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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Finlayson & Ors v Turnbull & Ors [2001] ScotCS 262 (14 November 2001) URL: http://www.bailii.org/scot/cases/ScotCS/2001/262.html Cite as: [2001] ScotCS 262

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[1] The individual parties to these proceedings are all solicitors. Prior to 28 August 1992, they were collectively the partners of a firm known as A.F. Finlayson & Co which carried on business from various offices in Glasgow. As at that date, the first, second and third pursuers were equity partners, and the fourth pursuer and each of the three defenders were salaried partners. The offices from which the defenders worked were situated in the Parkhead and Dennistoun areas. Much of the work done from these offices was criminal legal aid work, but some civil work was also undertaken. The partnership was constituted at will. On 28 August 1992, without any prior warning to the pursuers, the defenders resigned from the partnership and effectively abandoned the Parkhead and Dennistoun offices, taking with them certain members of staff and a total of between 1,000 and 1,500 client files. Almost immediately they commenced business on their own account through the medium of a new partnership known as Turnbull McCarron. As a result of these events, the partnership of A.F. Finlayson & Co (hereinafter referred to as "the former firm") was dissolved.

[2] Shortly thereafter, the pursuers raised the present action against the defenders, concluding inter alia:

[3] In May and June 1995, a proof before answer took place before Lord Milligan on the pursuers' claims for declarator and damages. By Interlocutor dated 1 March 1996 his Lordship pronounced decree of declarator as first concluded for, and awarded damages to the pursuers in the sum of £78,000 together with interest thereon from the date of citation. By Interlocutor dated 28 May 1996, Lord Milligan altered this interlocutor on the question of interest. No appeal against the composite effect of these interlocutors was taken.

[4] On 9 May 1995, at the commencement of that earlier proof, Lord Milligan pronounced an interlocutor whereby, in respect of the pursuers' third conclusion, and of consent, he ordained the defenders to produce accounts within 4 weeks; allowed the pursuers to state any objections within 4 weeks thereafter; and allowed the defenders to lodge answer to the same within a further period of 4 weeks. By Interlocutor of 8 July 1998, following the lodging of the defenders' account No. 50/1 of Process, Lord Milligan appointed the pursuers to lodge a Note of Objections thereto within 8 weeks; allowed the defenders to lodge Answers thereto within a further 6 weeks; and allowed a period of adjustment thereafter. It was not, however, until 5 December 2000 that the Court finally closed the Record and allowed parties a proof before answer on their respective averments in the original Record and in the relative Note of Objections and Answers. This proof was assigned to take place on 16 October 2001 and the ensuing 7 days.

[5] When the proof called before me on 16 October, it was immediately apparent that there was no prospect of its being completed within the 8 days assigned. The defenders' revised Account of Charge and Discharge comprised some 40 numbered principal and subsidiary entries, each of which bore to reflect multiple receipts, claims, retentions or entitlements arranged in different categories. The pursuers' Note of Objection addressed each of these composite entries, and in addition sought to identify 16 further categories of receipts, claims, retentions or entitlements for which the defenders had allegedly failed to account. This Note was supplemented by incorporation of 41 numbered Schedules running to a total of 69 sheets. Some of these Schedules bore to relate to only a small number of the client files which had been appropriated by the defenders in August 1992, while others bore to relate to several hundred. The defenders' Answers were similarly supplemented by incorporation of extensive numbered Schedules. It was clear from a cursory examination of these various documents that the parties' dispute was wide-ranging and concerned inter alia the detail of fee accounts and other documents contained within individual client files. Not surprisingly, the productions lodged by the parties for the purposes of this proof were extremely voluminous.

[6] In these circumstances, I considered that it would be entirely inappropriate, with only 8 days of court time assigned, to embark on an unrestricted proof on the whole of the issues which appeared to be in dispute. Such a proof could take months to complete, and adjournments would be highly undesirable if, as seemed likely, evidence of a precise and detailed nature was led. I understood Counsel to agree with this assessment, and therefore invited them to investigate (i) whether there was any prospect of reducing the scope of their dispute by agreement, and (ii) whether it might in any event be practicable to make use of the available court time, perhaps by proceeding with a proof limited or restricted in some way. In the course of the following day Counsel reported that, while they had made some progress towards agreement on certain Schedules of smaller value, this would not of itself allow a full-scale proof to commence with any prospect of its being completed within the time available. They wished, however, to proceed by inviting me, of consent, to allow a proof restricted to only one of the 41 disputed Schedules, namely Schedule 14 which broadly related to legal aid fees due or claimable in respect of work undertaken for some 17 named clients prior to the dissolution of the former firm. Counsel for the defenders stressed that his agreement to this course of action, if it were to be acceptable to the court, must not be taken as implying any concession as to the running of interest on any principal sum found due. This stipulation was accepted by Counsel for the pursuers, and Counsel further agreed that if a restricted proof were to be allowed all questions of expenses should be reserved to await resolution of the outstanding disputes on other Schedules.

[7] On being formally moved to restrict the proof under Rule of Court 36.1, I granted the motion and appointed a proof in respect of Schedule 14 alone to proceed separately from and in advance of any proof in respect of any other Schedule. At the same time I indicated that, on completion of the proof so restricted, the diet would then be discharged quoad all remaining areas of the parties' dispute. My purpose in delaying the discharge was to ensure that no averments which might be thought relevant to the dispute on Schedule 14 were inadvertently excluded from probation at that stage.

[8] The proof on Schedule 14 was heard over the following 3 court days. Only one witness was led on each side, the pursuers' witness being Mrs Joan Finlayson, the wife of the third pursuer who had had periods of employment with the former firm, and the defenders' witness being the third defender Mr Kevin McCarron. As the evidence developed, it became clear that the real dispute between the parties concerned issues of broad principle rather than the detailed valuation of the client accounts encompassed within Schedule 14. I therefore propose, in this Opinion, to concentrate on these issues of principle, and to deal briefly with matters of valuation in the broader context in which they arise.

[9] In the original Closed Record (No. 46 of Process), the defenders at page 22B expressly acknowledged that they did not dispute any liability to account to the pursuers for work which they had carried out as partners of the former firm. While not expressed as a formal admission, this acknowledgement mirrored the pursuers' averment at page 20/21 to the effect that fees and outlays for pre-dissolution work carried out by the former firm were earned by, and therefore remained assets of, that firm in respect of which the defenders owed the pursuers an obligation of accounting. The pursuers' third conclusion was similarly framed with respect to fees earned by the former firm, and it was by reference to this conclusion that the court ordered an accounting in May 1995. In what I shall call the additional Closed Record of August 2001 (No. 72 of Process), the defenders' acknowledgement was effectively repeated (a) in describing item 14 of their Account as comprising "claims to be lodged in the hands of the Scottish Legal Aid Board", (b) in their unqualified admission of the pursuers' averments in Article 1, and (c) in their further averments in Answer 4 at page 22B. However, the defenders went on to aver (at page 22B/C) that they were "in particular" bound to account for the fees received by them (my underlining) for work done by the former firm up to the end of August 1992.

[10] Both Counsel addressed me on these aspects of their pleadings at the end of the proof. Counsel for the pursuers, founding on an objection timeously taken to a line of defence suggesting that the defenders' receipt of monies was a precondition of any liability to account, submitted that his objection should be sustained and that the proper scope of the defenders' liability was defined by the parties' agreement in the first Article and Answer of No. 72 of Process, and further reflected in the defenders' averments elsewhere. For his part, Counsel for the defenders sought to persuade me that the proper scope of his clients' liability to account was indeed restricted to monies received by them in relation to pre-dissolution work. In support of that submission, he further referred me to the pursuers' fourth Plea-in-Law in the original Record No. 46 of Process which was to the following effect:

He also drew my attention to the fact that the pursuers' averments at the beginning of condescendence 4 of that Record also appeared to relate to fees authorised for payment to the defenders by the Scottish Legal Aid Board.

[11] Having now considered these competing submissions (after reserving all questions of competency and relevancy when the pursuers' objection first arose), I am not persuaded that the scope of the defenders' liability is restricted by the pleadings in the manner for which their Counsel contended. The pleadings on both sides lack consistency on this issue, and this may in part be due to the fact that the original Record No. 46 of Process came into existence as long ago as May 1995, and that the proof allowed in December 2000 extended, not only to that Record, but to the additional Record by which it was largely superseded. In my judgement, the pursuers are well entitled, on their pleadings in the two Records read together, to seek an accounting from the defenders in respect of fees (including any outlays) earned for pre-dissolution work, irrespective of whether payment of such sums has actually been made to the defenders. This would, as it seems to me, be the expected scope of an obligation to account in a case of this kind, since otherwise defenders in possession of partnership files could avoid all liability by destroying or disposing of them, or by failing appropriately to pursue the recovery of sums due.

[12] Counsel for the pursuers went further and sought to persuade me that by reason of the defenders' admission in Answer 1 of the additional Record the pursuers were automatically entitled to an accounting in all cases where pre-dissolution work was done and fees were earned. As he put it, the defenders' liability arose as soon as the work was done, and it could not be altered by failure to render accounts or by the rendering of insufficient accounts. In my judgement, however, that submission went too far, and, when pressed, Counsel conceded that his clients' entitlement to an accounting must be limited to fees legitimately exigible, and would not, for example, extend to claims properly deemed invalid under the "Caroline Thomson" category discussed below. Subject to that necessary qualification, therefore, I hold that, on the pleadings before me, the pursuers are entitled to pursue the present accounting without reference to whether particular fees have or have not been received by the defenders. And at the same time I reject as unsound, both on the pleadings and as a general proposition of law, the defenders' contention that only fees actually received by them may legitimately be brought into account.

[13] Another significant issue which arose at the proof related to certain client files originally included within what was called the "Caroline Thomson" category. These were files where an assistant, unqualified in Scots law, had apparently signed and issued legal aid and advice certificates to clients (either in her own name, or in the name of one of the partners of the former firm) when she had no legal right to do so. Not surprisingly, when this serious irregularity came to light soon after the dissolution of the former firm, the Scottish Legal aid Board refused to pay any fees due under such certificates, and took steps to arrest and/or recover certain fees which had already been paid out. Under Schedule 14, the defenders identified 10 clients whose files were affected in this way, and at page 22D of the additional Record made averments to the effect that the Board had properly refused to pay the accounts in question. Although they averred, in addition, that the Board had also discounted "appearance work" by Caroline Thomson, the defenders' Account of Charge and Discharge brought out a £0.00 balance on item 14 and, as regards the 10 affected cases, their amended Schedule 14 contained no explanation of this beyond the annotation "INVALID - C THOMSON". The pursuers' Calls (5) and (6) at page 21B of the additional Record were not answered.

[14] If all 10 cases in the defenders' "INVALID - C THOMSON" category had in fact involved legal aid and advice certificates signed and issued by the assistant in question, it may be that no particular difficulty would have arisen. However, at the commencement of the restricted proof I was informed that the defenders were conceding, and that the parties now agreed, that in 7 of these 10 cases the relevant certificates had not in fact been signed and issued by Caroline Thomson at all. This agreement was subsequently formalised in paragraph 2 of the Joint Minute No. 86 of Process which was lodged at the end of the proof. However, the defenders did not at any stage seek leave to amend their pleadings to take account of this potentially significant development.

[15] Against that background, Counsel for the pursuers took an objection, on the ground of lack of fair notice on Record, when in cross-examination of the first witness Counsel for the defenders sought to advance a new line of defence suggesting a different justification for the £0.00 balance shown against the 7 affected client files. By that early stage of the proof, the position regarding the "Caroline Thomson" saga was far from clear, and I therefore allowed the line to be developed under reservation of all questions of competency and relevancy. I adopted the same approach when, shortly thereafter, Counsel for the pursuers took a further objection to a line of questioning which sought to raise an issue as to the level of fees properly chargeable for work carried out by unqualified individuals such as Caroline Thomson.

[16] In inviting me to sustain his objections at the close of the proof, Counsel for the pursuers submitted that the defenders had advanced only one ground for effectively excluding consideration of the actual value of the 10 client files originally marked "INVALID - C THOMSON". In 7 cases that ground had been withdrawn by concession, and the defenders were not entitled to advance new grounds, without notice on Record, for excluding the ordinary valuation of these files. Nor, he submitted, were the defenders entitled (again to the extent that no notice had been given on Record) to challenge the pursuers' valuation of particular file entries on "Caroline Thomson" grounds. According to him, it was for the defenders to aver and prove (i) any positive ground on which they sought to exclude files from valuation altogether, and (ii) any positive rebuttal of the pursuers' detailed Objections. The defenders' concession had deprived them of the only ground on which they could legitimately contend that the 7 files in question should be excluded from valuation, and the result was that an ordinary valuation of these files should now prevail. Since the only such valuation in each case was advanced by the pursuers, the figure properly brought out by that exercise should be brought into account.

[17] In reply, Counsel for the defenders disputed the proposition that it was for the defenders to aver and prove anything in these proceedings, and submitted that it was for the pursuers to set up the figures claimed in their Objections and in their Schedule 14. According to him the defenders were entitled to found on evidence, elicited under objection, which demonstrated (i) that by mid-1995 the Scottish Legal Aid Board were robustly refusing to pay out on accounts considered by them to fall within the "Caroline Thomson" category, (all as illustrated by the Board's letter No. 48/1 of Process and relative Schedules), (ii) that both parties were then well aware of a situation best described as a "can of worms", and (iii) that from then onwards the pursuers had effectively acquiesced in the invalidation of these files, and had not pressed for accounts to be submitted or for the payment of fees to be followed up. In these circumstances, he said, the defenders' obligation to account for their intromissions was discharged by merely narrating the events of 1995 including the pursuers' acquiescence. The fact that it was now accepted that 7 out of 10 of the affected files should not have been in the "Caroline Thomson" category in the first place was "of no moment", and could not alter the defenders' position to any degree. Once a bad debt, as he put it, always a bad debt and thus the defenders' Account remained correctly stated in all cases. If the pursuers wished to take the matter up with the Scottish Legal Aid Board, it would still be open to them to do so. In any event, in his submission, he was entitled to take advantage of the evidence, again elicited under objection, to the effect that for an unqualified person like Caroline Thomson meetings should be charged at 50% of the qualified rate and court appearances at £0.00.

[18] Apart from challenging the defenders' entitlement to introduce a defence of acquiescence without notice on Record, Counsel for the pursuers drew my attention to the evidence, elicited subject to his objection, to the effect that following the revocation in 1992 of all relevant mandates by the defenders, his clients "did not have the agency of the files" and were thus not in a position to press for the relevant fees to be rendered or recovered. In some cases, moreover, his clients did not have access to the files at all. They were thus unable to acquiesce in anything, bearing in mind that the defenders' concession regarding the 7 files did not emerge until the commencement of the proof. In any event, notwithstanding the contrary assumption of his only witness Mrs Finlayson, it was clear from the evidence of the third defender that all time limits affecting the submission of legal aid accounts after dissolution of the former firm had been waived by the Scottish Legal Aid Board. It could not therefore be said that payment on the 7 affected files had been shown to be irrecoverable.

[19] In my judgement, the pursuers are well-founded in maintaining that, without fair notice on Record, the defenders' attempt to introduce acquiescence as a new basis for excluding the 7 files from ordinary valuation was illegitimate and should be rejected. Neither party sought to cite authority in support of their submissions in this area. Nonetheless, judging the matter from the standpoint of principle, I am satisfied that it would be unfair, and prejudicial to the pursuers, to allow the defenders to take advantage of the evidence elicited under objection and thereby set up a new and different line of defence of which no prior notice had been given. On a technical basis, I am inclined to think that it would have been for the defenders to aver and prove positive grounds habile to exclude particular categories of files from valuation altogether, but in the whole circumstances I do not find it necessary to base my decision on narrow questions of onus now that the restricted proof on Schedule 14 has been heard and concluded. It is enough that I decline, on considerations of fairness, to entertain the defenders' new line irrespective of where the technical onus of averment and proof may lie in such matters. Had proper notice of this line been given by the defenders on Record, the element of surprise would have been avoided and the pursuers' conduct of the proof might well have been different.

[20] In any event, even if I had exercised my discretion differently, and in the defenders' favour, I would not have been prepared to uphold their new line of defence as developed in evidence. The simple fact (as the defenders conceded) is that the 7 files in question did not concern "Caroline Thomson" certificates, and therefore should not have been treated as invalid by the defenders at any relevant date. These files should, in other words, have been regarded as susceptible of ordinary valuation and payment from the beginning, and I have difficulty in seeing why anyone other than the defenders should bear responsibility for the fact that they were not. It was, after all, the defenders who removed the files from the former firm's offices in the first place; it appears to have been the defenders who had "the agency of the files" at the time when the confusion arose; and Counsel for the defenders accepted, in his submissions, that there was no evidence to suggest that payment would have been refused by the Scottish Legal Aid Board had the matter been pursued with them on the correct footing.

[21] Moreover, on the limited evidence led before me, it was not proved that the pursuers were in 1995 aware of the true position regarding the 7 files in question, or of their ultimate entitlement to receive payment of full fees on these. It was for the defenders to make the running on this issue but, significantly, the matter of acquiescence in the non-rendering of ex concessu valid fee accounts was not, in terms, raised with either of the witnesses led. Even if it had been raised with Mrs Finlayson, she was not one of the pursuers, nor was she even a qualified solicitor. At various stages she was employed by the former firm, but despite her obvious familiarity with the bookkeeping side of the firm's business I cannot see how anything she might have said on the matter of her employers' alleged acquiescence could properly have been held binding upon them. Similarly, had the matter been raised with the third defender, I would not have been disposed to uphold the plea on the basis of his evidence alone. At the very least, the pursuers should have had a fair opportunity to address the point in evidence before any question of an adverse finding against them could arise. The defenders might have sought to overcome this difficulty by leading one or more of the pursuers in evidence, but they did not seek to do so. For these reasons, I would have rejected the defenders' unstated plea of acquiescence as unsound.

[22] Accordingly, the defenders' attempts to exclude the 7 files from ordinary valuation having failed, it seems to me that these files must now have a fair valuation set against them in the defenders' Account. Mrs Finlayson was the key witness on this matter, having prepared the pursuers' Schedule 14 on the basis of her examination and analysis of the defenders' file accounts. In some cases Schedule 14 recorded, by means of a cross, the fact that particular files had at some stage been in the possession of Messrs Millar, law accountants for the pursuers. However, there was no evidence as to what input (if any) these law accountants had had in respect of any of the client files which passed through their hands, and I therefore ignore their involvement for present purposes. I also ignore the fact that Mrs Finlayson was not herself a qualified law accountant, because the minor corrections to which she spoke concerned simple errors which could readily be picked up by a skilled and intelligent bookkeeper. In this context, I regard it as significant that in neither of the two cases in which Mrs Finlayson's adjustments were ultimately contended for by the pursuers (both of which appear in the "SETTLED DIRECT" category discussed below) was she cross-examined on the accuracy of her figures.

[23] In the whole circumstances I consider that the fair value of the 7 files in

question is represented by the following figures inclusive of VAT:

Client Name	£ Value
Forbes	176.25
Hanlon	85.46
Love	29.38
McKenzie	94.00
Mills	45.94
Steven II	190.41
Walker	29.38 _______________
TOTAL	£650.82

All of these figures are derived directly from the original file accounts prepared on behalf of the defenders.

[24] Before leaving the "Caroline Thomson" chapter of this case, I must return to the defenders' suggestion that figures for "attendances" should be reduced to reflect Caroline Thomson's involvement. Counsel for the pursuer opposed this suggestion on the ground that it was not the subject of averment, and that in the absence of proper notice his clients had had no opportunity to go into such detail. As regards the "appearance work" mentioned by the defenders on Record, none of the relevant file accounts appeared to contain any such entry, and accordingly that issue did not arise for consideration. In my view, both of the arguments advanced for the pursuers in this area were well-founded, and I do not consider that any attempt to reduce individual fees for "attendances" or "appearance work" would be appropriate.

[25] At the conclusion of the proof the pursuers conceded, and I now hold, that two of these files, referable to the clients Moss and Samson, should properly be regarded as invalid and have a £0.00 figure set against them. However, as regards the client Glass, Counsel for the pursuers contended that the account should be brought in at its full value because the client file was missing and the pursuers were unable to verify whether this was properly a "Caroline Thomson" case or not. The Scottish Legal Aid Board, he said, had already been shown to be wrong in seven instances, and it was thus particularly incumbent on the defenders to establish that in this case the relevant certificate was in fact signed by Caroline Thomson as they claimed. Again, this was not simply a matter of quantification, where the onus would admittedly be on the pursuers, but an attempt by the defenders to exclude the case from valuation altogether. Accordingly, in his submission, if the defenders could not make good that exclusion, and did not otherwise challenge the pursuers' figures to any material extent, then on a "broad approach" the pursuers' figures should be brought out in the Account as recoverable.

[26] In response, Counsel for the defenders advanced the same argument on acquiescence as I have already rejected, maintaining that any claim by the pursuers in the Glass case was thereby superseded.

[27] Mrs Finlayson's evidence was to the effect that this was one of the cases where, at some stage, the file had gone to the pursuers' law accountants, but she was unable to say when or how it had gone missing after that. The third defender was also unable to say when or how or in whose hands the file had disappeared. There was a certain amount of evidence to suggest that numerous files in the defenders' hands had not been produced.

[28] In my judgement it is the defenders who must ultimately accept any disadvantage flowing from the unexplained disappearance of a relevant file. I consider that it was for them to prove that their entry "INVALID - C THOMSON" was correct, and for that purpose to produce the file or at least advance an explanation for its disappearance involving culpability on the part of the pursuers or of anyone acting on their behalf. Since the defenders have failed on both of these alternatives, I conclude that their attempt to exclude the Glass file from valuation must be rejected. The relevant figure of £274.89 inclusive of VAT was not itself disputed, and I hold that this figure should now be brought into account under Schedule 14 along with the figures tabulated in paragraph 23 above.

[29] I now turn to consider the remaining client files, in respect of which no "Caroline Thomson" issue arose. In his submissions at the close of the proof Counsel for the pursuers referred to these as "Settled Direct" cases, because in the defenders' Schedule 14 all but one were variously marked "AFF SETTLED DIRECT BY ALLAN MCDOUGALL" or "SETTLED DIRECT". The odd man out was the Steven II entry, which was marked "REFUSED BY SLAB". The other files related to clients Borris (3), Brodie, Coakley, Geddes (2), Sannachan and Thomson (2).

[30] At the commencement of the proof, it was intimated by Counsel for the defenders that his clients conceded liability to account in the full value of the Coakley file, namely £547.90 inclusive of VAT. For his part, Counsel for the pursuers ultimately withdrew all three elements of his clients' claim referable to the Borris file. He also accepted that another file, in the name of Simpson, was the subject of entries in the defenders' Schedule 4, and on that basis withdrew any claim relative to that file under Schedule 14. Apart from these concessions, the defenders maintained that no further sums fell to be brought into account for any purpose, and the pursuers maintained that the true value of the relevant file should be brought out in each case. According to the defenders, the pursuers had failed to establish that they had not already received payment of the relevant fees in settlement of their legitimate claims, whereas the pursuers contended that it was the defenders who had failed to prove that settlement of such fees had ever taken place. I was not favoured with any citation of authority in support of either of these competing submissions, and it is therefore necessary to look carefully at the evidence led and then approach the matter on the basis of principle.

[31] Mrs Finlayson's evidence on the issue of payment was of limited assistance. In her evidence in chief, I do not believe that she was specifically asked whether or not the pursuers had actually received payment of any of the disputed sums. It was, however, implicit in her evidence that the relevant accounts included in Schedule 14 were outstanding since, for example, credit for receipts was noted or allowed for in all three entries referable to the client Borris. Mrs Finlayson also described the second set of figures in Schedule 14 as representing "what (the pursuers) were prepared to accept". She further acknowledged the receipt of certain payments to account in connection with one of the Geddes entries and, in answer to a question about the source of her figures relative to the other Geddes entry, said that she assumed she had been given figures "regarding what we were due". Taking all these factors into account I consider, albeit with some hesitation, that the pursuers did just enough, through Mrs Finlayson's evidence in chief, to discharge any initial onus on them to establish that the client accounts on which they sought payment were prima facie still outstanding. It was then, as it seems to me, for the defenders to prove the positive contention in their own Schedule 14 to the effect that the pursuers had already received direct settlement of the sums claimed. In my judgement the defenders have failed to do so.

[32] In cross-examination, Mrs Finlayson was asked about the receipt of payment by the defenders, and also about the source from which any payments referable to Schedule 14 would have come. However, according to my notes and recollection, the question of payment to the pursuers of the "SETTLED DIRECT" accounts was not specifically raised with her, and she certainly made no concession on that matter. The nearest she came to the possibility of direct settlement was in accepting that in some cases the file had been remitted to the pursuers for feeing purposes, but it became clear that she did not know whether fees in such cases had ever been recovered.

[33] The third defender's evidence did not, I think, advance matters much. The focus of the defenders' concentration appeared, as before, to be on the question whether they had ever received payment of fees properly due to the pursuers. This was emphatically denied, but according to my notes and recollection the third defender was unable, in his evidence, to demonstrate positively that any particular payment had actually been received by the pursuers from third parties. As in the case of Mrs Finlayson, the nearest he came to the possibility of direct settlement was in speaking to correspondence in the Brodie, Geddes and Thomson cases which showed that at some stage these files had been remitted to the defenders with a view to their submitting independent fee accounts of their own. In relation to the client Geddes, the third defender also sought to draw the inference of payment to the pursuers from the fact that both the defenders and their Edinburgh correspondents, Messrs Brodies, had received payment of their fees, in circumstances where the pursuers' entitlement was also under discussion and there appeared to be sufficient funds available for that purpose. There was, however, no satisfactory evidence that any relevant payment was ever actually received by the pursuers in that case.

[34] In the foregoing circumstances, I am unable to hold it proved that the pursuers actually received direct settlement of any of their claims as alleged by the defenders. The question remains, however, whether this is enough to entitle the pursuers to have the full value of all of the "SETTLED DIRECT" files brought into account under Schedule 14. In my opinion that question falls to be answered in the negative with regard to some, but not all, of the files. In the Brodie, Geddes I and II, and Thomson I and II cases, there was convincing documentary evidence, spoken to without objection at the proof, to show that at some stage the file was sent to the pursuers, usually at their own request, for the express purpose of enabling them to render fees on their own account. In such circumstances, I do not consider that the defenders' liability should extend beyond simply narrating the fact that, by agreement, the pursuers themselves re-assumed responsibility for recovering such pre-dissolution fees as might be due. I therefore hold the defenders' £0.00 entries to be appropriate in these five cases. However, as regards the other disputed "SETTLED DIRECT" case (namely Sannachan), there was no such evidence, and I consider that the pursuers are entitled to have the fair value of pre-dissolution work brought into account under Schedule 14 at the undisputed figure of £470 inclusive of VAT.

[35] If I were wrong as to the pursuers themselves having re-assumed responsibility for their own fees in the five cases mentioned in the previous paragraph, the relevant figures for inclusion in Schedule 14, inclusive of VAT, would on the evidence have been £306.03, £245.16, £1,134.52, £307.20 and £481.61 respectively. With only two exceptions, these figures are derived directly from the original file accounts prepared on behalf of the defenders. The exceptions arise in the Brodie and Thomson I cases where upward adjustments of £10 and £9.50 respectively were spoken to by Mrs Finlayson. Her evidence on these adjustments was not challenged in cross-examination, although it is fair to say that the third defender later made certain observations on the figures.

[36] I turn finally to the single claim (other than the "Caroline Thomson" cases discussed above) in which the defenders contended that official refusal of payment justified a £0.00 entry in Schedule 14. The evidence on this matter was not satisfactory. In chief, the third defender's evidence was circumstantial and speculative, with the principal verbs used being "assume" and "surmise". In answer to questions from the bench, he accepted that he could not actually say why any non-payment by the Scottish Legal Aid Board had occurred, and that he was merely advancing possible scenarios on which the Board sometimes did not pay. In the end of the day, however, he reverted to affirming, with apparent conviction, that the files supported him and that what he was saying was likely to be correct. Looking at the matter broadly, I am unable to regard the third defender's evidence as sufficiently clear and specific to warrant its acceptance where (i) the matter was not raised with the pursuers' only witness and (ii) the matter was not the subject of averment on Record. For these reasons, I consider that the pursuers are entitled to have a fair valuation of the Steven I file brought into account under Schedule 14. The appropriate figure here was, on the evidence, £195.76 inclusive of VAT. Once again, this figure was derived directly from the original file account prepared on behalf of the defenders.

[37] In the whole circumstances, I consider that the following positive adjustments to item 14 of the defenders' Account are justified on the evidence led at the proof:

[From Paragraph 23]
Forbes	176.25
Hanlon	85.46
Love	29.38
McKenzie	94.00
Mills	45.94
Steven II	190.41
Walker	29.38
[From Paragraph 28]
Glass	274.89
[From Paragraph 30]
Coakley	547.90
[From Paragraph 34]
Sannachan	470.00
[From Paragraph 36]
Steven I	195.76 ___________
TOTAL	£2,139.37

[38] In these respects, therefore, I sustain the pursuers' Objections to item 14 of the defenders' Account, and find that the said item 14 requires to be corrected by deletion of the sum at charge of £0.00 and by substitution therefor of the sum of £2,139.37. In implement of what I understood to be the parties' agreement at the outset, I shall also grant decree against the defenders for payment to the pursuers of the foregoing sum, but consider it appropriate to put the case out By Order to enable parties to be heard as to whether that decree should take effect immediately or at some later date. All questions of interest and expenses will in any event be reserved. Quoad ultra the pursuers' Objections to item 14 of the defenders' Account will be repelled.