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OUTER HOUSE, COURT OF SESSION
[2006] CSOH 96A
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A4945/01
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OPINION OF LADY
SMITH
in the cause
STEVEN McFARLANE
Pursuer;
against
SCOTTISH BORDERS
COUNCIL
Defenders:
ннннннннннннннннн________________
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Pursuer:
Campbell QC; Thompsons
Defenders: Jones QC.; Simpson & Marwick
28 June 2006
Introduction
[1] The
pursuer was injured in an accident at work when he was working for the
defenders as roadman and the sit-on road roller that he was operating tipped
over. His accident occurred on 19 March 1999. He was unsuccessful at first instance but, after a
reclaiming motion, was, on 4 March 2005, found entitled to damages.
The issue raised before me related to expenses, a matter which far outweighed,
in value, the principal sum awarded to the pursuer.
Background
[2] On 4 March 2005, the Court pronounced the following two
interlocutors:
"Edinburgh, 4 March 2005. The Lords
having heard counsel, the cause having been put out By Order under reference to
the Opinion of the Court dated 3 March 2005 and having considered the
Pursuers motion for review of the Temporary Lord Ordinary's interlocutor dated
19 December 2003, Allow said motion;
Recall said interlocutor; sustain
the first plea in law for the Pursuer as regards breach of Regulation 5(2) of
the Construction Regulations; Sustain
the fifth plea in law for the Defenders to the extent of finding the Pursuer
50% to blame; Decern
against the Defenders for payment to the Pursuer of the sum of г25,553 sterling
together with interest thereon from today's date; find the Defenders liable to the Pursuer of
the whole expenses of the cause in both the Outer House and Inner House and
remit an account thereof when lodged to the Auditor of Court to tax".
"Edinburgh, 4 March 2005. The Lords decern against the Defenders for payment to the Pursuer of
the expenses referred to in the interlocutor of today's date as the same shall
be taxed by the Auditor of Court".
[3] Thereafter,
the pursuer's solicitors submitted their judicial account to the defenders'
agents. It amounted to г109,801.52. The defenders, in response thereto, on 12 July 2005, offered г92,500 in settlement of their liability for
expenses .On 10 August 2005, the pursuer rejected that
offer. The defenders lodged a tender in
that sum, in process, on 31 October 2005, and intimated it to the
pursuer, in an effort to avoid the cost of taxation. The pursuer did not accept the tender and
insisted on going to taxation.
[4] I was
advised that an insistence on resorting to taxation, as had happened in this
case, had increased over recent times. The feeling seemed to be that it was as
well to do so, since the paying party would be footing the bill for the
taxation in any event.
[5] After
taxation, the pursuer's account was taxed at a total sum of г91,707.20
including the auditor's fee (referred to as "fee fund dues") and the pursuer's
agents' fee for attending the taxation.
Defenders'
Motion
[6] As
enrolled, the defenders' motion was to find the pursuer liable to the defenders
in the expenses
of taxation, including the fee fund dues but, in the course of the hearing, it
was refined. Ultimately, the defenders' motion was restricted to seeking that
the pursuer be found liable to the defenders in respect of the expenses incurred
by them in connection with attendance at the taxation.
[7] That
restriction of the motion came about after discussion as to whether the court
could competently make an award in favour of the defender of the expenses of
taxation in circumstances where, as here, those expenses appear to be covered
by the interlocutor that remits the account to taxation. The court cannot, by
subsequent order, alter the substance of such an interlocutor. I did not, in
the event, hear full argument on the matter but it did seem that competency was
going to be a problem for the defenders insofar as insisting on that part of
the motion departed from, namely, the part relating to the fee fund dues and
the fee for the pursuer's agents' attendance at the taxation, was concerned.
[8] It
was, however, evident from the discussion that it may be possible, in future
cases, if the paying party has tendered a sum in respect of their liability in
expenses, to invite the auditor, after consideration of the account, to begin
not by issuing the usual report but by issuing a draft report. That would
enable him to ascertain whether or not the payee party has "beaten" the
expenses tender and if not, make submissions to the auditor accordingly. No
doubt such submissions would be to the effect that the paying party should not
have to bear the burden of such entries in the payee party's account as arise
solely because of the taxation having taken place; that will usually be the fee
fund dues and attendance at taxation entries. In a large account, the former
can be substantial as they are calculated on a percentage basis
, at present 4%. It would then be for the auditor to determine
whether or not to uphold the paying party's submissions to any extent. In the
event that either party was dissatisfied with his ruling, in the event that
they considered that he had erred in law, the matter could then be brought
before the court by way of note objections, in the usual way. Such a course of action seems to me to be
appropriate and competent. Further, its
availability would have what I consider to be the desirable result of requiring
the payee party, when considering an offer to settle the matter of expenses
that has been tendered, to do so without being able to assume that a resort to
taxation will be free of cost to them.
[9] In
particular, despite the reservations expressed by Lord Leechman
in the case of Gilmour's Tutor v Renfrew County Council & Ors 1970
SLT 47 as to the competency of
tendering for expenses
based, it seems, on a view that a party should not be "hindered
in any way" in furthering his right to resort to taxation, there does not
appear to be any authority to that effect.
Indeed, it might be thought that the views of the Lord President
expressed in the case of Burgess v Stag Garage Ltd 1959
SC 387 that the practice whereby parties adjusted
accounts without going to taxation was a satisfactory one which may save
additional cost, are to contrary effect. That case was not cited to Lord Leechman in Gilmour's
Trustee. Further the series of older
authorities where parties were found not to be entitled to the whole of the
costs of taxation in circumstances where it was not reasonable that all of
those costs had been incurred, to which I refer later in this opinion in
connection with the defenders' submissions, would seem to reflect a similar
approach.
[10] Turning
to the restricted motion that remains for determination, it relates only to the
cost to the defender of being represented at the taxation. That is a cost which
did not appear as an item on the pursuer's account. That is not surprising
since it is a paying party's item of expenditure, not one of the payee party's
items. The sum involved in this taxation is not, I understand, substantial but
it is a cost which will vary according to the length and complexity of the
taxation and could, in some cases, be much more.
Submissions
for the Defenders
[11] Mr
Jones made a general submission that an award of expenses is designed to
achieve substantial justice between parties (Howitt v Alexander & Sons 1948
SC 154). That principle was illustrated in the context of taxation in cases
where the court had withheld the expenses of taxation from a party in whose
favour an award of the expenses of the cause had been made either because a
significant amount of the account had been taxed off (McLaren - Expenses p.429 ; Hogg v Balfour 1835 13S 451 ; Cameron v Chapman 1835 14S 24 ; Meiklejohn v Moncrieff 1850 13D 303) or where the payee party should have accepted
the amount tendered in respect of the paying party's liability for expenses (Bannatyne v
McLean 1884 11R 681 ; Allan v Allan's Trs 1851 13D 1270).
[12] The
defenders' expenses occasioned by the taxation process were not,
it was submitted, covered by the interlocutor of 4
March 2005. The authorities relied on by the pursuer simply vouched the proposition
that an interlocutor awarding expenses such as that of 4 March 2005 covered all
the expenses up to that date. The defenders' expenses had not been incurred at that
stage nor had there been a decerniture for the
defenders' expenses. All that was being sought was that the court deal with a
matter of expenses as it arose, as had been done in the cases of Hogg and Cameron. The circumstances
could be distinguished from those that arose in Laing v Scottish Arts Council 2001
SC 493. In the present case, unlike Laing, the
defenders were asking the court to look at a matter which had arisen as a
consequence of the award of expenses made earlier. That had not been the situation
in Laing.
Submissions
for the Pursuer
[13] Mr
Campbell submitted that the expenses of attendance at taxation were part of the
expenses of the cause and no further award could now be made in respect of
them. If they were separate then neither them nor the
fee fund dues could ever form part of the account. He referred to Rule of Court
42.1(1) and submitted that it meant that a global award was to be made to cover
everything. The interlocutor for expenses did cover the future since it covered
the expense of making up the account. All that a party had
available to it after taxation was the note of objection procedure.
There was a concern that if resort could not routinely be had to taxation that
difficulties would arise in respect of counsel's fees in speculative actions;
at one point he seemed to suggest that counsel's fees in such cases could not
be agreed and had to be fixed at taxation. Nothing in the 2002 Scheme for
Accounting for and Recovery of Counsel's Fees issued by the Faculty of
Advocates suggests that that is the case and the submission seemed in fact to
be that there was not at present a practice whereby counsel in such cases were
asked to agree fees and agents should not be forced to try and do so.
[14] The
defenders' motion was, it was further submitted, incompetent
as the court was functus.
Reference was made in support of that submission, to the cases of UCB Bank v Dundas and Wilson 1990 SC 377, Laing v Scottish Arts Council, Taylor v Marshalls Food
Group Ltd (No 3)1999 SLT 629, Davis v British Coal 1993 SLT 697 and Ewos Ltd v Mainland 2005 SLT 1227.
Discussion
[15] The
question of the competency of the defenders' motion falls to be resolved
firstly by a consideration of what was covered by the interlocutors of 4 March 2005. One of them
was a decerniture which means that it is not open to
either party now to raise any issue that it covered. What, though, was its scope? Did it cover the expenses that the defenders
now seek, namely the expense incurred by them in connection with the taxation,
a matter which is not mentioned in the interlocutor and which is not expressly
reserved. Are the terms of the interlocutors such that parties and the court
are to be seen as having intended expenses to be disposed of exhaustively?
[16] The
defenders' approach is an attractive one which inspires sympathy in the
circumstances of this case. No doubt
they feel aggrieved at having had to incur an expense which could have been
avoided altogether if their tender had been accepted, in which case the pursuer
would have recovered more by way of expenses than the auditor awarded. The
substantial justice that awards of expenses should be designed to achieve (Howitt) might be
thought to dictate that the motion be granted.
[17] However,
the problem for the defenders is that the same principle of justice requires
that there be finality in litigation and certainty where orders of the court
are concerned. Thus, where there has been a decerniture,
matters covered by it are not able to be raised for reconsideration. That was
the principle that was applied in the case of Laing with the effect that where a party whose tender had been accepted
had overlooked the need to move for or reserve the question of his expenses
from the date of tender, when decree was granted, he could not competently do
so at a later stage. The view was taken that the parties and the court must be
seen as having intended expenses to be disposed of exhaustively at the earlier
stage.
[18] Despite
Mr Jones' persuasive submission that the expenses he sought could be seen as
separate from those covered by the interlocutors of 4 March 2005, as they were
consequent upon the award there made, not part of it, I have reached the view
that I cannot competently grant the defenders' motion. One of the interlocutors
of 4 March 2005 is a decerniture.
That was not the position in either Hogg
or Cameron. Further, it is plain from
a consideration of those interlocutors that they cover not only expense
incurred up to that date but also any expenses incurred in remitting the
account for taxation and having it taxed; that must be inferred from the wording
used and it accords with what has, I understand, been the interpretation
accorded to such interlocutors in practice, under the present rules of court.
These were future matters as at 4 March 2005. They might never have
arisen. Had parties agreed expenses,
there would have been no taxation. Parties may not reach agreement on expenses
though and the interlocutors allow for that. If they do not, taxation will be
required. Expense will obviously arise in connection with the taxation; that
has been the case since the establishment of the office of Auditor of Court
under and in terms of the Act of Sederunt dated 6 February 1806 which recognised the need to make provision for
auditor's fees. That future expense
could be significant, depending on the amount of the account and the complexity
of the taxation. In all the
circumstances, it is not correct to say, as did Mr Jones, that the
interlocutors cover only expenses up to the date that they bear. It seems to me
that the parties and the court must, rather, be seen as having intended that
expenses were being disposed of finally and exhaustively. They left no room for
a further award in respect of part of the expenses of the taxation. That is a
matter which could have been allowed for by way of reservation, in the same way
that determination of the exact basis of taxation was, to an extent, reserved
in the case of Ewos Ltd thus enabling the court to
determine that basis at a date later than the date that the award of expenses
was made. That was not done, however,
and in these circumstances, I do not see that it is open to me to make the
award now.
[19] Regarding
the expenses of the hearing on the motion roll, Mr Campbell indicated that
since it would run counter to his argument that it was not now open to the
court to make a further award of expenses to move that they be awarded in the
pursuer's favour, he would not, in the event of successful opposition do so. I
make, accordingly, no such order.
