SHERIFFDOM OF GRAMPIAN HIGHLAND AND ISLANDS
AT INVERNESS
A589/04
JUDGEMENT
of
SHERIFF
PRINCIPAL SIR STEPHEN S T YOUNG Bt QC
in the cause
MRS JESSIE MACKENZIE
Pursuer and Respondent
against
ROBERT GRANT and MRS MHAIRI JANETTE GRANT
Defenders and Appellants
|
Act: Mr Andrew
Murchison, solicitor, Murchison
Law, Inverness
Alt: Mr Niall
Ramsay, solicitor, Anderson
Shaw & Gilbert, Inverness
Inverness: 25th July 2007
The
sheriff principal, having resumed consideration of the cause, refuses the appeal
and adheres to the interlocutor of the sheriff dated 13 March 2007;
finds the defenders and appellants liable to the pursuer and respondent 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; quoad ultra remits the cause to the
sheriff to proceed as accords.
Note
[1] In this case the pursuer and respondent
craved the court in short to interdict the defenders and appellants or anyone
acting with their instructions or on their behalf from entering onto the
pursuer's property in Inverness. The circumstances of the dispute are briefly
outlined by the sheriff in the opening three paragraphs of the note appended to
his interlocutor dated 16 February
2007 following the proof as follows:
This lamentable litigation
concerns a distance of 380 millimetres, although even on that measurement there
were a few minutes of debate between the parties' solicitors, before a
consensus was reached, as to whether it might be 375mm or 400mm. The proof
lasted 12 days and took over a year to complete.
It concerns the boundary
between two plots of ground close to the centre of Inverness. There is a modest
dwe1linghouse on each plot.
The bare bones of the facts
in the dispute are straightforward. The
pursuer owned a dwellinghouse and garden ground. She decided to build a house for her son on a
plot in the garden. She applied for and
obtained planning permission. She chose
not to proceed, but decided instead to sell the plot. The defenders purchased it. They applied for and obtained planning
permission to build a house different in character to the one for which the
pursuer had permission. In the course of
clearing the site, the defenders used a digger to dig out ground along what
they maintain is the boundary between the plot and the ground retained by the
pursuer. She objected that the digging
had encroached upon her ground. She
obtained an interim interdict against the defenders. There has been no further encroachment. She no longer seeks a final interdict. The
purpose of the proof is for the court to decide upon whom the expense of the
action should fall, notwithstanding that, on any view, the expense of the proof
must have been far more than the expense of the action to that point.
[2] The
outcome of the proof was that the sheriff found in fact and law that on 9 and 11 August 2004 the driver of a digger encroached upon the pursuer's
property on the instructions of the defenders and that in respect of these encroachments
the pursuer was entitled to a perpetual interdict as craved. As indicated, in the event the pursuer did
not seek a perpetual interdict and the sheriff dismissed the action
accordingly. But he found the defenders
liable to the pursuer in the expenses of the action from its commencement until
22 June 2005 and in one half of these expenses from 23 June 2005 onwards. No
appeal has been taken against this decision.
[3] Paragraph
1 of Schedule 1 to the Act of Sederunt (Fees of Solicitors in the Sheriff
Court) (Amendment and Further Provisions) 1993 (as amended) provides that the
Table of Fees in the Schedule shall regulate the taxation of accounts between
party and party and shall be subject to the powers of the court to increase or
modify such fees as outlined in the ensuing paragraphs. Paragraph 5 provides that the court should
have certain discretionary powers in relation to the Table of Fees. In particular, paragraph 5(b) provides:
The court may, on a motion
made on or after the date of any interlocutor disposing of expenses, pronounce
a further interlocutor regarding those expenses allowing a percentage increase
in the fees authorised by the Table of Fees to cover the responsibility
undertaken by the solicitor in the conduct of the cause. In fixing the amount of the percentage
increase the following factors shall be taken into account -
(i)
the complexity of the cause and the number, difficulty or
novelty of the questions raised;
(ii)
the skill, time and labour, and specialised knowledge
required, of the solicitor,
(iii)
the number and importance of any documents prepared or
perused;
(iv)
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;
(v)
the importance of the cause or the subject-matter of it to
the client;
(vi)
the amount or value of money or property involved in the
cause;
(vii)
the steps taken with a view to settling the cause, limiting
the matters in dispute or limiting the scope of any hearing.
[4] On 22
February 2007 a motion was lodged on behalf of the pursuer in terms of which
she sought a percentage increase of 40% to the fees (sic) awarded to her in
terms of the interlocutor of the sheriff dated 16 February 2007 having regard
in short to the matters specified in sub-paragraphs (i), (v) and (vii) of
paragraph 5(b). This motion was opposed
by the defenders and after a hearing on 6 March
2007
the sheriff by interlocutor dated 13 March
2007
granted the motion but only to the extent of allowing the pursuer a percentage increase
of 10%. The sheriff appended to his
interlocutor a detailed note in which he rehearsed the submissions of the
parties' respective solicitors and explained the reasons for his decision. He rejected the arguments advanced for the
pursuer in support of her claim for a percentage increase under reference to
sub-paragraphs (i) and (vii), and for present purposes nothing more need be
said about these.
[5] The
sheriff summarised the parties' submissions in relation to sub-paragraph (v) on
page 4 of his note where he wrote:
2.
Importance
to the client etc
The
pursuer's solicitor pointed out, in support of this ground, that the pursuer is
a private individual with limited resources. On that ground alone, the action
was plainly of great importance
to her, given the financial risks involved.
The subject-matter of itself would inevitably - and did in reality -
cause her considerable anxiety. The
action involved her home; the defenders were claiming nearly a half metre of
her garden ground; she might lose a patio which was important to her. Because of these factors, the solicitor had
been involved in a lot of ''handholding'', with much agent/client contact which
would be taxed off by the Auditor. The
importance of the matter to the pursuer was not to be tested objectively, but
by her actual state of anxiety.
The defenders' solicitor
submitted that the importance to the client must be tested objectively; just
because the pursuer was excitable does not mean that the action is objectively
important. Every court action is likely
to be important to a litigant.
[6] The
sheriff explained the reasons for his decision at pages 5 to 9 of his
note. At page 6 he wrote:
It is clear that
what the court must do is to decide whether a percentage increase of fees is
appropriate to cover the responsibility undertaken by the solicitor in the
conduct of the action. The rule then
goes on to specify the factors (often colloquially referred to as "the seven
pillars of wisdom'') which the court must take into account. It is obvious that in almost all actions, the
factors will apply to some or other extent.
It is therefore a question of degree in each case as to whether an additional fee is
appropriate. I was not referred to any
authorities, but I respectfully agree with the dictum of Lord Johnston in Keystone Properties Limited v Sun Alliance
and London Insurance plc, unreported
7 June 1994, in which he stated, "In my opinion, the Rule of Court is
designed primarily to reward solicitors upon whom special (my italics)
responsibilities are imposed qua solicitor in the conduct of the case".
[7] The
sheriff dealt with the submissions in relation to sub-paragraph (v) at pages 7
and 8 of his note where he wrote:
2.
Importance to the client etc
In describing this
litigation in my judgment as 'lamentable', it is obvious that I did not think
it to be important at all, even recognising, as I did, that feelings can run
high where there are disputes about boundaries between heritable properties.
Nevertheless, I can accept
that the factor as set out in the rule does not in express terms rule out the
possibility of an uplift in fees because only the client sees the cause or the
subject-matter as especially important.
At the end of the day, the rule requires the court to consider an uplift
of fees from the point of view of the solicitor, not the client. An anxious client may well increase the
solicitor's responsibility.
In my opinion, the court
should be slow to award an increase simply because a litigant is having to take
a risk with his own funds. Expenses are
an important factor in ensuring parties look to compromising a dispute and it
would be unfortunate if the court simply as a matter of course awarded an
uplift to the privately funded litigant and thereby, if only in a small way,
discouraged settlement. That is not to
rule out such an award in appropriate cases, but I do not think that this is
one of them.
I consider that different considerations
apply to the importance of the subject-matter.
It is well known that owners of heritable property, particularly when it
is their home, can become very anxious indeed about an alleged
encroachment. That doubtless often
reflects badly on them, but it is rarely the fault of the solicitor who acts on
their behalf. It seems to me that such cases - and this is a very good (or
bad!) example - can often result in a special responsibility being
placed upon the solicitor, such that an uplift of fees is appropriate.
[8] At
page 9 of his note the sheriff expressed his conclusion in the following terms:
I therefore conclude that the motion ought to be
granted but only in respect of the second factor relied upon, being number (v)
in the rule, and that only to the extent of the importance of the
subject-matter of the cause to the pursuer.
I will allow a percentage
increase of ten per cent in the fees authorised by the Table of Fees in respect
of the expenses awarded to the pursuer.
[9] The
defenders sought leave to appeal against this decision and this was granted by
the sheriff on 28 March 2007. In the grounds of appeal in the note of
appeal reference was made to paragraph 5(b), and in particular sub-paragraph
(v), and it was then said:
The Sheriff has misdirected
himself in allowing an increase in circumstances where "only the client
sees the cause or the subject-matter as especially important." While the Rule does not, in express terms,
rule out the possibility of an uplift in fees on such a basis, it does not,
nevertheless, allow of such an interpretation.
[10] Opening
the appeal, the defenders' solicitor acknowledged under reference to Martin v McGrath 1992 SCLR 557 that an appeal
on any aspect of expenses was unusual and generally inadvisable. But he submitted that in the present case the
sheriff had incorrectly interpreted sub-paragraph (v) in holding that the
importance of the cause or the subject-matter of it to the pursuer justified a
percentage increase in the expenses awarded to her. He suggested that the expression "the
importance of the cause or the subject-matter of it to the client" might be
judged subjectively or objectively. In
this case the sheriff had applied a subjective test and in so doing he had
erred. In applying sub-paragraph (v) it
was, said the defenders' solicitor, the duty of the court to decide whether or
not the cause or the subject-matter of it was important to the client when
judged objectively or reasonably. If a
subjective test was to be applied, it had to be asked how realistically the
court could assess the state of mind of the client, in particular where the
case in question had not gone to proof so that the sheriff had not had the
opportunity to assess the client for himself.
In such a situation all that a solicitor would be able to say was that
his client had been very wound up about the case. It would be wrong to decide the question of
expenses effectively on the basis of a psychological assessment of the
client. The more one thought about it
the more obvious it must be that the correct approach was to apply an objective
or reasonable standard in judging the importance of a cause or the
subject-matter of it to the client. The
sheriff having failed to apply such a standard, his interlocutor of 13 March 2007 should be recalled.
Reference was made here to Boal v
Newalls Insulation Co Ltd 1994
SCLR 534 and Zyszkiewicz v University of Glasgow 1995 SCLR 1124.
[11] On the
assumption that the sheriff had been entitled to apply a subjective test in
judging the importance of the cause or the subject-matter of it to the pursuer,
the defenders' solicitor accepted that the sheriff had been entitled to find
that the subject-matter of the cause had been important to the pursuer, and he
did not challenge his decision on this basis to allow a percentage increase of
10% in the fees authorised by the Table of Fees.
[12] In response,
the pursuer's solicitor submitted that the purpose of paragraph 5(b) was to
compensate solicitors for any special responsibility adopted by them in the
conduct of litigation. The court
therefore had to assess whether any of the factors enumerated in sub-paragraphs
(i) to (vii) were present and, if so, whether this had added to the
responsibility undertaken by the solicitor in the conduct of the cause. In the application of sub-paragraph (v), the
true question was whether or not the cause or the subject-matter of it had been
important to the client so that it had added to the responsibility of the
solicitor. In every such case the
importance of the cause or the subject-matter of it to the client had to be matched
to the responsibility of the solicitor, and a sheriff would only be entitled to
grant a percentage increase in the expenses awarded to a party if he were
satisfied that such importance had indeed resulted in additional responsibility
for the solicitor. If he were satisfied
merely that the cause or the subject-matter of it had been important to the
client but not that this had resulted in additional responsibility for the
solicitor, then he ought to refuse the motion for a percentage increase. The simple question was whether the cause or the
subject-matter of it had been important to the client, whether judged
objectively or subjectively, so that it had resulted in increased
responsibility for the solicitor. In
seeking to import into the rule a requirement that the importance of the cause
or the subject-matter of it to the client should be judged according to an
objective or reasonable standard, the defenders were seeking to introduce a
requirement that was not to be found in the rule itself. The decisions in Boal v Newalls Insulation Co Ltd and Zyszkiewicz v University of Glasgow merely showed that importance
to the client was not by itself enough to justify a percentage increase. It had to have resulted in an additional
responsibility for the solicitor. In all
the circumstances the appeal should be refused and the interlocutor of the
sheriff dated 13 March 2007 adhered to.
[13] In my
opinion the submissions for the pursuer are to be preferred. The purpose of paragraph 5(b) is, as it says,
to confer on the court a discretion to allow a percentage increase in the fees
authorised by the Table of Fees to cover
the responsibility undertaken by the solicitor in the conduct of the cause
(my emphasis). In other words, in
applying the rule the court must focus on the responsibility undertaken by the
solicitor in the conduct of the cause and, in so doing, take into account the
factors enumerated in sub-paragraphs (i) to (vii). It is clear that the relevance of all these
factors is that, individually or cumulatively, they may add to the responsibility
undertaken by a solicitor, and the task for the court in considering a motion
under paragraph 5(b) is to assess the responsibility undertaken by the
solicitor in light of these factors and to determine accordingly whether or not
a percentage increase in the fees authorised by the Table of Fees is
appropriate.
[14] It is
not in dispute, as the sheriff observed at page 7 of his note, that an anxious
client may well increase the solicitor's responsibility in the conduct of a
cause and, if the court is satisfied in a particular case that this has been
so, it would in my opinion be entitled to allow a percentage increase in fees
under reference to sub-paragraph (v)
provided that it is also satisfied as a matter of fact that the source
of this anxiety is the importance of the cause or the subject-matter of it to
the client. In other words, I consider
that the court is entitled to assess the importance of the cause or the
subject-matter of it to the client subjectively as well as objectively. In every case in which a motion is made under
reference to sub-paragraph (v) the simple question which the court has to ask
is: Has the importance of the cause or the subject-matter of it to the party,
judged either objectively or subjectively, been such as to result in an
additional responsibility being undertaken by that party's solicitor in the
conduct of the cause over and above the responsibility that would ordinarily be
undertaken by a solicitor in the conduct of a cause? If the answer to this question is in the
affirmative, then the court is entitled (but not bound) to allow a percentage
increase in fees.
[15] Neither
solicitor was able to provide me with a copy of the judgement of Lord Johnston in Keystone Properties Ltd v Sun Alliance and London Insurance plc to
which the sheriff referred at page 6 of his note. I surmise that Lord Johnston's observation in
that case was made under reference to rule 347(d) of the old Rules of the Court
of Session which provided that in all cases an additional fee might be allowed
at the discretion of the court to cover the responsibility undertaken by the
solicitor in the conduct of the case.
The rule provided that in deciding whether to allow such a fee the court
should take into account a variety of factors including "(5) the importance of
the litigation or the subject-matter thereof to the client". Rule 347(d) has now been superseded by rule
42.14 in the current Rules of the Court of Session which provides for the
allowance of an additional fee and directs the court in determining whether to
allow an additional fee to take into account the same factors as are enumerated
in paragraph 5(b) with the addition of one other factor, namely the exceptional
urgency of the steps taken by the solicitor.
But curiously there appears to be no reference in the current rule to
the purpose of it being to cover the responsibility undertaken by the solicitor
in the conduct of the cause.
[16] On the
whole matter I am satisfied that the sheriff was entitled in the present case
to allow a percentage increase in fees under reference to sub-paragraph (v) of
paragraph 5(b). The appeal is therefore
refused. It was not in dispute that in
this situation the defenders should be found liable to the pursuer in the
expenses of the appeal.
