NOTE
(Expenses)

Cope & others and Stock & another v Ms X

Following the issue of our opinion on 19 November 2012 and our Order on 31 January 2013 allowing the variation and discharge of the title condition sought by the applicants, the second applicants moved for the expenses of the process. They did so on the basis that the applicants had been wholly successful in their application.

Ms X opposed this and asked that the Tribunal should make no award of expenses, broadly on the ground that such an award would be disproportionate and unjust.

We do have some sympathy for people in the position of the respondent. Prior to the 2003 Act it was the practice of the Tribunal to find no expenses due to or by either party where a respondent had acted reasonably in opposing an application to discharge or vary the conditions under which they held their titles. This was because they were defending their existing rights. However, section 103 showed that Parliament wished to change that approach. They wished to bring matters into line with other litigation. The normal, very well established principle, is that the winner is entitled to his or her expenses. This applies no matter how finely balanced the issues and how reasonable the conduct of the losing party. The reason is clear. An award of expenses is not a punishment. Where a person has been put to the expense of litigation to establish a right, that expense should be paid by the person who caused it. The true right in question is the statutory right to variation where this is reasonable having regard to all the factors set out in sec 100 of the 2003 Act.

Like other courts, the Tribunal has a discretion in relation to the award of expenses. But that discretion has to be exercised in accordance with established principle. We cannot depart from the principle that expenses follow success unless there are good grounds to do so. It is not enough to say that a respondent has acted reasonably. It is normally necessary to find that the successful party acted unreasonably. The reasonableness in question is reasonableness assessed by reference to the conduct of the application itself. It may be observed that this falls to be distinguished from allegations of unreasonableness in relation to prior conduct or in relation to proposals for settlement.

The respondent advanced several arguments in support of the proposition that it was misleading to say that the applicants were wholly successful. However, the bulk of the respondent’s material on that point appeared indirectly to challenge the merits of the decision rather than address the issue of substantive success or to point to matters of detail where the respondent’s view had prevailed. It is well established that the concept of substantive success looks at the eventual outcome. In many cases there may be disputes on a range of issues bearing on the end result. It is very common to find that the eventual winner has not been successful on all points of detail. That does not detract from the over-all success.

Plainly we cannot re-open the case on the merits and the fact that the applicants’ witnesses had to change or qualify their evidence on various points has no bearing on the applicants’ over-all success. We need not attempt to deal with all the points now made, although we do not accept them as well-founded. This may be illustrated by reference to Ms X’s first example where she complained that the Tribunal had misunderstood the evidence of Mr Smith when he was comparing the two tracks. Her assertion was that when he talked of the “old road” he was referring to the section of track going down to the public road. But this was not clear from his evidence. He was aware of the distinction. He said of the “old access track” that he drove over it and that he did not report on it but that it was just a farm track “like the rest of the track to the public road”. When he was asked by the respondent to contrast the old road and the new road, the only relevant comparison would have been between the new road and the section to be replaced. There is no good reason to assume that his reference to the “old road”, in that context, was intended as a reference to the section which was to remain. But, in any event, any confusion over this does not appear to us to have a bearing on expenses. As we have indicated, litigation often involves a number and variety of disputed minor points. There is no doubt that in course of the process it emerged that certain matters relating to maintenance of the new route required to be attended to. However, these were not stand-alone issues which would justify a conclusion that there had been divided success. Ultimate overall success is the foundation of any consideration of expenses.

We are satisfied that, in the context of expenses, the applicants did indeed enjoy substantive success. We have found nothing in the material before us to justify any departure from that approach. We do not accept that the minor changes ultimately made to the track or signage have any bearing on expenses. Ms X at no stage gave any clear indication that if such changes were made she would withdraw her opposition and accept the new route.

Ms X contends that it is relevant that she has been placed at a disadvantage with regard to increased maintenance costs. While there may be circumstances in which loss to the respondent at a level which has not been found to justify an award of compensation, could be an element in assessment of expenses, this would be unusual. But, in any event, in the present case dispute over compensation was not a significant element in the overall conduct of the litigation. Ms X did not lead evidence to quantify any additional cost. While we accept that she may, indeed, face some modest increase in maintenance costs it may be added that the benefit of a shorter straighter road might well add value to her property.

We note that the respondent makes some reference to the increase in value of the second applicants’ subjects. We do not see that as having any bearing on expenses. The reason for most applications for variation or discharge of title conditions is to bring about some perceived improvement to the burdened subjects. That will usually increase their value. That is a positive factor which we would take into account in favour of an application in terms of factor (c) of sec 100. It is not a factor to be used against a successful applicant who has been put to the expense of litigation to achieve the benefit.

In relation to the certification of expert witnesses, we have certified Mr Sinclair. We are satisfied that it was appropriate to instruct an expert witness to speak to the quality of construction of the new road. He was a suitable expert. We recognise that his evidence was open to challenge on some points but this, of course, is not uncommon. What is important is the overall weight of his evidence. He was an appropriate witness.

However we are not satisfied that this case justified instruction of a second expert. Although we do not accept the criticism of Mr Woods made by the respondent we are not satisfied that his evidence added anything of significance. He made a detailed comparison of the old and new tracks in use. This evidence appeared to be based on an assumption that direct comparison was necessary. We recognise that the applicants intended the new track to be a substitute and if we had been assessing liability for expenses in terms of fairness, this might possibly have gone into the balance in their favour. However, on the merits we had to assess matters as they stood. A new track having been provided, there was no doubt that the agricultural traffic would move on to it. In effect the respondent had the original track to herself. There was, accordingly, no need to compare issues of inter-visibility. It may be added that the Tribunal has repeatedly stressed the importance of site inspection. While photographic evidence at hearing can be invaluable in helping our understanding of the evidence as it is given, it is seldom necessary to have experts speaking to photographs of matters which can be assessed at inspection. In the circumstances we are not prepared to certify Mr Woods as an expert witness and we do not consider that any expense occasioned by his attendance as a witness should be a charge against the respondent.

The applicants also moved for an uplift in the fees. We are not persuaded that there is any justification for this. We accept that Ms Slee presented full and careful submissions on issues of law and carefully addressed all possible issues of fact. But there was no significant dispute over issues of law or principle. There was no real dispute about issues of title. In particular, it may be observed that the inconsistency between the line of the track in use and that shown on the title was raised by the Tribunal and dealt with, without difficulty, on the spot.

A substantial number of documents were lodged but where fees will inevitably have to be charged on an itemised basis, we do not accept that the number of documents is any justification for uplift. The solicitor will be paid for the time spent dealing with them. They were not of any great complexity. We do not accept that litigation in Perth Sheriff Court in itself justifies an uplift in fees.

While we have no doubt that disputes with neighbours can have a blighting impact on country living, and are accordingly of importance in that sense, the role of the solicitor must be viewed in relation to the subject matter of the application. We were dealing with changes required in connection with the addition of land to what were already extensive subjects at Berrybrae. We did not accept that this can properly be viewed as being of high significance to occupiers.

We have no doubt that efforts were made by the applicants to settle the case. Had they been successful there would have been no need for the proceedings to have been brought. However, that does not add to the basic principle upon which expenses follow success. It is more difficult to quantify this aspect as a basis for uplift. It is plain that there was little or no meeting of minds. Each side seemed to take a dim view of the other in relation to the negotiation. We were somewhat surprised to find the respondent’s solicitor writing to her to express views of the applicants or their solicitors in terms of “their flagrant disregard”, as being “arrogant”, “not reasonable” not “respecters of courtesy” and as treating his efforts “with disdain”. Such comments from a solicitor are unlikely to facilitate further negotiation. It may also be said that these comments were quite inconsistent with our impression of Mr Stock and the overall tenor of the correspondence lodged. However, while steps taken with a view to settling the cause are a factor to be considered, we are not satisfied that an uplift on this head should be allowed without consideration of the detail of proposals including some consideration of the reasonableness of the steps taken. This is plainly a matter of dispute. We do not think the expense of obtaining further clarification could be justified. It may be noted that we would be concerned with the proposals in relation to the current application to the Tribunal. Much of the detailed discussion preceded the application.

In summary, we find the respondent liable to the second applicants in the expenses of the application. We certify Mr Sinclair as an expert. We note that the expense occasioned in connection with the evidence of Mr Woods should not be a proper charge against the respondent. We make no finding that there should be any uplift on fees.


Certified a true copy of the statement of reasons for the decision of the Lands Tribunal for Scotland intimated to parties on 6 June 2013

Neil M Tainsh – Clerk to the Tribunal