NOTE
(Expenses)

Bruce Smith & Another v Martin Alan Properties Limited

[1] The applicants formally withdrew this application for discharge of express servitude rights of access for service purposes to a development site on 26 March 2013, some four weeks before the hearing which had been fixed for 29 April. The respondents seek an award of expenses; further, they claim such expenses on the ‘agent/client, client paying’ (indemnity) basis and in that connection have referred to the guidance summarised by Lord Hodge in McKie v Scottish Ministers [2006] SC 528. Both claims are opposed by the applicants.

[2] Having considered the circumstances referred to in parties’ respective written submissions as best it can without a full hearing on the merits, the Tribunal has decided that the respondents are entitled to an award of expenses from 16 July 2012 onwards; but that these should be on the normal ‘party and party’ basis.

Award

[3] An applicant who withdraws an application without having agreed the issue of expenses may normally be taken as accepting that he is unsuccessful, i.e. the opposing party should receive expenses on the basis that ‘expenses follow success’, in accordance with Section 103(1) of the Title Conditions (Scotland) Act 2003.

[4] It may be possible in the particular circumstances to negative that position. The Tribunal has considered the circumstances, including the applicants’ account of the position surrounding this application. Subject to one matter mentioned in the following paragraph, the Tribunal is not persuaded by the applicant’s submission that there is any reason to depart from the general rule. Put shortly, after the respondents drew the applicants’ attention to the position as seen by the respondents and gave the applicants an opportunity to withdraw the application on the basis of no expenses, issue was joined as to the reasonableness of the application. It related to express servitude rights for which a substantial consideration had been paid in 2006 by the respondents’ predecessors in title; the applicants maintained, in effect, that circumstances had changed so that there was no longer any requirement for the servitude; but the respondents set out their continuing need for it. The picture we have is that the applicants did not wish to have the servitude exercised over their land and sought to persuade the respondents that the service access could follow a different route outside their land, but the respondents, for reasons why they explained in their objections to the application, were unwilling to give up their rights. The applicants proceeded with the application for a substantial period before giving it up. The respondents refer to aspects of the applicants’ conduct of the proceedings, but we should make clear that the basic award of expenses does not reflect the reasonableness of the applicants’ conduct as such but rather the fact that they appear clearly enough to have caused the respondents expense by pursuing this application with which they did not succeed.

[5] However, we consider that the respondents’ initial offer to allow the applicants to withdraw without expenses fairly reflected the situation at the time when the application was lodged, viz. that the applicants did, as the respondents accepted at the time, have some reason at the time when they lodged the application to think that the servitude was no longer required. We shall reflect that by fixing 16 July 2012, i.e. 3 weeks after that offer was made, for the commencement of the award. An additional reason for following that course is that it is evident that there is substantial duplication between the first part of the respondents’ objections received on 23 July 2012 and the terms of their letter of 26 June: the respondents will receive the expenses of their objections and subsequent procedure but not of that previous letter.

‘Agent/client’ Basis

[6] On a consideration of all the circumstances, as elaborated in the competing submissions, we are not persuaded that this is a case for awarding expenses on the indemnity basis. As Lord Hodge pointed out, expenses are normally awarded on the party/party basis. As already noted, the applicants did initially have some basis for bringing the application. Thereafter, while we can agree with the respondents that it might have been clear to the applicants rather sooner that their basis for pursuing this application was weak, we are quite unable to agree, on the material before us, that the applicants ‘sought to delay matters at every possible opportunity and failed to engage with the Lands Tribunal or us in any meaningful way’. The procedure was perhaps slightly longer drawn out than necessary, and the respondents should receive their expenses through that procedure, but the applicants have explained their conduct and we do not think that, on a consideration of all the relevant factors, the grounds for departing from the normal rule have been made out.


Certified a true copy of the statement of reasons for the decision of the Lands Tribunal for Scotland intimated to parties on 12 July 2013

W Douglas Ballantyne – Deputy Clerk to the Tribunal