Scottish Court of Session Decisions

EXTRA DIVISION, INNER HOUSE, COURT OF SESSION

[2015] CSIH 43

P325/13

Lord Brodie

Lady Clark of Calton

Lord McGhie

OPINION OF THE COURT

delivered by LORD BRODIE

in the Reclaiming Motion

of

MUB

Petitioner and Reclaimer;

against

THE SECRETARY OF STATE FOR THE HOME DEPARTMENT

Respondent:

Act:  Caskie;  Drummond Miller LLP

Alt:  MacGregor;  Office of the Advocate General

Third Party:  Broome;  Scottish Legal Aid Board

4 June 2015

Introduction
[1]        This is a motion for and in respect of an award of expenses following upon the refusal of the reclaiming motion at the instance of the petitioner.  It is made by the respondent, the Secretary of State for the Home Department.  The motion falls into three parts and is in the following terms:

“On behalf of the Respondent, the Lords having refused the reclaiming motion by interlocutor of 30^th January 2015, (1)  to find the Petitioner and Reclaimer liable in the expenses of the reclaiming motion as taxed, (2)  for an order in terms of s19(1) of the Legal Aid (Scotland) Act 1986 requiring payment of those expenses out of the Scottish Legal Aid Fund in respect that it is just and equitable in all the circumstances that the award should be paid out of public funds and (3)  to find the Petitioner and Reclaimer liable in the expenses of the Outer House proceedings as an assisted party and to modify those expenses to NIL in terms of s18(2) of the Legal Aid (Scotland) Act 1986.”

[2]        Part (3) of the motion was unopposed by the petitioner, and accordingly, was granted.  Part (1) was opposed to the extent that the petitioner sought modification to nil.  The Scottish Legal Aid Board was heard in opposition to part (2).

Petition
[3]        The petition is for judicial review of the refusal by the Upper Tribunal on 22 November 2012 of an application by the petitioner for permission to appeal a determination by the First‑tier Tribunal.  The temporary Lord Ordinary dismissed the petition in terms of interlocutor dated 21 November 2013.  The petitioner reclaimed that interlocutor.  That reclaiming motion was refused for the reasons set out in the opinions of the members of the court on 30 January 2015.

Jurisdiction to make an award of expenses out of the Scottish Legal Aid Fund
[4]        Section 19 of the Legal Aid (Scotland) Act 1986 provides as follows:

“19       Expenses out of the Fund.

(1)        In any proceedings to which a legally assisted person is party and which are finally decided in favour of an unassisted party, subject to subsections (2) and (3) below, the court may make an award out of the Fund to an unassisted party of the whole or any part of any expenses incurred by him (so far as attributable to any part of the proceedings in connection with which another party was a legally assisted person).

(2)        Before making an order under this section, the court shall consider making an award of expenses against the legally assisted person.

(3)        An order under this section may be made only if—

(a)        an order for expenses might be made in the proceedings, apart from this Act; and

(b)        in the case of expenses of proceedings in a court of first instance, those proceedings were instituted by the legally assisted person, and the court is satisfied that the unassisted party will suffer financial hardship unless the order is made;  and

(c)        in any case, the court is satisfied that it is just and equitable in all the circumstances that the award should be paid out of public funds.

(4)        The provisions of subsection (3)(b) above regarding financial hardship may be modified, in their application to persons who are concerned in proceedings only in a fiduciary, representative or official capacity, by regulations made under this section.

(5)        No appeal may be made against an order made under this section, or against a refusal to make such an order, except on a point of law.

(6)        In this section, “expenses” means expenses as between party and party, and includes the expenses of applying for an order under this section.”

[5]        Rule 6(2) of the Act Sederunt (Civil Legal Aid Rules) SSI 1987/492 provides that on an application being made to the court under section 19(1) of the 1986 Act if the court does not summarily dismiss the application it may order the applicant to lodge a statement on oath of his grounds for claiming payment out of the Scottish Legal Aid Fund of the whole or part of the expenses incurred by him together with an estimate of the probable amount of these expenses.  In the present case the court made such an order on 23 April 2015.  In compliance the respondent lodged a statement on oath dated 7 May 2015 together with an account of expenses in the sum of £11,603.50.

Submissions
Respondent
[6]        Mr MacGregor appeared on behalf of the respondent.  The statement on oath lodged on behalf of the respondent had been framed with a view to setting out the relevant law and the basis upon which a claim was made in the present case for payment of expenses out of the Fund.  Mr MacGregor adopted what appeared there.  In order for the court to make an award it had to be satisfied that it was just and equitable in all the circumstances that expenses should be paid out of public funds.  This was to confer a very wide discretion on the court.  However, unlike in relation to the expenses of proceedings in the Outer House, it was not also a necessary condition for the award being made that the court was satisfied that the respondent would suffer financial hardship if the award was not made.  Guidance as to when the court should be satisfied that it was just and equitable that an award should be paid out of public funds was available from the decisions in relation to the predecessor provision, in Christensen v Ranks Hovis McDougall Ltd 1974 SLT (Notes) 69 and 70 and Bell v Fife Council 1975 SLT (Notes) 4 at 4 - 5.  The relevant factors to be taken into account included the fact that the reclaiming motion was made by the assisted party, the fact that the unassisted party had been successful in the reclaiming motion, whether the reclaiming motion had had any real merit and the conduct of the parties.  Further assistance was available from the decision of the Court of Appeal in R (Gunn) v Secretary of State for the Home Department [2001] 1 WLR 1634.  As appeared from the judgment in that case, the phrase “out of public funds” in the legislation did not restrict the court’s power to make an award only in favour of a litigant who was not publicly funded;  it will normally be just and equitable that, when a costs order is made against a party who had been supported by public funds, the costs covered by the order should, insofar as they cannot be recovered from the funded party, be defrayed out of public funds;  it is just and equitable that the funding body should stand behind the person it has funded unless there are facts that make the result unjust or inequitable;  and a government department is not at a disadvantage as compared with any other litigant in seeking recovery. 

[7]        It was Mr MacGregor’s submission that, applying the principles he derived from both Scottish and English authority, it was just and equitable that the respondent’s expenses in this reclaiming motion should be paid out of public funds.  It was because of the Board’s assessment of prospects of success that the reclaiming motion had been brought.  The petitioner having brought the reclaiming motion, the respondent had been successful in resisting it.  The reclaiming motion had no real merit.  The petitioner had not followed the guidance given in SA v Secretary of State for the Home Department 2014 SC 1 in drafting the petition.  Arguments had been advanced which were not the subject of well‑focused averments in the petition.  Argument had been made in support of the reclaiming motion that had not been made to the Lord Ordinary.  This was a case where the respondent required to enter the petition process.  The decision which was made the subject of judicial review was that of the Upper Tribunal but the Upper Tribunal does not appear to oppose applications for judicial review and therefore the respondent had to appear as contradictor.  It is true that in the present case the respondent had not objected to a grant of legal aid but it would appear from the guidance provided by the Board in its Civil Legal Assistance Handbook that it does not attempt to determine legal issues when assessing probable cause.  No doubt the Board had decided to grant legal aid to the petitioner on the basis of the advice of counsel, but that generic consideration had not weighed with the United Kingdom Supreme Court when deciding a question of costs in McGraddie v McGraddie 2015 SLT 69 and it should not weigh with the court in the present case.  Mr MacGregor advised that the experience of the respondent in England in relation to equivalent applications was that all of the 41 which had been made in the last year had been granted.  The practice was to make an order for payment out of public funds unless something “jumped off the page” indicating that it was not just and equitable to do so.

Scottish Legal Aid Board
[8]        Mr Broome appeared on behalf of the Scottish Legal Aid Board.  His motion was to refuse the motion made by the respondent.  He began by setting out the six principles which he drew from the Scottish authorities which had been referred to by Mr MacGregor:

(1)        The “just and equitable” test had to be applied in each case by reference to the circumstances of that case;

(2)        the court had a wide discretion in the matter;

(3)        the court had to weigh up all the factors in the case;

(4)        the facts in a particular case may alter the weight which requires to be given to a particular factor;

(5)        no factor automatically results in a motion being granted;

(6)        the relevant facts include (but are not limited to) the conduct of parties and the issues in the case.

Mr Broome accepted that the starting position was that the respondent had won and the petitioner had lost but argued that, nevertheless, one had to look at all the factors in the case.  The English case of R (Gunn) was of no assistance.  Scottish authorities had not been cited.  Practice as to costs in England is not the same as practice in relation to expenses in Scotland.  In any event, the observations in R (Gunn) which had been founded on by Mr MacGregor were obiter.  Accordingly, in Mr Broome’s submission, the court should simply apply the “just and equitable” criterion without relying on any presumptions or other elaboration drawn from English authority.  Looking at all the factors in the present case, it was relevant that the respondent had not objected to the grant of legal aid for the reclaiming motion.  It would have been open for her to do so and one cannot know what would have been the result had an objection been made.  The case was a very important one from the perspective of the petitioner.  Whatever criticisms may be made of the presentation of the petitioner’s case that was not the responsibility of the Board.

Decision
[9]        We are required to determine whether we are satisfied, in all the circumstances of this case, that it is just and equitable that the award of expenses against the petitioner in favour of the respondent should be paid out of the Scottish Legal Aid Fund.  The circumstances of the case are unremarkable.  If an order is made it will result in public funds going from an agency of government to a department of government.  That introduces no speciality.  Mr Broome did not contend that it did.  We note that a suggestion that the public body should not receive payment from public funds was quickly departed from in Bell v Fife County Council and an argument that the reference to payment being made “out of public funds” in the English regulations implied that an order could only be made in favour of a privately funded litigant was rejected by the Court of Appeal in R (Gunn).  So far as the conduct of parties and the Board was concerned nothing was identified that we can regard as either untoward or unreasonable.  Despite some critical comments made by the court about the way in which the petitioner’s case had been presented, Mr MacGregor accepted that counsel had been doing his best for his client, and that the Board is not, and should not be, in a position to control precisely how a case is put forward.  Mr Broome made something of the respondent’s failure to object to a grant of legal aid in respect of the reclaiming motion, although he did not go to the length of saying that it had been unreasonable for her not to do so.  This is not something to which we feel able to give any weight.  This was an application for judicial review.  The issues were entirely legal issues.  These issues had been canvassed in the determination by the First‑tier Tribunal and in the opinion of the temporary Lord Ordinary.  We assume that the Board had had the benefit of the views of the petitioner’s counsel.  It is difficult to see what the respondent’s advisors would have been able to add to that other than their views on the applicable law.  As Mr MacGregor pointed out, chapter 3 of the Civil Legal Assistance Handbook sets out, in some detail, the Board’s decision‑making process when determining whether or not an applicant for legal aid has probable cause and whether it would be reasonable to make a grant of legal aid in his favour.  It includes the information, at paragraphs 3.1, that the Board will not pre‑judge issues that are a matter for the court to decide.

[10]      What then is left are the uncontentious facts that it was the assisted party who reclaimed and it was the unassisted party who was successful.  We agree with what was said in Bell v Fife County Council that when exercising the wide discretion conferred by section 19(3)(c) of the 1986 Act, it would be wrong to assume that the establishment of these two factors will automatically result in the granting of a motion for the payment of an award of expenses out of public funds but, nevertheless, as was stated in both Bell and Christensen they are important factors.  In the absence of anything else of significance to tip the balance the other way, they are likely to be determinative.  In the present case there really is nothing else.  We would make no criticism whatsoever of the Board’s decision to fund this reclaiming motion but, in the absence of factors pointing to another conclusion, we consider that it should continue to stand behind the petitioner and pay the expenses occasioned to the respondent by the petitioner’s unsuccessful attempt to reclaim against the temporary Lord Ordinary’s decision.

[11]      As we have been satisfied that it is just and equitable in all the circumstances that the award of expenses in favour of the respondent should be paid out of the Scottish legal aid fund, we shall make no order for modification, as moved for by the petitioner.  Accordingly, we should grant part (2) as well as well as parts (1) and (3) of the respondent’s motion.