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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> M'Gregor's Trustees v. Kimbell [1911] ScotLR 214 (19 December 1911)
URL: http://www.bailii.org/scot/cases/ScotCS/1911/49SLR0214.html
Cite as: [1911] SLR 214, [1911] ScotLR 214

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SCOTTISH_SLR_Court_of_Session

Page: 214↓

Court of Session Inner House Second Division.

(Single Bills.)

Tuesday, December 19. 1911.

49 SLR 214

M'Gregor's Trustees

v.

Kimbell.

(Reported ante July 14, 1911, 48 S.L.R. 950, and 1911 S.C. 1196.)


Subject_1Expenses
Subject_2Process
Subject_3Trustees
Subject_4Special Case — Interlocutor Finding Parties Entitled to Expenses out of Fund — Expenses as between Agent and Client.
Facts:

A special case was brought by testamentary trustees to determine questions regarding the disposal of accumulated funds in their hands which had fallen into intestacy, and an interlocutor was pronounced in terms of an agreement by the parties including the trustees, finding “the whole parties” entitled to their “expenses as the same may be taxed by the Auditor” out of the accumulated funds.

Held that the account of expenses incurred by the trustees must, in terms of the interlocutor, be taxed as between party and party and not as between agent and client.

Headnote:

A Special Case was presented to the Court by David Edward and another, trustees of the late James M'Gregor, first parties, Mrs Alice Jeffs or M'Gregor, now Kimbell, widow of the said James M'Gregor, and now wife of William Alfred Kimbell, second party, and others, to determine, inter alia, whether the second party was entitled to jus relictæ out of certain accumulated funds in the hands of the trustees, which had fallen into intestacy.

The Special Case stated, inter alia—“It has been agreed that the taxed expenses of the several parties to this case shall be paid out of the surplus accumulated funds referred to, so far as still in the hands of the first parties, subject to the sanction of the Court.”

On July 14, 1911, the Court pronounced an interlocutor finding the second party entitled jure relictce to one-half of the said accumulated funds (see report ut supra), and finding the whole parties “entitled to their expenses as the same may be taxed by the Auditor—to whom remit—out of the surplus accumulated funds in the hands of the first parties.”

The second party thereafter lodged a note of objections to the Auditor's report on the first parties' account of expenses, in which she objected that the Auditor had taxed the account as between agent and client instead of as between party and party in terms of the interlocutor of 14th July 1911.

In the Single Bills the second party moved the Court to remit the account back to the Auditor to tax as between party and party, and argued—The agreement and the interlocutor used the word “expenses” without qualification. That meant expenses as between party and party— Fletcher's Trustees v. Fletcher, July

Page: 215↓

7, 1888, 15 R. 862, 25 S.L.R. 606; Magistrates of Aberchirder v. Banff District Committee, March 3, 1906, 8 F. 571, 43 S.L.R. 409. The trustees could doubtless charge their extrajudicial expenses against the trust estate which they administered, but not against the accumulated funds, which being intestate estate were not in their hands in virtue of the trust estate, only by accident.

Argued for the first parties—The trustees could not recover their extrajudicial expenses out of the general trust estate, which was not subject to the litigation in which the agreement as to expenses was made and the interlocutor pronounced. The rule that expenses meant as between party and party applied only to the parties other than the trustees, for when trustees were awarded expenses that meant expenses as between agent and client— Merrilees v. Leckie's Trustees, 1908 S.C. 576, 45 S.L.R. 449; Davidson's Trustee v. Simmons, July 9, 1896, 23 R. 1117, 33 S.L.R. 748.

 Judgment:

Lord Justice-Clerk—The last observation alone by counsel for the first parties requires to be dealt with, namely, that where trustees appear as trustees and there is a remit to the Auditor to tax the account incurred by them, the taxation must in general be as between agent and client. That may be perfectly right in the ordinary case, because it is not disputed that trustees are entitled to be indemnified against expense incurred in the administration of the estate under their charge. But we have here a peculiar case dealing with a particular fund in the hands of the trustees. The interlocutor, which proceeds on an agreement by the parties to the Special Case, finds all the parties “entitled to their expenses, as the same may be taxed by the Auditor, out of the surplus accumulated funds in the hands of the first parties.” In these circumstances it very plainly appears that Mr Jameson's client would be subjected to absolute injustice if the first parties are to get their expenses as between agent and client out of the accumulated funds in question, for that would involve payment of a very large sum out of the half of the funds to which Mr Jameson's client has been found entitled. On the whole matter, therefore, I think that the first parties' account should be again remitted to the Auditor with instructions to tax it as between party and party.

Lord Salvesen—I entirely agree. I think the finding as to expenses which the Court pronounced, and which proceeded on the agreement as to expenses by the parties to the Special Case, must be construed as a direction to the Auditor to tax the accounts of the parties, including that of the trustees, as between party and party. I am not disposed to say anything which will prevent the trustees from recovering their extrajudicial expenses out of the rest of the estate under their charge. That question, however, is not before us now.

Lord Guthrie—I agree. The trustees are among the parties to the Special Case, and are therefore parties to the agreement as to expenses. Had they chosen they might have refused to enter into the agreement, with the result that their whole expenses, judicial and extrajudicial, would have been charged against the general trust estate. But there was nothing to prevent them agreeing to charge their judicial expenses against the accumulated funds and their extrajudicial expenses against the general trust estate, and I think that is the effect of the agreement as to expenses to which they were parties.

Lord Dundas was sitting in the First Division.

The Court sustained the objections and remitted the account to the Auditor to tax as between party and party.

 Counsel:

Counsel for the First Parties— J. R. Dickson. Agents— Morton, Smart, Macdonald, & Prosser, W.S.

Counsel for the Second Party— Jameson. Agents— Wishart & Sanderson, W.S.

 1911

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URL: http://www.bailii.org/scot/cases/ScotCS/1911/49SLR0214.html