NOTE
(Expenses)

David Durie v Keeper of the Registers of Scotland and Helga Macfarlane

Summary

[1] In this appeal, under Section 25 of the Lands Registration (Scotland) Act, against a decision of the Keeper not to rectify an entry in the register, the Interested Party withdrew her opposition two days prior to the hearing of the appeal. The appellant seeks an award of expenses against the Interested Party, sanction for the employment of junior counsel and sanction for two expert witnesses.In summary, the appellant claimed in this appeal that his sasine title was a better title than the title which the Interested Party had acquired and registered (‘inaccuracy’); and that the interested party was not in possession (‘possession’); and even if she was in possession the Interested Party had caused the inaccuracy by carelessness (‘carelessness’). The Keeper, having originally registered the Interested Party’s title without exclusion of indemnity, took the line when requested to rectify that the appellant appeared to have had a good title but it was not possible to reach a concluded view whether the authorof the interested party might have had a better title, so that the issue of inaccuracy required judicial determination; and, further, that there was a dispute about possession which also required judicial determination. Much closer to the hearing the Keeper changed her position to the extent of formally admitting that there was inaccuracy, i.e. accepting that the appellant had had a good title, and also, for the first time, making a positive case supporting the appellant’s case on carelessness. The Keeper was, however, to have taken only a “watching brief” at the hearing, leaving the appellant and the Interested Party in dispute on all three issues of title, possession and carelessness until the Interested Party (who had apparently reached some sort of settlement with the author of her title) withdrew all opposition to the appeal. The appellant did not seek any award of expenses against the Keeper. The matter of expenses has been considered on the basis of written submissions from the appellant and the Interested Party.

Submissions

[2] The appellant’s essential position on the overall issue of expenses was that he had been successful; the Interested Party had caused the appeal by refusing to consent to rectification which she now accepted was appropriate; the appellant had set out fully in the Notice of Appeal his positions on all three issues; and there had been no unreasonable conduct on his part in the conduct of the appeal.

[3] The Interested Party, opposing an award of expenses, claims to have acted reasonably and in good faith. She explains the circumstances in which she purchased the land in question – said to be a wildly overgrown, “apparently abandoned” area in the proximity of her garden ground – from Glasgow City Council, in good faith, although without a completely exhaustive examination of title and with the sellers granting warrandice limited to “fact and deed only”. She had been “required to defend her title” as any settlement or concession would have prejudiced her position quoad Glasgow City Council. Three factors had prompted her to withdraw her opposition when she did, viz. the Keeper’s late change of position, as indicated above, by amendment just a few days before; a proposal made by Glasgow City Council after that amendment was reported to them; and an even later new inventory of productions, lodged late, by the appellant, including originals of two 1884 Feu Charters with deed plans, which “finally provided categoric confirmation of the appellant’s title”. She further submitted that ultimately the issues of possession and carelessness had not required to be addressed because she, having been satisfied of the appellant’s good title, had not wished to take advantage of the error.

[4] In answer to these submissions, the appellants submitted that the background to the Interested Party’s acquisition of the land, and the position as between her and the author of her title, were irrelevant.

[5] Both parties referred to attempts at different times to resolve the dispute. The Tribunal, however, accepting that both parties may have been reasonably motivated throughout, does not consider it necessary to review that material, which did not seem to point either way in relation to expenses.

[6] The Interested Party also opposed certification for the employment of junior counsel and of two expert witnesses, Professor Rennie on the standard to be expected of a careful solicitor and Colum Scott MRICS on identification of lots described in the titles and the extent of operations claimed to constitute possession.

Tribunal’s Consideration: Expenses Generally

[7] The Tribunal sees no reason to doubt that the Interested Party may have been, in a very general sense, reasonably motivated in her attempt to acquire this land, bordering her own, which she says was largely neglected and in need of tidying up, and in her belief that the title being passed to her was good. Unfortunately, the legal issues in a matter of this sort can be complex, leading sometimes to perhaps disproportionate expense when the intrinsic value of the land in issue is considered. However, the Tribunal finds itself unable to accept any of her submissions against an award of expenses in the appellant’s favour.

[8] Behind the primary rule that “expenses follow success” lie two principles, firstly that the party who must be held to have caused the expenses in question should pay but secondly that there may be cases in which aspects of the successful party’s conduct of the proceedings may alter that position. In this case, having withdrawn all opposition, the Interested Party must be taken now to have accepted that, however reasonable her beliefs and conduct were, she was in the wrong, i.e. that the appellant had a good title and either she was not “in possession” or alternatively, if she was in possession, that she had caused the inaccuracy by carelessness. Prima facie, in refusing to agree to rectification and in opposing the appeal, she caused the appellant to incur judicial expenses which he should be entitled to recover from her.

[9] Very exceptionally, a court may mark its disapproval of a successful party’s whole position, going beyond the actual conduct of the proceedings, by some modification, or possibly even refusal, of the claim for expenses, but we do not understand the Interested Party to have suggested that and in any event are clear that it does not arise in this case.

[10] The Tribunal has considered whether there is anything in the Interested Party’s submissions to alter the position. She claims to have acted reasonably and in good faith, and that may be so, but it does not alter the position that she was legally in the wrong. She says that any settlement or concession would have prejudiced her position as against Glasgow City Council from whom she acquired the defective title, but the appellant is correct to assert that that is basically irrelevant as against him. Neither of these things reflects in any way on the reasonableness of the appellant’s conduct of the proceedings.

[11] The Tribunal has looked slightly more closely at the factors which the Interested Party says caused her to withdraw her opposition. Firstly, although no-one is seeking to recover expenses from the Keeper, that should not prevent us from considering whether the Keeper could be seen as having caused expense, in particular by delaying until late in the day her concession that there was inaccuracy. That could conceivably, in this tripartite situation, lead to a different view as to whether the Interested Party should be responsible, or entirely responsible, for having caused the appellant’s expense. However, when the Keeper’s position is properly considered, we cannot so find in this case. No doubt the Keeper made a late change of position in coming to positively admit inaccuracy, but her position prior to that was that that might be the position but she was not able to adjudicate on it, i.e. it was for the Interested Party to defend her title. The Interested Party then did oppose the appeal, making no admission of inaccuracy and advancing positive cases on the issue of possession and carelessness. She may have drawn some comfort from the registration of her title without exclusion of indemnity, but we cannot find in the Keeper’s position at any time after rectification was sought anything which alters the assessment of causation of the appellant’s expenses. Once the issue of rectification was raised and the Keeper’s position on that known, responsibility for the appellant’s expenses lay, in the Tribunal’s view, with the Interested Party. If the Keeper’s late change of position had some effect in resolving the dispute and thus reducing the expenses in issue, it does not alter the position up until that time.

[12] The Interested Party refers also to the late production by the appellant, after the date for lodging productions, of the originals of deeds and deed plans which, it is said, clinched the position on inaccuracy. Should the appellant be entitled to his expenses, particularly after the date by which he should have lodged these? Although it does appear that both sides considered this material important on the issue of inaccuracy, making its late production potentially relevant to expenses, there is no indication what steps the Interested Party took to investigate this material. Another problem for the Interested Party is that this was not the only issue. Nor, as far as the pleadings are concerned, was it a critical issue, because the Interested Party was primarily fighting on possession and carelessness. This is inconsistent with a position that she would accept defeat if inaccuracy was shown. In other words, she was causing the appellant’s expense by opposing the appeal even on the basis that she was wrong on inaccuracy. Had she been contesting only inaccuracy, it might have been appropriate to take account of this late production of crucial evidence, although it would have been difficult for the Tribunal, not having heard the case, to reach a view on its significance. This runs into the Interested Party’s final point, that the issues of possession and carelessness did ultimately require to be considered: in the pleadings, they were major planks in the Interested Party’s position, causing expense, until she withdrew her opposition.

Tribunal’s Consideration: Employment of Counsel

[13] As already indicated, there were three broad issues: inaccuracy, possession and carelessness. The interested party submits that there were no complex or difficult questions of fact and law. We have the impression that that might be right in relation to inaccuracy, which may have been more a question of locating the appropriate sections of the title deeds and identifying whether the land in question was or was not included in conveyances or exclusions from conveyances. We are, however, satisfied on a consideration of the pleadings that the issues of both possession and inaccuracy raised difficult questions of fact and law in this case. These are applications of the provisions in Section 9(3) and 9(3)(a)(iii) of the 1979 Act, to particular circumstances, there being a relatively small number of previous decisions on these provisions, the application of which can be difficult. While a capable litigation solicitor could of course have handled the case, the question is whether it was reasonable to employ junior counsel. In the circumstances of this case, we have no doubt that it was, and we have granted this part of the motion.

Tribunal’s Consideration: Expert Witnesses

[14] As regards the expert evidence of Professor Rennie, the Tribunal distinguishes between interpretation of titles as such and evidence on the standard to be expected of a reasonably competent solicitor, i.e. on the issue of carelessness. The appellant’s submission refers to the latter area, in which it is normal and often necessary for a court or this Tribunal to have such expert evidence. We have not seen any report by Professor Rennie, but if he did so report or take steps preparatory to giving evidence on this issue, we consider such expense reasonable. We have granted this part of the motion, limited to Professor Rennie’s involvement in the issue of carelessness under Section 9(3)(a)(iii).

[15] Mr Scott did prepare two plans which were lodged as productions, one purporting to identify various areas referred to in a 1939 deed and the other identifying the area of operations relied on in the possession issue. The Interested Party submits that all that was necessary was to consider the 1884 deed plans in comparison with the Land Register plan. The 1939 deeds were, however, in issue, and the Tribunal considers it reasonable for the appellant to have engaged this expert for this limited purpose at a time when he was being put to proof to demonstrate his title. There was also the issue of the extent of possession claimed by the Interested Party. We have certified this witness also.

Decision

[16] For these reasons, the Tribunal has decided to:-

(i) find the Interested Party liable to the appellant in the expenses of the application;

(ii) to sanction the employment of junior counsel;

(iii) to certify the employment of Professor Rober Rennie as a skilled witness, in so far as related to the issue of ‘carelessness’ under section 9(3)(a)(iii) of the Land Registration (Scotland) Act 1979; and

(iv) to certify the employment of Colum Scott MRICS as a skilled witness.

[17] The appellant has in fact submitted an Account of Expenses to the Tribunal. However, in the event of failure to agree the amount, expenses will require to be taxed by the Sheriff Court Auditor.


Certified a true copy of the statement of reasons for the decision of the Lands Tribunal for Scotland intimated to parties on 17 August 2012

Neil M Tainsh – Clerk to the Tribunal