NOTE
(Expenses)

Thomas Ross Kinnaird v The Keeper of the Registers of Scotland and Others

1. In this appeal under Section 25 of the Land Registration (Scotland) Act 1979 against the Keeper’s decision not to rectify what the appellant claimed was an inaccuracy in the register in the description of the interested parties’ property, the interested parties withdrew their opposition to the appeal just before evidence was to be led by the appellant at the outset of the hearing of the appeal. Various motions for expenses have been enrolled, with written submissions and responses. In particular, the appellant seeks the expenses of the appeal from the interested parties, and on a ‘solicitor and client’, rather than ‘party and party’, basis; the Keeper seeks expenses from the interested parties; and the interested parties oppose all three aspects, submitting that there should be no award of expenses to or by any party. There are also motions for certification of counsel and one expert witness.

2. The Tribunal has decided as follows:-

(i) the interested parties are liable to the appellant in the expenses of the appeal, on a ‘party and party’ basis;

(ii) the interested parties are not liable to the Keeper in expenses;

(iii) the cause is certified as suitable for the employment of junior counsel; and

(iv) Dominic Haynes, of Messrs Mason Land Surveys Ltd., Dunfermline, is certified as a skilled witness for the appellants.

3. The dispute concerned a narrow strip of land (“the subjects”) beside an access track admittedly owned by the interested parties. The interested parties’ development plans for a steading area at the end of the track, together with planning requirements in relation to access to that development, apparently conferred a substantial value on the subjects. Following their purchase of adjoining land including the steading area and the access track, the interested parties acquired a registered title to land including the subjects as well as the access track in 2006, on the basis of a disposition which clearly included the subjects. The appellant, whose title was registered on the Sasine Register, claimed that that was erroneous: the sellers did not have title to the subjects. The appellant applied to the Keeper for rectification of the interested parties’ title. The Keeper indicated agreement with the appellant’s position, but the interested party disputed the matter. The Keeper accordingly decided that he could not proceed to rectify as he could not adjudicate on the boundary dispute between the appellant and the interested parties. The Keeper was taking no part in the dispute, and did not appear at the hearing, but had lodged answers, and also helpful written submissions, mainly raising some technical issues which would require to be resolved in the event of the appellant’s position being upheld. At the outset of the hearing, at which both the appellant and the interested parties were represented by counsel, the appellant’s counsel sought leave to produce late a plan prepared by Mr Haynes. Counsel for the interested parties opposed that, but the Tribunal allowed the production to be lodged and adjourned briefly to enable the interested parties, who had apparently not seen the production until that morning, to consider it. On the hearing resuming, counsel for the interested parties intimated that their opposition to the appeal was withdrawn.

Consideration: the Appellant’s Motion for Expenses

4. The interested parties advanced a number of reasons why the appellant should not be entitled to his expenses despite having obviously succeeded. Put briefly, they argued that they had reasonably relied on the title registered by the Keeper, who had not been persuaded that there were sufficient grounds for rectification. It had been peculiarly difficult to identify where this boundary was. (It can certainly be said that an attempt in the appellant’s foundation title, a 1979 disposition, to define a servitude right of access along the access track involved an error in their title plan, and gave rise to some of the difficulty.) Most pertinently, perhaps, it was argued that the appellant had not disclosed his detailed position until 20 minutes before the hearing was due to proceed. There had also been a chronic failure by the appellant to specify what the boundary should be. In any event, the appellant would have had to appeal against the Keeper’s decision anyway, so that the interested parties’ opposition could not be said to have given rise to all the expenses.

5. The appellant did not accept that the plan prepared at the last minute by Mr Haynes involved any material change in their position, which they said had been clearly spelled out in the appeal. In support of his application for expenses on a solicitor and client basis, as opposed to the normal ‘party and party’ basis, he advanced some strong criticisms of the interested parties’ conduct of the whole matter. It was said that the application for registration of the interested parties’ title was untruthful. The interested parties had not opposed an interdict action which the appellant had raised in order to prevent the interested parties from taking possession of the subjects which the appellant claimed to own. It had been obvious from June 2007 that the 1979 disposition was erroneous and that there was no other basis for the interested parties’ position. The interested parties had claimed that an expert report prepared for them vindicated their position but refused repeated requests to see it. They had continued to make offers to purchase the subjects. They had sought to delay the progress of the appeal. In short, they had demonstrated a lack of good faith, abused the process and caused substantial unnecessary expenses. Reference was made to McKie v Scottish Ministers 2006 SC 528, per, Lord Hodge, in relation to awarding expenses on a scale other than judicial expenses.

6. We are of the clear view that the appellant, having succeeded in the appeal by virtue of the interested parties having withdrawn opposition (the Keeper having adopted a neutral position), is basically entitled to his expenses. It is not unusual for the Keeper to decide that he cannot make a decision to rectify because the party against whom rectification would be made maintains a contrary position on the underlying title and the Keeper is not provided with adjudicatory machinery to resolve the dispute. In this particular case, the correspondence makes clear that the Keeper, having examined the titles, was of a mind that there was inaccuracy and, in accordance with his normal practice, explained his view to the interested parties. It follows that the Keeper’s decision and the appeal were caused by the interested parties’ opposition to the appellant’s claim. The interested parties, whose claim did not succeed, must be regarded as having caused the appellant the expense of vindicating his position in this appeal. This is not a question of reasonableness, but a question of expenses following success, and it applies to the whole of the appeal proceedings.

7. If we had thought that the appellant’s late production represented some substantial change in his position, or that he had not made his position clear until that point in time, that would almost certainly have affected the appellant’s entitlement to expenses. However, we do not take that view. The appellant’s position that the correct boundary of the interested parties’ land was the northern fence of field No. 438 was clear from the outset. The interested parties’ position was that that was not necessarily wrong but the appellant was unable to prove it. We of course did not hear evidence but on a broad consideration of all the material, we do not consider that the late plan swung the day: the matter was largely one of the appellant’s evidence about the location in fact, for many years, of that boundary together with interpretation of the deeds which clearly referred to the Ordnance Survey mapping over a period of years. It is correct that the plan contained some detail not previously provided, but in the main it simply illustrated the appellant’s argument on the basis of the deeds and possession: Mr Haynes could in our view have illustrated his evidence from existing productions, although this would no doubt have made for a less efficient presentation of his evidence. The late production of the plan was reprehensible, and we agree with the interested parties that the appellant should not have waited to see the opponents’ productions before deciding to instruct Mr Hayne, but we simply do not see the plan itself as having been crucial or decisive.

8. It is true that there was a complicating glitch in respect of the extent of the subjects, in so far as the error affected a strip 5.3 metres wide, not the 3 metres referred to by the appellant, but that clearly arose because the appellants (presumably appreciating the ransom value of the subjects) had in fact sold all but the 3 metre strip to another party, so that his interest was only in the 3 metre strip. That raised a technicality in relation to rectification, which, as the Keeper pointed out, required to be addressed, but the substance of the appellant’s position was in our view quite clear and the interested parties’ opposition to the appellant’s claim did not relate to this. There is nothing to suggest that if the appellant had given the required specification of the order sought at an earlier stage it would have made any difference to the interested parties’ position.

9. We take a different view on the motion for expenses on the solicitor and client basis. As it seems to us, and following the principles set out by Lord Hodge, which we respectfully accept, the issue of reasonableness in this case depends largely on the question whether the interested parties had a reasonably stateable position in the dispute. If so, we do not think that we are in a position to conclude that their conduct of the litigation was either incompetent or unreasonable. Put shortly, there was in our view at least some obscurity in relation to the boundary position and it was a tenable position that if the northern boundary of ‘field’ 439 were the medium filum of the ditch (a position which received some encouragement from an admission by the appellants in their pleadings) there was some difficulty in the way of the appellant’s claim. We do not think that we can in the circumstances, and without having heard the evidence, safely conclude that the interested parties were unreasonably ‘spinning out’ a hopeless claim. The reference back to the terms of the application for registration of the interested parties’ title suggests some concerted plan knowingly to obtain an inaccurate title, but we cannot on the material before us uphold such an allegation. The failure to defend the interdict proceedings does not in the circumstances seem to us to point to unreasonableness. The interested parties attempted to take possession of the subjects to which they had obtained a title. The interdict action then raised by the appellant clearly presaged a rectification issue, which, however, could not be resolved in the court action. The decision not to defend that action would reduce expense and was in our view understandable. Again, there is not necessarily anything unreasonable about attempts to negotiate a resolution, provided that there was a tenable basis for resisting the appeal. The timing of the withdrawal of opposition does attract some suspicion, on the basis of our view of the materiality of the Haynes plan, but we do not consider that this provides a sufficient basis for the appellant’s criticism of the interested party’s conduct of the whole matter.

The Keeper’s Expenses

10. The Keeper’s claim for expenses basically follows the analysis at Paragraph 6 supra: had the interested parties accepted that there was an inaccuracy in the title sheet (and that there were no other grounds, such as possession and prejudice, for resisting the application to rectify), there would have been no need for this appeal, so that the expense incurred by the Keeper has also been caused by the interested parties. The interested parties argue that, having intimated a neutral position requiring the parties to take their boundary dispute to the Tribunal, the Keeper’s legitimate interest in the appeal proceedings was limited to perusing the pleadings to consider whether they gave rise to any cause to depart from the position of neutrality and making any necessary submissions on the terms of any order to be made by the Tribunal.

11. Although each case will depend to an extent on its own circumstances, there is perhaps here an underlying question of principle which has not previously been considered by the Tribunal and on which we have not received full submissions. As we have indicated above, the Keeper may often (entirely appropriately) not reach a decision, which might be a decision whether to register a title (or whether to include a disputed area in a title which is being registered), or perhaps to exclude indemnity, or, as in this case, whether to rectify, because of a title dispute, in each case on the view that he is not in a position himself to adjudicate on the dispute. In such cases he may often be able to say, as he does in this case, that had the losing party not expressed opposition, he would have reached a different decision from which no appeal would have been required and in this sense the losing party, whether the appellant or the interested party, has caused such expense as the Keeper reasonably incurs in presenting his position to the Tribunal. In this case, while he has gone slightly beyond merely perusing the pleadings and making submissions about the form of the order which the Tribunal would require to make, the Keeper’s pleadings and written submissions were generally limited to providing background and explaining his position.

12. However, it seems to us that some input of this kind (not necessarily in the form of formal pleadings or submissions) may be expected in any appeal in this sort of situation and might be regarded as in effect part of the administrative expense of the land registration system. We did not receive submissions on this issue of principle but consider that as the sums involved in the present case are likely to be comparatively modest, it is appropriate to proceed for present purposes on that basis. It seems to us that the interested parties (and the same could be said of the appellant had he lost), having been told that the Keeper cannot resolve the dispute and would be neutral in any court or tribunal proceedings, might reasonably expect that they were not at risk of having to pay the Keeper’s legal expenses of participating in the proceedings.

13. In the circumstances of this case, it can be added that in so far as the Keeper raised particular matters such as the need to intimate the appeal to another party (the purchaser from the appellant whose purchase included part of the subjects inaccurately included in the interested parties’ title), the need to identify precisely the extent of the inaccuracy, and the effect on another registered title, these were all in response to the terms of the application and were in no real sense caused by the interested parties.

14. Further, again in the circumstances of this case, the Keeper himself had actually, following his examination of the title, made the original inaccurate entry in the register which, while no doubt understandable, could be seen as the immediate cause of the inaccuracy.

15. The matter does not end there, because the Keeper, like the appellant, criticised the interested parties’ conduct. In particular, he relied on some now clearly wrong answers given in the course of the interested parties’ application to register their title. Secondly, he too referred to the interested parties’ failure to defend the interdict proceedings. We have, however, addressed these matters above. We do not consider that they evidence such unreasonableness as to justify awarding expenses to the Keeper.

16. Different considerations might well apply in cases where the Keeper has become involved in any substantive dispute. Expenses might well then run, either way, depending on the outcome.

17. We conclude that while some basic input by the Keeper is welcome in such cases, the Keeper should not receive his expenses from the interested parties in this case.

Certification of Counsel

18. This is not opposed, and we agree that it is appropriate in this case.

19. We do sometimes restrict such certification, for example to representation at the hearing. We mention this because, if we had been making an award of expenses in favour of the Keeper, it would not automatically follow that the certification of counsel would apply to that award, as the parties appear to have assumed. Preparation and presentation of a case of neutrality would not necessarily justify the expense of instructing counsel.

Certification of Appellant’s Expert Witness

20. The interested parties were content to leave the issue of Mr Haynes’ certification as a skilled witness to the Tribunal’s judgment. Having considered the material supplied by the appellants, we accept that certification is appropriate. It is not essential for an actual report to have been provided, but sufficient if a witness with appropriate qualifications or expertise has been asked to prepare to give expert evidence. We are satisfied that Mr Haynes was a witness with appropriate expertise and it is evident that he prepared to give expert evidence. We note that the interested parties had also employed an expert whose work included the preparation of an accurate plan to throw light on the dispute.


Certified a true copy of the statement of reasons for the decision of the Lands Tribunal for Scotland intimated to parties on 30 April 2009

Neil M Tainsh – Clerk to the Tribunal