Lands Tribunal for Scotland

NOTE
(Expenses)

Patrick Harbinson & others
v
Mr and Mrs Thomas MacTaggart

Summary

1. In December 2005 the Tribunal dismissed these eight applications under section 21(1) of the Land Registration (Scotland) Act 1979. The applicants had claimed to be ‘tenants-at-will’ of beach huts on a strip of ground beside the seashore, but the Tribunal having heard legal arguments dismissed the claims on grounds of relevancy and specification. Most of the applicants maintained an unsuccessful appeal to the Court of Session. We have now to consider, on the basis of written submissions, questions of expenses of the Tribunal proceedings.

2. Having considered the various arguments advanced, we have decided that the successful respondents are in this case entitled to expenses as sought. Further, we have certified the cases as suitable for the employment of counsel.

Submissions

3. It is convenient first to outline the applicants’ submissions as to why they should not be held liable in expenses despite their lack of success in the case. They acknowledged that the court had awarded expenses against them and indeed indicated that they had not opposed that award, but they maintained that the situation before a tribunal was different. There had been no award of expenses in McCann v Anderson, Conochie v Watt and the Land Court case, McLean v Kershaw (with reference particularly to what the court said on expenses at 1993 SCLR 164). There was thus precedent, in cases where the landlord was the respondent, for no expenses where there was a complicated legal issue. There had been a stateable argument in support of the applicants’ case, which had failed on only one aspect, which was one of law not evidence. The argument, which had been promoted by the local MSP and had considerable public support, was “far from hopeless”. The claims would never have been made if the landlord had not sought “extortionate” rent increases: the applicants were simply responding to that. An award of expenses would be harsh and oppressive in the circumstances.

4. The respondent argued that the applications had been brought advisedly after something in the nature of a public campaign: the applicants must be assumed to have been advised about the risk of expenses. The respondents were not responsible for bringing the proceedings and their legal propositions had been upheld. Questions of moral blame or fault were irrelevant (McPherson v Walker (No 2) 2002 SCLR 142). The respondents were a husband and wife against 8 applicants and a public campaign. There was no material reason why the Tribunal should adopt a different approach from the Inner House on expenses. There was, however, a broad discretion and each case should be decided on its own merits. The cases referred to were merely illustrative and did not provide any precedent. Sanction for counsel should be granted because this was an obscure area of law.

Tribunal’s Consideration

5. The situation regarding expenses in different tribunals is governed by each tribunal’s express jurisdiction and rules. In our case, subject to certain expressed variations or qualifications in relation to some of our jurisdictions, the Tribunal is required, under Rule 28(1) of the Lands Tribunal for Scotland Rules 2003, to “deal in such manner with the expenses as in its discretion it thinks fit”. This gives us, generally, the same discretion in relation to expenses as courts enjoy. Generally, we exercise this discretion in the same way as courts, i.e. by recognising, as an application of the more general principle that the person who has caused the expense should bear it, that expenses should normally follow success because parties’ rights are taken to have been all along such as the court has found them to be. In the case of applications under this particular jurisdiction, notwithstanding the applicants’ submissions, we are not aware of any decision by the Tribunal indicating any general departure from that guiding principle. In both McCann and Conochie, the reports merely disclose that, of consent, no finding as to expenses was made; while in Ferguson v Gibbs, it was noted that both solicitors moved that expenses should follow success and indicated that the Tribunal considered this appropriate. In McLean, the court had these observations on expenses:-

“Insofar as we have found that 1A Leurbost is a cottar subject, the respondent Mr Maclean has been unsuccessful and we therefore refuse Mrs Illius’ motion so far as expenses are concerned. In any event, in an application of this kind, the main object of which is to clarify a complicated and longstanding problem, we feel that an award of expenses would be inappropriate”.

As we understand that case, the dispute was not between the tenant and the landlord but rather among members of the tenant family. At all events, we are not persuaded that there is any general rule applicable to Tribunal applications to determine whether tenancies-at-will exist. We must consider each case individually.

6. We know of no principle that expenses should not be awarded in cases which fail only on a point of law. Indeed, had the respondents not asked for a legal debate and instead allowed this case to proceed to a hearing with evidence, substantially more expense would have resulted. We do not think it is anything to the point that the case for the unsuccessful party was “stateable” (which would apply in any case brought by responsible representatives.) Nor is this, in our view, really a case in which there was divided success at the legal debate. We note that the Inner House described the applicants’ case as “fundamentally irrelevant” in not one but two important respects. While we held that the case was just adequate to merit a hearing of evidence on all but one of the points argued, we did express misgivings about a number of aspects of the applicants’ pleadings. At all events, we do not think that the hearing before us could have been materially shorter so as to have reduced the expense brought about by the application. It also seems relevant, if not necessary, to point out that the respondents made their position on the matter of relevancy and specification very clear in advance of the hearing before us.

7. That leaves the wider equitable considerations suggested by the applicants. They suggested that there was considerable local support, including that of an MSP, for their case. They argue that it was really the respondents who caused this expense by seeking an extortionate rent increase. We are, however, in no position to offer a view on that suggestion and we have to agree with the respondent that what caused the expense was the bringing of these applications which the applicants must be assumed to have appreciated were not well founded. Not having established the tenancies-at-will, the applicants must be taken to be in the same position as other insecure tenants faced with rent increases on the expiry of tenancies. We would mention that the respondents’ contention in response, comparing their situation as a single party with that of the group of applicants with public support, appears to us to be equally irrelevant.

8. There may be cases in which a difficult or obscure issue of law is involved and in which a party of substance who may benefit from obtaining the certainty of a court ruling may choose either to fund the proceedings or at least not to seek expenses if successful. This is not such a case and there is in our view nothing to indicate that it should be. We are of the clear opinion that the successful respondents are entitled to their expenses at the level sought, viz. the level of fees payable in the sheriff court.

9. We do not understand the applicants, who themselves employed junior counsel, to oppose sanction for counsel. There is no doubt that the area of law in question is somewhat obscure, and we agree that the cases are suitable for the employment of junior counsel.