NOTE

Brian Pattie & Another v Keeper of Registers of Scotland & Malcolm Stewart & Another
(Expenses)

Summary

[1] In this appeal under Section 25 of the Land Registration (Scotland) Act 1979 (“the Act”), the appellants appealed against the refusal of the Keeper to rectify the interested parties’ registered title by removing from it a strip of ground which appears to measure very approximately 50 by 3 metres. The appeal was to be heard on 7 October 2013. Very shortly before the hearing the interested parties consented to the rectification sought. The interested parties also sought agreement on no award of expenses due to or by either party; at that late stage, the appellants, although they had previously offered such terms, sought to insist on expenses; and agreement was then reached for the consent to be given and the dispute resolved, subject to further argument on expenses. The Tribunal has now considered the appellants’ motion for expenses against the interested parties on the basis of written submissions.

[2] The Tribunal has decided that the appellants are entitled to their expenses. Put shortly, the Tribunal is unable to proceed on any view as to the position on the merits of this application. However, the appellants have been entirely successful in the application. They also on numerous occasions, both before and after this appeal was commenced, offered to resolve matters on the same basis without any expense to the interested parties. The interested parties’ concession came far too late. The expense of these proceedings has been caused by the interested parties who should accordingly be held liable in expenses.

The Circumstances Summarised

[4] The appellants and the interested parties are neighbouring farmers. The strip of ground in question adjoins the walls of the appellants’ steading buildings. The strip appears to have been fenced off and thus separated from the interested parties’ land for a number of years, but the interested parties maintained that their registered title including the strip is accurate, their subjects having been accurately mapped some years ago. They maintained that the fence was not a boundary fence but rather a stock fence placed for convenience a short distance out from the actual boundary. The appellants’ title is a Sasine title founded on a Disposition of 1893 without a title plan, but they allege many years of prescriptive possession. On the pleadings, the Keeper does not take up any position on the accuracy of the registered title, but does, as she is bound to do where there is such a dispute, explain her inability to adjudicate. In their adjusted pleadings, the interested parties set out what appears to the Tribunal to be a coherent case (whether or not it was correct) to the effect that there was no inaccuracy and the appellants’ title was not habile to found prescriptive possession.

[5] Certain correspondence produced on both sides may be referred to, although it has not been formally proved or admitted, on the basis that there is no suggestion that it is not what it bears to be. In summary, upon being informed by the Keeper that she could not rectify unless the interested parties consented, the appellants entered into correspondence with the interested parties’ solicitors. In each of 6 letters between 12 April and 10 September 2012, the appellants requested the interested parties to execute their consent to rectification in exactly the terms which the interested parties eventually accepted. In this correspondence the appellants did not seek any payment towards their expense. They made clear their intention if necessary to apply to the Tribunal, and they referred to the expense of that. The interested parties maintained disagreement with the appellants’ position. The appeal was lodged on 4 March 2013.

[6] In a letter of 17 June 2013, dealing with procedural issues, the Tribunal (which was not then aware of the previous correspondence) wrote inter alia:-

“If they have not already done so, parties should seriously consider whether this is a dispute which would be better resolved by negotiation or some form of mediation.”

On 28 June, the interested parties requested a meeting. The appellants did not agree to a meeting but on 4 July offered to resolve the dispute on the basis of the interested parties giving the consent sought, with no expenses due to or by either party, stating that otherwise they would proceed and seek expenses. The appellants wrote to the same effect on 8 August, indicating that their offer in relation to expenses would be withdrawn if agreement was not given by 15 August. On 25 September, the interested parties instructed their solicitor to concede the position on the basis of no expenses. On 27 September the appellants’ solicitors indicated that the appellants required their expenses. Correspondence at this time also includes reference to possible exchanges of land to resolve parties’ differences, but nothing came of that. Parties then agreed that the interested parties would sign the consent to rectification on the basis that expenses were left to be resolved on this subsequent opposed motion. In a letter of 1 October, the interested parties’ solicitors highlighted that they had counsel’s opinion backing their position but realised that “someone requires to rise above legality, be pragmatic”, and also that the value of the strip on an agricultural valuation was “the appropriate proportion of the value of an arable acre in The District”.

Submissions

[7] The appellants’ position, in summary, is that this matter could have been settled at an early stage. The interested parties had delayed matters unnecessarily by their refusal to cooperate. The interested parties had accepted that the land had a significant value to the appellants but was worth virtually nothing to them. It would be unreasonable not to award expenses to the appellants on account of the conduct of the interested parties. There were no factors to suggest that the Tribunal should depart from the general rule that expenses follow success.

[8] In their submission the interested parties referred to the Tribunal’s discretion and to the Tribunal’s letter of 17 June, following which, they submitted, the appellants had failed to negotiate. They also noted that in a telephone conversation on 30 September, the appellants’ solicitor promoted for the first time a proposal to exchange parcels of land, i.e. it them emerged that the appellants’ real target was ownership of the adjoining land as well as the strip in question. The Tribunal was also asked to consider the enhancement in the value of the appellants’ land by virtue of their now having title to the strip, removing any question of a ransom strip.

[9] In a response, the appellants submitted that the Tribunal’s discretion was usually exercised in accordance with the general principle that expenses follow success (Jas Miller & Anr v Keeper & Ors, LTS/LR/2011/02, and Durie v Keeper and Anr, LTS/LR/2011/01). The party held to have caused the expense should pay. The applicants had been wholly successful. In relation to the Tribunal’s letter, it was submitted that the applicants had made every attempt to negotiate settlement. Objection was taken to the suggestion that the strip had been used to try and trigger a larger exchange of land They had sought a resolution by transfers of land as more likely to be conducive to good relations in future. The interested parties’ argument regarding increase in value of the appellants’ property supported the appellants’ position: they were justified in pursuing their remedy, the strip on the other hand being of little or no value to the interested parties.

Consideration

[10] The appellants’ submission that expenses are generally awarded on the basis of the ‘success’ rule, in the Tribunal as well as in ordinary civil court litigation, is correct. The underlying principle is that, whether pursuer or defender, a party who has not succeeded has been in the wrong and has therefore caused the successful party’s expense. The Tribunal, like courts, does have a discretion in the matter, but must exercise that in the light of the underlying principle.

[11] On the material available, we can accept the interested parties’ submission that they conceded on pragmatic grounds, despite having legal opinion in support of their position. In our view on the pleadings, issue was properly joined on ‘inaccuracy’. The appellants correctly point out that the interested parties advanced no real basis or specification for their claim to have been a ‘proprietor in possession’, but that question would only have arisen if ‘inaccuracy’ was established. Not having heard evidence and submissions on ‘inaccuracy’, we cannot assume that the appellants would have succeeded on that issue.

[12] However, the appellants have obtained exactly what they sought. The question arises why, if they ultimately conceded this on pragmatic grounds, the interested parties did not do so earlier. The correspondence produced and referred to above shows clearly that they were repeatedly asked to do so, at no expense to themselves, before this appeal was taken. Then, following the Tribunal’s letter of 17 June, they again had the opportunity, between 4 July and 15 August, to withdraw their opposition on the basis of no expenses. The appellants’ withdrawal of that offer is understandable and reasonable, given that there would be substantial preparation expense in the period up to the hearing.

[13] The interested parties criticise the appellants for failing to negotiate after the letter of 17 June. The appellants in fact responded to that letter by making the offer of no expenses. It appears to be the case that the appellants were not prepared again to sit down and negotiate further. In the circumstances now known to the Tribunal, we do not think that the appellants behaved unreasonably. They had a clear and consistent position as to what should happen. They had repeatedly made that position clear.

[14] The interested parties’ position is all the more difficult to understand when the value of this strip of land is considered. To them, it was simply a small part of their agricultural land, something in the region of 0.015 hectares on our very approximate measurement. That would appear to give it an agricultural value somewhere in the low hundreds of pounds. There was little financial interest for them in this dispute, except on some sort of ransom basis. We find no indication of a point of principle which would provide a reasonable explanation of the interested parties’ actings. We have looked in vain for some reason, relevant to this issue of expenses, why they maintained their opposition for so long.

[15] On the material available, we do not see anything improper in the appellants raising the possibility of resolving this dispute by a wider form of agreement on the basis of exchanging parcels of land, although if this were their motive in pursuing this claim, one might have expected them to raise the possibility earlier.

[16] The fact, if it be true, that the value to the appellants is rather higher, so that they benefited from an enhancement of the value of their property as a result of pursuing this appeal, is not a factor in favour of the interested parties’ argument. Rather, it tends to support the appellants’ insistence on their position.

[17] Our conclusion is that, whoever was correct in law, the interested parties caused the expense of these proceedings. They are liable in expenses.


Certified a true copy of the statement of reasons for the decision of the Lands Tribunal for Scotland intimated to parties on 29 January 2014

Neil M Tainsh – Clerk to the Tribunal