Lands Tribunal for Scotland

NOTE
(Expenses)

John McCoach and Joanna McCoach
v
The Keeper of the Registers of Scotland
and
City of Edinburgh Council

[1] This appeal against a decision by the Keeper to rectify an inaccuracy in the appellants’ registered title was opposed by the Keeper and by the local authority, who claimed to be owners of the appeal subjects, as ‘interested party’. The appeal, which raised a number of complex issues and required a number of hearings, was refused. Reference is made to the Tribunal’s Opinion issued on 19 December 2008. The appellants accept some liability in expenses towards the Keeper, but do not accept liability to the interested party. There are also issues as to certification of the Keeper’s expert witness and the interested party’s counsel. Parties have agreed to disposal of these matters on the basis of written submissions, which were finally all available to us on 27 July 2009.

[2] Having considered all the submissions made, we have decided as follows:-

(i) the appellants will be liable to the Keeper in the expenses of the appeal, under exception of the expenses of the hearing of 26 March 2007;

(ii) the appellants will be liable to the interested party in the expenses of the appeal, modified to three-quarters thereof;

(iii) Professor Rennie will be certified as an expert witness for the Keeper; and

(iv) the employment of counsel for each of the Keeper and the interested party is sanctioned.

[3] We have two clear overall views of this case. Firstly, the expenses of these proceedings were caused by the appellants appealing, and having been unsuccessful they must be held to have wrongfully caused expense for which they should basically be held liable. That is in accordance with the general principle that expenses follow success because the party found to be in the wrong must be taken to have caused the expense by bringing or, as the case may be, defending the proceedings. The Tribunal of course has discretion in relation to expenses, but that discretion must be exercised in the light of the general principle and rule.

[4] Secondly, the interested party had a clear and legitimate interest in joining in opposition to the appeal. They considered (correctly, as the Tribunal has found) that they had a title to the subjects which prevailed over the applicants’ title. They had made the application for rectification which led to the decision appealed against. The appellants referred to the interested party when they raised their appeal and asserted throughout that the interested party could not show a good title.

[5] However, the appellants’ submissions on expenses raise – quite properly – some more detailed issues which require to be considered. The appellants question whether the expense of exploring in these proceedings the validity of the interested party’s title was properly caused by the appeal. The appellants can also point to some element of ‘divided success’ which may, in some cases, have an effect on the award of expenses. It is also in our view appropriate to consider, in a case in which the decision of an authority – here, the Keeper – is under challenge, but the true issue may be seen to be a competition with another citizen – here, as to ownership of the subjects - whether all the expenses incurred by both of these parties opposing the appeal ought to be awarded.

[6] In order to explore these issues, it is necessary to give a brief outline of the issues which arose in the case and how it proceeded. The issues raised during the course of the appeal were:-

(i) Was there an ‘inaccuracy’ in the Register?

(ii) Were the appellants ‘a proprietor in possession’?

(iii) Had the interested party, before the appellants applied for registration of their title, obtained a title (on the basis of an a non domino disposition) by prescriptive possession?

(iv) Was the inaccuracy ‘caused wholly or substantially by the proprietor in possession’?

(v) In the event of the appeal succeeding, what was the appropriate remedy?

[7] Issue (i) was disputed by the appellants until the very last hearing, which was a hearing of final submissions. They then conceded that the prescriptive title which they relied on was not habile to include the subjects.

[8] The Keeper did not contest (ii), but the interested party did. The Tribunal found in the appellants’ favour on this issue.

[9] The appellants’ late concession that there was ‘inaccuracy’ ultimately made issue (iii) unnecessary for the decision in the appeal. The Keeper did not contest this issue, but the appellants did. At the time of registration, neither the appellants nor the Keeper was aware of the interested party’s title on the Sasine Register, so this issue played no part in the registration and formed no part of the Keeper’s reasoning in deciding that there was inaccuracy and that it was caused by carelessness. However, it would have made the Register inaccurate even if the title relied on by the appellants had been habile. The Tribunal found in favour of the interested party on this issue.

[10] The appellants contested issue (iv). The interested party joined the Keeper in arguing that there was carelessness. The Tribunal upheld the Keeper’ decision that the inaccuracy had been caused by carelessness.

[11] The appellants argued that if their appeal succeeded, the Keeper’s order should be recalled (the word ‘reduction’ might be used) with the result of restoring the registration of the subjects in their ownership. The Keeper and the interested party argued that the appellants’ remedy would be limited to a financial remedy. The Tribunal expressed the view that the appellants’ submission on this was correct.

[12] Issue (i), in relation to the prescriptive title relied on by the appellants, was an issue of interpretation of those titles. Issues (ii) and (iii) required factual evidence and submissions. Issue (iv) required factual and expert evidence and submissions. Issue (v) was purely a matter of submissions.

[13] In advance of the hearings, the parties had four different views (!) on the most appropriate procedure. It is sufficient to record that the appellants asked the Tribunal to consider first only the issue of ‘carelessness’, but the Tribunal decided that all issues should be considered together, in effect a ‘Proof Before Answer’ on all issues. That decision in relation to procedure cannot be laid at the door of the other parties. We did allow all the parties the opportunity of requesting legal debate on any issue once the pleadings were clarified, but no party took that up.

[14] The Tribunal hoped, by encouraging parties to agree facts or issues as appropriate, to have all the issues concluded, or at least all the evidence heard, in the first four day hearing assigned, with a degree of direction as to which issues should be considered on which days. In the event, during that four day hearing, it proved possible only to hear the evidence on issues (ii) and (iii), the possession issues. A further five day hearing took place, at which evidence bearing on issue (iv) was heard. A final one day hearing of oral submissions, supplementing written submissions, on all the issues, took place. There were also two earlier procedural hearings, which arose primarily on motions for production of documents.

[15] The appellants’ submissions on expenses appear to depend to a substantial extent on an assertion that the only real issue was the issue of carelessness. In fairness, this is consistent with the position taken up by them in relation to procedure. However, it is simply not correct, because the appellants maintained until the final hearing that there was no inaccuracy.

[16] The appellants contend that the Keeper should not have implemented his decision to rectify upon being advised of the intention to appeal that decision. We reject this. Had the Keeper proceeded to rectify without any warning or opportunity to the appellants to make representations against that course, that would have been one thing. The Keeper had, however, written to the appellants’ agents in January 2006 and considered their detailed representations on the matter before rectifying the Register in July. Accepting, for the purpose of the argument, that there might have been an appealable act or omission, so that an appeal would have been competent, we cannot agree that the Keeper should have left the Register as it stood until the appeal was concluded. He might in some situations follow such a course, but in this case he would have been leaving on the Register an inaccuracy which he had decided to rectify.

[17] We in any event do not accept that the decision to proceed with rectification had any consequences relevant to the expenses of the appeal, except possibly in relation to issue (v). The appeal would still have proceeded. We reject the submission that the interested party would have had no interest in the issue of carelessness under Section 9(3)(a)(iii): success by the appellant on that issue alone would mean that the interested party would lose its good sasine title to the subjects.

[18] It is suggested that the appellants should not be liable to the respondent for the increased costs of the hearing made necessary by the interested party’s submission on prescriptive possession (issue (iii)), because the carelessness alleged by the Keeper did not relate to the interested party’s position. Again, that ignores the fact that the appellants did not admit the inaccuracy. We might accept that the appellants, appealing against the Keeper’s decision which had been in relation to their title and not that of the interested party, were not directly putting the interested party’s title in issue (although in fact the Appeal as originally lodged did just that, but was subsequently amended), but the interested party had an alternative position on inaccuracy.

[19] The appellants may be on stronger ground in relation to ‘divided success’. They succeeded on issue (ii), which was introduced into the proceedings by the interested party. We do not doubt the interested party’s statement that it was ‘entirely proper’ to raise it, but that is nothing to the point. We also do not agree that there was ‘little or no additional evidence’ on this issue: it was finely balanced and the evidence on it took up a fair amount of the first hearing of evidence. The appellants can also claim success on issue (v), an important issue of principle contested by both the Keeper and the interested party, although the Tribunal did not reach a concluded view as it was in the event not necessary to decide on remedy. This was, however, simply a matter of submissions.

[20] The appellants further contend that the Keeper took his decision to rectify without full information, and in particular without sight of the relevant content of the appellants’ solicitors’ file. The short answer to that is that it made no difference: even on all the information which did come to light the appellants maintained their appeal. In any event, the Keeper had considered the appellants’ detailed representations and this was a case in which there were particular difficulties about information, for which the Keeper had to rely on the appellants and some of which was always either missing or obscure. We do not understand the submission that the Keeper caused expense by reaching his decision when he did. There might possibly be a question for the Auditor to consider in relation to the number of reports obtained from Professor Rennie, although here again we would have thought that the problem was the inadequacy and obscurity of the information available to the Keeper.

[21] In any case where two parties are opposing, it may be necessary to consider whether there was any real need for more than one opponent, and also whether there was any unnecessary duplication of their efforts which should not be landed on the party liable in expenses. There may be cases in which the necessity of the Keeper’s involvement, at least throughout the appeal, may be questioned because the issue is actually one between the two interested parties and on which the Keeper is not himself in a position to adjudicate. However, that has not been suggested in this case and in the particular circumstances we agree that it does not arise. We have already indicated our view that the interested party had a proper and legitimate interest to participate in the appeal. Further, and again in the particular circumstances, we do not consider that there was any unnecessary duplication of effort on the part of either the Keeper or the interested party.

[22] The appellants argue that their attempt to negotiate with the interested party was rejected. This is based on an offer they made to make a payment to the interested party to give up their claim to ownership of the subjects. The interested party were rather slow in responding to this offer by rejecting it. If it is viewed as something in the nature of a tender, then clearly the result justified the interested party’s position. While we consider that this was a case which cried out for mediation, we do not think that the material produced could be interpreted as an offer by the appellants to negotiate or mediate and do not require to consider whether any failure by the interested party to respond to such an offer should affect their claim for expenses.

[23] The Keeper makes certain points about the appellants’ presentation of the appeal, but we do not find it necessary to consider these as the appellants are not themselves seeking any award of expenses.

[24] On 26 March 2007, we heard an extended motion on an application by the appellants for a production order in relation to opinions received by the Keeper. The appellants had substantial, if not complete, success in that motion, and we do not think that they should be held liable for that particular expense incurred by the Keeper. Otherwise, we see no reason to modify the award of expenses in favour of the Keeper.

[25] We also consider that the interested party is entitled to an award of expenses, subject only to the issue of ‘divided success’. As far as issue (v) is concerned, we think that this was a matter of relatively short submissions which did not add materially to the expense. The appellants did, however, succeed on issue (ii), which was put in issue only by the interested party, who took this substantial point which would not otherwise have arisen. Having considered all the circumstances, including the relative times taken up by procedure, evidence and submissions on issue (ii), and also considering that the appellants are not seeking any award in their favour in relation to this success (and indeed will be liable to the Keeper in expenses including his involvement in the hearing while this point was under consideration), we think that modification of the award of expenses in favour of the interested party by one quarter is appropriate.

[26] There are two subsidiary questions. Firstly, while we do not always certify an expert conveyancer as an expert witness, we are in no doubt that this is justified in the circumstances of this case. Points made by the appellants in relation to this appear to be directed at the necessity for all of his opinions, but this is a matter for the Auditor to consider.

[27] Secondly, while the appellants do not oppose certification of counsel for the Keeper, their submissions might be construed as resisting certification of counsel for the interested party. They do not advance any argument on this or offer any reason why counsel should be appropriate for one party but not another. Again, there might be cases in which the expense of counsel for each of two opposing parties might not be justified, but in the present case the complexity, as well as the extent of the interested party’s interest in the issue of rectification of the appellants’ title, in our opinion justifies the employment of counsel for the interested party also.