[1] The Tribunal refused this application under Section 91 of the Title Conditions (Scotland) Act 2003 (“the Act”) on the basis of written submissions and a site inspection at which an informal meeting, in lieu of a full hearing, was also arranged. The applicants are three of the eight proprietors in a restored historic building with 7 flats and one office. Their application was for discharge of a deed of conditions regulating management of this property community. Three other proprietors, including The National Trust for Scotland (“the Trust”) (who, as well as owning the office, had as, in effect, the developer, executed the deed and retained certain functions under it), opposed the application. Reference is made to our Opinion dated 19 August 2009. The Trust and one other proprietor, Mrs Stefani, seek awards of expenses. The applicants oppose the award or, alternatively, seek modification of any award.
[2] The Tribunal, having considered all the circumstances, have decided to find the applicants liable to each of these respondents in the expenses of the application, without modification.
[3] The Trust were represented throughout by their solicitors, who, however, did not attend the site inspection and informal meeting, although two representatives of the Trust were present, primarily in an observer capacity. Their submission in relation to expenses was originally set out at the end of their written submissions on the application. They argued that they were put to the expense of preparing Answers, adjustments and written submissions, and attending a site visit, in respect of an application which, they contended, was fundamentally irrelevant, lacking in specification and in any event not reasonable in all the circumstances of the case (reasonableness being, in accordance with Section 98(a) of the Act, the determining issue on the merits of the application). These points were supplemented in response to the applicants’ opposition to an award of expenses: it was perfectly reasonable and appropriate that the Trust were legally represented, and little weight should in the circumstances be attached to the fact that the Trust’s preliminary argument was not upheld.
[4] Mrs Stefani also was represented by solicitors who at certain stages lodged adjustments or submissions on her behalf, although these to a substantial extent adopted the Trust’s submissions. Her position in relation to expenses was similar. She argued that she had required to seek legal advice on the application and incurred legal expenses in responding to it.
[5] The applicants basically submitted and conducted these proceedings without legal representation. However, solicitors on their behalf have made submissions on expenses. They submit that the Tribunal in exercising its discretion should refuse these applications for expenses, firstly because, they argued, legal representation was not required to respond to the application, and, secondly, because the Trust’s request for dismissal of the application as unspecific and irrelevant was rejected by the Tribunal. Alternatively, they submit that the award should be restricted to covering the work undertaken to respond to the application with an appropriate reduction to take account of the lack of success of the Trust’s request for dismissal of the application.
[6] Section 103(1) of the Act provides that in an application such as this the 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.”
The overriding principle is thus that ‘expenses follow success’, on the basis that the unsuccessful party must be taken to have caused the successful party’s expense, but we do have a discretion in the circumstances of the particular case.
[7] We can see no reason not to apply the normal principle in this case. The application caused the Trust, and Mrs Stefani, expense. They were each entirely successful in their opposition to the application. We reject the submission that legal expenses should not be awarded on the basis that legal representation was not required. No reason was advanced in support of this submission and we can find nothing unreasonable in the Trust’s (and Mrs Stefani’s) resort to legal advice and representation in a case of this sort. The case involved technical legal issues in relation to the title to property. We cannot support the suggestion that an application to discharge the whole of a deed of conditions applicable to the Trust’s and Mrs Stefani’s respective properties does not call for legal assistance and representation. Some parties may choose not to use lawyers in such matters, although we cannot help feeling that the applicants would have been well advised to do so in this case. It may also be noted that Mrs Stefani was a flat proprietor, whereas the Trust were owners of the downstairs office, and, looking at the circumstances of this case, we do not think it at all unreasonable for Mrs Stefani to consult her own solicitors.
[8] It is correct that we did not uphold the Trust’s preliminary legal arguments that the application should be dismissed as incompetent or irrelevant for lack of specification. Full expenses are not always awarded to successful parties who have maintained substantial arguments which have not been upheld and which have taken up time at hearings, although this would rarely if ever justify refusing any award of expenses. In this case, however, we do not consider that any significant extra expense was caused by the Trust’s advancing these points. They were taken in the same written submissions as the points made on the ‘merits’ and, in our view, tended to merge into them. The position would likely have been different if these preliminary arguments had been advanced, and rejected, at a separate stage or hearing of the application.
[9] Accordingly, in our opinion, the Trust and Mrs Stefani are each entitled to awards of expenses without modification. In reaching this view, we have considered, with a degree of anxiety, the extent of time which was taken up, and therefore expense incurred, with this application which, at the end of the day had to be rejected as, in effect, basically misconceived. Having reviewed the procedure, however, we are bound to say that this was really the result of the applicants’ failure to take a realistic view of the position. At one stage, the Tribunal gave the applicants an opportunity to put their application on a sounder footing by specifying particular parts of the deed of conditions which they wished discharged or varied, but the applicants did not take that opportunity. The Tribunal felt it appropriate to give the applicants every opportunity of justifying their position.
[10] Further, in the particular circumstances it is clear that both the Trust’s solicitors and Mrs Stefani’s solicitors generally conducted the proceedings with due regard for economy: neither attended the site inspection and informal hearing (on the basis, agreed with the Tribunal, that if further response to the applicants’ position became necessary, an opportunity would be given for that). Mrs Stefani’s solicitors took the opportunity to adopt the Trust’ submissions, again substantially reducing expense.
[11] These things said, if any question arises as to the reasonable necessity for, or the length of, any particular item charged as expenses, that will be a matter for the Auditor.
Certified a true copy of the statement of reasons for the decision of the Lands Tribunal for Scotland intimated to parties on 29 October 2009
Neil M Tainsh – Clerk to the Tribunal