NOTE
(Expenses)

Margaret MacKay v Ronald McGowan and another

1. This Note should be read in the light of our Opinion of 24 September 2014 and Order of 13 January 2015. We now deal with a motion for expenses by the applicant against the respondent, and for certification of Mr Yellowley as an expert witness for the applicant. The motion was made in writing and parties have made written submissions. The respondent continues to represent himself and his wife.

Background

2. The application sought discharge of certain title conditions, failing which a variation so as to permit the erection of a dwelling house on vacant land proposed in a grant of planning permission. The application was dated 26 January 2014. After objections dated 18 February 2014 were lodged, the applicant clarified by amendment of 6th May that the variation sought was for the construction of a dwelling house not exceeding one and a half stories in height. At the hearing on 7 August 2014 the applicant sought to amend her application also to seek an order varying the title conditions so as to permit certain extensions to her existing building. We took the view that we should hear argument on the form of any order at the end of the hearing, and agreed to hear evidence as to any relevant factors in play regarding any possible extension. This was on the basis that a possible extension was already canvassed in the pleadings and a specific order for variation would have amounted to a modification of an existing case viz. an application for discharge of the conditions altogether. The hearing lasted a day. In our decision we allowed a variation of the title conditions so as to permit the building of a new dwelling house as reflected in the planning permission. We did not however agree to a full discharge as would have permitted a larger dwelling house or as would have permitted the construction of any extension to the existing dwelling house. We gave parties an opportunity to agree a form of words to give effect to our opinion. Agreement did not materialise and in the light of certain technical information provided by the applicants, we made a detailed order on 13 January 2015. We had also made certain comments in our opinion at paragraph [36] regarding the apparent relative strength of parties’ positions should plans be drawn up in the future for certain extension to the existing dwelling house.

Applicant’s submission

3. The applicant contended she had been substantially successful. She referred to section 103 of the Title Conditions (Scotland) Act 2003 which states:-

“103 (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.”

We were also referred to Cope & Others and Stock & Another v Ms X LTS/TC/2012/02. The Tribunal said:-

“However, section 103 showed that Parliament wished to change (the pre 2003) approach. They wish to bring matters into line with other litigation. The normal, very established principle, is that the winner is entitled to his or her expenses.”

and

“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 has acted unreasonably.”

and

“It is well established that the concept of substantial success looks at the eventual outcome. In many cases there may be disputes from 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 overall success.”

4. The applicant submitted that she had sought a variation or discharge as alternatives and that the hearing would have been necessary even if the discharge had not been sought. Minimal additional time was incurred in relation to the discharge aspect of the case alone, or to the discreet matter of an extension. We were reminded that at paragraph [16] we commented that time was taken by the respondent commenting on a matter which we found to be largely irrelevant.

Respondent’s submission

5. The respondent provided a lengthy written submission and supplementary submission. In summary the points he made were as follows:-

Pre-application correspondence referred to a discharge not a variation; the applicant had not sought only a variation, only a variation was granted, and only over a limited part of the site; the issue of a variation to permit an extension or extensions arose late in the day, the issue was important as evidenced by much of the Tribunal’s opinion being directed to the extension issue; the applicant had initially sought a variation so as to permit a two storey house, i.e. beyond the planning permission granted; a discharge would in any event have permitted a dwelling larger than one and a half storeys, had the applicant only requested a variation in 2011, the application would have been unnecessary (we infer here that the respondent’s position is that he would have agreed to a variation in 2011 had he been asked to agree to one.) He further submitted that he believed the reason why the applicant sought a full discharge was because this is what the prospective purchaser wanted; the applicant had obtained academic opinion to the effect an application to the Lands Tribunal was unnecessary; the applicant had acted unreasonably by marketing the property with planning permission without disclosing the title condition problem; the applicant had carried out a secretive investigation to his financial affairs and those of his wife; it had been wrong of the applicant and her agents to disclose his name to the prospective purchaser, following which he had been put under pressure to agree to a discharge; there were defects in the draft discharge he had been asked to sign; a letter from the applicant’s solicitor referred to correspondence with the prospective purchaser’s solicitor saying there had been direct contact between the prospective purchaser and the respondent which was factually incorrect and should have been verified; a request to give permission to the applicant’s surveyor to view the respondent’s property in order to progress the application had unreasonably threatened a court order; the application used inaccurate terminology; the survey report was defective; the applicant did not adhere to the tribunal’s timetable; a signpost advertising a camp site was erected shortly before the site visit and was an attempt to mislead the tribunal, and the sign has now been removed; the applicant had unreasonably sought his agreement following the Tribunal’s opinion to permit stables, garages, greenhouses and other outbuildings; there were now horses on the site suggesting that the request for stables had been unreasonable and that this also consisted of a breach of the conditions.

Discussion

6. We do not propose to discuss each and all of the respondent’s points in turn. In our view they are outweighed by the resulting substantial success of the applicant which we discuss below. Some of his points in any event appear to go over old ground from our decision, such as the criticism of the marketing of the property and the way the transaction fell through, which criticisms did not assist us in reaching a view on the case. Others are inaccurate i.e. that the tribunal’s timetable was not adhered to by the applicant. We did not make any findings about the signpost, since we concluded overall there had not been significant change to the character of the area. Although we did not agree with all the opinion expressed in the applicant’s survey report, we found it helpful and would not describe the report as defective or inaccurate. We have no note of a typing error in the application being raised as an issue or causing a problem at the hearing. Whether the occupation of a part of the site by horses is or is not in breach of a title condition is not relevant to the issue before us. Many of the points imply that the respondent is of the view that it is unfair upon the owner of benefited property to be expected to engage in a process concerning variation or discharge of title conditions. This is a perilous view, given the existence of section 103.

7. We agree with the applicant that we require to start with section 103 and consider the extent of success by either party to the proceedings. We are satisfied that the applicant has been substantially successful. Three factors point to this conclusion. In the first place, the application expressly sought a variation of title conditions so as to permit the construction of a dwelling house as an alternative to outright discharge. She was successful in obtaining the order sought in the alternative. Secondly, we agree that relatively little additional time was taken up at the hearing, or effort expended in documents, considering issues other than seeking an order of some sort to permit the dwelling house proposed in the planning permission. Thirdly, the respondent vigorously opposed the application both in writing and orally at the hearing. It is fair to describe his opposition as root and branch. Relatively little of his effort went specifically to dealing with the issue of a possible extension(s) to the existing dwelling. For example only one short paragraph of a 20 page note of objections referred to the extension issue. We do not recall substantial time being taken on the issue at the hearing, other than some time being taken by the motion to amend as we have narrated above. The height of the house did not appear to be advanced as significant issue at the hearing, no doubt because in any event the planning permission restricted its height to one and a half storeys. We are therefore unpersuaded that had the applicant specifically limited her application only to the variation which we have permitted, that the proceedings would have been much shorter. In general terms it follows that the applicant is entitled to an award of expenses

8. Both parties appeared to accept, at least implicitly, that we might make some modification to take account of matters where it can be said the applicant was unsuccessful and the respondent was successful. This is, of course, something which can otherwise be left to the auditor when taxing accounts under paragraph 9 of schedule 1 to the Act of Sederunt (Fees etc.) 1993 (SI 1993/3080). In the hope that we can short circuit further dispute, we are prepared in the circumstances to do so ourselves. We can only very broadly gauge the additional time and effort taken on such matters. Essentially these related to the issue about an extension and, for a short time in the adjustment period, the size of the house. We cannot ignore the fact that the respondent took more time on a matter which we did not find helpful. Judging matters broadly we would make a modest reduction to the applicant’s expenses by a factor of 10%.

9. It is not the tribunal’s normal practice to allow expenses for a period prior to the lodging of representations by an objector: West Coast Property Development Limited v Clarke and Others LTS/TC/2005/21 (6 October 2006). This is on the view that the unsuccessful objector has not usually caused the expense of the initial application. On the other hand where a single benefited proprietor has made clear an intention to object, it may well be possible to conclude the whole cost of procedure before the tribunal is attributable to such objection: Franklin v Lawson LTS/TC/2012/23 (15 July 2013).

10. The pre application correspondence was not referred to us in detail. However it is before us and we have considered it. A letter of 7 January 2013 from the applicant’s solicitors expressed the hope that the respondent would agree to a discharge of the relevant conditions and enclosed a draft “for approval/ revisal.” They very properly stated that the deed had serious legal ramifications and strongly advised him to instruct solicitors, and that the applicant would be responsible for his associated legal fees and outlays. There followed a process of correspondence in which the respondent instructed solicitors but which ended with his declining to sign the discharge. A letter from the respondent’s solicitors of 7 May 2003 contained an air of finality in that it stated they thought it unlikely their clients would change their position. This no doubt forced the applicant to take proceedings, and we recognise there is a reasonable argument that from that point the expense of the application can be said to have been caused by the respondent. But at that stage the lesser option of a variation was not being mooted. This was only first canvassed in the actual application to the Tribunal. In a letter of 17th November 2013, still prior to the application, the respondent asked to see the building plans which would be assessed by the applicant’s surveyor. This may imply his mind was not entirely closed, or at least that he was waiting to gauge the strength of an application to the Tribunal by when more details might be apparent. As there was only a grant of planning permission in principle in existence, thus implying the possibility of further details in due course, this position was not unreasonable. The first mention of a possible extension to the existing building came about in the survey report, in turn referred to within the application to the Tribunal. Therefore, given the timing, the possibility of an extension in addition to the new building was not under particular discussion in the run up to the application. Only at the point of the disclosure of the report would the implications of a full discharge have become readily apparent. Therefore there is a reasonable argument that the respondent was entitled to wait until the application itself until being held responsible for the continuing litigation. We find the matter finely balanced. At the end of the day we have to be guided by section 103. As the only pre application discussion related to a complete discharge of the title conditions, and in opposing this the respondent was in a sense successful, we are not persuaded to alter our normal approach so as to allow the applicant the expense of the initial application. We therefore allow the applicant her expenses, as modified, from the date of the objections to the application, viz 18 February 2014.

11. Various negotiations were carried out as to the form of our order in the light or our opinion of 24 September 2014. On the basis that some negotiation would have been necessary in any consensually agreed variation, and that we did not accept all the wording and items proposed by the applicant, we would find no expenses due to or by either party from the date of our opinion of 24 September 2014.

12. We would certify Mr Yellowley as an expert witness for the purposes of rule 28(5) of the Lands Tribunal Rules 2003. The test in terms of Act of Sederunt (Fees etc.) 1992 (SI 1992/1878) schedule 1 paragraph 1 is whether the witness was a skilled person and whether it was reasonable to employ that person. Mr Yellowley is a chartered surveyor. He had visited the site to consider both the benefited and burdened properties. He gave evidence as to value of the burdened property should development be permitted or not permitted. He gave evidence as to the impact of development upon the benefited property. Although we did not agree with all his conclusions we consider it was reasonable to employ him. As his report was carried out prior to the application, it is not our intention that the expense of his report should be borne by the respondent in the light of our conclusion at 10 above. However we think his attendance at the Tribunal should be covered by our general findings at 7 and 8.

Decision

13. In conclusion, we find the applicant entitled to 90% of her expenses of the application from the respondent from 18 February 2014 until 24 September 2014. We certify Mr Yellowley as an expert witness. We find that expenses should be assessed on the Sheriff Court Scale and, failing agreement, taxed by the auditor of Oban Sheriff Court.


Certified a true copy of the statement of reasons for the decision of the Lands Tribunal for Scotland intimated to parties on 29 April 2015

Neil M Tainsh – Clerk to the Tribunal