Scottish Court of Session Decisions

FIRST DIVISION, INNER HOUSE, COURT OF SESSION

[2015] CSIH 1

XA107/10

The Lord President

Lady Clark of Calton

Lord Wheatley

OPINION OF THE LORD PRESIDENT

in the Motion by the Appellant

in the case

ALASTAIR SALVESEN

Landlord and Appellant;

against

JOHN RIDDELL and ANDREW RIDDELL

Tenants and Respondents:

and

THE LORD ADVOCATE

Intervener

For the landlord and appellant:  Reid, QC;  Gillespie MacAndrew

For the intervener:  McBrearty QC;  Scottish Government Legal Directorate

6 January 2015

The motion

[1]        The appellant has enrolled the following motion against the Lord Advocate:

“For the expenses of process of the appeal and of the Land Court on an indemnity basis (to include the expenses occasioned by the involvement of Messrs Riddell) which failing the expenses on a party and party basis with an additional fee (under Rule 42.14(3), heads (a), (b), (e), (f), (g)).”

Counsel for the Lord Advocate opposed the motion for expenses in the Land Court on the basis that the Lord Advocate was not a party to that process, the Convention point not having been taken, and that any claim that the appellant had for expenses in that court should have been pursued against the respondents.  In relation to the appeal he submitted that the Lord Advocate’s intervention in the Inner House caused only part of the expenses there incurred; that indemnity expenses are awarded as a mark of disapproval; that no criticism could be made of the Lord Advocate in relation to his intervention in the case; and that in any event no additional fee should be awarded under Rule 42. 

 

The history
[2]        The history of this action and of the legislation that gave rise to it is set out in my Opinion in this case in the Inner House (Salvesen v Riddell 2013 SC 69) and in the Opinion of Lord Hope in the Supreme Court (Salvesen v Riddell 2013 UKSC 236). 

[3]        The respondents were the general partners in a limited liability partnership that was tenant of the appellant’s farm.  The limited liability partnership agreement provided that the partnership would come to an end on 28 November 2008.  On 3 February 2003 the appellant gave notice of dissolution to that effect. 

[4]        In March 2003 on the eve of the passing of the Agricultural Holdings (Scotland) Bill, an amendment was proposed by the Deputy Minister, and agreed to by the Parliament, that was seriously detrimental to the appellant’s interests.  The effect of the amendment was that because the notice of dissolution had been served after 16 September 2002, the respondents would be entitled to serve notice of their intention to become joint tenants of the farm.  If that notice took effect, they would thereby obtain a 1991 Act tenancy (2003 Act, s 1).  The mere creation of a protected agricultural tenancy of that kind would greatly reduce the capital value of the appellant’s farm. 

[5]        On 12 December 2008 the respondents duly served the notice.  On receiving it, the appellant applied to the Land Court for an order under section 72(8) of the 2003 Act and for removing of the respondents.

 

The proceedings in the Land Court
[6]        The issue before the Land Court was whether the appellant could establish the requirements of paragraphs (a) and (b) of section 72(9).  In relation to the present motion, the significant point is that at the hearing in the Land Court the solicitor then representing the appellant intimated that a Convention-based challenge to the vires of the section was no part of his case (Land Court Note, para 8).  The Land Court, with regret, refused the application.

 

The proceedings in the Inner House
[7]        The appellant thereafter instructed other solicitors, who instructed senior counsel.  When the appeal came before this court, we allowed the appellant to amend the grounds of appeal by taking the point that the section infringed his rights under article 1 of Protocol 1 to the Convention and accordingly, in terms of section 29 of the Scotland Act 1998, was ultra vires.

[8]        The Lord Advocate intervened on behalf of the Scottish Executive to oppose the appeal, so far as it was based on the Convention. 

[9]        We allowed the appeal on an interpretation of section 72(9) of the 2003 Act; and on the Convention point came to the conclusion that section 72 was ultra vires. 

 

The aftermath
[10]      The Lord Advocate appealed to the Supreme Court on the Convention point.  Meanwhile, the appellant settled with the respondents.  The agreement was that he would obtain vacant possession and that no expenses would be due to or by either the appellant or the respondents.  In consequence of the settlement neither the appellant nor the respondents took part in the proceedings in the Supreme Court.  The Supreme Court allowed the Lord Advocate’s appeal for technical reasons; but in effect it upheld the decision of this court on the substantive question of vires although narrowing its effect to section 72(10), on the basis of submissions that had not been advanced in this court.

 

Conclusions
Expenses in the Land Court
[11]      The Lord Advocate intervened in this court because of the challenge to the vires of section 72.  That issue was not raised on the appellant’s behalf in the Land Court.  I can therefore see no justification for an award of expenses against the Lord Advocate in respect of proceedings to which he was not convened and in which the appellant ‘s then solicitor disclaimed any case based on Convention grounds.  Since the appellant sought a remedy in the Land Court under section 79 only, his claim for expenses in that court lay against the respondents; but by his agreement with them he has renounced any such claim.   He cannot now seek to recover such expenses from the Lord Advocate. 

 

Expenses in the Court of Session
[12]      The appeal was brought on the section 72(9) point.  The appellant succeeded on that point; but that question lay between him and the respondents.  In the subsequent settlement, the appellant released the respondents from any liability in expenses in relation to the appeal.  The Lord Advocate intervened in the appeal only when the Convention point was raised.  Since he opposed the appeal only on that point, his liability in expenses should in my view be confined to the expenses incurred in relation to it.  It is impossible to make a precise calculation of the proportion of the hearing that was taken up with the Convention argument.  In my view, a fair assessment would be to find the Lord Advocate liable in 50% of the appellant’s expenses. 

 

The scale of expenses
[13]      In my view the expenses for which the Lord Advocate is found liable should be on the scale that is moved for.  This was a litigation that the appellant was forced to conduct in defence of his right to vacant possession of his property against legislation that was found to be beyond the competence of the Parliament.  That legislation resulted from a late amendment to the Bill proposed by the Deputy Minister contrary to previous assurances by the Scottish Executive and by the relevant minister that existing limited partnership tenancies would not be affected by the Bill.  The history of that process and the reasons given to the Parliament for the amendment are set out ad longum in my Opinion in the Inner House (2013 SC 69, paras [13] to 32]).

[14]      In general, the court awards indemnity expenses to mark its disapproval of a party’s conduct of a litigation (eg Bell v Inkersall Investments Ltd (No 2) 2007 SC 823); but in a discretionary matter of this kind, there may be other valid reasons for its doing so.  In this case the appellant has not been put to expense by the unreasonable conduct of an opponent.  He has been put to expense by reason of an invalid statutory provision that, had he not challenged its lawfulness, might well have resulted in the loss of vacant possession of his farm and consequently in a substantial loss of capital value. 

[15]      In my view, the mere fact that legislation has been found to be ultra vires should not in itself justify the award of indemnity expenses to the party who has challenged it; but the circumstances of this case justify that course.  The appellant was drawn into this litigation because of the late amendment proposed by the Deputy Minister.  Although we should not assume that a ministerial statement reflects the objective intention of the Parliament in enacting a provision (Wilson v First County Trust (No 2) [2004] 1 AC 816, Lord Nicholls of Birkenhead at para 66; cited in Salvesen v Riddell 2013 UKSC 236 at para 37), a ministerial statement is not irrelevant to that question.  On the contrary, the nature of the statement may acquire significance from other circumstances.  In this case the amendment was a Scottish Executive amendment.  The Deputy Minister spoke of it as representing Executive policy. 

[16]      The statement itself was inaccurate and undisciplined.  Although landlords such as the appellant had merely exercised their contractual rights, it characterised their actions as “immoral.”  It raised the spectre of “eviction,” which was an emotive and misleading description of the lawful procedure to which landlords such as the appellant had resorted. 

[17]      In my Opinion, in which my colleagues concurred, I pointed out that the offending section applied in relation to a random period of time (2013 SC 69, at para [85]); that it was essentially retaliatory (para [90]);  that there was no intellectual or principled justification for it (at paras [91] and [99]) and that there was no convincing justification for the differential treatment of the group of landlords to which the appellant belonged in section 72 and of other landlords in section 73.

[18]      The objective conclusion of the Supreme Court was that section 72(10) was discriminatory because it adversely affected the right of a small group of landlords in the enjoyment of their property; that it was hard not to see the provision as having been designed to penalise landlords in that group retrospectively; that the benefit of section 73 was also denied to such landlords; and that the penalisation of them appeared to be entirely arbitrary (2013 UKSC 236, at para [42]).  The Supreme Court also pointed out that some of the remarks by the Deputy Minister, to which I referred in my Opinion (2013 SC 69, at paras [87] to [92]), might be taken to indicate that the intention was to punish landlords who served notice as the appellant did (2013 UKSC 236, at para [37]).  The Supreme Court also said that a reader of the Deputy Minister’s remarks in that debate might be forgiven for thinking that they displayed a marked bias against landlords.

[19]      The idea that the statement of the Deputy Minister was not influential in the decision of the Scottish Parliament to enact section 72(10) is, I think, fanciful.

[20]      I conclude that, on any proper examination, the late amendment should have been seen at the outset to offend against the Convention rights of those landlords at whom it was directed.  The appellant was unavoidably drawn into this costly and prolonged litigation in consequence of a provision that ought not to have been passed.  In this court the Lord Advocate’s position was that article 1 of Protocol 1 was not even engaged.  These considerations, in my view, place an entirely different complexion on the Lord Advocate’s intervention.

[21]      In all the circumstances, I conclude that expenses in this court on the scale proposed are entirely justified.

 

Disposal

[22]      I propose to your Ladyship and to your Lordship that we should grant the motion in relation to 50% of the expenses of the proceedings in this court only; and that those expenses should be on the scale agent and client, client paying. 

FIRST DIVISION, INNER HOUSE, COURT OF SESSION

[2015] 1

XA107/10

The Lord President

Lady Clark of Calton

Lord Wheatley

OPINION OF LADY CLARK OF CALTON

in the Motion by the Appellant

in the case

ALASTAIR SALVESEN

Landlord and Appellant;

against

JOHN RIDDELL and ANDREW RIDDELL

Tenants and Respondents:

and

THE LORD ADVOCATE

Intervener

For the landlord and appellant:  Reid, QC;  Gillespie MacAndrew

For the intervener:  McBrearty QC;  Scottish Government Legal Directorate

6 January 2015

[23]      I agree with the Opinion of your Lordship in the chair and have nothing further to add.

FIRST DIVISION, INNER HOUSE, COURT OF SESSION

[2015] 1

XA107/10

The Lord President

Lady Clark of Calton

Lord Wheatley

OPINION OF LORD WHEATLEY

in the Motion by the Appellant

in the case

ALASTAIR SALVESEN

Landlord and Appellant;

against

JOHN RIDDELL and ANDREW RIDDELL

Tenants and Respondents:

and

THE LORD ADVOCATE

Intervener

For the landlord and appellant:  Reid, QC;  Gillespie MacAndrew

For the intervener:  McBrearty QC;  Scottish Government Legal Directorate

6 January 2015

[24]      I agree with the disposal proposed by your Lordship in the chair and have nothing to add.