This is a motion for an award of expenses by the applicants in an application for discharge of title conditions. The applicants wished to build a house on subjects which comprised the end of the rear garden area of a (now flatted) Victorian terrace house and the end section of a service lane which section provided access only to the rear of the flats. There was no opposition from owners of the flats, but there was opposition from the owners of two mews houses adjoining the subjects and also from the owners of some other flats in the terrace. Conditions in three deeds were involved. For details of how these applied and the Tribunal’s reasons for its decision, we refer to our Opinion of 28 June 2006. Basically, the applicants were successful following a hearing, although in the case of one of the title conditions, what they were granted was a variation to enable the particular proposed development, for which they had planning permission, to proceed, rather than a discharge.
On the matter of expenses, we have decided, applying Section 103(1) of the Title Conditions (Scotland) Act 2003 (“the Act”), as follows:-
Since this Note is at some length, we think it appropriate briefly to summarise our opinion on the main matter raised, viz. the application of Section 103(1). In our opinion, this provision of the Act requires the Tribunal to depart from its previous practice of not awarding expenses against benefited proprietors in favour of successful applicants for discharge or variation of title conditions unless there is an unreasonable aspect to the benefited proprietors’ opposition. We are instead required, in the exercise of our discretion in each case, to pay particular attention to the normal rule in civil litigation that expenses follow success. We are, however, required also to consider the particular circumstances of each case. In the present case, we find justification for some modification of the award, on a combination of circumstances, viz. the fact that the applicants’ success was limited to an order of variation as opposed to the discharge which they sought, the failure of the applicants to make any effort to discuss the possibility of agreement, the fact that the applicants introduced submissions on matters of title and interest at a late stage and some slightly understandable unfamiliarity of the respondents with the change in the law brought about by Section 103(1).
We have decided not to make an award on a joint and several basis, but rather to find the respondents liable in fixed proportions, distinguishing slightly between the three respondents who appeared at the hearing and five respondents who were parties because they submitted and at no time withdrew written representations but did not appear at the hearing. The eight separate awards add up to a total of 70% of the applicants’ expenses, which we consider in all the circumstances to be a fair allocation of responsibility for the expense occasioned to the applicants by the respondents’ opposition to their application.
We wish to draw particular attention to one matter in this case, which is that benefited proprietors who submit, and at no time withdraw, written representations in response to an application such as this are parties to the application whose opposition will result in expense to the applicants with the result that, depending on the circumstances of the case, they run the risk of having to pay or contribute to the applicants’ expense incurred in meeting their opposition.
The application was originally made in July 2005 in the name of a Mr Gibson, who owned the subjects at the time. 31 benefited proprietors were named and the application stated, in relation to the 1875 Feu Contract under which, in the event, most of the argument arose, that a ius quaesitum tertio was conferred on those proprietors. Notification of the application, as required by Section 93 of the Act, was made to the apparently benefited proprietors, in the form specified by Section 94. Nine proprietors (in two cases, joint proprietors) lodged (or participated in lodging) representations objecting. An adjustment procedure followed. In December 2005, a hearing was fixed for 24 April 2006. Although the original notifications had not made reference to the matter of expenses (that not being one of the matters set out in Section 94 of the Act), the Tribunal’s letters dated 21 December 2005 to each of the respondents (in the case of Mr Clarke, the solicitors then acting on his behalf) set out the Tribunal’s normal guidance on procedure leading up to and during the hearing. These letters included a section referring to the possibility of awards of expenses and to Section 103 of the Act in this regard. On 6 April 2006 the applicants’ solicitors applied to have West Coast Property Developments Limited sisted as the applicants in respect that they now had title to the subjects. At the same time, intimation was given of legal submission by the applicants that the respondents did not have title and interest to object. The hearing took place on 24 and 26 April 2006, with a site inspection on 25 April. The applicants were represented by a solicitor, and also included among their witnesses the architect who had been involved in the design of the proposed house and negotiations with the planning authority. Three of the respondents attended, although not all for all of the time. None was legally represented at the hearing, although one, Mr Clarke, had been represented by solicitors from September 2005 to February 2006. The remaining respondents did not attend or indeed give any further intimation of their position. As they had not withdrawn their objections, they had to be treated as maintaining their opposition. At the hearing, the applicants’ solicitor produced a written submission ‘on legal matters’, including ‘Title and Interest’. The Tribunal felt it only fair to the respondents, who were not legally represented and had only received intimation of the basis of this technical legal argument at a late stage, to have the opportunity to lodge any further submissions on it in writing. The respondent Mr Clarke, the immediate next door neighbour, was also given an opportunity, if so advised, to lodge submissions in support of a claim for compensation in the event of the application being successful. Certain further written submissions, including one by Mr Clarke on compensation, were received. The Tribunal issued its decision, essentially granting the application, and also refusing Mr Clarke’s claim for compensation, on 28 June 2006.
In accordance with our normal procedure, we have considered the issues on expenses on the basis of written submissions. The applicants’ solicitors (Messrs MacRoberts) at first applied, in reasonably formal terms, for awards against all the respondents jointly and severally, in respect of expenses incurred as a result of the respondents’ objections, i.e. from their consideration of the objections onwards. Various submissions in response were received. These included a letter from the respondents’ MSP, and one or two of the respondents had also the support of a local councillor. The applicants’ solicitors responded at some length to those submissions. As that latter response explored the relevant law and as the respondents had not been legally represented, the Tribunal allowed a further opportunity for the respondents to obtain legal assistance and make any final submissions on this issue of expenses. Two further submissions for respondents were received, one from solicitors (Messrs Bell and Craig) who had been instructed by most of the respondents.
Rule 28(1) of the Lands Tribunal for Scotland Rules 2003 provides as follows:-
“28 (1) For the purposes of determining applications under Part 9 of the Act of 2003, expenses shall be determined in accordance with sections 97(4), 99(3) and 103 of that Act…”
Sections 97(4) and 99(3) of the Act deal with particular types of application with which this case is not concerned.
Section 103(1) of the Act provides as follows:-
“103 (1) The Lands Tribunal may, in determining an application made under this part of the Act, make such order as to expenses as they think fit but shall have regard, in particular, to the extent to which the application or any opposition to the application, is successful.”
The following authorities were referred to:-
Dobbie v Fife Council LTS/COMP/1996/8, 14.1.1998
McTaggart v Campbell & Another LTS/LO/2000/23, 10.1.2002
Parks of Hamilton (Holdings) Ltd v South Lanarkshire Council LTS/LO/2001/46, 4.10.2002
Donnelly & Regan v Mullan & Others LTS/TC/2005/01, 1.9.2006
It is convenient first to set out the competing submissions on the general effect of Section 103(1), particularly the relationship with the Tribunal’s previous practice in relation to awarding expenses against benefited proprietors; then to summarise particular points taken in relation to application of the provision in the particular circumstances of this case; and finally to set out the contentions on some discrete matters such as the certification of the architect as an expert witness, liability of some particular respondents and expenses in relation to Mr Clarke’s claim for compensation.
Section 103(1). The applicants accept that the Tribunal has discretion in relation to the matter of expenses, but submit that Section 103(1) creates a presumption that expenses will be awarded to a successful applicant and that there are no grounds on which this presumption should be overturned in this case.
The respondents’ position on the general issue of interpretation of Section 103(1) is most clearly set out in the submission from Messrs. Bell and Craig. They first refer to the Tribunal’s practice prior to the Act, that:
“in the normal case an unsuccessful party taking a stand on his rights as a benefited proprietor will not be found liable in expenses provided he has acted reasonably” (McTaggart v Campbell & An’r)
The Tribunal had developed a clear practice of not awarding expenses against unsuccessful objectors who were benefited proprietors unless there was some unreasonable aspect in their opposition. The practice of the Lands Tribunal for England and Wales was still on the same basis (Lands Tribunal Practice Directions, para. 22.4). Section 103(1), it was submitted, preserved the right of the tribunal to make an award of expenses at their discretion. Although the Tribunal had stated in Donnelly and Regan v Mullan and Ors that as a general rule expenses follow success, that was a case with certain differences from the present and the Tribunal did not require to be bound by previous decisions. An interpretation of the Act to the effect that expenses are awarded according to the extent of success would become a formula and not an act of discretion: the Tribunal should still have discretion even after assessing the extent of success. To maintain “a difficult balance of discouraging frivolous objections and encouraging lay people to defend their proper property rights against unwarranted challenges by developers (who thereafter gain financially from the success)”, the Tribunal should in this case find each party responsible for its own expense. The Tribunal must retain discretion in relation to awards of expenses and look at each individual case according to its own particular circumstances.
In individual submissions in response to the original application for expenses (made in fact before the Tribunal issued its decision on expenses in Donnelly and Regan v Mullen and Ors), one or two of the respondents go further than Messrs Bell and Craig, in effect inviting the Tribunal to follow its former practice of not awarding expenses against benefited proprietors unless they acted unreasonably. Generally, the point being put in a number of different ways, it is suggested that the respondents were entitled to defend their rights and the status quo and should not be penalised for doing so.
Particular circumstances. The respondents make a variety of submissions in relation to the particular circumstances of this case. Substantial reliance is placed on the fact that the Tribunal only varied the conditions in the Feu Contract so as to permit the particular proposed development: this was considerably different from the discharge sought by the applicants and represented a measure of success in the respondents’ opposition to the application. They had succeeded in protecting important existing rights and burdens in the community created by the Feu Contract. There were no negotiations or attempts by the applicants to contact the respondents to discuss their proposals. No attempt at mediation was made by the applicants. The applicants stand to gain financially from their success in the application, by contrast with the imposition on the respondents of the new development, including the disruption and disturbance while it is being built. The applicants had accepted that the respondents had right, title and interest to object, and also that there was a servitude right of access using the service lane. Messrs Bell and Craig also referred to “the transitional position in relation to legislation”.
A very common theme in the respondents’ submissions is that, when the application was intimated to them, they were not advised of their possible liability in expenses. Several of them suggest that they were invited by the Tribunal to respond or make representations. It was not suggested that they take legal advice. They believed that this application procedure was like the planning process. One, Mr Clarke, suggested that this was a chance, denied to them under the planning process, to, in a sense, appeal the planning consent.
In her further submissions dated 22 September 2006, the respondent Patricia Thompson (one of the respondents who appeared at the hearing) made a number of detailed points about the applicants’ conduct of the case – failure to provide copies of all the productions; change of applicant at short notice; non-appearance at the hearing of the new applicant; failure to confirm the future intentions of the new applicant; and presenting arguments about the 1875 Feu Contract during submissions without opportunity for cross-examination. She also pointed to ways in which the respondents had been reasonable in reducing expenses.
The applicants’ response to these various submissions in relation to the circumstances of the case can be summarised as follows. On the question of variation versus discharge, the applicants contend that it was always clear that the purpose of the application to discharge the burdens was to allow the particular development in accordance with the planning permission received for it. There was very little practical difference between variation and complete discharge. It was always clear that the respondents would not be prepared to consent to variation, and if such a compromise had been suggested by the respondents it would almost certainly have been accepted. There was no substantial qualification of the applicants’ success, nor any significant success for the respondents.
In the applicants’ submission, the fact that the respondents had right, title and interest to object was not unusual in litigation and not a factor to be taken into consideration. It was not accepted that the objections were necessary, the loss of amenity caused by the proposed development having been found by the Tribunal to be insubstantial and significantly less than suggested. It was accepted that the applicants had not made any proposal to the respondents, but neither had the respondents made any proposal. The applicants had reasonably anticipated that no mutually acceptable compromise could be reached.
The applicants considered that it would be true of most applications to the Tribunal that the respondents were not made aware of their possible liability in expenses. The applicants should not be prejudiced by the fact that the statutory forms do not provide such notice or the respondents’ failure to seek legal advice. The respondents ought to have been aware that the application was a quasi-judicial process and that there might be liability in expenses. It was implicit in the submissions that even after becoming aware of the possible liability they chose to proceed with the objections. If respondents assumed that the process was similar to the planning permission process, that was their error and it should not be given any weight by the Tribunal. The suggestion from the councillor that it would be ‘grossly unfair’ for the respondents to be liable in expenses for ‘expressing their views’ ran contrary to the statutory provision: it would be grossly unfair to the applicants if they were not compensated for the significant expense incurred as a result of the objections just because of the respondents’ ignorance of their potential liability. All the respondents had been specifically advised by the applicants’ solicitors on 6 April 2006 that an award of expenses would be sought if the application succeeded.
Other matters. The respondent Ms Creighton, one of those who did not attend the hearing, had a particular submission regarding her own position. She suggested that, having merely been asked “casually” by Mr Fleming if he could add her name, she did not see the letter before it was sent. Having seen it, she questioned whether it amounted to ‘objections’. She then took no further part in the proceedings. The applicants did not respond on this point.
Objection is also taken on one or two grounds to the certification of Mr Cornelius as an expert witness. It is suggested that intimation should have been given that it was proposed to call him as a witness and if it had been he could have been objected to, or at least questioned on a different basis. Certification, it was said, should have been sought in advance of the hearing when, again, it would have been opposed. Messrs Bell and Craig referred to Dobbie v Fife Council, a compensation case in which there was a problem about the status of an alleged expert who was also a representative with a financial stake in the outcome of the case. The applicants contended that a motion for certification could be made at any time prior to the expenses of the process being awarded. Although Mr Cornelius was an architect acting under the applicants’ instructions, that did not prevent him from appearing as an expert witness and he had been separately instructed for that.
Mr Clarke objected to an award of expenses in relation to his claim for compensation. He had only requested that when “invited to do so” by the Tribunal, and the respondents in general had never been influenced by any form of financial gain. He had himself incurred a surveyor’s fee in this connection. The applicants countered that the further procedure occasioned by Mr Clarke’s claim had caused them expense and the expense incurred by him as the unsuccessful applicant was irrelevant to the successful party’s motion for expenses.
Section 103(1). As Messrs Bell and Craig appreciated, the Tribunal has, during the period in which written submissions were being made in this case, issued a decision on expenses in another case in which successful applicants sought expenses against objectors who were benefited proprietors (Donnelly and Regan v Mullan & Ors). In that case we set out views on the general issue of interpretation of Section 103(1). In the particular circumstances of that case, which were by no means identical to this one, we found the respondents liable in expenses, modified to one half. We accept that we are not bound by that previous decision and have considered the general issue again in the light of the submissions in this case. However, we see no reason to reach any different general view. For convenience, we have substantially reproduced our reasoning in this Note. We also accept what we think is the main thrust of Messrs Bell and Craig’s submission, that each case must be considered in its own particular circumstances, and we go on to consider – as we did in that case - the particular circumstances of the present case.
In this case, concerns have been raised around the theme of objectors without legal representation being unaware of their potential liability in expenses and the feeling that it is reasonable for benefited proprietors to seek to defend their rights and express their views, and we have considered these issues with some anxiety. We do appreciate that situations like this are likely to recur under the current legislation. The focus of the benefit of title conditions has to an extent shifted towards neighbours, who may often not obtain legal advice although that might seem an obviously appropriate step to take if they are of a mind to oppose applications of this nature.
The correct approach, applying Section 103(1) of the Act of 2003, to claims for expenses by applicants who have been successful in opposed applications for discharge or variation of title conditions is not straightforward. The unsuccessful opponents are ‘benefited proprietors’ seeking to uphold their legal rights. It is not at all surprising that they will be unhappy at the prospect of not only losing the rights but also having to pay the sometimes very substantial professional expenses of the party who had purchased property on the basis that it was burdened by those rights. That sentiment might seem particularly applicable where, as in the present case, the applicants may simply be seeking a financial gain from which the title conditions in question would have barred them. We, however, must apply the law in relation to expenses as we find it to be.
The question whether to make an award of expenses in favour of one party against another in civil litigation is generally said to be at the discretion of the court which heard the case. That, however, is somewhat misleading, because there is a very clear overriding principle, which finds expression in a clear general rule with one or two well recognised exceptions. The principle is that the expenses should be borne by the person who caused them. The general rule arising out of that principle is that “expenses follow success”, because parties’ rights are taken to have been all along such as the court has found them to be. The party who has required to vindicate rights, either by bringing the action in which he has been successful, or by successfully defending, has been caused expense by the unsuccessful party. It is not a question of penalty but of which of two (or more) parties should bear the expense caused by the proceedings.
The main recognised exceptions, which may be seen also to arise from the general principle, are that the general rule that expenses follow success rule may not be applied, or may be modified, if the court disapproves of some aspect of the successful party’s conduct (which may be said to have caused or contributed to the expense) or if it can be said that there has been ‘divided success’. In the latter case, the court is not so much looking to see whether the successful party has got as much as claimed, or succeeded on all points argued, as looking at whether substantial unnecessary time has been taken up (and therefore expense caused) on areas in which the successful party was not in fact upheld. The system of ‘tendering’, where a successful party awarded less than an amount formally tendered does not get expenses in respect of the period after the tender and indeed has to pay the opponent’s expenses in relation to that period, also fits in with the general principle: a party who persists in a claim after having been formally offered more than he is found entitled to has caused expense to the other party even although he was successful in the case.
The ‘discretion’ lies in the court’s consideration of how these rules apply to the particular circumstances, in the light of the general principle.
The Tribunal generally has power to award expenses. There was no special statutory provision in relation to the expenses of applications under the Conveyancing and Feudal Reform (Scotland) Act 1970 for discharge or variation of land obligations. The Tribunal, however, developed a clear practice of not awarding expenses against unsuccessful objectors who were benefited proprietors unless they had acted unreasonably, because benefited proprietors were simply seeking to uphold their rights: unless there was some unreasonable aspect to their opposition, they should not have to pay the applicants’ expenses. It is certainly of interest to know that recent Practice Directions of the Lands Tribunal of England and Wales confirm that in their jurisdiction the same approach is, and is still, applicable.
However, Section 103(1) of the 2003 Act provides as follows:-
“The Lands Tribunal may, in determining an application made under this Part of the Act, make such order as to expenses as they think fit but shall have regard, in particular, to the extent to which the application, or any opposition to the application, is successful”.
Special provision is made in Sections 97(4) and 99(3) for expenses in two particular situations in which, under certain different procedures introduced by the Act, the application is to preserve, rather than discharge or vary, existing rights. Rule 28(1) of the Lands Tribunal for Scotland Rules 2003 provides:-
“For the purposes of determining applications under Part 9 of the Act of 2003, expenses shall be determined in accordance with sections 97(4), 99(3) and 103 of that Act. In all other cases except those to which the provisions of section 11 of the Act of 1963 apply or proceedings referred to in paragraph (6) of this rule, the Tribunal shall deal in such manner with the expenses as in its discretion it thinks fit.”
We reject the submission that notwithstanding these provisions the Tribunal should follow its previous approach. To do so would be to have regard, in particular, to the fact that the unsuccessful benefited party was merely seeking to uphold existing rights. What the provision does in relation to this class of application, is to start by affirming the Tribunal’s discretion but then introduce a particular direction to have regard to the extent of success. The Parliament must be taken to have been aware of the Tribunal’s previous practice and must inevitably be taken to have intended that this should change. It follows that, interested as we are in the fact that the (quite separate) English tribunal, applying a corresponding jurisdiction, maintains a practice apparently the same as this Tribunal’s previous practice, we are not able to follow the same line.
It must also follow that the undoubted fact that the respondents had a right to object cannot be a factor of any weight. They could not be respondents if they did not have such a right, and in litigation generally it is rarely the case that the defender does not have the right to defend. The Parliament has provided that particular consideration is to be given to the question of who has won and lost.
Messrs Bell and Craig submitted in effect that we are in danger of applying a formula and thus failing to exercise a discretion. It is quite helpful to suggest that we should first consider the extent of success but then, where relevant material has been placed before us, consider the exercise of the discretion. We certainly agree that we should, in order to apply the discretion, look carefully at the circumstances of the particular case. We would not, however, be giving effect to the Parliament’s intention if we did not recognise that the discretion is to be exercised in accordance with the broad general principle which we have identified, viz. that expenses should be borne by the party who caused them. It is worth pointing out that even under the Tribunal’s former practice our consideration was always related to that general principle, so that in cases where we found a benefited proprietor liable in expenses we did so on the view that, having taken up an unreasonable position in the case, in reality they and not the applicants had caused the expense (see, for example, Parks of Hamilton (Holdings) Ltd v South Lanarkshire Council, LTS/LO/2001/46, 4.10.2002, at page 2).
The fact that we are described as ‘quasi-judicial’ might suggest that more consideration needs to be given to the need to warn objectors of this potential liability, but it does not alter the legal position that we are required to pay particular attention to the question of success, albeit as part of the exercise of a discretion which also makes it appropriate and indeed obligatory to consider the particular circumstances of the case when respondents invite us to do so. Despite the success of one party, we must consider whether in the particular circumstances there is reason either not to award expenses or to modify an award.
The position is, however, slightly more complicated, because the new rule is not precisely that “expenses follow success”, rather that the extent of success is to be a particular consideration. That would seem to require consideration of the extent of success of the applicant or the opponent without the necessity for any formal tender. We think that this is a reference to the extent of success of the application (or the opposition to it) rather than of individual arguments. For example, we do not think it justifies any approach of counting up success in relation to the individual factors listed in Section 100, unless some particular chapter or area of evidence and submission (on which the applicant has not been successful) can be identified as having taken up a substantial amount of time. It does, however, clearly seem to permit consideration of the fact that, as quite often happens and happened in this case, an application for discharge is granted only to the extent of variation to enable a particular development to proceed. Objection which has led to such, sometimes very considerable, reduction in the extent of curtailment of the benefited proprietor’s rights, clearly has resulted in some success for the objector and is therefore clearly relevant. In such a case, consideration has to be given to how this affects the position about expenses. It may often be clear enough that the application to vary was still, and would still have been, opposed, which might suggest that at most the effect given to this factor should be quite limited.
Generally, the unsuccessful objector has not caused the expense of the initial application (although an applicant who has taken all reasonable steps to obtain the benefited proprietor’s agreement at no expense to the benefited proprietor might be in a position to argue otherwise). Normally, therefore, we would still not be inclined to award expenses in respect of any period before the objector has lodged representations. We would not expect applications for awards of expenses of unopposed applications. The fact that the Parliament felt it necessary to make particular provision in Sections 97(4) and 99(3) for situations in which applications to preserve are unopposed (the expense of these applications having been caused by the “terminator” or “proposer”, who is not the applicant) supports the general exclusion of expenses of unopposed applications (and also seems to confirm the Parliament’s appreciation of the underlying principle which we have highlighted).
Nor do we consider that Section 103(1) does anything to exclude the other exception to the general rule that expenses follow success, where disapproval is being shown of some aspect of the successful party’s conduct. We think one important application is in relation to any failure or delay in setting the case for the application out clearly. If an application, particularly one based on a particular proposed development, is vague and not justified by detailed averments or evidence until shortly before the hearing, the objector may well be able to argue that had he known the details he would not have opposed or not maintained opposition.
More generally, it might be added that consideration of conduct would include consideration of the approach and efforts of the parties towards reaching agreement. No hard and fast rules can be laid down as to steps which parties should take in this direction, each case being dependent on its own circumstances. The Tribunal, however, would expect parties to give reasonable consideration to this question, including reasonable consideration of any suggestions by other parties that matters should be discussed. In this connection, we would not rule out the possibility of reflecting in relation to expenses any unreasonableness on the part of a successful party in the particular circumstances in relation to a proposal of mediation or the like.
Particular circumstances. Applying these considerations to the present case, the applicants have clearly been substantially successful. Their objective was to remove the title objection to the proposed new house. However, they did apply for, and were not awarded, a full discharge of the relevant title conditions. Rightly or wrongly, the applicants accepted that the objectors, who are in two different categories, viz. adjoining mews house proprietors such as Mr Clarke and flat proprietors in the terrace, such as Ms Thompson, were benefited under the Feu Contract. In that situation, the Tribunal proceeded on the basis that, despite the very changed situation since 1875 and also that the title conditions appeared to have little to do with the particular amenity of the service lane area, the Feu Contract might still have some force and that the respondents might therefore be entitled to the assurance that development would be no more extensive than that for which planning permission had been obtained. The Tribunal therefore ordered variation, not discharge, of the conditions in the Feu Contract.
While we accept that that can be seen as some success for the objectors, we must consider what effect it had on the expenses incurred by the applicants. It seems to us that the objectors were mainly objecting to the particular development, i.e. their position, was one of opposition to both variation and discharge. There was some natural difference of emphasis between, for example Mr Clarke, the immediate neighbour, and Ms Thompson, who was taking a slightly wider view. The respondents can of course say that, at least in advance of the hearing, the applicants did not place before them the option of variation. As will be seen from our general consideration above, applicants would be well advised to consider carefully exactly how much to ask for in applications (and indeed if, as in this case, there is room for very real doubt as to whether very old feuing conditions are still enforceable, whether to seek a determination, in the same application, under section 90(1)(a)(ii) as to validity). In this case, however, there is really nothing to indicate that any of the respondents were looking for, or would at any time have agreed to, variation rather than discharge. We can in this case give some, but only quite limited, effect to this factor.
Some of the respondents refer to the applicants’ apparent motive of financial gain. We can well understand their feelings in that regard, but it does not have any relevance to the issue of expenses. This is a matter which can be of some slight relevance in relation to the merits, at the stage of weighing up relative benefit and burden, and was taken into account in our consideration of the application, but it does not arise when considering who has caused, and who should be responsible for, the expenses of the application once opposition to it is entered.
In relation to issues of reasonableness in the conduct of the proceedings, we should perhaps make clear that, while their opposition may not have been on particularly strong ground, there is no criticism whatever of the reasonableness of the respondents’ opposition. What we must consider here is any issue in relation to the conduct of the applicants, because it is the applicants who are seeking the award of expenses.
The respondents rely on the failure of the applicants to negotiate or even contact the respondents at all to discuss their proposals. We agree in general with the proposition that before invoking the jurisdiction of the Tribunal, and perhaps also during the course of the proceedings, applicants should consider the possibility of reaching agreement with benefited proprietors. It is certainly an unfortunate feature of the planning process that discussion with neighbours is not built into the process and therefore quite often does not happen, and it is not unusual to find a similar, and we sometimes think unfortunate, lack of communication in relation to discharge and variation of title conditions. As we have indicated above, consideration of the applicants’ conduct in this respect is relevant to the issue of expenses. However, when one looks at particular situations, one has then to recognise the realities. As far as the position before the application is concerned, it has to be remembered that on the legal view which the applicants took (and indeed the respondents must be taken to have concurred in), there were some 31 benefited proprietors. Further, there had been a long drawn out planning process with extensive opposition. The machinery for achieving discharge or variation of title conditions allows for situations in which, because of the number of benefited or possibly benefited proprietors, it is wholly unrealistic to think in terms of achieving unanimous agreement, and we think this is one such case. Even after the potential opposition was reduced to the number of objectors, we can in this case readily accept that the prospect of achieving agreement would be so slim as to be reasonably ignored. Conceivably, if agreement had been reached with Mr Clarke, it would have been realistic to hope to achieve the agreement of others. We would have thought that an approach to him as the immediate neighbour might have been appropriate. We take this matter into account in our general assessment of the expenses position, but in this particular case it can only carry a small amount of weight.
It is also suggested that we should consider the applicants’ failure to offer mediation, which is really an extension of the above point. The above considerations would seem to apply here also: although one can imagine the possibility of binding all the objectors into such a process, we can also understand that the applicants would find it difficult to contemplate such a course in the circumstances. A shorter answer to this particular point, however, is that the objectors did not either individually or together propose mediation. The Tribunal does encourage parties to try to reach agreement, if necessary by mediation, and this matter also was mentioned in the letters of December 2005, so that all parties received it. It seems to us that this contention could only seriously be considered if a particular proposal of mediation had been placed before the party in question.
Ms Thompson makes some particular suggestions of unreasonableness on the applicants’ part, which we find to be without merit. She mentions a problem about productions, a matter which was bound to be difficult for the applicants because they had no idea which respondents were going to turn up for the hearing. There is nothing unreasonable about the change of applicant before the hearing: these situations occur from time to time, although the particular expense occasioned by the change in identity should not be recoverable. Nor do we consider the non-appearance of the new applicants, or their ‘failure to confirm their intentions’, of any significance: they clearly, by continuing with the application, wished to continue with the particular development, beyond which their intentions are irrelevant. There is no criticism of presenting arguments after evidence: that is the way in which courts and tribunals normally proceed.
There is, however, one relevant matter in relation to the actual conduct of the proceedings. This is that the applicants, having from the outset proceeded on the basis that the respondents were benefited proprietors, at a very late stage indicated an intention, which was really not foreshadowed in their pleadings, to make submissions on the respondents’ title and interest. In the event, these submissions stopped short of submitting that any of the respondents were not benefited, but the relevance for the issue of expenses is that the Tribunal felt it appropriate at the end of the hearing to allow the respondents time, if so advised, to lodge written submissions in response. To the extent that the applicants’ expenses included considering and responding to these, they should not be recoverable. We shall not attempt to isolate the particular steps which are subject to this comment, but will take this into account as one, very small, relevant factor.
The other area which we have to consider concerns the Tribunal’s procedure in relation to intimation, particularly of the risk of an award of expenses. We appreciate the concerns about this, although the persistent theme that the Tribunal ‘invited’ comments or representations is inaccurate. The intimation, in the terms required by the statute, gave the benefited proprietors the opportunity, if so advised, to oppose the application by making representations. The Tribunal has hitherto not mentioned the matter of expenses in its initial intimations of proceedings of this sort. It was felt that, since the matter was not contained in the list of contents prescribed by Section 94(a)(i) of the Act, that it might be regarded as something in the nature of a threat to make reference to it. Indeed, in the present case, we note that one of the respondents did complain of that when the applicants drew attention to their intention to seek expenses. As already mentioned, the matter is covered in the Tribunal’s standard letter accompanying the order fixing the hearing. As a matter of fact, we have now taken the concerns expressed in this and one or two other cases, where Section 103(1) has come into play, into account and a careful reference to the matter of expenses is now being added to these intimations. In the present case, however, it is apparent that none of the respondents withdrew their opposition after they (or in one case their solicitor) received the letters of 21 December 2005 which did contain such a reference, or after receiving the applicants’ solicitors’ letter of 6 April specifically intimating that in the event of success they would move for expenses.
Generally, we would in any event have thought that property owners should appreciate readily enough the legal nature of proceedings of this sort relating to property rights, and it would seem ill-advised to embark on opposition without obtaining appropriate advice, including on risks such as expenses. We also note in this particular case that Mr Clarke, who was perhaps the most prominent objector and has in fact at certain stages in the proceedings lodged material on behalf of other objectors as well as himself, was legally represented in the initial stages. We do, however, appreciate that we are a tribunal, not a court, which might give some initial impression of informality and we do indeed strive to proceed as informally as is appropriate in legal proceedings.
Messrs Bell and Craig referred to what they described as ‘the transitional position in relation to legislation and to the Lands Tribunal approach to expenses’. It is not strictly accurate to describe this as a transitional case under the legislation, as it was commenced several months after the commencement date of the Act, and the Tribunal has in fact decided expenses in accordance with our interpretation of Section 103(1) in a number of cases now. Nevertheless, we appreciate that these decisions have not received substantial coverage and we think it is reasonable to give some slight effect to this point. In fairness to the applicants, however, this point also can in our view only contribute to a modest modification of expenses rather than anything more.
The sum of all this consideration, which we have set out at some length so as hopefully to give some indication of the way the Tribunal is approaching these matters under the new legislation, is that the applicants are entitled to an award of expenses. There are, however, in this case some relevant factors, individually of very little weight when properly viewed – the limitation to variation, rather than discharge, of the Feu Contract conditions; the failure to make any effort to discuss the possibility of agreement; the effect of the applicants’ late introduction of arguments about the respondents’ title and interest; and some slightly understandable unfamiliarity of the respondents with the risk under section 103(1) of the Act – which, taken together in the exercise of the Tribunal’s discretion in relation to expenses, merit some modification of the award. We shall modify the award to the applicants by 30%, i.e. the applicants will be awarded 70% of the judicial expenses in relation to the merits of the application in respect of the period from their receipt of the objections lodged by the respondents onwards. For the avoidance of doubt, any particular expenses related to the change of applicants will not be included. The question of expenses in relation to Mr Clarke’s claim for compensation is a separate matter considered below.
Allocation among respondents. The applicants seek their expenses on the basis of joint and several liability among the respondents. A particular concern has been raised about the potential effect of this on any individual respondent, who might in theory be held liable for the full sum. Although there is nothing unusual in the basis of the applicants’ motion, we think that this concern should be addressed in this particular case.
Firstly, however, we consider the particular case of the respondent Jill Creighton. She has submitted that she lodged no representations on her own account. She indicates that she had been asked, as she puts it ‘casually’, by the respondent Ross Fleming if he could add her name to his representations, which came in the form of a handwritten letter signed only by Mr Fleming. She took no further part than that. One might take her submission as including an acceptance that this respondent did indeed authorise the sending of representations in her name, and it could be added that she took no steps to withdraw from her involvement. However, the Tribunal’s correspondence was addressed to Mr Fleming on behalf of himself and Ms Creighton. In the circumstances, while Ms Creighton was correctly treated as a respondent, we think no injustice would be done by omitting her from the list of respondents found liable in expenses. We shall make no award of expenses against her.
We would mention that one point made by Ms Creighton in her submission to us was that she questioned whether the letter written by Mr Fleming amounted to ‘objections’. We would reject this argument. The letter starts:-
“I am writing on behalf of myself Ross Fleming and Gillian Crichton to object to the above discharge application as detailed in your letter of 17th August…”
The letter was accompanied by the statutory fee for representations. To the extent that the submissions of other respondents suggested or implied that they also were not formally making representations, but merely accepting some sort of invitation to comment, we reject this submission also. Benefited proprietors should understand clearly that under this jurisdiction if they advance representations in relation to applications, they become respondents. Put another way, such representations are either formally before the Tribunal or they cannot be considered at all. If they are accompanied by the statutory fee for which the Act (for the first time) provides, they will be treated as representations making that proprietor a party to the proceedings.
We next consider the question of joint and several liability for expenses. Rule 28 (2) of the Lands Tribunal for Scotland Rules 2003 provides as follows:-
“(2) The Tribunal may order that a party shall pay to another party either a specific sum in respect of the expenses incurred by that other party or such proportion of those expenses as the Tribunal thinks fit.”
We consider that this rule allows us, by making separate proportionate awards against the individual respondents, to make liability several rather than joint and several. We admit to being unaware of any precedent for such an approach, but we have decided in the exercise of our discretion to follow it in this case. It is not simply a question of recognising the potential hardship, and indeed worry, to individual proprietors made jointly and severally liable. These were separate representations, and in principle it seems to us appropriate in a suitable case simply to allocate proportions on a several basis so that each respondent is made responsible for a fixed share of the expenses caused by the opposition to the application. We have taken into account the indication by the applicants’ solicitors that they note with some sympathy the concerns of some respondents regarding their ability to pay and would attempt to come to some appropriate arrangement in this regard, and we had no reason to doubt the applicants’ sincerity in this regard.
Having decided to proceed in this way, we have of course set ourselves the task of making the allocation. We have decided to do this on the basis that those respondents who submitted representations, were parties in the proceedings, at no time intimated any withdrawal of their opposition, but simply did not appear at the hearing, have essentially caused the main expense to the applicants of preparing for and attending the hearing in just the same way as the three respondents who did attend the hearing, but the latter have caused just slightly more expense because if they had not attended the hearing it would have been a very much briefer affair. In considering an equitable disposal, we on the one hand accept that in a sense those who did not attend the hearing may seem to have involved themselves less. On the other hand, they had the benefit of, and would have stood to gain from, the fact that the three did attend and argue the cause. In the end, we considered that the fairest way was to make the three just slightly more responsible than the other (now) five, on the grounds that the second day of the proceedings would probably not have been required had they not attended. We did not think there was any reason to differentiate among the three who did attend, although it could be said that Mr Clarke and Ms Mazzolini, the existing mews house proprietors, were in a slightly different position from Ms Thompson, a flat proprietor in the original terrace. We have decided to find Mr Clarke, Ms Mazzolini and Ms Thompson each liable to the extent of 10% and Mr and Mrs Scott (jointly), Ms Warrington, Mr Fleming, Mr and Mrs Conway (jointly) and Mr Ingham each liable to the extent of 8%, making a total of 70% awarded to the applicants. We think that represents a fair allocation all round of the applicants’ expenses in relation to the merits of this application.
This is a decision in the exercise of our discretion in the particular circumstances of this case. The Tribunal will not necessarily enter into such an allocation exercise in other cases. There is much to be said for respondents presenting their cases jointly, making appropriate joint provision in relation to the risk of a finding of expenses against them.
Before leaving this matter, we should indicate that the circumstances might have been different had those respondents who decided simply not to appear requested the Tribunal to dispose of the case on the basis of written submissions (a course which is open to the Tribunal if parties agree), or possibly simply advised the Tribunal they did not wish to attend but simply wished their written representations taken into account. Each case must be considered in its own circumstances. Clearly, however, benefited proprietors who simply make written representations and then take no further part must be aware that, having not withdrawn their representations, they must be regarded by the Tribunal as parties and are therefore at risk in relation to expenses. We again point out that they did each receive the letters of 22 December 2005 which did give guidance on the matter of expenses.
Certification of Mr Cornelius as Expert Witness. We can deal more briefly with this matter. We refuse to certify Mr Cornelius as a skilled witness, although not for the reasons advanced by the respondents.
As the applicants submit, we should and do follow the same rules and procedure as the Court of Session and sheriff courts in issues of certification of witnesses. Rule 42.13(2) of the Court of Session Rules 1994 provides as follows:-
“(2) Subject to Paragraph (3), where it was necessary to employ a skilled person to make investigations in order to qualify him to give evidence in a prospective proof or jury trial, charges for such investigations and (if there is a proof or jury trial) for any attendance at it, shall be allowed in addition to the ordinary witness fees of such person at such rate which the Auditor shall determine is fair and reasonable.”
Paragraph (3) requires the party seeking expenses on such a basis to move the court for certification, just as the applicants have here done. The essential requirement is that the expert witness has specially prepared himself to give the evidence. Where, therefore, an expert has, like Mr Cornelius, previously been employed by the party, it is perfectly appropriate for him to give evidence, which will indeed be expert evidence to the extent that it is not simply stating ordinary facts, but it will only be possible to recover fees on an expert basis as part of the expenses of the cause if the expert has specially prepared. In the present case, the applicants submit as follows:-
“It was not part of Mr Cornelius’ initial instructions in relation to his work at the subjects that he appear as an expert witness at the Tribunal. Separate instructions were provided to Mr Cornelius in this regard and a separate note of fee has been issued to the Applicants for work in connection with the application.”
Having also reviewed Mr Cornelius’ evidence, which was substantially explanation of the plans, etc prepared by him and the steps taken to satisfy the planners, we are not satisfied that the test of special preparation to give evidence has been satisfied. Although it is not an absolute requirement for the expert to have actually prepared a separate written report for the purposes of the court (or Tribunal) proceedings, there is no indication that he prepared any such report in any form. It will of course be clear that in refusing this part of the applicants’ motion we are not in any way criticising Mr Cornelius or his evidence or indeed the decision to call him as a witness, merely holding that we are not satisfied that the test for holding the other side responsible for the expense of calling him as a witness on an expert basis has not been met.
Objections were taken on the basis that intimation had not been given that Mr Cornelius was to give evidence and objection to that might have been taken, or that he should have been certified in advance. These objections are misconceived: there could have been no objection to Mr Cornelius giving evidence, and the procedure is for certification to be considered after the event. The reference by Messrs Bell and Craig to some consideration in Dobbie v Fife Council is also wide of the mark, because the Tribunal in that case were considering a particular problem which can arise with regard to experts in certain small compensation cases and is of no relevance to this case.
Expenses in relation to Mr Clarke’s Compensation Claim. We are in no doubt that the applicants are entitled to their expenses in perusing and preparing submissions in response to this claim, which was unsuccessful. Mr Clarke submits:-
“…in all reality the respondents have at no time requested compensation until invited to do so by the tribunal … The respondents in general have never been influenced by any form of financial gain.”
The position, however, is that the Tribunal felt it appropriate to draw Mr Clarke’s attention to the possibility of applying for compensation, if so advised, and he had time to consider whether to do so. His decision to do so is his responsibility. We would understand that this expense is relatively minor, as the applicants merely considered his claim and, without employing any valuation expert of their own, submitted a written response in reasonably brief terms.
As we indicated at the outset, we have considered this matter at some length because we are aware that there is a degree of concern about claims of expenses against benefited proprietors who have reasonably but unsuccessfully opposed applications of this nature. Part of that concern was expressed to us in a letter from the respondents’ MSP. The applicants indicated a degree of concern regarding a member of the legislature seeking to influence the discharge of judicial functions. We understand that concern, but the MSP did acknowledge that she had no particular standing in the matter. She did not really add to points made by the respondents individually, and it is sufficient to record that her views on the particular circumstances of an individual litigation cannot carry any weight arising out of her status as an MSP.
Note issued: 6 October 2006
Members: J N Wright, QC; I M Darling, FRICS
Case Ref: LTS/TC/2005/21
Certified a true copy of the statement of reasons for the decision of the Lands Tribunal for Scotland intimated to parties on 6 October 2006
Neil M Tainsh – Clerk to the Tribunal