NOTE
(Expenses)

David Grant and another v National Trust for Scotland

Introduction

[1] In our Opinion of 8 August 2014 we took the view that part of the first subjects (“the north site”) should be disburdened to the extent of permitting two buildings as might be proposed by the applicants and agreed by the respondents. We agreed to the discharge of conditions regarding part of the second subjects (“the south site”). Parties have agreed the terms of our Order, which is issued with this Note. The applicants have moved for the expenses of the application and for an additional fee. Both parties have made written submissions. This note should be read in conjunction with our Opinion.

Background

[2] The application was made under Section 90(1)(a) of the Title Conditions (Scotland) Act 2003. It was made on 23 September 2013. The title conditions in question are found in a conservation agreement made under the National Trust for Scotland Order Confirmation Act 1938. The application is understood to be the first relating to such a conservation agreement which has proceeded to a decision by the Tribunal. A significant issue was the extent to which the housing development proposed by the applicants would impact upon the setting of respondents’ garden and designed landscape (“GDL”) and how this would impinge upon the benefit conferred by the title conditions. The applicants lodged a “visual impact assessment” on 18 June 2014 which gave a general indication of a possible layout and scale of a development. This was the lodging date for productions in terms of the Tribunal’s timescale. At this point the respondents produced a detailed study by Mr Carter, a landscape architect showing significant viewpoints to and from the GDL and assessed potential visual impacts. On 24 June 2014 the respondents’ agents wrote to the applicants’ agents to the effect that Mr Carter advised that two appropriately sized buildings could be placed upon the north site without objection, so long as certain safeguards were in place. Nevertheless the case proceeded to a hearing and site visit on 2 and 3 July without agreement upon either the north or south site.

Applicants’ submission on expenses

[3] In summary the applicants submitted that they had been substantially successful. Reference was made to Shepherd v Elliott (1896) 23 R 695 for the proposition that the cost of litigation should fall on the party who has caused it; the general rule is that costs follow the event. The party who has resisted the vindication of the rights upheld is prima facie to blame; in some cases the court may on cause shown not apply the general rule where the conduct of the successful party is in question.

[4] The applicants had been wholly successful regarding the south site, which had potential for 30 houses. Whereas eight buildings had been proposed for the north site, the Tribunal was prepared to permit two appropriately sized buildings. In terms of numbers that amounted to substantial success and not divided success. The two sites were inextricably linked. The applicants had been forced to apply to the Tribunal since the respondents had insisted upon payment of £50,000 for a discharge relating to the north site. Reference was made to a letter from the respondents of 18 June 2013 referring to eight house plots which comprised essentially the same layout as that proposed in the visual impact assessment submitted to the Tribunal. The letter stated:

“This letter is not intended to be contractual in effect and is without prejudice to the whole rights, title and interest of the National Trust for Scotland and may not be relied upon without their express consent.”

The applicants maintained they were nevertheless entitled to rely upon the letter firstly because it contained a factual content and secondly, because the general rule preventing disclosure of such correspondence yielded in questions of expenses. Reference was made to Critchley v Campbell (1884) 11 R 475 in which the Lord President said at 480:

“The meaning of the parties, I think, was that the offers were not in any way to prejudice their rights in regard to the question between them, and not that they might not be referred to as affecting the question of expenses.”

The above passage was followed by Lord Hunter in O’Donnell v A.M.&G. Robertson 1965 SLT 155.

[5] The respondents’ email of 24 June 2014 had come late in the day. It was not couched in the language of a tender or other form of proposal, but was merely a statement of the respondents’ position. In any event this constituted a late change in position. Following the 18 June 2013 letter the applicants were entitled to think that the respondents took the view that an 8 house development on the north site would not have a deleterious impact upon the GDL. It was submitted that both sites required to be developed in order to make the development viable. The respondents were not prejudiced by the furnishing of development proposals on 18 June 2014, which were necessarily conceptual in nature since there was no planning permission. The outcome would have been the same even if those proposals had been produced earlier.

Respondents’ submission on expenses

[6] It was submitted there had been divided success. The Tribunal had essentially agreed with the respondents’ position for the north site in terms of the email of 24 June 2014. The applicants had sought a wider discharge and had been unsuccessful. In the context of the Tribunal application the respondents had only seen an indicative layout and proposal on 18 June 2014, which was the lodging date for productions a fortnight before the hearing. They had sought such details from an early stage by means of adjustments dated 17 January and 15 April 2014 and associated correspondence, and had asked to see a landscape and visual impact assessment. Mr Carter, their landscape architect, had been unable to address a detailed proposal in his report which required to be lodged on 18 June 2014, thereby resulting in his comments upon the layout being made for the first time at the hearing itself. It was reasonable for the respondents to challenge the development proposals even although they had been unsuccessful regarding the south site.

[7] The respondents’ letter of 18 June 2013 was written without prejudice and should not be founded upon. It was written with a view to settlement of the dispute and was accordingly privileged; the letter stated that it could not be founded upon without the respondents’ express consent and they did not consent to its use.

Discussion

[8] The starting point for any decision on expenses is Section 103 of the Title Conditions (Scotland) Act 2003. This states:-

“(1) The Lands Tribunal may … 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.”

[9] The reference to the extent of success to the application, or its opposition, tends to suggest that we require, in particular, to have regard to the outcome. As we indicated in West Coast Property Developments Limited v Clarke & Others LTS/TC/2005/21, 6 October 2006; this can be said to imply consideration of the extent of success of an applicant or opponent without the necessity for any formal tender. Therefore we agree that the respondents can be said to have been to some extent successful in that their position in the email of 24 June 2014 for the north site was upheld. Thus they can be said to have had a degree of success at least from that date. We think also that a level of success can be inferred from the nature of the issues. We took the view that the north and south sites each had to some extent a different relationship to the GDL in terms of the respondents’ interest in maintaining the setting of the GDL. Viewpoints were assessed differently depending upon development within the north or south site. In particular a view north from the B9002 towards the GDL was not affected by development on the south site. Consequently time was spent at the hearing specifically considering the issue of the north site. We therefore agree that some modification is required to the applicants’ expenses. However, looking solely at the north site, it can be seen that the applicant has also been successful. As we shall discuss, we require to take account of the fact that initially the respondents had sought payment in respect of permitting development there, albeit a larger one, and had proceeded to oppose the application in its entirety.

[10] We also think it is appropriate to point out what the Tribunal said in Franklin v Lawson LTS/TC/2012/23, 15 July 2013:-

“Although it will not be enough for an unsuccessful opponent to say that he or she acted reasonably, there may be particular circumstances which allow an exercise of discretion based on the particular position of the respondents.”

The Tribunal proceeded to modify expenses where there had been a special adverse impact upon an unsuccessful respondent.

[11] In this case we think it is fair to say that the respondents were in a particular position. Under the 1938 Act the respondents have statutory purposes to promote the preservation of, amongst other things, places of historic or national interest or natural beauty. When facing an application for variation or discharge of title conditions, the respondents are not in the same position as a normal landowner. They require to consider their statutory purposes. While no doubt this matter cannot be assessed too finely, and we do not attempt a detailed analysis of these purposes here, it seems to us that the respondents would require to consider the consequences of a variation or discharge in the light of those statutory purposes.

[12] This leads us to the issue of the amount of detail which the respondents were given as to the proposed development. At [54] of our Opinion we referred to the fact it is often a difficult decision for an applicant to decide how much detail to bring to the Tribunal and at what stage in the planning process. In the present case we were dealing with potentially sensitive landscape issues. The GDL is of national importance. Only after much consideration of the landscape evidence were we able to conclude that the impact of the development upon the setting of the GDL in its proper context would be decidedly limited. One has to have in mind some structure – even only an indicative one - in order to focus upon its impact on the landscape. We think the fact that the application to the Tribunal was not accompanied by any kind of conceptual proposal until late in the case did make it more difficult for parties to address the landscape issues, which can only have underlined the difficult position in which the respondents found themselves. It should have been provided here at the outset. We acknowledge that its absence is tempered to some extent by the fact there had been in existence a lapsed planning permission for 2 buildings/ 4 semi detached dwellings with relevant drawings at the north site. Also the north layout which emerged would not have come as a great surprise to the respondents in the light of a similar drawing provided in pre application discussions. Nevertheless we do not think it can be concluded that time and expense would not have been saved had an indicative or detailed proposal been worked up and produced earlier. It is clear that the respondents were actively seeking design details from the applicants early in the process, without success. Therefore we think had these been produced earlier it is very possible that the narrowing of issues evidenced by the respondents’ concession of 24 June 2014 would have occurred earlier. So we conclude that the applicants could have conducted the case more efficiently with a view to minimising expense.

[13] We now turn to the respondents’ “without prejudice” letter of 18 June 2013 made prior to the date of the application. We think the passage quoted in Critchley v Campbell is in point. The “without prejudice” conditions in the letters in that case were written in wide terms, but the court still held they were only dealing with the question between the parties, and not the question of expenses. We think the written requirement for express consent in the instant case requires to be read in that context. We are therefore prepared to consider the terms of the letter in the context of expenses. However, we also bear in mind that because it was written “without prejudice” parties ought to have known that it could not be used as a concession by the respondents in the merits of the application. We do not regard the letter as having amounted to an unequivocal admission or statement of fact. It is true that the letter does not expressly mention any adverse impact upon the GDL other than the need for a screening hedge, and instead seeks a payment of £50,000 “to reflect that there will be an uplift in value of the land.” But it was written at a time before the respondents had taken the advice of Mr Carter and before the application process. This was a process which the “without prejudice” letter was seeking to avoid by proposing a settlement. It follows that we do not think the applicants could have taken comfort from a supposed implication that the respondents would not find the 8 house layout objectionable should the former commence proceedings. Moreover, for aught yet seen the respondents had not prevented themselves from making a case for compensation under section 90(6) and (7) of the 2003 Act.

[14] We also point out that in arriving at a decision in this case, we were helped by the expertise of Mr Carter, led by the respondents. His report provided a clear and professionally carried out framework in which to consider the important visual receptors in the context of the GDL. Although we did not agree with all his conclusions, particularly as to the importance to the GDL of the non-developed south site, the report allowed us to draw conclusions of our own with more confidence than if the report had not been available. This exercise was not carried out to anything like the same extent by the applicants’ witness. Therefore we accept that not only did the respondents act reasonably in following Mr Carter’s advice, but also that expense incurred in providing his evidence to the Tribunal was of assistance generally. We think this factor weighs somewhat in favour of the respondents.

[15] In these circumstances we have some sympathy with the respondents. We propose to allow the applicants their expenses, but modified to 70% on the Sheriff Court scale.

[16] The Tribunal indicated in Franklin v Lawson that it is recognised that in some cases an applicant would have to bear the expense of the initial application because that expense would often be incurred even if the application then fell to be dealt with as unopposed. Accordingly the Tribunal often only awards expenses from the date of a respondents’ written objections. But where a single benefited party has made clear an intention to object, it may well be possible to conclude that the whole cost of procedure before the Tribunal is attributable to such objection.

[17] In this case it is said that the respondents forced the applicants to proceed because of the position taken in the letter of 18 June 2013. We think it is fair to conclude that there had been significant discussion to resolve matters without an application to the Tribunal. It can be inferred that the cost of the application was incurred because the respondents objected to a variation or discharge, or at least to a variation or discharge without payment representing development value. We would therefore also allow the applicants the expense of the initial application, on the modified basis discussed above.

[18] Since Our opinion of 8 August 2014, parties have been required to discuss the form which our Order should take, in the light of a particular proposal by the applicants. It seems to us that the precise form of any discharge involves work which would have been required even in a consensual process. Accordingly we find no expenses due to or by either party from 8 August 2014.

Additional Fee

[19] The applicants sought an additional fee. Since we are awarding expenses on the Sheriff Court scale it is appropriate to have regard the numbered criteria in Act of Sederunt (Fees of Solicitors in the Sheriff Court) (Amendment and Further Provisions) 1993 SI 1993/3080. Paragraph 5 of Schedule 1 provides:-

“(b) The Court may, on a motion made on or after the date of any interlocutor disposing of expenses, pronounce a further interlocutor regarding those expenses allowing a percentage increase in the fees authorised by the Table of Fees to cover the responsibility undertaken by the solicitor in the conduct of the cause. In fixing the amount of the percentage increase the following factors shall be taken into account:-”

[20] The applicants sought an additional fee on the basis of the heads (i), (iv), (v), (vi) and (vii). These are as follows:-

(i) the complexity of the cause and number, difficulty or novelty of questions raised;

(iv) the place and circumstances of the cause or in which the work of the solicitor in preparation for, and conduct of, the cause has been carried out;

(v) the importance of the cause or the subject matter of it to the client;

(vi) the amount or value of money or property involved in the cause;

(vii) the steps taken with a view to settling the cause, limiting the matters in dispute or limiting the scope of any hearing.”

Applicants’ submission for additional fee

[21] Under head (i) the applicants submitted that the case had complexity surrounding the nature of interest sought to be protected by the respondents and that there were detailed technical reports and data required. Particular knowledge of the area was required and there were planning matters which were also complex and required specialist skill. Under (iv) the subjects were in a very rural location in Aberdeenshire and it had been necessary to attend the subjects in advance as well as the site visit. Under (v) the applicants are active members of the local community and wished to prevent the decline in the village by the important opportunity to develop the land. The application had placed great financial and emotional strain on the applicants. Regarding (vi) the development value of the land is of the order of £500,000. Under head (vii) an attempt had been made to settle the case including an offer to convey part of the north site.

Respondents’ opposition to additional fee

[22] The respondents referred to Harris v Douglass 1993 SLT (Lands Tr) 56. Reflecting the wording of the rules in place at the time, the Tribunal indicated that the case must be one of importance or requiring special preparation, meaning that the case required to be of more than ordinary importance or that it required more than normal preparation when compared with other cases of the same type which came before the Tribunal.

[23] Regarding head (i) it was submitted that the planning issues were straightforward in terms of the local plan allocations for housing and employment; and that there was agreement as to the purpose of the conditions in the conservation agreement in the application of Section 100 of the 2003 Act. Regarding paragraph (iv) it was invariable for the Tribunal to make site visits and for the applicants to prepare accordingly. Under head (v) it was submitted that the case was not sufficiently important to the client to justify an additional fee or under (vi) the development value was not sufficiently high to meet the criteria. Regarding head (vii) the proposal in question related to a development of 8 dwellinghouses on the north site which, as the decision illustrated, was unacceptable.

Additional fee - discussion

[24] In terms of head (i) we recognise this was a difficult case and that there was a particular responsibility upon the applicants’ solicitor. It is the first of its type to have been litigated to a decision and, although at the end of the day there was little dispute as to how the factors of section 100 should be applied, this would not necessarily have been apparent from the outset. There was therefore a novelty factor. It was also necessary to address more than one question since there was quite detailed landscape evidence as well as a significant planning background including the need to understand the operation of the planning system generally. Also to some extent the sites had to be considered separately. We would allow an uplift of 20% under head (i).

[25] We are not persuaded to allow an additional fee under heads (iv), (v), (vi) or (vii). Regarding head (iv) we agree it is invariable practice for the Tribunal to carry out site visits in title conditions cases and the need to visit remote locations is inherent in the nature of this type of legal work. In the context of Sheriff Court cases there is often a need for representatives to travel and accommodate themselves, and we are dealing here with only a two day hearing. To some extent the need for representatives to visit the site to understand the landscape is already taken into account in our finding under (i) above. Regarding head (v) this is a case in which the applicants are landowners and have chosen to seek to take on the role of property developers themselves. Many landowners would have contracted with an experienced developer to carry out the type work in question. Although the site areas are significant, in the context of the type of risks routinely taken by developers as against the potential rewards to be made, we do not think the case is sufficiently out of the ordinary. Under head (vi) we were not given the present agricultural value of the land but we do not think the development uplift is likely to be exceptional. We would expect a broadly similar uplift could be achieved on a considerably smaller number of development plots in other parts of Scotland. Regarding head (vii) we do not consider the steps taken to seek to settle the case, while commendable, are out of the ordinary.

Conclusion

[26] We therefore allow the applicants 70% of their expenses of the application until the date of our Opinion of 8 August 2014. In addition we allow the applicants an uplift of 20% under paragraph 5(b) head (i) of schedule 1 to the 1993 Regulations. Expenses should be on the Sheriff Court scale and, failing agreement, as taxed by the Auditor of Aberdeen Sheriff Court.


Certified a true copy of the statement of reasons for the decision of the Lands Tribunal for Scotland intimated to parties on 5 May 2015

Neil M Tainsh – Clerk to the Tribunal