Scottish Court of Session Decisions

Petitioners:  MacColl;  Lindsays

Second, Third and Fourth Respondents:  R N Thomson QC;  TC Young Wilson Terris

2 May 2014

Introduction

[1]        The background to these proceedings is outlined in my opinion of 9 July 2013 ([2013] CSOH 116).  By two interlocutors of the same date I granted the petitioners the remedies described in paragraph 45 of that opinion.  The second, third and fourth respondents’ reclaiming motion was refused (on the single bills) by interlocutor of 14 January 2014.  In terms of the same interlocutor the petitioners were awarded the expenses of the reclaiming motion.

[2]        On 2 May 2014 I heard the petitioners’ motion (i) for the expenses of the petition process except in so far as already dealt with (ii) for an additional fee in terms of rule of court 42.14.  I granted the motion for expenses and I allowed an additional fee under reference to heads (a), (b), (e) and (g) of rule 42.14(3).  I have now been informed that that interlocutor has been reclaimed.

Submissions for the petitioners

[3]        The petition was served on these respondents in October 2008.  Mr MacColl submitted that proceedings had been protracted.  At every turn these respondents had sought to put off the day when matters could be determined by the Court.  There had been multiple changes of representation which had created delays and extra work.  At long last, on 29 May 2013, these respondents had admitted that they had no defence to the merits of the petition.  A proof on remedies had then been fixed.  

[4]        The inescapable fact was that, despite these respondents’ efforts, the petition had been successful.  The petitioners had required to seek declarator that the affairs of Holdings had been conducted in a manner unfairly prejudicial to their interests as members of Holdings.  They had required to seek appropriate remedies.  Expenses should follow success in the normal way.  There was no good reason why they should not.

[5]        An additional fee was justified.  It was accepted that where expenses had already been awarded and taxed they could not be the subject of an additional fee. 

[6]        From the outset the petition had been drafted so that it contained a proposal for resolution of matters.  Even in the context of a section 994 petition that had been a relatively novel approach.  Interdicts were sought and undertakings were given at the bar.  Over the years there had been many attempts at achieving a negotiated settlement.  These had involved a great deal of time, effort and expense.  The award of expenses of 15 June 2012 was made against the second and third respondents to mark the court’s displeasure at their conduct of the proceedings.  (It had been an award of an interim nature, that they pay 60 per cent of the petitioners’ expenses at that stage.  That award had been taxed.)  The interlocutor of 30 October 2012 followed soon after.   Finally, on 29 May 2013 unfair prejudice was admitted and the proof on remedies was allowed. 

[7]        So far as head (a) was concerned, the cause was complex and it raised many difficult issues.  The remedies which required to be considered were novel.  Head (b) was satisfied.  The solicitors involved had, and had required to have, skill and specialist knowledge of company law.  It had been a highly time consuming matter - 2020 hours of solicitors’ time had been expended (excluding the reclaiming motion against the interlocutor of 9 July 2013).  With regard to head (c), there were 6,933 digital documents relating to the case and 24 files (a full filing cabinet).  As regards (e), the litigation was very important to the petitioners.  It was not merely a dispute about money.  Turning to (f), at one point the land had been valued at up to £9 million - before the insolvency of the proposed purchaser, Scottish Coal.  In relation to (g), a great deal of work was done by the solicitors with a view to settling the cause, but also to limit the matters in dispute and limit the scope of any hearing.

Submissions for the second, third and fourth respondents

[8]        Mr Thomson submitted that the motion was premature.  It should be refused in hoc statu.  Expenses should be reserved until after the expiry of the second anniversary of the interlocutor of 9 July 2013.  Only then would the Court be in a position to determine whether the petitioners had made appropriate use of the remedies provided by that interlocutor.  It was suggested that they had not done so to date.  Only at the expiry of that period could the Court see where the equities lay.  Any question of expenses quoad the sixth respondent could be dealt with at the same time.

[9]        So far as an additional fee was concerned there was a risk of inequity inter se the fourth respondent on the one hand and the second and third respondents on the other because the latter had awards against them that had been taxed (such as the award of 15 June 2012) which could not now be the subject of an additional fee.  More fundamentally, there were no grounds for an additional fee.  This had been a family dispute.  It had not been of “labyrinthine” complexity.  The respondents had not led any evidence at the hearing.  It would be for the auditor to decide whether 2020 hours had required to be expended, or whether the number of documents which required to be generated was truly justified.  The present value of the property was perhaps nearer £1 million than £9 million.  So far as head (g) was concerned the solicitor’s efforts had not been extraordinary.

Decision

[10]      I am not persuaded that the motion for expenses ought not to be dealt with before any possible question of liability of the sixth respondent in expenses is raised and determined.  No such motion for expenses against that respondent is before the Court.  If and when any such motion is made it will be for the Court to deal with it in the normal way. 

[11]      I have no difficulty in rejecting the contention that the motion for expenses is premature.  The petitioners have been put to the expense of bringing the petition proceedings in order to establish unfair prejudice and to obtain appropriate remedies.  They have been successful.  In my view expenses should follow success in the ordinary way - and they should be dealt with now.

[12]      I have no hesitation in allowing an additional fee.  I am unimpressed by the argument of potential inequity inter se the respondents.  The hearing proceeded (correctly in my view) on the basis that the award of expenses made on 15 June 2012 (as corrected by the interlocutor of 2 August 2012) was an interim award against the second and third respondents to reflect the court’s displeasure at their conduct; and that the Court reserved all questions relating to the remaining 40% of expenses (see the entries in the Minute of Proceedings for 2 August 2012 and 2 May 2014).  With the benefit of hindsight the petitioners may well feel they ought to have moved for an additional fee before the previous awards (including the award of 15 June 2012) were taxed.  Neither the fact that they did not do so, nor the consequences of their omission, provide a good reason for refusal of an additional fee.  In exercising my discretion the primary consideration is that justice is done between the petitioners and the respondents.  In my opinion justice requires that an additional fee be allowed.  It is very clear to me from my involvement in the case, and from a consideration of its history, the interlocutor sheet and the minute of proceedings, that this was a difficult and complex case, involving a degree of novelty, and requiring a great deal of time, effort, responsibility and specialised skill and knowledge on the part of the petitioners’ solicitors.  The case was of very considerable importance to the petitioners.  Extraordinary efforts appear to have been made, on repeated occasions, to resolve matters.  Very significant efforts were made to seek to narrow the issues in dispute.  For these reasons I agree with Mr MacColl that an additional fee is appropriate on heads (a), (b), (e) and (g).