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OUTER HOUSE, COURT OF SESSION
[2007] CSOH 201
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PD473/06
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OPINION OF LADY DORRIAN
in the cause
ROSS CAMPBELL
Pursuer;
against
DOUBLE GROUP
CONTRACTS LIMITED
Defenders:
ญญญญญญญญญญญญญญญญญ________________
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Pursuers: Stuart, Solicitor Advocate; HBJ Gateley Wareing (Scotland) LLP
Third Defenders: Davie; McClure Naismith
14 December 2007
[1] This
case came before me on the pursuer's motion to allow his note of objections to
be received and marked number 22 of process, to ordain further procedure
thereon and to dispense with intimation of the motion in terms of Rule 23.3
since the last day of lodging was the date on which the motion was
enrolled. The motion was opposed on
behalf of the third defender.
[2] An
interlocutor of 3 July 2007 decerned against the pursuer for payment to the
third defenders of the expenses occasioned by a discharged proof all as taxed
by the Auditor of Court. A diet of
taxation was fixed for 29 October
2007. Proposed abatements to
the account were intimated to the defenders' agents on 15 August 2007 but rejected. These abatements were then prepared as points
of objection which, in terms of Rule of Court 42.2 should have been lodged with
the Auditor on 23 October but by oversight were not lodged until 24 October. At the diet of taxation the Auditor declined
to grant relief under Rule of Court 42.2(1C) for the consequences of failure
timeously to lodge the statement and declined to consider any point raised therein.
[3] The
pursuer maintains that the Auditor should have abated the third defender's
account in relation to the specific items contained in the statement of points
of objection which are repeated in the note of objections. It is alleged that in declining to grant
relief the Auditor misdirected himself by failing to take into account all
relevant factors, which are then specified in the note.
[4] Under
reference to the written ground of opposition counsel for the pursuer submitted
that the mere extract of decree prior to approval of a report would not prevent
the operation of Rule 42.4 which allows for the lodging of a note of
objections within 14 days after the date of the report. Extract may be applied for within 7 days
of a decree, which in this case could have happened even prior to the taxation.
[5] He
submitted that a note of objections under Rule 42.4 was the appropriate
procedure to be followed where the Auditor had refused to grant relief under
Rule of Court 42.2(1C). He referred
to Gupta v Ross 2005 SLT 548 where the Court, approving Urquhart v Ayrshire &
Arran Health Board 2000 SLT 829, held that it was implicit that
Rule 42.4 was designed to deal with objections to specific items in the
Auditor's report. Reference was then
made to Honer v Wilson 2007 SLT 54 where a pursuer lodged a note of objection
arguing that the fee fund dues charged by the Auditor were excessive, the Court
holding that a note of objections was the only proper and available procedure,
and distinguishing the case of Urquhart. Counsel then referred to Coyle v Auditor of the Court
of Session 2006 SLT 1045 in which a petition for judicial review was held
to be competent where the Auditor had refused to grant relief under
Rule 42.2(1C). At paragraph 20
the Temporary Judge held that the case concerned the interpretation of a
relevant Rule of Court and questions of procedural fairness, neither of which
related to a specific item in the account of expenses. He suggested that the objections procedure was
restricted to those items considered and allowed or rejected by the Auditor and
did not cover items which the Auditor has refused even to consider. Counsel submitted that this was incorrect and
that failure to consider an item did not take it outwith the scope of the
objections procedure.
[6] Finally
he referred to Petrie v Northwest Co-Operative Limited 2005 SCLR 841, a case in which the objections procedure was used in respect of the
Auditor's allowance of an additional fee.
Counsel submitted that the consequences of being unable to pursue a note
of objections would be that his only recourse would be by way of judicial
review. It was more appropriate that
expense be restricted and kept within the same process. To allow the matter to be raised under
Section 42.4 was more practical and reasonable and less time consuming than
would be a judicial review.
[7] For
the third defenders Miss Davie submitted that there was a clear
distinction between objections taken at an earlier stage and those taken under
Rule 42.4. The issue under
Rule 42.2 was a matter of discretion for the Auditor. Where points of objection are not timeously
intimated the Auditor is required to ignore them under Rule 42.2(1B)
unless he grants relief under Rule 42.2(1C). The Auditor however, in exercising his
discretion against the pursuer in this case, retained responsibility to carry
out an assessment of what should be taxed and did in fact do so.
[8] Rule 42.4
contains a review procedure, designed to review what has been placed before the
Auditor. It is the substance of the
Auditor's decision which is to be reviewed.
A distinction needs to be drawn between specific points in the account
of expenses with which the Auditor deals - the substantive matter; and the
discretionary points which he might require to decide - procedural
matters. The cases of Urquhart and Coyle are directly in point in that both deal with the Auditor's
discretion in determining whether to consider late points of objection. The case of Gupta is entirely consistent with those two decisions and the cases
of Petrie and Honer are not inconsistent.
[9] In
Urquhart Lord Reed pointed out that
there was not in reality an objection to the report, but rather a complaint
about the procedure followed by the Auditor.
Counsel recognised that in Urquhart
there was a blanket challenge whereas in the present case the note of
objections purports to relate to specific items. That did not in reality address the
requirements of the rules and an argument that it did was considered and
properly rejected in the case of Coyle. The pursuer's attempt to get round the
requirements of Rule 42.4 by incorporating specific points into his
overall general objection is mechanistic.
The argument was that specific objection could be taken in a note of
objections to items corresponding to the items which are the subject of the
points of objection, as has been done in this case. Temporary Judge Reid regarded such an
argument as "... ingenious but unsound".
[10] The comments in Coyle
that the procedure was not intended to cover items of objection which the
Auditor has refused even to consider were an appropriate interpretation of the
Rule. Furthermore, the wording of 42.4
allows objection to be stated only by a party "... who has appeared or been
represented at the diet of taxation". By
this was meant a party who has appeared or been represented on a matter of
substance.
[11] The case of Urquhart
was specifically distinguished in Honer
in which it was accepted by the parties and highlighted by Lord Glennie
that the issue related to an argument about a specific item in the account of
expenses. Petrie related to the Auditor's refusal to award an additional fee,
which was accepted as a specific item in an account of expenses. It should be noted that at a diet of taxation
in that case both parties were heard by the Auditor in relation to the
allowance of an additional fee and it is against that background that the
observations made therein must be seen.
[12] On the issue of extract of the decree counsel submitted that
this was a case in which the Extractor had seen fit to allow extract within 7
days and that a factor which was likely to have arisen in respect of that
decision was that there were no points of objection at taxation so therefore no
reason to think that Rule 42.4 would be invoked. That was part of the reasoning of the
solicitors in seeking extract within that timescale as they had not anticipated
that the Court could be seized of the matter under Rule 42.4.
[13] I have come to the conclusion that the submissions for the
defenders are to be preferred. I consider
that the purpose of Rule 42.4 is to address substantive arguments on
specific items which were addressed at taxation before the Auditor. The note of objections presented in this case
is presented in a way which attempts to "dress it up" as relating to such
matters but in reality it does not do so.
It is entirely coextensive with the issues sought to be taken as points
of objection and in each case the basis of the argument is the wrongful
exercise of discretion on the part of the Auditor in relation to Rule
42.4(1C). The Rule provides that the
note of objection will be followed by an order ordaining the Auditor to state
by minute "the reasons for his decision in relation to the items to which
objection is taken" and that in my view is to be interpreted as meaning a
substantive decision in relation to each of these items. As in the case of Urquhart the matter complained of is not in reality an objection to
the report, but rather a complaint about the procedure followed by the
Auditor. The refusal to grant relief
under Rule 42.4(1C) falls in my view into the same category as for example, a
refusal to adjourn a diet of taxation and as such falls within the category of
matters described as inappropriate for this procedure in paragraph 7 of Gupta.
As Lord Glennie pointed out in Honer
v Wilson,
that case differed markedly from Urquhart
and differs in the same way from the present case. Petrie
advances the pursuer nowhere because what was under consideration there was a
substantive decision by the Auditor in relation to a specific item which had
been challenged at taxation. Coyle is very much in point and the
reasoning in that case appears to me to be sound. The wording of the Rule, which limits
objection to any party who has appeared or been represented at the diet of
taxation would also appear to support the suggestion that the Rule is intended
to deal with substantive arguments.
[14] So far as the issue of extract is concerned, extract would not
operate to prevent a note of objection which was otherwise competent and was
timeous but it might weigh powerfully against a note of objection which was not
timeous.
