SHERIFFDOM OF GRAMPIAN HIGHLAND AND ISLANDS
AT WICK
A129/04
JUDGEMENT
of
SHERIFF
PRINCIPAL SIR STEPHEN S T YOUNG Bt QC
in the cause
BARRY NELSON
Pursuer
against
DAVID MacBEATH
Defender and Appellant
|
Act:
Absent
Alt:
Mr Stephen Lennon, solicitor, Ewan Harris & Co, Dornoch
Dr
Kirsty Hood, advocate, for Highland Law Practice, Wick
Wick: 18th January 2007
The
sheriff principal, having resumed consideration of the cause, refuses the
appeal and adheres to the interlocutor of the sheriff dated 6 September
2006; finds the defender and appellant liable to the Highland Law Practice in
the expenses of the appeal and allows an account thereof to be given in and
remits the same, when lodged, to the auditor of court to tax and to report;
certifies the appeal as suitable for the employment by the Highland Law
Practice of junior counsel; quoad ultra
remits the cause to the sheriff to proceed as accords.
Note
[1] This is an appeal by the defender against
the interlocutor of Sheriff Sutherland dated 6 September 2006 in terms of which
he refused the defender's motion to have the pursuer's former solicitors,
Highland Law Practice ("HLP"), found liable to him for the expenses of the
action from 3 September 2004 to 4 March 2005.
[2] The sheriff explained his decision in a
note which he appended to his interlocutor of 6 September 2006.
In paragraph [1] of this note he recorded that the defender's motion
called before him on 6 January, 15 March and 18 May 2006, and that the motion was based on the
defender's written motion, no. 7/6 of process, and an oral motion made at the
bar on 24 November 2005. In paragraphs [2] to [17] he proceeded to
summarise the opening submissions made by the defender's solicitor in support
of the motion and in paragraphs [18] to [30] he summarised the submissions in
response of the solicitor for HLP. At
paragraphs [31] to [37] he summarised the final submissions of the defender's
solicitor, and at paragraphs [38] to [49] he explained his reasons for refusing
the defender's motion. His note speaks
for itself, and it is unnecessary that I should set it out in full here.
[3] It is apparent from the interlocutor sheets
that the case called in court on numerous occasions between 3 September 2004
and 18 May 2006 and that with one exception (on 15 July 2005) Sheriff
Sutherland presided at all these hearings.
So he had the advantage, denied to an appeal court, of having had a
ready familiarity with the circumstances of the case from the outset. He was thus especially well placed to
consider the merits of the defender's motion which is the subject of this
appeal, and indeed this appeal affords a good illustration of the reason why
appeals solely on questions of expenses are severely discouraged - see
Macphail's Sheriff Court Practice (3rd
Edn) at paragraph 18.117. At the conclusion of the appeal hearing I was
tempted to dismiss the appeal there and then with a brief statement of my
reasons and the comment that I thought that it was without merit. But in
deference to the care with which the defender's solicitor had evidently
prepared his lengthy submissions I decided that I had better prepare a written
judgement.
[4] Given his familiarity with the
circumstances of the case, it is perhaps understandable that the sheriff did
not feel it necessary to rehearse these in his note before summarising the
submissions that were made to him. If I
may respectfully say so, I think that it would have been helpful to have found
in his note at least a brief opening narrative of the circumstances of the
case, and also an explanation of the reasons behind his decisions on the matter
of interim interdict which was the subject of the first three hearings on 3, 10
and 24 September 2004, and to which I shall refer in more detail shortly.
[5] The initial writ was lodged in court along
with the pursuer's first inventory of productions on 2 September 2004.
In terms of crave 1 the pursuer sought an order under section 8 of the
Protection from Harassment Act 1997 prohibiting the defender from harassing him
by approaching him, assaulting him, threatening him, entering his home,
damaging his property, interfering with his livestock, or otherwise putting him
into a state of alarm or distress. In
terms of crave 2 he sought interdict and interdict ad interim to prevent the
defender from molesting him by approaching him, abusing him verbally,
assaulting him, threatening him, entering his home, damaging his property,
interfering with his livestock, or otherwise putting him into a state of alarm
or distress.
[6] In article 2 of the condescendence the
pursuer averred that he was the brother of the tenant of the croft at
Knockally, Dunbeath, Caithness and that the defender was the son of the
landlord of this croft, Mr John MacBeath.
The pursuer averred that he had resided in the croft house for a period
in excess of three years and that his sister, Mrs Ivy Pemberton, had agreed
with the landlord that she would become the tenant of the croft and would pay
£220 per month in order to purchase the croft at a total price of £25,000 from
the landlord. It was averred that the landlord and Mrs Pemberton had signed the
appropriate papers to put this arrangement into effect in or around 2002 and
that Mrs Pemberton had then given the pursuer permission to stay on the croft in
the croft house as she only wished to work the land. It was then said that the pursuer had moved
into the croft house and had resided there ever since.
[7] In article 3 it was averred that the
pursuer remained in the croft house without remark or incident until in or
around March 2004 when the defender called to see him while he was visiting his
sister and asked him when he would be moving out of the croft house at
Knockally. It was said that the pursuer
told the defender that he would not be moving and that he and his sister had
then confirmed that the agreement had been made with the defender's
father. It was said that the defender
then indicated that he had a power of attorney in respect of his father and
that the price of the croft had increased to £60,000. It was averred that the pursuer indicated
that they would need to see a valuation and evidence of the power of attorney
and that these had not been produced by the defender. Finally it was averred that the defender then
told the pursuer that if he did not get out of the croft, he would physically
get him out.
[8] In articles 4 to 8 of the condescendence
the pursuer averred that since in or around the end of July 2004 the defender
had mounted a campaign of harassment against him, and details were given of a
variety of incidents in which, for example, the defender was said to have
broken into the croft house and changed the locks on three separate occasions,
packed the pursuer's belongings into cardboard boxes and damaged some of his
pictures. On another occasion it was
said that the pursuer had received a visit from police officers after the
defender had reported to the police that there were two doors in the house
which had been stolen and which had in fact been given to the pursuer by a
local construction company. In addition the defender had gone into the field
surrounding the croft house and had released the pursuer's livestock, and later
it was said that the pursuer had received a bill from the electricity company
confirming that he had moved from the croft house and that upon inquiry it had
become apparent that it had been the defender who had told the electricity
company of the pursuer's move.
[9] In article 9 the pursuer averred that the
defender would continue to harass him and to enter into his home and that he
was concerned that every time he had to leave his home he invariably came back
to find that the defender had broken in and changed the locks. He averred that the defender had pursued a
course of conduct in the form of harassment against him and that he had a
reasonable belief that the defender would continue in that course of conduct
and that he was therefore entitled to the protection of an interim interdict
and thereafter a non-harassment order.
[10] Finally the pursuer tabled two pleas-in-law
in which, in short, he maintained that he was entitled to the protection of an
interim interdict and a non-harassment order, the defender "having engaged in a
course of conduct amounting to harassment of the pursuer, as condescended upon and
having shown an intention to persist therein".
[11] The pursuer's inventory of productions
included four items. The first of these
was a series of electricity bills addressed to the pursuer at an address other
than the croft house at Knockally. The
bills relate to the supply of electricity at the croft house and one of them
recorded that it was a final bill to 17 July 2004. The second item was a copy of a typed letter
dated 3 October 2001 which bears to be signed by John MacBeath and is addressed
to Mrs Ivy Preston. (It appears from a
letter in the pursuer's second inventory of productions that Mrs Preston and
Mrs Pemberton are one and the same person, Preston
having been her married name and Pemberton her maiden name). The letter reads as follows:
Dear
Ivy
This
agreement is made today between myself John MacBeath [landlord] and Ivy A.
Preston [tenant] and Ivy A. Preston has life tenency to my land and buildings
known as MacBeath Croft Knockally Dunbeath. Caithness.
Should my present tenent Mr Barry Nelson decide to vacate the cottage known as
MacBeath Cottage at Knockally Dunbeath KW6 6EU the tenancy goes to Mrs I. A.
Preston likewise the land and buildings if vacated by Mrs Preston goes to Mr
Barry Nelson
Yours
sincerely
(Sgd) John MacBeath
[12] The third item in the pursuer's first
inventory of productions was a copy of a hand-written letter dated 11 January
2002 which is addressed to Mrs Preston and appears to have been written and
signed by Mr John MacBeath. It reads:
Dear
Mrs Preston
This
is to confirm that you & Barry are partners of the said croft at Knockally
Dunbeath and I have written to the Crofters Commission regarding grants etc.
for you, the sheep will be sorted out as soon as I can manage.
Yours
truly
(Sgd)
John MacBeath
[13] The fourth item was a copy of a printed
Form AT5 which is intended to be a notice under section 32 of the Housing
(Scotland) Act 1988 to be served on a prospective tenant of a short assured
tenancy. The form bears to have been
signed by John MacBeath and is dated 23 June 2003. The word "long" has been substituted for the
word "short" wherever it appears on the form.
In Part 1 of the form the prospective tenant is said to be the pursuer,
and Part 2 of the form reads as follows:
I your
prospective landlord John MacBeath of No 1 Crakaig, Loth, Helmsdale give notice
that the tenancy being offered to you of the house and land and outbuilding
MacBeath Croft, Knockally, Dunbeath Caithness KW6 6EU to which this notice
relates is to be a long assured tenancy in terms of section 32 of the Housing
(Scotland) Act 1988.
[14] Whatever may be the legal effect (if any)
of this document, the initial impression which it gives is that as at 23 June
2003 Mr John MacBeath was seeking in some way to grant to the pursuer a tenancy
of the croft house and land at Knockally of which he (Mr MacBeath) was the
landlord.
[15] It appears that a caveat had previously
been lodged on behalf of the defender, and a hearing therefore took place
before the sheriff on 3 September 2004 at which both parties were represented
by their respective solicitors, the pursuer's solicitor Miss MacLennan being a
partner of HLP. The outcome of the
hearing was that the sheriff interdicted the defender ad interim from entering
the pursuer's home, damaging his property or interfering with his
livestock. He assigned 10 September 2004
as a further hearing and on that date, having heard the parties' solicitors, he
continued the interim interdict which he had previously granted until 24
September 2004.
[16] On 24 September 2004, having heard the
parties' solicitors, the sheriff recalled the interim interdict. As already indicated, it is not apparent from
his note why he took this step. It
appears that he may have done so having previously indicated that he wished to
see some evidence to support the averment in article 2 of the condescendence to
the effect that Mrs Pemberton was the tenant of the croft at Knockally. It seems that the question whether or not she
was in fact the tenant of the croft at that time loomed large in the mind of
both the sheriff and the defender's solicitor, and that when no evidence of
this was produced by the pursuer's solicitor the sheriff decided to recall the
interim interdict. It is not clear
whether the sheriff considered the possibility that, even if Mrs Pemberton was
not the tenant of the croft, the pursuer having resided there for more than
three years in pursuance of some sort of informal agreement between his sister,
himself and Mr John MacBeath would in any event be entitled to the protection
of an interdict against a third party, namely the defender, to prevent him
entering what was then, at least de facto,
his home, damaging his property and interfering with his livestock.
[17] On 11 October 2004 the sheriff clerk signed an interlocutor
fixing 26 October 2004 as
the last date for lodging defences and 7
January 2005 as the date for the options hearing.
[18] On 26 October 2004 defences and a first inventory of
productions were lodged on behalf of the defender. In the defences attention was drawn to
section 26(3) (sic - I think that section 23(3) must have been intended) of the
Crofters (Scotland) Act 1993 to the effect that the landlord of a croft shall
not, except with the consent in writing of the Crofters Commission, or, if the
Commission withhold their consent, except with the consent of the Secretary of
State, let the croft or any part thereof to any person, and any letting of the
croft otherwise than with such consent shall be null and void. It was averred that no such written consent
had been produced and that therefore any letting of the croft to either Mrs
Pemberton or the pursuer was null and void.
It was averred too that Mrs Pemberton's agents had written to her on 26
November 2003 clearly indicating that the arrangement which had been made with
Mr John MacBeath did not have the protection of the Crofters Acts and that she
had no valid tenancy of the croft and therefore could not give the pursuer
permission to reside in the property. It
was further averred that the Form AT5 which had been produced by the pursuer
was not apt to create a tenancy of a croft and reference was made to an
affidavit by Mr John MacBeath in the defender's inventory of productions in
which he (Mr John MacBeath) denied that he had signed the documents previously
produced by the pursuer.
[19] On the third page of the defences there
was a further reference to Mr John MacBeath's affidavit in the following terms:
Reference
is again made to item 4 of the Defender's Inventory which is an Affidavit from
the Defender's father John McBeath.. At paragraph 2 of the said Affidavit John
McBeath indicated that he did enter into an informal verbal agreement with Mrs
Ivy Pemberton and the Pursuer to allow them the use of the croft on a 'grace
and favour' basis for a payment of £220 per month but only while they raised
the £25,000 necessary to purchase the croft. However, neither Mrs Pemberton nor
the Pursuer has made any formal offer to purchase the croft. In or around
October 2003 the said monthly payments stopped and John McBeath has not
received any payments since. The Pursuer is called upon to explain why these
payments stopped and his failure to do so will be founded upon. The said
Affidavit at paragraph 3 clearly states that John McBeath has not signed any of
the documents produced by the Pursuer's agent and he has never at any time
entered into any written agreement with Mrs Ivy Pemberton or the Pursuer in
respect of the said croft. The 'grace and favour basis' agreement is terminable
at will by Mr McBeath. Mrs Pemberton and the Pursuer have been requested by
John McBeath's agent to remove themselves from the croft but they have failed
to do so.
[20] In the final paragraph of answer 2 the
defender averred that the pursuer's agents at the second interim interdict
hearing had clearly stated that the pursuer had been advised in writing by the
solicitor in Inverness then acting for Mrs Pemberton to continue the rental
payments but to place them in a separate account and that this had been done. The pursuer was called upon to produce this
letter and statements showing that regular monthly payments had been made to a
separate account since October 2003.
[21] The remaining answers in the defences
were, in short, to the effect that the pursuer and Mrs Pemberton had for some
time been asked to leave the croft and had failed to do so, that the defender
acting on behalf of his father had been within his rights to change the locks
and attempt to secure the property and that he had not been harassing the
pursuer or releasing his livestock.
[22] The defender's inventory of productions
included a copy of the letter dated 26 November 2003 to Mrs Pemberton from her
solicitor in Inverness and the original of the affidavit by Mr John
MacBeath. Of course it was not for the
pursuer's solicitor to decide whether or not Mr MacBeath was telling the truth
when he denied that he had signed any of the documents in the pursuer's
inventory of productions. At the same
time it may be said that the signature of Mr MacBeath on the affidavit does
look remarkably similar to the signatures on the productions lodged by the
pursuer. The inventory also contained copies of two letters dated 20 August
2004 from Mr John MacBeath's agents to the pursuer and Mrs Pemberton respectively. In short they advised both recipients that it
was understood that they had vacated the croft at Knockally, that they should
remove their remaining belongings and stock, that Mr MacBeath had instructed
his son (the defender) to secure the property, that they had no valid crofting
tenancy and no right of occupation and that if they persisted in their attempts
to gain illegal possession of the property the agents would have no alternative
but to raise interdict proceedings against them in the sheriff court.
[23] In the defences as originally lodged there
were no preliminary pleas, but at some stage during the adjustment process the
defender tabled preliminary pleas to the effect that the action was incompetent
and that the pursuer's averments were irrelevant and lacking in
specification. These were followed up by
a rule 22 note which was lodged on behalf of the defender on 30 December
2004. It does not appear to me that this
raised any new point of substance beyond what had already been focussed in the pleadings
and the productions which had been lodged by both parties. But it did include a final paragraph in the
following terms:
The
pursuer's agents as officers of court have a duty not to allow the legal
process to be abused or to waste court time with an action that has no legal
foundation or merit. However, they have
failed to discharge their duty in this respect and therefore should be found
jointly and severally liable for the expenses of this action.
[24] The options hearing duly took place on 7
January 2005 and was continued on the motion of the pursuer, and without
objection from the defender, to 4 February 2005.
[25] At some stage in the ensuing four weeks
adjustments were made to the pursuer's pleadings. In particular a new final paragraph was added
to article 2 of the condescendence in the following terms:
The
pursuer is entitled to stay on the croft by virtue of the agreement made with
Mr MacBeath Snr. It is clear from the
documents produced and the terms of the letter from Messrs MacPherson & Co
dated 9 April 2002, that the defender's father (the landlord) entered into some
form of contractual arrangement with the (pursuer). The defender's father would be fully entitled
to raise an action of removing against the pursuer. The pursuer was forced to raise this action
in view of the prejudice caused to him by the illegal and criminal action of
the defender. The pursuer is fully
entitled to the protection of the court whilst the contractual matters are
decided by the court. That is all the
pursuer seeks in this action. Submitted
that acting in a criminal manner with regard to damaging property and
interfering with livestock, can never be "a reasonable course of action" and
accordingly the statutory defence will not be open to the defender. The pursuer is therefore entitled to the
protection of the court and to the orders first and second craved by the
pursuer.
[26] The reference here to the statutory
defence was a reference to section 8(4)(c) of the Protection from Harassment
Act 1997 which provides that it should be a defence to any action of harassment
to show that the course of conduct complained of is in the particular
circumstances reasonable. The letter
from Messrs MacPherson & Co was included in a second inventory of productions
for the pursuer which was lodged on 4 February 2005. Messrs MacPherson & Co were a firm of
solicitors and they wrote on behalf of the pursuer to Mr John MacBeath saying, inter alia, that they understood from
the pursuer that Mr MacBeath had agreed to grant him a life tenancy of the
croft at a rent of £55 per week, that he would like an option to purchase the
property at a fixed price of £25,000 under deduction of all rent paid up to the
time of any such purchase and that he wished to enter into a formal tenancy
agreement on this basis. Also included
in this inventory of productions were a copy letter and an original letter,
both apparently in the hand-writing of, and signed by, Mr John MacBeath. The first of these appears to be a response
to the letter from Messrs MacPherson & Co, and in it Mr MacBeath stated
that he had been speaking to the pursuer on the telephone and he had suggested
that he or his sister would pay Mr MacBeath £15,000 and the remaining £10,000
"in a year or two, to which I am quite agreeable to do, as I am keen to get the
croft sold". The second of these letters
is undated and is addressed to the pursuer's sister. In it Mr MacBeath wrote:
I am
seeing my solicitor tomorrow and I am fixing the let of the croft at whatever
you may be able to afford. I have also
to get in touch with the Crofters Commission to get things sorted out. You may also have the croft on rental
purchase until you can get things sorted out.
[27] At the continued options hearing on 4
February 2005 the sheriff closed the record and continued the cause to the
procedural roll of 4 March 2005 for the lodging of a joint minute.
[28] On 4 March 2005 Miss MacLennan, having
represented the pursuer since the raising of the action, advised the sheriff
that she was withdrawing from acting for him.
Thereafter there was a series of procedural hearings, the details of
which are not of importance in the present context. In short, the pursuer arranged to be
represented by a firm of solicitors in Edinburgh. But this firm too withdrew
from acting on behalf of the pursuer on 11 November 2005 and the sheriff
proceeded to grant decree of absolvitor in favour of the defender. This left as the only remaining live issue in
the action part 2 of the defender's motion, no. 7/6 of process, in terms of
which the defender moved the court: "2.
Admit (HLP) as party minuter to this action as he will be seeking to
make them jointly and severally liable with the pursuer in the expenses of this
action; 3 September 2004 - 4 March 2005, at any future hearing of
expenses". The sheriff continued
consideration of this until 24 November 2005 when, as already indicated, a
motion was made by the defender's solicitor at the bar that HLP should be made
personally liable for the expenses of the action from 3 September 2004 to 4
March 2005. Again as indicated, this was
the subject of further hearings before the sheriff on 6 January, 16 March and
18 May 2006.
[29] The narrative which I have given so far is
based upon an examination of the contents of the process. It was supplemented at the hearing of the
appeal by counsel for HLP who explained that an application for legal aid had
been made on behalf of the pursuer. The
initial application had not been intimated to the defender's solicitor. It had been granted nonetheless and
intimation of this had then been made to the defender's solicitor. He had proceeded to lodge objections to this
but the Scottish Legal Aid Board had nonetheless confirmed that the legal aid
certificate should remain in force.
[30] Counsel also explained how it was that HLP
had come to withdraw from acting for the pursuer. She stated that the defender had intimated
adjustments to his answers on 22 December 2004 and then his rule 22 note on 24 December
2004. This was against the background of
the options hearing having been assigned for 7 January 2005, and in view of the
intervening holiday period it was not surprising that at the options hearing
itself the pursuer's solicitor should have moved for it to be continued. The pursuer's adjustments were subsequently
intimated to the defender's solicitor on 3 February 2005 and the continued
options hearing took place the following day.
By that stage it had been accepted on behalf of the pursuer that there
was no valid tenancy of the croft under the Crofters (Scotland) Act 1993. Instead the pursuer's position was as set out
in the final paragraph of article 2 of the condescendence which I have narrated
in paragraph [24] above. This, said
counsel, was a perfectly intelligible position in light of the documents which
had been exhibited to HLP and lodged in the pursuer's first and second
inventories of productions. By that
stage HLP had been experiencing difficulty in obtaining instructions from the
pursuer, and at the continued options hearing on 4 February 2004 he told them
that he was intending to leave Caithness to go to England and had no intention
of returning. On this basis, and since
HLP were not confident that he was being entirely candid with them, they
advised him that pragmatically there was little point in proceeding with the
action. The pursuer accepted this advice
and accordingly the defender's solicitor was informed that he wished settlement
of the action. In light of this the
sheriff continued the case to 4 March 2005 for the lodging of a joint
minute. But some time before 4 March
2005 the pursuer then told HLP that he would not be leaving Caithness after all
and that he wished to continue with the action.
Given that they had already been discussing with the defender's
solicitor settlement of the action and payment of the expenses thereof to date,
HLP felt themselves to be in an impossible position, and once again were
concerned about how candid the pursuer was being with them given his apparent
change of tack. It was in these
circumstances that they had decided to withdraw from acting for him. The Scottish Legal Aid Board had been
informed of this and the legal aid certificate had subsequently been
transferred to the firm of solicitors in Edinburgh who had taken over acting
for the pursuer
[31] Against the background of what I have said
so far it seems to me that it ought to have come as no great surprise that the
sheriff should have decided to refuse the motion to find HLP personally liable
in the expenses of the action for the period between 3 September 2004 and 4
March 2005. In paragraph [41] of his
note he rightly observed that the power to award expenses against a solicitor
personally should be exercised with care and discretion and only in clear
cases, and then in paragraph [42] he wrote:
[42] In the present case it was accepted that
defences were not lodged until 25 October and that by early January the
pursuer's solicitor is trying to effect a settlement. She only received the file from the previous
solicitors at the beginning of October and although she went over its contents
with her client, it was difficult to get further instructions from him
regarding the defences. While she may
have been wrong in law regarding a right under the Crofting Acts, that did not
mean that her whole writ was unsupportable and it is difficult to see how her
conduct could in any way be construed as an abuse of process.
[32] It appears that at some stage after 4
March 2005 the pursuer was sequestrated.
In his note the sheriff went on to consider the significance of the
pursuer's subsequent bankruptcy and the question whether or not HLP could be
found jointly and severally liable along with the pursuer for the expenses of
the action. He rejected the defender's
submission that this could be done and concluded in paragraph [49] of his note
as follows:
[49] However, the principal reason for my refusal
of the motion against the pursuer's solicitor is failure of the defender to
show that the actings of HLP were such as could be construed as abuse of
process. Just because they may have been
wrong in law regarding the question of crofting tenancy, that does not mean
that the rest of the writ was unsupportable and I do not see anything before me
which would warrant the court being so critical of their actings as to consider
any finding of expenses against them.
[33] In his note of appeal the defender stated
five separate grounds of appeal, and in opening the appeal his solicitor
addressed me at some length in support of each of these.
[34] The first ground of appeal reads as
follows:
(a)
The Sheriff erred in law in finding that the test to be
applied for an abuse of process was the standard of Dereliction of duty or
serious misconduct as set out in Orchard
v South Eastern Electricity Board 1987 QB565. The said authority is from an extraneous jurisdiction and is at
best only persuasive. The Defender's
agent maintained that the correct test to be applied was whether there had been
'an application of mind', by HLP, as set out in the Scottish Case of Stewart v Stewart 1984 Sheriff Court 58 and that the acting's of the
(Pursuer's) Solicitors were in breach of their duty to the court not to raise
an insupportable action as set out in Blyth
V Watson 1987 SLT Reports 616.
[35] The defender's solicitor submitted that
the sheriff had erred in law in applying the criteria set out in Orchard v South Eastern Electricity Board
[1987] 1 QB 565 and that the correct test to be applied in a situation such as
this was whether or not the agents had applied their minds to the action. Reference was made to the decision of Sheriff
Ireland QC (as he then was) in Stewart v
Stewart 1984 SLT (Sh Ct) 58 and it was submitted that, according to Sheriff
Ireland, the only criterion required to constitute an abuse of process was a
failure on the part of an agent to apply his mind, and that in the present case
HLP had failed to apply their minds by initiating and continuing an action
which was flawed in fact and in law. It
was not suggested that an agent should be found liable simply because his
client lost the action, but it was submitted that before initiating and
continuing an action an agent should apply his mind to the potential or
continuing action and should determine whether or not the action was correctly
based in law and in fact. If the agent
then decided that the action was not so based, then he should not continue it
or else should amend as necessary. In
the present case, once HLP had applied their minds to the action and had
realised that it was flawed in most parts, they should have withdrawn it or
amended to remove the flaws. The fact
that the pursuer had been granted legal aid did not absolve HLP from the
responsibility to apply their minds, and they had a duty not to pursue an
action which was insupportable.
Reference was made here to the decision of Lord Morison in Blyth v Watson 1987 SLT 616.
[36] In my opinion the short answer to the
first part of this ground of appeal, as counsel for HLP pointed out, is that
the sheriff did not rely on the decision in Orchard
v South Eastern Electricity Board as authority for the proposition that the
test to be applied for an abuse of process was the standard of dereliction of
duty or serious misconduct as set out in that case. The sheriff referred to it in paragraph [41]
of his note where he wrote, inter alia:
The
power to award expenses against a solicitor personally should be exercised with
care and discretion and only in clear cases (see Orchard v South Eastern Electricity Board .... where it was held that
such an award should only be made where it was clear that the solicitor was
guilty of a serious dereliction of duty or serious misconduct).
It is clear from this
passage that the sheriff was relying upon the decision in Orchard simply as authority for the proposition that the power to
award expenses against a solicitor personally should be exercised with care and
discretion and only in clear cases, and I do not think that anyone could take
issue with this. In the passage in
brackets the sheriff was narrating what he understood to have been decided in Orchard, but I do not read what he said
there as meaning that an award of expenses should only be made against a
solicitor where it was clear that he or she had been guilty of a serious
dereliction of duty or serious misconduct.
On the contrary, it is clear from what the sheriff said in paragraphs
[42] and [49] of his note that the test applied by him was whether or not there
had been an abuse of process on the part of HLP. This in my opinion is the correct test to be
applied in a case of this kind - see the judgement of Sheriff Ireland in Stewart beginning at the foot of page 60
and going over onto page 61, and also the opinion of Lord Maclean in Reid v Edinburgh Acoustics Limited (No. 2)
1995 SLT 982 at page 984I. It is true
that at one point in his judgement (at page 61) Sheriff Ireland stated that the
solicitor in the case before him "ought to have applied his mind to the
question whether" the defence which had been put forward "could be at least
plausibly argued, even if he could not be certain that it would succeed". But Sheriff Ireland made this comment in the
context of his consideration of the question whether or not there had been an
abuse of process on the part of the solicitor concerned (or, as he put it at
the foot of page 60, whether the solicitor had improperly used the procedure of
the court to delay the achievement of a result to which a litigant was
entitled). It is in my opinion quite
wrong to take from this particular passage in the judgement of Sheriff Ireland
the proposition, as the defender's solicitor sought to do, that the only test
to be applied in a case of this kind was whether or not there had been an
application of mind on the part of the solicitor. An abuse of process by a solicitor may take a
variety of forms, as the cases illustrate, and I do not think that it is
helpful in the abstract to attempt to formulate more precisely the
circumstances in which there may, or may not, be found to have been an abuse of
process by a solicitor. For the present
I will merely say that in my opinion the conduct of HLP in this case did not
come anywhere near constituting an abuse of process such as would have entitled
the sheriff to find them personally liable in expenses.
[37] The second ground of appeal reads as
follows:
(b) The Sheriff
erred in law in finding that the Pursuer had license to occupy the property and
the property could have been sublet with the Consent of the Crofters
Commission; reference is made to point Twenty six at the foot of page Seven of
the said Judgement. The Sheriff appears
to have made a finding in fact before the Proof and where no evidence has been
produced to support such a finding. No Productions
were lodged that would show the Pursuer had a valid licence to occupy the
property (Knockally Croft, Dunbeath, Sutherland). There was no valid tenancy
agreement in place, or written consent to sublet from the Secretary of State or
the Crofters Commission, in respect of the property and therefore it could not
be sublet as required by Section 23(3) of Crofters Act 1993 which further
states that any letting of the croft otherwise than with such consent shall be
null and void.
[38] In support of this ground of appeal the
defender's solicitor referred to paragraph [26] of the sheriff's note where he
wrote, inter alia: "There was a
license to occupy the property and the property could have been sub-let with
the consent of the Crofters Commission".
It was submitted that the fact that the pursuer did not have a right to
occupy the property had constituted a fundamental flaw in his case. This had been pointed out at all three
interim hearings before the sheriff. No
productions had been lodged to show that he had even a licence to occupy the
property, and in light of section 23(3) of the Crofters (Scotland) Act 1993 the
pursuer could not become the tenant of it since the necessary consent had not
been given by either the Crofters Commission or the Secretary of State. Any informal agreement that there had been
between the defender's father and Mrs Pemberton and/or the pursuer had come to
an end in October 2003, and by August 2004 it was clear that they had no right
to occupy the croft. It had been pointed
out at the outset of the action that the Form AT5 which had been produced was
not apt to create a tenancy over a croft, and no evidence had been produced to
demonstrate that payments of rent had been made into a separate account as
advised by Mrs Pemberton's solicitor in Inverness. There were, said the defender's solicitor, no
averments or pleas-in-law to support the averment which had been added for the
pursuer by adjustment to the effect that he was fully entitled to the
protection of the court whilst the contractual matters were decided by the
court.
[39] In my opinion, and again as rightly
pointed out by counsel for HLP, the answer to this ground of appeal is that the
sheriff did not make a finding that the pursuer was a tenant of the property or
otherwise had a licence to occupy it. It
is perfectly clear from his note that at paragraph [26] the sheriff was in the
course of recording the submissions which had been made to him by Miss
MacLennan of HLP and that it was she, and not the sheriff, who had advanced the
proposition that there had been a licence to occupy the property and that it
could have been sub-let with the consent of the Crofters Commission.
[40] At this point I should perhaps observe
that it does seem to me to be unfortunate that the defender's solicitor should
have concentrated so much on the question whether or not the pursuer was, or
could become, a tenant of the croft. For
it seems to me that this question is really beside the point. As counsel for HLP explained, there clearly
must have been some sort of an agreement between the pursuer and his sister Mrs
Pemberton on the one hand and the defender's father on the other as a result of
which the pursuer had had the use of the croft for some years. He raised the action, not in order to secure
a declarator of his right to the occupation or use of the croft, but rather in
order to obtain an interdict to protect himself against the activities of a
third party, namely the defender, which were being pursued at his own hand and
without the authority of the court.
There was, as counsel pointed out, a very real difference between, on
the one hand, the pursuer's rights as against the owner of the croft under the
Crofting Acts and, on the other hand, his right to obtain protection against
the actions of a third party such as the defender. It was true that in his affidavit the
defender's father had denied signing the various documents upon which the
pursuer had founded and which had been produced in his inventories of
productions. But, again, as counsel
pointed out, it was not for HLP to reach a decision on where the truth lay in
this respect. At the end of the day, and
had the action proceeded, this would have been a matter for the court to
determine.
[41] The third ground of appeal reads as
follows:
(c) The Sheriff
erred in law in finding that the Defender was only seeking expenses against HLP
because he felt he might not recover his costs against the Pursuer. It is and has always been the consistent
position of the Defender that HLP have never properly applied their minds to
this action and as a result the action has continued much longer and more fully
that was necessary with the result that the Defender incurred a lot of
unnecessary costs. The Defender in his defences, Plea in Law Six, set out that
the action was unsound and had no basis in fact and law. The Defender in his Rule 22 Note, at point
Six, set out that the Pursuer's agents had failed in their duty as officers of
Court, had abused the legal process and
should be found jointly and severally liable for the expenses of the action.
[42] The defender's solicitor referred here to
what the sheriff had stated at paragraph [44] of his note where he wrote:
It
appeared to me that the defender was only asking for expenses against the
pursuer's solicitors because he felt that he might not recover his costs from the
pursuer.
The defender's solicitor
reiterated that it had always been the defender's position that HLP had not
applied their minds to the merits of the action. He explained that at all three interim
hearings he had drawn the attention of HLP to the terms of section 23(3) of the
1993 Act and the fact that the pursuer could not therefore be a tenant of the
croft. It had been made clear in both
the defences and the defender's rule 22 note that the pursuer had no tenancy of
the croft so that HLP must have been aware from the outset that the action was
flawed. It had been the defender's
position from the beginning that HLP were abusing the process, and not only
after the pursuer had been sequestrated, and the sheriff had erred in law in
supposing otherwise.
[43] In my opinion there is no substance in
this particular ground of appeal. It
seems to me that it was entirely legitimate for the sheriff to comment, as he
did, that it appeared to him that the defender was only asking for expenses
against HLP because he felt that he might not recover these from the pursuer -
see the decision of the House of Lords in Medcalf
v Mardell [2002] 3 WLR 172. Thus on
page 193 (at paragraph 58) Lord Hobhouse of Woodborough observed that the power
to initiate wasted costs procedures "should not be motivated simply by
resentment at an inability to obtain an effective order for costs against an
assisted or impecunious litigant". At
the same time it does not appear to me from what he said at paragraph [44] that
the sheriff's impression of the defender's motivation in seeking expenses
against HLP personally weighed much, if at all, in his decision to refuse the
motion. On the contrary, it appears to
me to be perfectly clear that the principal reason why he refused the motion was
that he was not persuaded that the conduct of HLP could be construed as an
abuse of process - see paragraphs [42] and [49] of his note.
[44] The fourth ground of appeal is based upon
what the sheriff said at paragraphs [45], [46] and [47] of his note, and it
will be convenient to set these out first. The sheriff wrote:
[45] That leads me to another flaw in the
defender's argument - namely that the motion is for a joint and several
liability.
[46] I do not consider that that proposition is
sustainable. The argument against the
pursuer's solicitor is that their conduct was such as to amount to abuse of
process and I fail to see how the pursuer could in any event be answerable for
his solicitor's actions.
[47] I do not consider that the motion for joint
and several liability can stand and I would reject the (defender's) motion
against the (pursuer's) agent on that basis.
The fourth ground of
appeal begins with an assertion that the sheriff misdirected himself in law by
ruling that a motion for joint and several liability could not stand and
rejecting the defender's motion on that basis.
There is then a lengthy narrative, the broad thrust of which, once
again, is that in light of section 23(3) of the 1993 Act the pursuer was not,
and could not become, a tenant of the croft.
This particular ground of appeal ends with the following:
The
Pursuer's agent should have made her client aware of this and should have not
have proceeded with the action, on the basis that the Pursuer had a right to occupy
the croft, unless her client could produce a valid tenancy and a letter form
either the Crofters Commission or the Secretary of State consenting to a
tenancy being granted. It would appear
that the agent did not do so and later both the Pursuer and the agent chose to
pursue the flawed action.
The
Sheriff's judgement makes it clear that the Pursuer is liable to the Defender
in the expenses of the action. However
we would submit that the action was raised and pursued on the basis of the
legal advice given to the Pursuer by his agent and therefore the agent should
be equally liable, with their client during the period when they were the
principal agent, for the expenses of the action especially as the flaws in the
action were brought to the agents attention at all three interim hearings, in
the Defences and in the Defenders Rule 22 Note. Therefore it is submitted that
joint and several liability for the Pursuer and his agent, for the said period
is sustainable.
[45] In support of this ground of appeal the
defender's solicitor submitted that, if HLP had been guilty of an abuse of
process and if the pursuer were to be found liable for the expenses of the
action for the same period, then it was not such a great leap to find them
jointly and severally liable for the expenses of the action during that period
only. It was submitted that the pursuer
was entitled to rely on the advice which had been given to him by HLP. It could not be known for certain what this
advice was and who had been the driving force behind the initiation and
continuation of the action. But, if HLP
had been at fault, then making an award of expenses against them and the
pursuer on the basis of a joint and several liability was sustainable. The defender's solicitor acknowledged that he
had not been able to find any authority where a solicitor had been found
jointly and severally liable along with his client for the expenses of an
action. But, since the action had been
flawed from the outset, and since HLP should have made the pursuer aware of
this, they should be found jointly and severally liable for the expenses along
with the pursuer for the period from 3 September 2004 to 4 March 2005.
[46] Counsel for HLP submitted, rightly in my
opinion, that the sheriff had not misdirected himself in law in this
respect. Counsel confirmed that she too
had been unable to find any authority to support the proposition that a
solicitor might be found jointly and severally liable along with his client for
the expenses of an action. I think that
it would be going too far to say that this could never happen, for example if
it were to be demonstrated that the solicitor and his client had colluded with
each other to pursue an action that both knew to be manifestly unfounded. But there can be no suggestion of this in the
present case. Even if it be the case
that HLP had been guilty of an abuse of process, there would have been no basis
for asserting that the pursuer himself should have been in any way answerable
for this. In any event the argument does
not get off the ground since there has been no abuse of process on the part of
HLP.
[47] The fifth and final ground of appeal is in
the following terms:
(e) The Sheriff
erred in law in finding that Blyth v
Watson 1987 SLT Reports 616 and Stewart
v Stewart 1984 SLT Court 58 were extreme examples of cases that had gone
all the way to Proof to show that there was an abuse of process and as such could not be considered. The Sheriff appears to be of the view that
the action has to go almost to a Proof hearing before an abuse of process can
be considered. It is submitted that in
this action the written pleadings such as defences, adjustments and Rule 22
Notes were are all but completed by the Continued Options Hearing and all that
was left was the party's preparations for Proof, which required little or no
court involvement. It is further submitted that the abuse of process had
already occurred and therefore the said cases of Blyth v Watson and Stewart v
Stewart are relevant and fall to be
considered.
[48] The defender's solicitor submitted that it
could not be right that a proof had to have taken place before a finding could
be made that there had been an abuse of process on the part of a
solicitor. If it were otherwise, there
would be a huge drain on public resources and the resources of opposing
parties. In the present case, so the
defender's solicitor said, there had been an abuse of process on the part of
HLP from the stage of the interim hearings onwards as they could not have
failed to have been aware of the fact that the pursuer did not have a tenancy
of the croft under the Crofting Acts. It
was not until the continued options hearing that it had been made known to the
court that the pursuer was willing to settle the action. Given the admissions that had been made in
the adjustments that had been intimated on 3 February 2005, it had to be asked
why HLP could not have put forward these adjustments before the original
options hearing or else indicated at that stage that settlement was being
considered. By the time of the options
hearing HLP must have known about the flaws in the action and that it was
insupportable, and yet they had continued with it.
[49] Once again, it does not appear to me that
this ground of appeal accurately reflects what the sheriff actually said in his
note. Thus in paragraphs [39] and [40],
and in the opening section of paragraph [41] he wrote:
[39] (The defender's solicitor) indicated that the
authorities lodged with the court, while supportive of his position, did not go
as far as he was asking. With that
proposition I concur. One difficulty of
course in dealing with expenses is that each case must be dealt with on its
own. All the cases referred to had
either gone to proof or had been dealt with just before the proof diet or
debate while in the present case the pursuer's agents had spoken to the
defender's agents at the options hearing regarding settlement and had advised
their client accordingly. When an
agreement they thought they had brokered was gone back on by their client they
properly resigned agency. Blyth v Watson ..... was a case where
matters proceeded to a procedural roll hearing before the pursuers conceded
that the claim had been settled before the action had been raised and that the
settlement had been effected by the same solicitors who had signeted the
summons. Such are the extreme
circumstances of that case I do not consider it in any way aids (the defender's
solicitor's) proposition.
[40] Similarly Stewart
v Stewart ....... is another extreme example which went all the way to proof
and the court considered that the conduct of the defender's agents was an abuse
of process.
[41] Neither of these cases in any way reflects
what has happened in this present case ....
[50] In my opinion the sheriff was quite
correct to distinguish the circumstances of the present case from the
circumstances in Blyth v Watson and Stewart v Stewart. But, in distinguishing these two cases, he
does not say, as is asserted in this ground of appeal, that an action has to go
almost to a proof hearing before an abuse of process can be found to have
occurred. In short, I detect no error of
law on the part of the sheriff in the manner in which he approached and
considered these two cases.
[51] On the whole matter I am not persuaded
that the sheriff's decision to refuse the motion to find HLP personally liable
in expenses can be faulted. In any
event, if I had had to consider the motion myself, I think that I should have
had very little hesitation in refusing it.
[52] It was not in dispute that the expenses of
the appeal should follow success and I have therefore found the defender liable
to HLP in these expenses.
[53] Counsel submitted that I should sanction
her employment by HLP to conduct the appeal hearing on their behalf. She referred to Macphail's Sheriff Court
Practice (3rd Edn) at paragraph 12.25 and pointed out that the motion that HLP
should be found personally liable in expenses involved an imputation against
their professional reputation as officers of the court in that it was being
suggested that they had been guilty of an abuse of process. This was a serious matter, in particular
given that it had been taken to appeal to myself. Moreover it was appropriate where the
professional conduct of solicitors was at stake that they should arrange for
someone else to appear on their behalf in proceedings in court.
[54] The defender's solicitor submitted that I
should refuse to sanction the employment of counsel. He did not deny the importance of the matter
but submitted that the value of what was at stake was greater to the defender
than to HLP. He suggested too that Miss
MacLennan of HLP was an experienced court practitioner who would have been more
than capable of handling the appeal herself.
[55] Plainly, it was a very serious matter for
HLP, having successfully resisted the defender's motion before the sheriff, to
find themselves confronted by an appeal against this decision, especially when
what was at stake was their own professional reputation as officers of the
court. In such a situation, in which
they were so personally involved, it was I think entirely appropriate that they
should have instructed counsel to appear on their behalf. I have therefore granted their motion to
sanction the employment of junior counsel.
[56] For the sake of completeness, I should
record that in addition to the authorities which I have already mentioned I was
also referred to G v G [1985] 1 WLR 647, Britton v Central Regional Council
1986 SLT 207, Aird v School Board of
Tarbert 1907 SC 22, Kennedy v Kennedy
1992 SLT (Sh Ct) 39, Symphony Group plc v
Hodgson [1994] QB179, Ridehalgh v
Horsefield [1994] Ch 205 and Begg on Law Agents (2nd Edn) at
page 280.
