Scottish Court of Session Decisions

EXTRADIVISION, INNER HOUSE, COURT OF SESSION

[2016] CSIH 91

XA151/14

Lord Brodie

Lord Drummond Young

Lady Clark of Calton

OPINION OF THE COURT

on the Note of Objections

delivered by LORD BRODIE

in the cause

GLASGOW CALEDONIAN UNIVERSITY

Pursuers and respondents

against

LIHE LIU

Defender and Appellant

Appellant:  L Johnston, (sol adv);  Kennedy’s Scotland (for Nolans, Glasgow)

Respondent:  Party

09 December 2016

[1]        This is an application by note of objections to a report by the Auditor of the Court of Session on the taxation of the account of expenses incurred by the pursuers and respondents in an appeal to this court from an interlocutor of the Sheriff Principal dated 18 September 2014 dismissing the defender and appellant’s appeal, for which the defender was found liable by interlocutor dated 2 June 2015.  The diet of taxation took place on 25 January 2016.  The account of expenses has been taxed by the Auditor at £11,296.03.  The applicant is the defender in the action and the appellant in the appeal. In terms of his note of objections he proposes that a further £5640.01 be taxed off the account.

[2]        As is required by RCS 43.4 (2A) the Auditor has lodged a minute stating the reasons for his decision in relation to the items to which objection is taken in the note of objections. It is dated 6 May 2016. 

[3]        Before this court the applicant appeared on his own behalf. Ms Johnston, Solicitor Advocate, appeared for the pursuers and respondents and respondent to this application. Written submissions had been lodged on behalf of each of the parties and were adopted by them as the basis of their submissions.

[4]        Before going any further, it is convenient to say something about the process of taxation of accounts of expenses by the Auditor of the Court of Session and the jurisdiction conferred on this court by RCS 42.4 to consider objections to the Auditor’s report on his taxation of a particular account.

[5]        The purpose of taxation, as appears from the terms of RCS 42.10 (1), is to provide a mechanism to ensure that a party who has been found liable to pay the expenses of the opposing party will only have to meet such expenses as are reasonable for conducting a cause in a proper manner.  The task of achieving that objective is given to the Auditor; he is the decision-maker. In carrying out his task the Auditor has considerable discretion.  At the diet at which he hears objections the Auditor is entitled to see all necessary documentation and to receive such information as he may require to enable him to complete the taxation. He will have available the process, vouchers for all outlays including counsel’s fees and the file of the solicitor for the party found entitled to expenses.  The diet is a relatively informal hearing held in the Auditor’s Office.  The practice is for the Auditor to hear objections made orally and to give his decision on them, again orally, as they arise.  Although a party found liable in expenses will state them orally at the diet, RCS 42.2 (4) requires him to intimate in writing to the Auditor and the party found entitled to expenses four days before the taxation the particular points of objection he intends to make.  The points of objection thus become part of the documentation before the Auditor and available to parties as an agenda for the diet.  However, the practice is not to provide a copy of the points of objection to the court hearing an application by way of note of objections. In the present case we did have a copy of the points of objection but only because it had been handed up by the applicant in the course of his submissions.

[6]        The nature of the jurisdiction of the court in respect of objections to a report flows from the nature of the function of the Auditor. In terms of RCS 42.4 (4) the court has the power to sustain or repel any objection in the note or remit to the Auditor for further consideration.  However, the circumstances in which that power may be exercised are limited, as appears from authority, and indeed was acknowledged by the applicant. It is not open to the court to substitute its views for those of the Auditor in respect of a particular item in the account simply because it disagrees with the conclusion that the Auditor has reached: Wood v Miller 1960 SC 86 at 97 to 98.  As was explained by Lord Mackay of Drumadoon in Tods Murray WS v Arakin Ltd (No 2) 2002 SCLR 759 at 764, the grounds on which a decision of the Auditor can be challenged by way of note of objections are akin to those that apply in judicial review proceedings.  It follows that the court can interfere if, but only if, for example, he has misdirected himself in law or has taken irrelevant circumstances into account or has failed to take into account relevant considerations or has misunderstood the factual material put before him. Where, as will very often be the case, his decision depends on the exercise of discretion, it will only be susceptible to being overturned where it is such that no reasonable decision-maker could come to that conclusion.

[7]        A further consideration is relevant to the jurisdiction which this court is called on to exercise and that is that the Auditor is an expert decision-maker whose expertise is not one available to the court. While it is true that, as the applicant submitted, the Auditor must reach an objective view of what is reasonable, as Lord Carloway explained in Jarvie v Greater Glasgow Primary Care NHS Trust [2006] CSOH 42 at para [39] the Auditor is particularly well placed to inform such a view by virtue of his experience of contemporary Court of Session litigation. As Lord Carloway put it:  “The Auditor sees a very large number of accounts over a considerable range of cases”.  Judges have no equivalent experience.  Accordingly, they are only in a position to interfere where it is quite clear that the Auditor has gone wrong.

[8]        We would mention something else in relation to the court’s jurisdiction under RCS 42.4. It requires to be exercised proportionately.  That has the result that in reviewing the broad discretion conferred on the Auditor, the court will not enter into matters of minor detail.  By way of example, in the present case the applicant takes the point that the Auditor charged a fee of £42 for the lodging of the account whereas, given the date when the account was intimated (18 September 2015) the relevant fee was £39.  We are prepared to assume that the applicant is correct about this, but this is not a point that we are prepared to entertain.  A detail of this sort may well be relevant before the Auditor but it is not a matter for objection to the court.  In saying this we understand a point made by the applicant in argument.  The Auditor had been punctilious in charging a half hour fee in respect of the applicant’s late attendance (by some 16 minutes) at the diet of taxation.  The applicant suggested that if such points were taken against him then he should be able to take similar points on his own behalf.  We can sympathise with that but this is not a question to be determined by sympathy. It is simply not the function of the court on consideration of a note of objections to get involved in matters of fine detail with minimal financial consequences.

[9]        In this case the applicant framed his note of objections by adding brief annotations beneath items in the judicial account.  Three items are objected to as not being properly based on the Table of Fees: the fee for attendance at the diet of taxation; the allowance of a number of sheets in a document and the lodging fee previously mentioned.  In the case of every other objection the contention is that the solicitor’s fee or the outlay in respect of counsel’s fee is excessive having regard to the limited and straightforward nature of the work involved or that the item was unnecessary (and in one instance a duplication of something previously charged).

[10]      In his written submission to the court the applicant has marshalled his arguments under five heads: (1) Auditor has duty to provide reasons for his decisions, (2) Whether the note of objection is incompetent, (3) The Auditor exercised his discretion unreasonably, (4) Counsel’s Charges, and (5) The Auditor misdirected himself on the law.

[11]      It is convenient to consider head (2) first.  It arises because in his minute the Auditor identifies 23 items in respect of which the objection taken in the note of objection is either different from the objection taken in the written points of objection lodged in advance of the diet of taxation or was not included at all.  To that extent the Auditor considers the note of objections to be incompetent.  On behalf of the respondent, Ms Johnston took the same position.  The applicant had two answers to that. First, he disputed the contention that the points of objection were in fact new or changed from what had been argued to the Auditor. He invited the court to compare the copy of the points of objection which had been before the Auditor and which he had handed up to the court with the note of objections to the court. Second, he argued that even if the Auditor was correct, the Auditor had a duty to consider every item in the account and determine its reasonableness: Reeve v Dykes (1829) 7 S 632, AP v Duncan and Ors [2016] CSOH 111 at para [53].  Accordingly, his failure to do so could be a basis for an objection.

[12]      On the question of the competence of the objections to the 23 items we agree with Ms Johnston (subject to giving separate consideration to the attendance fee for the taxation). We have compared the note of objections with the points of objection.  As with the note of objections, the points of objection are in the form of an annotated copy of the judicial account, the annotations being entered under the item objected to.  On any view the annotations to the points of objection are not identical with the annotations to the note of objections but, more importantly, the Auditor who heard and determined the objections, took the view that the objections he heard or read (the applicant explained that some of the objections were considered by the Auditor after the hour allocated to the diet of taxation had expired) were different from the objections in the note of objections.  The Auditor was in a position to make that judgement.  We are not in a position to say that he is wrong.  We therefore must accept that the objections which the applicant seeks to advance before the court are, as far as these 23 items are concerned, not objections that were made to the Auditor.  As to the duty on the Auditor to consider the reasonableness of the whole account. We do not see that as an absolute duty.  Where objection is not made to a particular item we do not consider that the Auditor can be fairly criticised unless the supposed error is an obvious one.  However, what is in issue here is the competence of bringing these objections to the court. As Ms Johnston pointed out under reference to Lord Mackay’s opinion in Tods Murray WS v Arakin supra at 764 it is not for the court to enter into precisely what happened at the taxation and it is not for the court to consider matters which were not raised before the Auditor. Its function is one of review of the report, not a consideration of the account de novo.

[13]      Turning to head (1): Auditor has duty to provide reasons for his decisions, we acknowledge that during the diet of taxation the Auditor is likely to have given only very brief explanations of his various decisions and in that after the expiry of an hour with some of the applicant’s objections not dealt with, he adjourned to consider the objections on the documents, as at the date of  issue of his report there may have been objections which the Auditor will have rejected without giving any reasons whatsoever.  That however is the practice. It reflects the nature of the Auditor’s task: a consideration of a large number of items in an account by reference to the broad criterion of reasonableness.  The Rules of Court only require reasons to be issued at the stage of lodging the note of objection to the Auditor’s report: RCS 42.4 (2A).  That would suggest that the Auditor has no obligation to give reasons prior to that.  In this case the Auditor has provided reasons in the minute lodged in terms of the Rules.  We acknowledge that paragraphs 3 to 12 of the minute (which address the objections other than the 23 which the Auditor has declined to address on the view that they are incompetent) are shortly stated, but the sufficiency of reasons falls to be judged by the context in which they are delivered.  As Lord Carloway said in Jarvie supra at para [39], it is not generally necessary for the Auditor to provide a detailed analysis of his reasoning.  Here the applicant’s objections were to the effect that the charges for the specified items were unreasonably high for the nature of the work done or were in the nature of duplication. In considering such objections the Auditor was exercising a judgement based on his experience of what was reasonable.  The explanation for such decision-making and the resultant decisions is not amenable to much in the way of elaboration.  We consider that what appears in the Auditor’s minute in the present case is sufficient by way of reasoning.

[14]      Heads (3) and (4) can be considered together, although we would emphasise that we have read and considered each of the points in the applicant’s written submission and that we have had regard to each of the items objected to and to the nature of the objection noted in the note of objections, including, for completeness, the 23 items which we consider are not competently before us.  We consider that each of the objections is simply an invitation to us to come to a decision different from that come to by the Auditor.  We have not found any example of an error such as would entitle us to exercise the limited jurisdiction previously described in favour of allowing an objection and reducing any item.

[15]      We have also considered head (5). As far as the fee for attendance at the diet of taxation is concerned, it may be that the Table of Fees refers to the attendance of a solicitor. We do not construe that as having the result that if a law accountant is instructed he should not be allowed a fee and we understand that the practice of the Auditor is to allow the fee that would otherwise be allowed to a solicitor.  We see no error in law in that approach. As for the charge for sheets and the lodging fee to which we have already referred, we do not regard it as proportionate for the court to enter into these matters and we will not do so.

[16]      We repel the objections in the note.