Lands Tribunal for Scotland

NOTE

PMP Plus Limited
v
The Keeper of the Registers of Scotland & Others
(Expenses)

[1] In this appeal against a decision of the Keeper to register the appellants’ title to an area of ground only with exclusion of indemnity, substantial issues were considered at a debate at which the appellants and the Keeper were each represented by counsel. The Tribunal reached certain conclusions on the issues raised but in relation to one matter we gave an opportunity in the particular circumstances for further argument, particularly perhaps by individual proprietors as “interested parties”. In the event, no further points were taken by the Keeper or any individual proprietor. The appeal was allowed without any further hearing, although the Tribunal’s final order was by agreement limited to remitting the appellants’ application for registration to the Keeper for reconsideration in the light of our findings.

[2] We now have before us motions by the appellants to find the respondent liable to the appellants in the whole expenses of the appeal, and for certification of counsel. Certification of counsel is not opposed and clearly appropriate and will be made. We have considered the substantive motion for expenses and for the reasons expressed below have decided to find the respondent liable to the appellants in their expenses of the whole appeal modified by 25%.

[3] The substantive issued litigated before us was whether or not the appellants were entitled to a Land Certificate issued without exclusion of indemnity. On that point they were successful. In seeking an award of expenses they stressed the general rule that expenses follow success. They contended, in essence, that although the Tribunal did not accept their submissions on certain matters, these were not issues of such substance to justify departure from the usual rule.

[4] For the respondent it was contended that no award of expenses should be awarded to or by either party. In support it was said that he had fulfilled his statutory duties. He had acted reasonably. The arguments he advanced had enjoyed substantial success. It was contended that, for a variety of reasons, it would not be “fair or just” to make an award in favour of the appellants. The submission went on to set out a series of propositions apparently in support of that contention.

[5] The first was that the respondent was not in the position of an ordinary litigant. This was supported by reference to an assertion of a statutory duty to seek to preserve the accuracy of the Register and a duty to protect the public purse from claims against the indemnity fund. However, we think that the main argument under the first head was intended to be the proposition that the respondent would fulfil his relevant duties under the Registration Scheme by taking a reasonably based decision. It was said that it would be unfair to penalise him in expenses for taking such a decision.

[6] The first head also included assertions relating to responsibility for the difficulties in the title and criticism of the appellants conduct in seeking to resolve matters in the Tribunal instead of the ordinary courts. However, as it was not asserted that procedure in the ordinary courts would have been cheaper, it can be taken that the main relevant criticism was that the appellants were seeking expenses from the public purse in respect of the reasonable exercise by the respondent of his statutory duties.

[7] The second supporting proposition was that the Keeper had no power to adjudicate on matters of fact. It was suggested that his “primary position” in the appeal was essentially that he was entitled to exercise a discretion, based on reasonably held doubt or assessment of risk, to exclude indemnity. It was suggested that the arguments deployed on behalf of the Keeper were in illustration of the difficulties he faced in making his decision. The argument concluded: “In the circumstances, he was entitled to follow the approach he did, leaving to the Tribunal the resolution of any doubts arising from the terms of the appellants title”.

[8] Head three pointed to the respondent’s success on the argument that the Keeper was entitled to proceed on the basis of doubt rather than express his view as a positive decision, one way or another.

[9] Head four pointed to the success of the Keeper’s general arguments in relation to his role in dealing with doubtful or disputed issues. In particular, the Tribunal had accepted that it was reasonable for the Keeper to have doubts and to decide to register with exclusion of indemnity. It was said that, “the appellants’ success was accordingly – at its very highest – mixed. In such circumstances the Tribunal has a wide discretion as to the appropriate Order in relation to expenses”.

[10] The fifth head advanced an argument based on the Tribunal’s finding that it would normally be for the interested parties to take responsibility for resolution of disputed issues in proceedings before the Tribunal. It was suggested that the logical consequence was that the interested parties, including the appellants, should “take responsibility for expenses”. As this proposition was vague in relation to the question of how responsibility was to be allocated and, in any event, did not address the present situation where the Keeper appeared to have taken responsibility on behalf of some of the interested parties, we need say no more about it.

[11] Under the sixth head the respondent pointed out that the interested parties did not intervene on the question of voidability of the title.

[12] The seventh head started as a re-statement of the main submission. In other words, it repeated the contention that an award against the Keeper would be unjust. It was said that it would be to penalise the Keeper for a bona fide and reasonable exercise of his statutory duties. However, it went on to describe as a “windfall benefit” the fact that the other interested parties had not sought to contend that the appellants’ title was voidable.

Discussion

[13] The respondent does not explicitly dispute the importance of success in relation to expenses but the general tenor of his submissions is more redolent of the old approach to expenses based on a general view of the fairness and reasonableness of the parties in conducting the litigation. As McLaren makes clear, that principle has long been superseded; Expenses p 20and the authority there cited of 1848. The reasonableness or otherwise of conduct of a litigation is usually relevant only in the context of criticism of the way in which a successful party has conducted the litigation. Very rarely, it may be relevant in determining the basis of taxation.

[14] It seems to us that the submissions for the respondent are more revealing for what they do not say than what they do. In particular, they make no attempt to distinguish between the Keeper’s role in taking an administrative decision to refuse indemnity on the basis of a reasonably held doubt and his role as litigator in opposing the appeal. We do not accept that the Keeper had a statutory duty which required him to oppose the appeal on the merits. The main thrust of his contentions in relation to the statutory duty relate to his administrative decision. The submissions do not expressly address the substantive point made by the appellants. The appellants had to run the appeal in order to have their title registered without exclusion of indemnity. That, patently, was the only issue of concern to them. On that substantive point they were successful.

[15] Although the respondent suggests that his “primary argument” was that he was entitled to reach the administrative decision in the way he did, he did not attempt to suggest that the arguments advanced before us were limited to that point. Indeed, the Keeper was represented by able counsel at the hearing before us. If the intention had been to limit submissions on behalf of the Keeper to justification of his initial position, that could easily have been made clear. On the contrary, we clearly understood that the Keeper did have an interest in the outcome on the merits. He had accepted titles giving shares of unidentified common parts. We understood that it was recognised that the situation thus created was not easily resolved. Indeed the resultant state of affairs was described in dramatic terms. It was a “mess”. In short, we have no doubt that the appellants faced opposition on the merits. They were ultimately successful. If there had been no opposition on the merits much expense would have been avoided.

[16] Had this been a litigation between private litigants we would have had little doubt that the appellants were entitled to their whole expenses based on their substantive success. The issues upon which they were unsuccessful were only incidental to their main argument. There was nothing unreasonable in their maintaining the unsuccessful argument that the Keeper ought to have expressed a view, one way or the other. It was an argument raised in the respondent’s pleadings. It was quite proper for the appellants to deal with it. They were willing to concede other issues relating purely to the Keeper’s procedures.

[17] As we see it, the real difficulty in looking at the question of success in the present case is that we accept that although the issue discussed in the preceding paragraph was only incidental from the viewpoint of the appellants, it was an important issue from the viewpoint of the Keeper. The Keeper can reasonably claim that he was successful on a significant issue. The difficulty arises from the Keeper’s failure to keep the issues distinct.

[18] We do have a concern that the confused and repetitive nature of the respondent’s submission has obscured a submission which might have been more simply put. It might have been argued that, as the Keeper performed his duties properly, he had no concern with the expense of the appellants in presenting the initial application to the Tribunal. The Keeper might have accepted that the substantive issue for the Tribunal, on the merits, was simply a matter for interested parties and that he had no need to intervene. In other words, he might have made clear his position that the issue was doubtful and that he did not require to advance argument one way or the other. But he might reasonably have gone on to say that the grounds of appeal appeared to go further than to assert the appellants’ contentions as to the proper view of their titles and that the appellants did appear to challenge his entitlement to reach the decision he did. As it was a matter of considerable importance to the Keeper to know whether such a challenge was well founded, he required to enter the process to have that determined. As we have seen, it was a point determined in his favour. Whatever the position in relation to the merits he should not have to face a liability in expenses for procedure which simply confirmed that he had acted properly at an administrative level.

[19] The argument was not presented in such terms and the appellants have not required to respond to such a case. It is, accordingly, with some hesitation that we go on to look at matters in that light. We are satisfied, however, that the existing submissions cover the relevant ground and that, in the exercise of our wide discretion in relation to expenses it is appropriate to take a decision on the material now available rather than to put parties to further expense by inviting further submissions.

[20] Had the respondent followed the course outlined above, matters might have been expected to develop in quite a different way. The appellants would have had to incur the expense of presenting the initial application. But they might well have taken the view that they did not require to maintain any challenge to the approach taken by the Keeper if it was clear that the Tribunal would be free to reach a fresh decision on the merits. Their real objective was to have the doubt resolved in their favour rather than to have a finding that the Keeper ought not to have had a doubt.

[21] We are satisfied that the course followed by the appellants was entirely reasonable. The question of whether the Keeper was entitled to proceed on the basis of a doubt reasonably held, was not so obviously a separate issue that the appellants conduct of the case can be criticised. However, determination of liability for expenses is not normally based on any question of criticism of conduct. The problem is to identify the substantive success. Although the issue was an incidental one for the appellants, it was a significant one for the Keeper. The Keeper can be seen to have been successful on the issue in respect of which he had a proper interest to litigate.

[22] We need not repeat the terms of our earlier note at paragraphs 48 to 50. We are satisfied that it is not necessary for the Keeper to participate in all proceedings before us. Where the essential issues arise from a dispute or conflict of interest between parties, it is unnecessary for the Keeper to defend his decision. In the present case the main issue was a dispute as to the effect of conflicting titles. That was, primarily, a matter for the parties involved rather than for the Keeper. The Keeper chose to defend, on the merits, a position which proved erroneous. By taking this course he caused the appellants expense they would not otherwise have had to bear. He did involve himself in a substantial way in the litigation. The matter essentially litigated was whether the Keeper’s exercise of discretion was erroneous, either because he was not entitled to exercise it against the appellants on the basis only of a reasonable doubt, or because the doubt he identified was not justified. He succeeded on the first leg of the argument but the substantial dispute was on the second. It may be unfortunate for the Keeper that no interested party was prepared to come forward and make the argument, but the position is that the Keeper raised and argued two broad strands of justification for doubt about the appellants’ title and neither was upheld. The Keeper has a choice whether to leave such issues to the Tribunal, with the risk that a genuine issue may not be litigated, or to involve himself in the argument, in which case expenses would generally follow success. We can find nothing unreasonable in the Keeper’s position, but he must be held to have caused the appellants’ expense.

[23] It is unnecessary to deal with all the points made by the respondent. As noted above, many relate, on the face of them, to performance of the Keeper’s administrative duties. It is unnecessary to express any view as to the soundness or otherwise of the contention that the respondent did not contribute in any way to the difficulties in title which gave rise to the present litigation. Our concern is with the expense of procedure before the Tribunal. We note the stress laid on the Keeper’s need to defend the public purse. It was suggested that it was inappropriate for an appellant to seek expenses from the public purse in respect of the reasonable exercise by the respondent of his statutory duties. But, of course, many actions are defended by public bodies in the proper exercise of their duties. Where a decision adverse to that body is reached a finding in expenses would follow. The implicit corollary of the respondent’s argument would appear to be that it would be fair and just for a private citizen to bear the expense of litigation to correct an erroneous decision by a public servant if that public servant had acted reasonably. We are not satisfied that there is any basis for such an argument.

[24] We have noted the Keeper’s explicit contention that he was entitled to follow the approach of exercising a discretion based on doubt to exclude indemnity, “leaving to the Tribunal the resolution of any doubts”. The problem is that we are concerned with expense caused by the fact that the Keeper did not leave it to the Tribunal but took an active part in opposition to the appellants.

[25] The reference to a “windfall benefit” does provide a certain insight into the attitude of the Keeper but we find it hard to see what relevance it has to the issue before us. The appellants have all along maintained that they had a good title. They sought to have that confirmed by the Tribunal. All that the Keeper is able to assert is that no one with an interest to oppose on the issue of voidability did oppose. They may have come to take the same view as the appellants. In any event, absence of objection hardly justifies the reference to a “windfall” benefit.

[26] We are satisfied that the appellants are entitled to their expenses insofar as caused by the respondent’s opposition to their appeal on the merits. It is in practice impossible to disentangle the time and effort spent on that matter from the time spent in relation to the appropriateness of the Keeper’s administrative actions. In any event, we do not consider it appropriate to make any hard and fast distinction. We simply have in mind, in the exercise of our broad discretion, that the Keeper can be said to have had a measure of success on a matter important to him. We also have in mind our view that the appellants would have been required to raise the appeal in any event and that the final stages, after issue of our main note, were largely directed to resolution of issues which might arise between the appellants and the interested parties rather than the appellants and the present respondent.

[27] Exercising our discretion on a broad basis we consider it appropriate to find the respondent liable to the appellants in their expenses but to modify this by 25%.