Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION [2011] CSOH 180
XA22/05	OPINION OF M. G. THOMSON, Q.C. (Sitting as a Temporary Judge) in the cause EDINBURGH TELFORD COLLEGE Appellants; against THE COMMISSIONERS FOR HER MAJESTY'S REVENUE AND CUSTOMS Respondents: ­­­­­­­­­­­­­­­­­________________

Appellants: Simpson; Brodies

Respondents: Borland; Shepherd & Wedderburn

3 November 2011

[1] This case was remitted to the Outer House for a hearing on a note of objections to an account of expenses and a minute on behalf of the Auditor of Court in response thereto.

[2] The Account of Expenses related to a two day hearing of an appeal by Edinburgh Telford College, the appellants, to the Edinburgh VAT Tribunal. The appeal was heard on 29 and 30 November 2004 and the Tribunal's decision was given on 18 January 2005. The appeal concerned the proper treatment of input tax charged in relation to the construction of a new campus for the appellants. The sum of input tax at issue was £383,669.08.

[3] The decision of the Tribunal was appealed to the Inner House and on 22 February 2006 it was quashed. The respondents sought leave to appeal to the House of Lords, but this was refused, as was a petition to the House of Lords.

[4] The appellants were awarded the expenses in respect of the Inner House appeal and the unsuccessful motion for leave to appeal to the House of Lords against the respondents.

[5] The appellants then presented an application to the Tribunal in which they sought their expenses "incidental to and consequent upon the appeal" on an agent and client, client paying basis in accordance with Rule 29(1)(a) of the Value Added Tax Tribunal Rules 1986.

[6] Rule 29 provided inter alia:

"(1) A tribunal may direct that a party or applicant shall pay to the other party to the appeal or application -

(a) within such period as it may specify such sum as it may determine on account of the costs of such other party of an incidental to and consequent upon the appeal or application; or

(b) the costs of such other party of an incidental to and consequent upon the appeal or application to be assessed by ... the Auditor of the Court of Session in Scotland ... on such basis as it shall specify.

...

(3) Where a tribunal gives a direction under paragraph 1(b) of this rule in proceedings in Scotland the provisions of Chapter 42 of the Act of Sederunt (Rules of the Court of Session 1994) shall apply, with the necessary modifications, to the taxation of the costs as if those proceedings were a cause or matter in the Court of Session in Scotland."

[7] On 28 November 2007 the Tribunal gave a direction in terms of Rule 29(1)(b) that the expenses of the appellant of and incidental to and consequent upon the appeal be taxed by the Auditor of the Court of Session and that the respondent should make payment to the appellants of that taxed sum within fourteen days of the decision of the Auditor. The appellants' application for those expenses to be taxed on the agent and client, client paying basis was unsuccessful.

[8] The Tribunal explained its reasoning on this point as follows:

"The burden of the Appellant's Complaint in relation to the conduct of the Respondents, a consideration of which was a prerequisite for any Agent and Client Expenses Award, consisted of two major items. The first was delay in providing even an Interim Payment to the Appellant of his expenses and the other that the conduct of the Respondents subsequent to the House of Lords Petition tended to indicate that they were seeking to withdraw or re-litigate a question which had been a matter of concession from the beginning, ie whether the Appellant was a Body governed by Public Law. That Concession was made in their Statement of Case although subsequently in an attempt to delay the Hearing the Respondents sought to qualify that Concession. The Application to delay the Hearing was refused and the Concession was repeated not only before the Tribunal but also before the Inner House.

In correspondence produced to the Tribunal of recent date the impression is created that the Respondents wish to depart from that Concession and re-litigate it. They cannot of course depart from the Concession in the present Litigation however they may decide to attempt to deal with it in other Litigations. Insofar as that matter has delayed proper consideration of the issues between the Parties it is to be regretted.

However, that matter raised its head only marginally in the conduct of the Litigation before the Tribunal and need not cause delay at present. If the conduct of the Respondent after November 2006 is to be criticised on that matter it has to be dealt with elsewhere, eg as a question of maladministration.

Matters require to be resolved and progressed, the Applicant being substantially out of pocket. Accordingly the Tribunal issues the under noted Direction leaving it to Parties to persuade the Auditor of the reasonableness not only of the Account of Expenses but also the items therein which reflect the complaint of delays."

The Account of Expenses, as originally prepared in March 2007, was in the total sum of £295,644.78. It covered a period from January 2003 to March 2007 and contained provision for work related to the subsequent diet of taxation. The Account related principally to work done by Deloitte who had acted as tax advisers to the appellants and who had instructed senior counsel to represent the appellants at the hearing of the appeal before the Tribunal. The account included outlays, principally in respect of counsel's fees, of £17,898.75.

[9] On 25 September 2008 the Account was taxed by the then Auditor of Court, Mr Neil Crichton, at £28,012.66. He taxed off all fees charged prior to 22 April 2004, the date when the notice of appeal was submitted to the Tribunal. That alone had the effect of reducing the account by £168,167.52 to £127,477.26,

[10] In November 2008 the appellants lodged a Note of Objections to the Report of the Auditor of Court. In that Note the appellants formally objected to the Report, but concluded by seeking to have the Account of Expenses remitted back to the Auditor for further consideration. The Note contained two general points of criticism and then thirty detailed criticisms of the Auditor's treatment of particular entries in the Account.

[11] The first general point concerned the entries for work done between 7 January 2003 and 6 April 2004. It was claimed that this was essential preparatory work and that it had been caused by "unacceptable delays" on the part of Her Majesty's Revenue and Customs. Reference was made to the observations of the Tribunal on 28 November 2007 to the effect that it would be open to the parties to persuade the Auditor of the reasonableness not only of the Account of Expenses but also the items therein which reflected the complaint of delays.

[12] The second general point concerned the rate of remuneration fixed by the Auditor. It was claimed that he had apparently accepted that he had power to allow enhanced rates under the terms of Chapter 42, but that he had only done so on certain occasions. This was said to be inconsistent and, once the principle of enhancement was accepted, all relevant charges should be subject to the enhanced rate.

[13] The subsequent detailed criticisms may conveniently be divided into four groups. First, there were a number of entries which were said to be affected by the inconsistency in the rates used by the Auditor point. Usually, he restricted the rate claimed to the Court rate, namely the hourly rate to be found in paragraph 5(a), (b) and (c) of Chapter I of the Table of Fees in Rule 42.16(3) as it applied at the relevant time, which was £112.80. Sometimes, however, he allowed an enhanced rate, but there was nothing to explain his reasoning as to when the enhanced rate was appropriate. It was argued that once the principle of the enhanced rate was accepted, it should apply to all entries in the Account. Secondly, it was contended that the Auditor had failed to appreciate the complexity and novelty of the subject matter of the appeal. This meant, it was said, that he had wrongly excluded charges for work done and, where he had allowed charges, had wrongly restricted the rate - sometimes from as much as £636 or £584 per hour to £112.80 per hour. Thirdly, the Auditor had restricted charges to one member of Deloitte where, according to the account, work had been done by two members of staff, for example in attending consultations with counsel and the hearing of the appeal. Fourthly, charges had been abated where the work had plainly been done and, it was said, there was no reason for any abatement, for example an abatement of counsel's total fee and the amount claimed for perusing and considering the decision of the Tribunal.

[14] On 28 October 2009 the Inner House directed that in terms of Rule 29(3) of the VAT Tribunals Rules 1986, Chapter 42 of the Rules of the Court of Session would apply to the taxation of the appellant's Account of Expenses incurred in their appeal to the Tribunal, and ordained the Auditor to state the reasons for his decision in relation to the items to which objection had been taken in the appellants' Note of Objections. By this time Mr Crichton had retired as Auditor of the Court of Session and had been replaced by Mr Kenneth Cumming. He responded by Minute dated 17 November 2009 to the effect that the reason for the decisions to which objections had been taken was that, in light of the information provided and the submissions made at the diet of taxation on 26 August 2008, the charges, as allowed, were considered to be reasonable for conducting the cause in a proper manner. He included in the Minute a Note setting out his detailed responses to the numbered paragraphs in the Note of Objections, but these responses were preceded by the following explanation:

"The Appellants' account of expenses No. 12A of process was taxed by the current Auditor's predecessor, Mr Neil Crichton, who retired at the end of September 2008. While it has not been possible, in the preparation of this Minute, to obtain detailed input from Mr Crichton, the current Auditor is satisfied that the Minute, while regrettably but unavoidably brief, does fairly represent the views of his predecessor."

[15] The Auditor's response to the first general point was that expenses incurred prior to the lodging of written notice of appeal were not recoverable in terms of the Tribunal's direction on a party and party basis. With regard to the second general point, the Auditor explained that Mr Crichton had not been persuaded that any enhanced rate should be allowed and that he had intended to restrict all time charges to the rates set out in the Court of Session Table of Fees. Due to an administrative error three entries in the account had not been so restricted and those particular entries were specified.

[16] The Auditor then went on to deal with the 30 specific entries challenged in the Note of Objections. Here again there were four groups of responses. First, apart from the three admitted errors where an enhanced rate was wrongly allowed, all entries were restricted to the rates in the Table of Fees (Rule 42.16) and there was no inconsistency. Secondly, it was the intention of the Auditor to restrict the charges claimed to the rates set out in the Table of Fees. Thirdly, the Auditor had restricted charges for one event to one member of Deloitte's staff because of the then terms of Rule 42.9, which provided:

"An account of expenses presented to the Auditor in accordance with an order of the court shall set out in chronological order all items in respect of which fees are claimed and shall be taxed as if the whole work in the cause had been carried out by one solicitor."

Fourthly, a number of charges were taxed off in their entirety, or the recoverable number of hours was reduced, because the Auditor took the view that the charges were excessive on a party and party basis and included work which was agent and client in nature.

[17] The Auditor also drew attention to several instances in the Note of Objections where it was claimed that an item had been abated in full whereas in fact it had been restricted to the rate contained in the Table of Fees.

[18] In these circumstances the case came before the Court for a hearing on the appellants' Note of Objections and the Auditor's Minute in response thereto.

[19] Chapter 42 of the Rules of the Court of Session provides, or provided at the relevant time, inter alia:

"42.4(4) At the hearing on the note of objection the court may -

(a) sustain or repel any objection in the note or remit the account of expenses to the Auditor for further consideration; and

(b) find any party liable in the expenses of the procedure on the note.

(5) In the event of an objection being sustained, the court shall ordain the Auditor to amend his report to give effect to the decision of the court."

"42.5(1) In any cause where the court finds a party entitled to expenses, the court may direct that expenses shall be subject to such modification as the court thinks fit."

"42.10(1) Only such expenses as are reasonable for conducting the cause in a proper manner shall be allowed.

(2) Where the work can properly be performed by a local solicitor, the Auditor in taxing an account shall allow such expenses as would have been incurred if the work had been done by the nearest local solicitor, including reasonable fees for instructing and corresponding with him, unless the Auditor is satisfied that it was in the interests of the client that the solicitor in charge of the cause should attend personally.

(3) Subject to paragraph (4), a solicitor may charge an account either on the basis of Chapter I or on the basis of Chapter III of the Table of Fees, but he may not charge partly on one basis and partly on the other.

(4) Where the inclusive fees set out in Chapter III of the Table of Fees are not conveniently applicable or do not properly cover the work involved, an account may be charged on the basis of Chapter I of that Table.

(5) The Auditor may increase or reduce an inclusive fee in Chapter III of the Table of Fees in appropriate circumstances whether or not those circumstances fall under Part IX of that Chapter."

"42.14(1) An application for the allowance of an additional fee shall be made by motion to the court.

(2) The court may, on such an application to it -

(a) determine the application itself; or

(b) remit the application to the Auditor for him to determine whether an additional fee should be allowed.

(3) In determining whether to allow an additional fee under paragraph (2), the court or the Auditor, as the case may be, shall take into account any of the following factors:-

(a) the complexity of the cause and the number, difficulty or novelty of the questions raised;

(b) the skill, time and labour, and specialised knowledge required of the solicitor or the exceptional urgency of the steps taken by him;

(c) the number or importance of any documents prepared or perused;

(d) the place and circumstances of the cause or in which the work of the solicitor in preparation for, and conduct of, the cause has been carried out;

(e) the importance of the cause or the subject-matter of it to the client;

(f) the amount or value of money involved in the cause;

(g) the steps taken with a view to settling the cause, limiting the matters in dispute or limiting the scope of any hearing.

(4) In fixing an additional fee, the Auditor shall take into account any of the factors mentioned in paragraph (3)."

"42.16(1) The Table of Fees shall regulate the fees of a solicitor charged in an account in any cause between party and party."

[20] Counsel for the appellants submitted that Chapter 42 applied mutatis mutandis to the present account of expenses, because of the terms of Rule 29(3) of the VAT Tribunals Rules 1986. He referred to Wood v Miller 1960 SC 86 and to the Opinion of Lord Justice Clerk Thomson at pages 97 to 98 for the circumstances in which the Court might properly interfere with the discretion exercised by the Auditor:

"It is important to see that the Auditor is not said to have applied some wrong principle or misdirected himself in his legal approach. ....... It is not the function of a Judge reviewing an exercise of discretion to substitute his own view of the material under consideration. The decision of the Auditor stands in a not dissimilar position to the verdict of a jury. If the Auditor had no material to go on, his exercise will fall, but if he had material, then, so long as the decision he reached on it was not unreasonable, it cannot readily be upset. There is, however, this difference between a Judge exercising a discretion and a jury, that a Judge is usually expected to give and does give reasons. If, on a scrutiny of these reasons, it clearly appears that he has misstated or mistaken or misunderstood the material put before him there may well be grounds for interfering. But if as appears to be the case here, the Lord Ordinary's criticism on analysis comes only to a disapproval of the relative weight attached by the Auditor to the various elements involved, the Lord Ordinary is simply substituting his own view of the relevant factors."

Counsel described this as a Wordie Properties type test (Wordie Property Co Limited v Secretary of State for Scotland 1984 SLT 345.) He submitted that the reasons given by the Auditor should be approached with some caution because the input to those reasons by Mr Crichton was unknown.

[21] Counsel for the appellants then elaborated on his challenge to the hourly rate applied by the Auditor. He said that the reduction from £636 or £584 per hour to £112.80 per hour was unreasonable because of the sum of money involved, and the complexity of the issues raised in the appeal. Counsel explained that although the amount of input tax in issue in the appeal was in the order of £383,000 the input tax related to a total build cost for the appellants' new campus of £60 million and total VAT thereon of £10.5 million. That VAT would be chargeable at the rate of about £350,000 per month. The point at issue in the appeal would have a profound effect on the appellants' cash flow.

[22] Counsel explained that on the basis of case law to the effect that expenses incurred prior to submitting a notice of appeal were irrecoverable, he did not intend to make any submission in support of the first general point in the Note of Objections.

[23] With regard to the second general point in the Note of Objections, counsel drew attention to the amount by which the Auditor had abated Deloitte's total fees and submitted that the result was irrational.

[24] Counsel referred to what he described as Part VII of the Table of Fees at page C352/5 of the Parliament House Book and to the hourly rate to be found at page C343. His submission was that the account had been prepared on the basis of Part VII which gave the Auditor discretion to increase the hourly rate. Part VII provides:

"ADMIRALTY AND COMMERCIAL CAUSES, MERCANTILE SEQUESTRATIONS AND APPLICATIONS FOR SUMMARY TRIAL UNDER SECTION 26 OF THE ACT OF 1988 AND CAUSES REMITTED FROM THE SHERIFF COURT
Charges under this Part shall be based on this Table according to the circumstances."

He submitted that it could be inferred from the Auditor's actions either that he did not consider that Part VII applied or that he accepted that it did, but that he could find no special circumstances to justify an increase over the rate specified in the Table. In either event, the decision of the Auditor was irrational, especially when one considered the importance of the appeal to the appellants, the precedent which the decision set for other colleges in similar circumstances and the complexity of the subject matter. Both parties had appealed against the Tribunal's decision. These were all factors which, it was said, could be related to Part VII and justified an enhanced level of fees.

[25] Counsel for the appellants then proceeded to criticise the Auditor's treatment of three specific entries in the account. The first concerned the total abatement of a charge for finalising a list of documents. The Auditor's response was that he considered the charge to be excessive on a party and party basis since he had allowed a similar charge on the previous day. The second concerned three fees charged by Mr John Graham, the partner in Deloitte in overall charge of the case, totalling 20 hours at £636 per hour in respect of carrying through work on the claim. All these charges had been taxed off on the basis that they were agent and client in nature and accordingly not reasonable in terms of the Tribunal's direction. The third related to counsel's fee for a consultation which had been taxed off because of the absence of any related agents' charges. This was said to be a false assumption by the Auditor that no consultation had taken place.

[26] Counsel for the respondents invited the Court to repel all the objections in the Note of Objections except that relating to the abatement of counsel's fee for a consultation on 28 June 2004 which, it was accepted, had been abated in error, and in respect of that entry in the Account to remit back to the Auditor for further consideration of that entry. After drawing attention to the powers and the duties of the Court under Rule 42.4(4) and (5) counsel turned to the decision in Wood v Miller (supra) and accepted the test set out by Lord Justice Clerk Thomson at pages 97 to 98. He submitted that it could not be said in the present case that the Auditor had applied any wrong principle or had misdirected himself in his legal approach to his task of taxation. With regard to reasonableness, the Court could not interfere with the exercise by the Auditor of his discretion unless he had strayed outwith the band of reasonableness in the exercise of that discretion. It was submitted that before the Court could properly interfere with the Auditor's decisions, there had to be something more than a mere assertion of unreasonableness on his part.

[27] In response to the appellants' enhanced rate of remuneration point counsel for the respondents drew attention to three factors. First, the appellants' attempt to persuade the Tribunal to award expenses on an agent and client, client paying basis had failed, with the result that the proper basis for the account of expenses to be charged and taxed was on a party and party basis. Secondly, there had been no direction by the Tribunal that the appeal should be treated as a commercial cause or that expenses should otherwise be modified under Rule 42.5. Thirdly, no application had been made to the Tribunal for an additional fee under Rule 42.14. Such an application would have been open to the appellants because of the terms of Rule 29(3) of the VAT Tribunals Rules 1986. The Auditor's approach to the rate of fees allowed had to be seen, it was submitted, in light of the terms of the Tribunal's direction, and the absence of any modification or additional fee awarded by the Tribunal. Counsel then examined the various rates charged in the account of expenses and submitted that, once the inconsistency point had been resolved by the Auditor in his Minute, there was nothing even prima facie irrational about the Auditor's decision to restrict the rate of fee charged to the rate in the Table of Fees.

[28] Counsel then addressed the issue of fees charged by counsel for two consultations, one on 4 May 2004 and the other on 28 June 2004. Both had been abated in their entirety. The Auditor, who had allowed Deloitte's attendance at the second consultation, albeit at a restricted rate, accepted that the abatement of counsel's fee for that consultation was an error and it was in respect of that entry alone that counsel for the respondents accepted that a remit back to the Auditor was appropriate and necessary. Counsel's fee for the first consultation had also been abated by the Auditor on the basis that in the absence of any related agents' charges, counsel's fee was assumed to have been charged in error. It was submitted that the Auditor's approach to that first fee was reasonable in the circumstances as counsel could not have conducted a consultation on his own.

[29] Counsel for the respondents then considered the submission concerning the 20 hours of work which had been charged at £636 per hour on 13, 29 and 30 September 2004 and which had been taxed off in their entirety. Counsel submitted that the Auditor was well entitled to treat these charges as irrecoverable on a party and party basis. This was a matter which fell squarely within the Auditor's discretion. It had not been suggested by the appellants that he had misdirected himself or that he had erred in principle or that he had exercised his discretion in such a manner that no Auditor acting reasonably would have done on the material before him.

[30] Counsel for the respondents made a similar submission in relation to the Auditor's treatment of charges made in respect of preparation for the hearing and for the preparation of documents for that hearing. In both cases the Auditor had restricted both the number of hours and the rate of remuneration in a way which, it was said, fell squarely within the scope of his discretion. Here again, the Auditor had all the information before him to enable him properly to exercise his discretion.

[31] Having considered the submissions made by counsel for the appellants and for the respondents together with the explanations contained in the Auditor's Minute, I repel the Note of Objections except insofar as relating to the entries for counsel's fees in respect of consultations on 4 May and 28 June 2004. In respect of those two items alone I remit to the Auditor for further consideration. I accept the submission made by counsel for the appellants that, with regard to the alleged consultation on 4 May 2004 it is not self-evident from the fact that no charge was made for Deloitte's attendance that no such consultation occurred. There is nothing in the terms of counsel's fee note, which is attached to the Account of Expenses, to suggest that this might have been a duplicate charge made in error. For the reasons explained by Mr Cumming, it has not been possible to obtain Mr Crichton's detailed explanation for his treatment of this item and it is not known on the basis of what material he exercised his discretion on this point. A remit to Mr Cumming to consider this entry will enable him to consider afresh the proper treatment of this apparently anomalous entry in the Account of Expenses. He will similarly be able to consider afresh the proper treatment of counsel's fee for the consultation on 28 June 2004 which it has been accepted already was erroneously abated by Mr Crichton in his taxation of the account.

[32] At the end of the day the appellants did not insist in their objection to the Auditor's abatement of all entries in the account prior to 22 April 2004, the date when the notice of appeal was submitted. I accordingly repel the first general point in the Note of Objections.

[33] The appellants' second general point of criticism concerned the Auditor's failure to allow any enhanced rate over and above that prescribed in the Table of Fees. The Auditor's apparent inconsistency in allowing an enhanced fee on three occasions was explained by the Auditor as an administrative error and accordingly leaves the simple question of whether the Auditor acted unreasonably in not allowing an enhanced rate of charge. It was not submitted that he misdirected himself on any material fact or that he erred in law in his interpretation in Chapter 42. Indeed it was submitted that the sums involved and the legal complexity of the appeal were explained to him.

[34] I found difficulty in understanding the submission concerning Part VII of the Table of Fees. That Part is to be found in Chapter III of the Table of Fees which is concerned broadly speaking with block fees, whereas Chapter I contains the Table of Detailed Charges. Rule 42.10(3) makes clear that an account may be charged on the basis either of Chapter I or of Chapter III but not partly on one basis and partly on the other. It appears self evident from the Account of Expenses that it has been charged on the basis of Chapter I and accordingly that Part VII of Chapter III is of no relevance.

[35] It is apparent from the terms of paragraph 5 of Chapter I, which provides for time charges, that there is a prescribed rate per quarter hour, which at the relevant time was £28.20 (or £112.80 per hour), "or such other sum as in the opinion of the Auditor is justified". In other words, the Auditor was not bound to apply the rate of £112.80 per hour. He had a discretion in the matter, but he was entitled to consider also the fact that an application to the Tribunal for an award of expenses on the agent and client, client paying basis had been made and had failed and that no application had been made to the Tribunal for modification under Rule 42.5 or for an additional fee under Rule 42.14. Many of the points raised by counsel for the appellants in his submission are matters specified in Rule of Court 42.14(3) as being relevant in determining whether to allow an additional fee under paragraph (2) of Rule 42.14. I notice also that the reference in paragraph (3) to the determination by the Auditor of Court as to whether or not to allow an additional fee relates back to paragraph (2) which provides that the Auditor would only have that power if the remit had been made to him by the Tribunal following an application to the Tribunal under paragraph (2) of that Rule.

[36] It is apparent from the terms of the Auditor's note attached to his Minute that Mr Crichton appreciated that he had a discretion to allow an enhanced rate but that he had chosen not to do so on the basis of the material before him. In the absence of any suggestion that the Auditor was wrong in principle or had misdirected himself in his legal approach, I find that his decision on the rate of remuneration was within his discretion. While the effect of his decision not to allow an enhanced rate was apparently dramatic in relation to its effect on the total claimed in the Account of Expenses, that fact does not, in my opinion, give rise to even a prima facie inference of unreasonableness. It has to be borne in mind that the purpose of this taxation was to determine what charges it was reasonable to impose on the respondents rather than whether the charges were legitimate against the appellants.

[37] I have considered carefully the detailed criticisms made by the appellants in their Note of Objections and in submission of the Auditor's treatment of individual items in the account of expenses but, with the exception of the two entries relating to counsel's fees on 4 May and 28 June 2004 to which I have already referred, I find no basis upon which I would be entitled to interfere with the exercise by the Auditor of his discretion. There was no suggestion that he had erred in law by misunderstanding or misapplying the terms of Chapter 42. There was no suggestion that he had omitted to consider any material fact. It was not suggested that he had wrongly interpreted Rule 42.9 in terms of which he disallowed attendance by more than one representative of Deloitte. In relation to items such as preparation for the Tribunal hearing and the preparation of documents, the Auditor took an overall view as to what was a reasonable amount of time to spend in each such task and allowed time charges up to that level of assessment. The result was that some items were abated in full whereas others were merely reduced in rate. I agree with counsel for the respondents that such matters were peculiarly within the expertise of the Auditor who had access to the files and was able to hear representations on behalf of the parties. I cannot find that the decisions which he made were other than within the scope of his discretion.

[38] I was invited by counsel for the respondents to put the case out By Order for a hearing on the question of the expenses of the procedure on the Note, under reference to Rule 42.4(4)(b), and I shall do so.