account, in manuscript, the sums disallowed.

[4]        The appellant lodged a note of objection to the Auditor's report and enrolled a motion to have it received (see: rule of court 42.4(2)(b)).  Opposition to the motion was marked and a hearing of the opposed motion took place on 30 May 2014. Following an adjournment to consider our decision, we refused the appellant’s motion and undertook to provide our reasons in writing which we now do.

The Note of Objection

[5]        The appellant’s note of objection was in the following terms:

“(1)      The pursuer was and is not liable for any interest on expenses for both the Singh v Truscott and Singh v Napier cases.

(2)        The pursuer has over-paid the Defender (or his agents) in the Singh v Truscott case.

(3)        The Singh v Napier expenses hearing is to be re-heard, with costs borne by the Defender (or his agents), in order that the pursuer may examine the un-redacted Singh v Napier client ledger and know what he must pay the Defender.”

The opposition marked was in the following terms:

“The note of objection does not set out points of objection to the Auditor’s report and the taxed account. It does not set out any objections to specific items contained in the taxed account of the Auditor’s report. See Urquhart v Ayrshire & Arran Health Board 2000 SLT 829.

The orders which appear to be sought by the pursuer in terms of the note of objection to the Auditor’s report dated 11^th April 2014 are incompetent.”

[6]        The appellant lodged a skeleton argument in advance of the hearing in which he expressly abandoned the second ground stated in his note of objection. Otherwise the skeleton seeks to support the note of objection by explaining that when expenses were assessed by the auditor, he did so on the basis of a ledger that, for the most part, had been redacted by the respondent’s agents and submitting that in those circumstances, he did not receive a fair and open trial.

Appellant’s Submissions

[7]        The appellant relied on his skeleton argument and made some oral submissions.

[8]        He made no oral submission in relation to interest; he was well advised to refrain from doing so since it is clear from the terms of the report that the auditor did not purport to award interest.  It would, in any event, not have been appropriate for him to do so.

[9]        Regarding the substantive part of his argument, the appellant sought to distinguish the cases of Urqhuart and Gupta on the basis that the whole taxation procedure was flawed because he was not provided with an unredacted version of the ledger. There were so many redactions, he could not be specific regarding any particular item in the account which, because of the redactions, concerned him.  The problem was that he did not know what lay behind the redactions.

[10]      It became apparent that the appellant’s objection was that because of what he saw as a fundamentally flawed procedure, he had not been able to check exactly what fees the respondent had paid to the solicitor.  He was not saying that work referred to in the account had not been performed nor was he saying that the level at which the auditor had taxed the fees was unreasonable.  Nor was he saying that the unredacted ledger entries did not adequately vouch the payment of court fees.  It was, rather, that he sought to know more about what had actually passed or not passed by way of fees as between client and agent.

Submissions for the Respondent

[11]      At the hearing on 30 May, senior counsel for the respondent opposed the motion.  Regarding the first ground in the note of objections, the auditor had not awarded interest; interest would, at a future date, begin to run ex lege, following decerniture but that would not be at the behest of the auditor. The note was also, he submitted, incompetent for the reasons explained in Urquhart and Gupta. He explained that there had been no withholding of relevant information.  The ledger of the respondent’s former agents had been lodged only to provide vouching of various payments of court fees which appeared as outlays in the account.  The ledger system used by those agents did not enable them to extract that vouching from it.  There was no alternative but to lodge the entire ledger which included numerous items that had nothing to do with court fees.  They had, accordingly, redacted the entries in the ledger which did not provide such vouching; those entries were not relevant and the respondent did not seek to rely on any of them.

Decision

[12]      In the case of Gupta v Ross, a decision of the Inner House approving the principle stated in the case of Urquhart v Ayrshire & Arran Health Board, the court stated that it was implicit in the note of objection procedure provided for under rule of court 42.4 that objection may only be taken to specific items in the Auditor’s report and that it is not a competent procedure for dealing with objections of a different nature.  It is, for instance, not competent to use a note of objection lodged under rule 42.4 to challenge the general procedure adopted by the Auditor.  It is, however, clear from the appellant’s skeleton argument, as supplemented by his oral submissions that that is what he seeks to do.  He does not attempt to challenge any individual entry in the account. Instead, his purpose was, evidently, to present a case to the effect that the whole procedure at taxation was fundamentally flawed because he was not provided with an unredacted copy of the client ledger.  In these circumstances, he faced the formidable task of distinguishing the binding authority of the case of Gupta.  He was, however, unable to point to any relevant distinction. To the contrary, his explanations confirmed that the arguments he sought to advance could not competently be presented by way of a rule 42.4 note. 

[13]      We would add that, as explained to us, the appellant’s argument would not even be a relevant basis for a challenge of the sort that might be raised in relation to a taxation in another form of procedure.  As was submitted by counsel for the respondent, there was no withholding of any information that was relied on by the respondent or by the auditor.  The auditor did not have an unredacted version of the ledger either.  As to the issue of what may or may not have, as at the date of the account, passed between the respondent and his solicitors by way of actual payment of fees, that would not have been relevant to what the auditor had to consider, namely what was a reasonable fee for the work done.

[14]      After we had given our decision, senior counsel for the respondent moved for the expenses in relation to the hearing of the motion.  That motion was opposed by the appellant who invited us to make a finding of no expenses due to or by either party under reference to a brief email exchange between him and the respondent’s agents about the redacted ledger.  We were not persuaded that the circumstances were such as justified departure from the ordinary rule that expenses follows success and, accordingly, found the appellant liable in the expenses of the hearing.