1. This is a motion for expenses, including certification of the employment of counsel and of two expert witnesses, by the successful respondent in an application for discharge or variation of a title condition. The application related to a proposal to develop a separate flat in the applicant’s basement area, the applicant being the upper flat proprietor and the respondent the lower flat proprietor. We refer to our Opinion giving reasons for refusal of the application. In accordance with our normal practice, and with parties’ consent, we have considered expenses on the basis of written submissions.
2. The applicant, who herself had counsel from an early stage and also had expert witnesses, accepts her basic liability in expenses and restricts her opposition to a number of submissions in support of some restriction or modification of expenses. She does not oppose the certifications sought although her submissions do touch on possible limitations to the certification of counsel and the experts.
3. In summary, we have decided that none of the submissions for the applicant succeeds, but that the award of expenses in favour of the respondent should be restricted to four-fifths, reflecting our view that certain aspects of the respondent’s conduct of these proceedings unnecessarily increased the expense to both parties.
4. The procedure in this case, following a period of adjustment of the pleadings, may be summarised as follows. The applicant indicated a willingness for the merits of the application to be disposed of on the basis of written submissions and the Tribunal’s site inspection. Such procedure, in accordance with Rule 26 of the Lands Tribunal for Scotland Rules 2003, requires the consent of both parties. The respondent, as she was entitled to do, insisted on an oral hearing. The hearing was originally set down for one day on 17 June 2008, on which date the applicant, without prior intimation, sought a discharge mainly on the basis of certain evidential difficulties which she had at the time. That motion was opposed but granted, reserving the issue of expenses. On that date, the Tribunal considered with the parties the extent of evidence which would be required and arrangements for the future conduct of the proceedings, including arranging the Tribunal’s site inspection (with the benefit of having the experts’ reports available in advance) before the hearing. A further one day hearing was fixed. In the event, it did prove possible to conclude the oral hearing within one day and then decide the case with the assistance of final written submissions by each counsel.
5. The applicant’s grounds for seeking modification or restriction of the award of expenses may be summarised as follows:-
(i) The applicant was willing to proceed with the proposal to determine the application on the basis of a site visit and written submissions, and the oral evidence led was of little assistance;
(ii) The expenses of the discharged hearing should not be awarded against the applicant: although the respondent indicated that she was fully prepared and ready to proceed that day, she in fact subsequently produced extensive evidence;
(iii) Certification in respect of counsel ought not to relate to the discharged hearing or the full hearing, or at least there should be some restriction in relation to counsel’s fees, for the reasons advanced in (i) and (ii); and the certification of Mr McConnell as an expert witness should be limited to preparation of his report; and
(iv) the respondent being a solicitor, and her firm having acted as her agents, it should be made clear that the costs of the respondent herself preparing for the hearing, producing reports, corresponding, etc. should not be recoverable, although there was no objection to costs in so far as she in fact instructed another solicitor.
The applicant’s submission referred to Cellular Clothing Co v Schulberg 1952 SLT (Notes) 73; Lord Clinton v Brown (1874) 1 R 1137; Howitt v Alexander & Sons 1948 SC 154, 157; and Macphail, Sheriff Court Practice, 3rd. Edition, 19-11.
6. The respondent resists any suggestion that she acted unreasonably in exercising her right to an oral hearing. There was no reason why she should not be entitled to the expense of the discharged hearing, she having been ready and willing to proceed on that day; and material subsequently introduced by the respondent was in response to the Tribunal’s observations or the material subsequently produced by the applicant. The respondent acted reasonably in instructing counsel and having expert witnesses at the hearings, the applicant having done likewise. The issue arising from the respondent’s position as a solicitor was distinguishing between work done in her professional capacity and activity simply in her capacity as a party: if any particular difficulty arose on this issue, it was best dealt with in the context of any taxation which might be required.
7. As the applicant accepts, the Tribunal is required to give primary consideration to success (or the extent of success), and the respondent is basically entitled to her expenses. The Tribunal’s consideration of the grounds advanced by the applicant for modification or restriction is as follows:-
(i) The Tribunal does not consider that the respondent acted unreasonably in exercising her right to choose an oral hearing. Prima facie, exercise of that right is reasonable, and it would only be if its exercise was outwith the bounds of reasonableness that it should reflect on expenses. We do not exclude that possibility and sometimes look favourably on it in cases where applicants with the benefit of legal representation insist on an oral hearing in the face of unrepresented objectors who are content to rest on their written submissions and where it can be seen that there was no reasonable need for oral evidence or submissions. While we think in this case that the parties, particularly the respondent, made a bit of a meal out of the issues, the applicant had engaged counsel and there was clearly a substantial and hotly contested issue which was of importance to the applicant even if it might not be measured too high in monetary terms. We do not think that the respondent can be criticised for opting for the oral hearing.
(ii) We see no grounds for excluding the expense of the discharged hearing from the award in the respondent’s favour. We had no difficulty in accepting the respondent’s counsel’s statement that the respondent was ready and willing to proceed to answer the applicant’s case, as it then stood, on that date. The applicant’s difficulties on that date may to some extent have resulted from circumstances outwith her control – a difficulty arising in relation to an expert witness – but the fact is that she was not then ready to proceed. That situation should have been realised in the course of preparation for that hearing and in time, if necessary, to request a discharge which would not have caused substantial expense to the respondent. It is indeed the case that the respondent subsequently produced substantial material, but that was in general because the applicant only subsequently took steps to put the case which the respondent had to answer in better order. To the extent that it also followed on directions which the Tribunal gave, that also was a reasonable expense of the cause and is recoverable by the respondent.
(iii) It follows that there are no grounds for giving any lesser relief in the form of restriction on the certification of counsel or expert witnesses in relation to their instruction for either the first or the second hearing. No doubt if taxation is required, consideration might in such circumstances have to be given to the question whether any expense was duplicated, although we express no view on that.
(iv) We agree with the respondent’s submission that if any difficulty arises from the fact that the respondent is herself a solicitor and employed the firm of which she is a partner, that is a matter best considered at taxation.
We would add, in relation to (i),(ii) and (iii) above, that we have borne in mind that the respondent, and in particular her counsel, co-operated (as did the applicant’s counsel) in ensuring that when the oral hearing took place, it was able to be concluded within a day despite both sides having lodged extensive expert reports. Although we do have certain criticisms of the respondent’s conduct of the proceedings, the steps taken did ensure that, apart from the discharged hearing, the hearing expenses under consideration relate to a one-day hearing, which is regrettably not always the case in this jurisdiction.
8. Quite separately from these matters, and in particular from (iv), in our view the respondent personally added, unreasonably, to the difficulty of this case in two separate ways. The Tribunal has reviewed its own correspondence file in order to confirm its impression of these matters. Firstly, certain lengthy correspondence emanating from the respondent’s firm (although expressed in the first person) demonstrated an unreasonably argumentative and unhelpful approach to the management of these proceedings. The Tribunal was disappointed to see the extent to which the respondent made life difficult for the other side and their instructed experts. The applicant’s solicitors (as well as the Tribunal) were on several occasions put to responding to lengthy argumentative correspondence, for example in relation to access by experts to her property and arrangements for the site inspection. Secondly, the respondent was insistent through the pleadings and correspondence, and in submissions of her own evidence, on advancing positions about her property rights – in particular, a position which appeared to us have no reasonable basis in fact in relation to the division of ownership within the basement and which we note was not advanced in these proceedings by her counsel. These matters appear to us relevant in exercising our discretion in relation to expenses because we think that they must have added to the expense of these proceedings. We have decided not to leave this to taxation because we think that it might be difficult for the auditor to deal with and also modification of the respondent’s expenses would not compensate the applicant for the increased expense caused to her. We cannot in fairness stand by and watch parties conduct themselves in this way and then expect to recover full expenses. Our assessment of this factor, taking into account the extra expense caused to the applicant, is necessarily on a rough and ready basis. In reaching it we have taken account of the fact that although the respondent in her evidence at the oral hearing did seek to some extent to advance her position on the boundaries in the basement, it was nevertheless possible to conclude that hearing within one day so that, as far as hearings are concerned, it cannot be said to have increased the expense to any substantial degree.
9. We should stress that this reflects the Tribunal’s view of the respondent’s conduct of the proceedings, not any wider view about her attitude to the whole dispute. In that connection, regrettably it seems that this was a case involving a serious breakdown of relations between neighbouring owners and it is not for us to express any view as to responsibility for that. We should also make clear our acceptance that both counsel went to some length to keep the hearing of this case within reasonable bounds.
10. Finally, we should make clear that this modification of the award in favour of the respondent does not deal with point (iv) above: it will still be for the auditor, if taxation is required, to deal with any issue which arises as to separating out recoverable legal expenses from the respondent’s activity as a party.
Certified a true copy of the statement of reasons for the decision of the Lands Tribunal for Scotland intimated to parties on 16 April 2009
Neil M Tainsh – Clerk to the Tribunal