1. This was an application under Section 90(1)(b)(i) of the Title Conditions (Scotland) Act 2003 (“the Act”) to renew or vary real burdens which had been the subject of a Notice of Termination under Section 20 of the Act (“Sunset Rule”). The respondents had extension proposals and sought to terminate burdens in an 1888 Feu Charter relating to alterations or extensions of their terraced house. The applicants applied to renew the burdens. The respondents also argued that the burdens were no longer enforceable, a proposition resisted by the applicants. After a hearing, the Tribunal decided that the burdens were enforceable and that they should not be either simply renewed or simply discharged but rather varied to the extent of permitting the respondents’ proposed development. The result of our decision is that the respondents are now entitled to proceed with their extension in accordance with the planning permission which they hold.
2. In these circumstances the respondents claim to have succeeded and have the following motions in relation to expenses:-
(i) to find the applicants liable to the respondents in the expenses of the application and the whole procedure to follow hereon;
(ii) to certify their architect, Mr Neil Rothnie, as an expert witness in respect of work carried out in relation to the application, including inspecting the site and attendance at the hearing and at the formal site visit in the course of the hearing; and
(iii) to direct determination of the expenses, if not agreed, by the Auditor of the Sheriff Court at Aberdeen.
In accordance with the Tribunal’s usual practice, we have considered these motions on the basis of parties’ written submissions. The applicants, who were not legally represented at the hearing on the merits but did apparently have legal assistance at an earlier stage and in their preparation for the hearing, opposed the first two motions but did not themselves seek expenses. The third motion is uncontroversial and in accordance with the Tribunal’s practice in the event of an award being made, and will be granted. In relation to the first two motions, the Tribunal has decided in the particular circumstances of this case:-
(i) that the respondents are entitled to their expenses in the application, restricted to one-third; and
(ii) that Mr Rothnie should be certified as an expert witness.
Section 103(1) of the Act provides as follows:-
“(1) The Lands Tribunal may, in determining an application made under this Part of this 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.”
British Steel plc v Kaye 1991 S.L.T. (Lands Tr) 7
Harris v Douglass 1993 S.L.T. (Lands Tr) 56
Donnelly & Regan v Mullen and Others LTS/TC/2005/01, 1.9.2006
West Coast Property Developments Limited v Clarke and Others LTS/TC/2005/21, 6.10.2006
Smith v Prior and Others LTS/TC/2006/06, 2.3.2007
Sir Crispin Agnew, Variation and Discharge of Land Obligations, para 8-14, page 152
3. The respondents first submitted that the Tribunal, in applying Section 103(1), should not follow its former approach and should particularly consider the question of who has won and lost: Smith v Prior and Others, Donnelly and Regan v Mullen, and West Coast property Developments Limited v Clarke and Others. The respondents had enjoyed a considerable degree of success. The granting of the application to the limited extent to which it was granted would not have been acceptable to the applicants. The respondents had achieved the practical result which their representations in the application were intended to achieve. The applicants might have sought merely to vary rather than to renew the title conditions. The applicants had not achieved what their application sought. The respondents did not accept various allegations by the applicants in relation to refusal to enter into dialogue or discuss compromise and other matters. In relation to the certification of Mr Rothnie, the requirement was that the witness had specially prepared himself to give evidence (West Coast Property) and Mr Rothnie, although previously involved in relation to planning permission, he had attended with the respondent and his solicitor and inspected the site prior to the hearing: the motion related to only work done within the scope of the Tribunal hearing.
4. The applicants, in a somewhat lengthy and repetitive submission, argued for no award of expenses due to or by either party. This was a case of divided success. The applicants were forced to apply to dispose of the respondents’ attempt to invoke the ‘Sunset Rule’, and various of their submissions had been accepted. The applicants had never been able to discuss their suggestion for a lower and shorter extension with the respondents. They had been prepared to proceed by written submissions. Under reference to British Steel plc v Kaye and Harris v Douglass, the applicants submitted that they had only sought to stand on their existing legal rights and had not acted either unreasonably or vexatiously. Any award should be substantially modified to reflect the “delaying tactics” and slow presentation of the respondent’s solicitor. In relation to Mr Rothnie, his performance, in describing the layout of the applicant’s house, had been far from expert, showing that he did not prepare himself to give evidence. His evidence was unnecessary since the specialist Tribunal, which visited the site, could understand the plans and the photographs of the area, for itself. Reference was made to West Coast Property and Smith v Prior.
5. The Tribunal has considered the approach now required by Section 103(1) of the Act in a number of cases to which both parties referred, and particularly in West Coast Property Developments Limited v Clarke and Others. Although the applicants referred at some length to that case, they also referred to, and sought to derive assistance from, older decisions on the position before the 2003 Act. These reflected the Tribunal’s former practice of normally not awarding expenses against unsuccessful benefited proprietors and only doing so where such a party had acted unreasonably or vexatiously. We have, however, held in West Coast Property and other cases that under section 103(1) such an approach is no longer open to us. We adhere to that view, for the reasons set out fully in these more recent cases. We consider that we are now required normally to follow the ‘success’ rule applied in ordinary courts, reflecting the general principle that the party who can in the light of the decision be seen to have caused the expense should bear it. However, the Tribunal, like ordinary courts applying the general rule, has a discretion and requires to look at the particular circumstances of each case. That makes it permissible and appropriate also to consider whether any aspect of the successful party’s conduct of the proceedings merits disapproval which requires to be reflected or whether any other matter is material to expenses. Consideration of the approach and efforts of parties towards reaching agreement might also be relevant.
6. We think that the present case should be decided on a careful consideration of the application in its particular circumstances of the ‘success’ rule. First, we wish to explain why we do not think that there is any aspect of the conduct of the proceedings, or other wider equitable consideration, which should affect expenses in this case. The applicants in their lengthy submission refer to a number of matters. They suggest that the respondent’s solicitor indulged in ‘delaying tactics’ or in any event took over-long in his presentation of the case. We see no foundation whatsoever in these suggestions. This case involved two substantial issues, each requiring evidence and submissions, and was heard in the court within one and a half days. The applicants also complain of the approximately four month delay in raising the motion for expenses and the effect that that has had on their feelings. We can sympathise with the applicants’ feelings in the case generally, as we can with any benefited proprietor who takes up a perfectly reasonable position in opposing an application to our jurisdiction but loses, but this motion is timeous and we are afraid that our jurisdiction in relation to expenses does not allow us to give effect to such feelings. Nor can we give effect to any sympathy in relation to the applicants’ financial circumstances (which, incidentally, were not in any event spelt out to us).
7. More pertinently, perhaps, there is the question of the respondents’ approach towards reaching agreement. The applicants say that they had no opportunity for real discussion of possible compromise. They say that they had from the start taken up the position that a smaller, more sympathetically designed extension would have been acceptable but that the respondents took up a position from which they were not prepared to depart. For their part, the respondents say that the applicants never made any definite proposal. In the end of the day, the applicants at the hearing did indicate what they would find acceptable but the Tribunal, having considered all the relevant circumstances, decided against them. There was apparently no proposal for mediation. It cannot be said that the respondent unreasonably refused such a proposal, nor are we able to affirm that a different result would have been achieved by negotiation or mediation. So, although it does appear that the respondents adopted a fairly firm line in sticking to their proposals (except to the extent that the planners required them to modify in the fact of the applicants’ objections), we do not think that we would be justified in penalising the respondents if application of the success rule otherwise leads to an award in their favour. In short, while there is no criticism whatsoever of the applicants, we also do no not think that there is any material criticism of the respondents’ conduct of the proceedings.
8. This brings us to the main issue, as to the application of the success rule in the particular circumstances of this case. There were two broad issues. The respondents themselves raised the issue of the enforceability of the burdens and lost on that. It was clearly a substantial issue which occupied a substantial part of the case. The degree of overlap of this issue with the other main issue, on which the question of success is rather more complicated, was in our view only very slight. The applicants were put to substantial time and trouble, and possibly legal expense, in resisting this argument of the respondents. Then, on the actual application to renew the burden, there was divided success. The respondents clearly submitted and maintained in submission the position that, even if enforceable, the burdens in question should be discharged and not simply varied. We rejected that position. However, the applicants did not achieve simple renewal of the burdens, or even variation of them to a more limited extent than that required to permit the respondents to proceed with their extension. Instead, the respondents achieved variation enabling them to proceed, so they succeeded on that and therefore, in relation to the application as such, had a substantial measure of success. There is clearly a very large overlap between the issues of outright discharge and variation and, as we indicated in West Coast Property, where the benefited proprietor opposes variation (here, the particular variation sought by the burdened proprietor) and would apparently have done so even if that was all that was sought, then the burdened proprietors have clearly had the main success. That said, the achievement in successfully resisting the termination and maintaining the burden in existence, so that it could be relied on if necessary in future, produces a practical result and is not to be ignored. It does constitute some measure of success: the respondents took up a deliberate position on this and lost.
9. In our view, the particular course which this whole matter has taken requires also to be considered. The respondents might have achieved the substantial success which they did achieve merely by making an application to the Tribunal’s ordinary jurisdiction. What they did, however, was to go down the termination route provided by Section 20. There is nothing in any way unreasonable in their following that course, but in the event it was unsuccessful because when the matter of termination was tested in this case the terminators’ motion to discharge the burdens, i.e. confirm the termination, was unsuccessful. What this means in relation to the expense of this application is that the respondents caused the applicants the trouble and expense of making it. As it seems to us, this is relevant to the present motion. Accordingly, the position in relation to the extent of success is that the respondents raised and failed on one of the two issues; and on the other, had substantial success but failed to hold their position on termination or outright discharge. The applicants incurred substantial trouble and expense on issues on which they succeeded.
10. We have considered one other matter. This is that the applicants throughout wished this case disposed of on written submissions. The respondents, as they were entitled to do, resisted that. On the basis that the case had substantial and indeed previously untested issues in relation to enforceability and termination, it would be quite wrong to penalise the respondents for insisting on a hearing: a hearing on these issues was clearly appropriate. However, the respondents lost on these issues, and had the application simply been an application to vary to enable an extension proposal to proceed, it would likely have been regarded as entirely suitable for disposal on written submissions. In that case, while a hearing would still have been required if the respondents (applicants as they would have been in such a case) insisted on it, we would have been inclined to reflect this question to some extent. This then is another matter which we have slightly in mind in reaching our view on the application of the success rule, although we think it is a comparatively minor matter: apart from anything else, it is difficult to gauge the exact effect which proceeding on written submissions would have had on the expense.
11. Mathematical approaches to success on the two issues might produce an award of one third to the respondents on the basis that they succeeded on one of three questions, or perhaps one quarter on the basis that they lost one of two issues and had divided success on the other. Such approaches, however, seem to us inappropriate and indeed positively misleading. On a consideration of the relative extents of success, bearing in mind that the respondents put the applicants to expense in certain respects and considering to some small degree the question whether a hearing was really required, all as discussed above, we have reached the view that the respondents are entitled to an award of expenses but that a fair reflection of the position, given the extent of success which the applicants achieved and where the applicants are not themselves applying for expenses, is to restrict this to one third.
12. There is one other matter to mention. The respondents in their answer to the applicants’ submission refer to an informal offer said to have been made to the applicants some time before the hearing, that the respondents be allowed to proceed with their extension on the basis of the applicants paying the costs to date. As it happens, the applicants have not had the opportunity of replying on this particular matter, but we can deal with it on the basis of accepting that it occurred. On the substance, it looks very like an offer to agree to variation and drop the other issues and, as such, highly pertinent because in effect that would be akin to a tender of the position which the respondents ultimately achieved. However, the condition that the applicants should pay the expenses of the procedure to date is obviously out of line with the position we have found in relation to success. Even, therefore, accepting that such an offer was made, the applicants’ rejection of it cannot be described as out of line and so it cannot be said, under normal rules in relation to tendering, that the applicants have caused the further expense. It might perhaps be added that there is no indication that this offer was recorded in any way.
13. On balance, we consider that the motion for certification of Mr Rothnie as an expert witness is justified. First, despite criticisms by the applicants we accept that he is a skilled witness and gave evidence going beyond mere fact. As an architect, he is clearly a skilled witness. We agree that some of his evidence might be seen as unnecessary in view of the Tribunal’s specialist status, but we do consider that he addressed as an expert one or two of the issues in the case, for example when he addressed questions about the impact on the applicant’s light. Although the Tribunal has specialist expertise, it is not unreasonable for a party in a case such as this to seek to strengthen its position by having an expert address the issues. In Smith v Prior, the expert was in fact a solicitor experienced in residential property matters and we did not consider it fair and reasonable to hold the other side responsible for the expense of what was really an opinion on the legal issue. Here, as the respondents correctly point out, the issue was not simply an issue of law but included issues as to the impact of a development on the neighbouring proprietors. We reject the applicants’ criticism of the quality of Mr Rothnie’s evidence.
14. As we pointed out in West Coast Property, there is a requirement that an expert has specially prepared himself to give evidence. Otherwise, when he is merely telling the Tribunal about what he did previously, in relation to planning, etc., he is, although expert, not occupying the position of an expert witness and should not be remunerated as such at the expense of the unsuccessful party. In West Coast Property, we felt that that hurdle was not overcome. We did, however, point out that the preparation of a separate expert report was not en essential requirement, although it obviously helps to establish the special preparation. In this case, the submission on expenses prepared by the respondents’ solicitor refers to attendance at a meeting with the respondents and their solicitor, and also to an inspection of the site prior to the hearing. In these circumstances, there is in our view just sufficient to establish the necessary degree of special preparation. The auditor will of course only accept expense which is clearly related to Mr Rothnie’s evidence in this application.
15. We express the hope that parties will be able to agree expenses without the need for a further contest between them, before the auditor, and that a reasonable approach will be taken to any question as to enforcement of this liability.
Certified a true copy of the statement of reasons for the decision of the Lands Tribunal for Scotland intimated to parties on 1 November 2007
Neil M Tainsh – Clerk to the Tribunal