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2025UT22
Ref: UTS/AP/24/0127
DECISION OF
Sheriff SA Craig
ON AN APPLICATION FOR AN ORDER FOR EXPENSES
IN THE CASE OF
Mrs Magdalene Porteous,
Appellant
- and -
Archerfield House Hotel Management Ltd,
per Ennova Law
Respondent
FTS Case Reference: FTS/HPC/LM/24/1848
8 April 2025
Decision
The application for expenses is REFUSED.
Introduction
1.
By decision dated 3 March 2025 the Upper Tribunal refused the appellant's application
for permission to appeal a decision of the First-tier Tribunal for Scotland Housing and
Property Chamber ("FTS"). In brief, the reason for refusal was that the appellant had
failed to identify an error in law on the part of the FTS and therefore there was no
arguable ground of appeal.
2.
The respondent has made a request for an award of expenses against the appellant. It
relies on Rule 12 of The Upper Tribunal for Scotland (Rules or Procedure) Regulations
2016 which provides:
"12 Order for Expenses:
(1) The Upper Tribunal may make an Order for Expenses as taxed by the Auditor
of the Court of Session in proceedings on appeal for The First Tier Tribunal if the
First Trier Tribunal had the power to make an Order for Expenses, and only on the
basis on which The First Tier Tribunal has the power to award expenses.
(2) Notwithstanding paragraph 1 and without prejudice to that paragraph, the
Upper Tribunal may make an Order for Expenses as taxed by the Auditor of the
Court of Session against a party if that party's act, omission or other conduct has
caused any other party to incur expense which it would be unreasonable for that
party to be expected to pay, with maximum recoverable expenses being the
expenses incurred."
3.
The power of the FTS to award expenses is found at paragraph 40 of the First tier
Tribunal for Scotland Housing and Property Chamber (Procedure) Regulations 2017
SSI 2017/328 ("the 2017 Rules"):
"40 - Expenses:
(1) The First Tier Tribunal may award expenses as taxed by the Auditor of the Court
of Session against a party but only where that party through unreasonable
behaviour in the conduct of the case has put the other party to unnecessary or
unreasonable expense.
(2) Where expenses are awarded under paragraph 1, the amount of the expenses
awarded under that paragraph must be the amount of expenses required to cover
any unnecessary or unreasonable expense incurred by the party in his favour the
Order for Expenses is made".
4.
Read short, Rule 12 provides that the Upper Tribunal may order expenses if the FTS
itself had such a power and on the basis on which it had that power. The FTS would
have that power in a case such as the present, but only where there was unreasonable
behaviour in the conduct of the case which put the other party to unnecessary or
unreasonable expense.
5.
The Upper Tribunal's power in terms of Rule 12 is subject to sub paragraph (2) which
provides that, notwithstanding the provisions of sub paragraph (1), the Upper Tribunal
may order expenses where a party's act, omission or other conduct caused any other
party to incur expenses which it would be unreasonable for that party to be expected
to pay.
6.
Those are not entirely the same. Rule 12(1) requires the Upper Tribunal to determine,
in effect, whether there has been unreasonable behaviour in the conduct of the
proceedings that has resulted in the other party to incur unnecessary or unreasonable
expense. Only if it so determines can an order be made. It therefore focuses on the
behaviour in the conduct of proceedings.
7.
Rule 12(2) provides that such an order may be made if there is an act, omission or other
conduct which has caused expenses which it would be unreasonable for the other party
to pay. Arguably that widens the grounds on which an order can be made in that it is
not focused entirely on the conduct of the party, but encompasses an act or omission as
well. However, that may be a distinction without a difference as an award under either
paragraph would require the Upper Tribunal to determine that the party had caused
the other party to incur expenses that it would be unreasonable for them to bear.
8.
Whether under either paragraph, the power to order expenses is discretionary and
requires the Upper Tribunal to be satisfied that the party against which it is sought has
acted unreasonably in the conduct of the case, or acted or omitted to act, or conducted
themselves in such a way that the party seeking the order has incurred unnecessary or
unreasonable expenses or expenses it would be unreasonable for them to expect to pay.
The application for expenses
9.
The respondent argues that in lodging and progressing an application for permission
to appeal, the appellant acted unreasonably and caused the respondent to incur
unnecessary expenses. It relies on two points.
10.
First, having failed to identify an error in law on their part, the appellant had been
unsuccessful in obtaining permission to appeal from the FTS. As the basis for her
application to the Upper Tribunal for permission to appeal relied on similar arguments
to those in her unsuccessful application to the FTS, she ought to have known that no
point of law had been identified. Thus the appellant acted unreasonably in proceeding
with her permissions application.
11.
Second, the volume of paperwork submitted to the Upper Tribunal was large and
repetitive, some outwith the deadline, and all required to be considered by its solicitor.
In lodging voluminous and repetitive documentation and proceeding to a hearing
focusing on a revisiting of the facts without identifying a point in law, the appellant
acted unreasonably causing the respondent to be exposed to unnecessary expense.
12.
Any discussions prior to the raising of proceedings were irrelevant, it said, and it was
entirely appropriate for the respondent to lodge answers and attend at the permissions
hearing. It was the lodging and progressing of the application for permission that was
unreasonable, not the appellant's behaviour at the hearing itself.
13.
The appellant opposed the expenses application. It had been her genuine belief that the
documents she relied on were relevant. They were not repetitious or abundant, but
instead had been resubmitted by her following an email error on her part, which she
corrected. She had previously sought a resolution to the issue without success.
14.
The appellant submitted that she had not sought a formal oral hearing on her
application; the respondent did not require to attend or be represented and did not
object to the hearing being held. Finally, no schedule of expenses had been submitted
by the respondent in support of its application.
15.
Parties confirmed that they were content for the Upper Tribunal to determine the
matter on the basis of written submission. Other than reference to the Rules (as above)
neither party referred to any authority on the interpretation or application of those
rules.
Decision
16.
In proceedings before the courts typically expenses follow success. That is not the
position in proceedings before tribunals which are creatures of statute which regulate
what they may or may not do.
17.
The circumstances in which the Upper Tribunal may award expenses has been
judicially considered (see Ramirez-Stich v Strachan, 2019 WL 06896891 and Hutcheson
v Russell 2023 S.L.T. (Tr) 75) as well as on the broadly similar provisions in England
and Wales (see Willow Court Management Co (1985) Ltd v Alexander [2016] UKUT 290
(LC) L. & T.R. 34). The English provisions entitled the first tier tribunal to order
expenses where a party "acted unreasonably in bringing, defending or conducting
proceedings".
18.
Willow Court was a decision intended to provide guidance to the approach to be taken
by the first tier tribunals within the statutory structure in which it has jurisdiction. At
paragraphs 24 to 26 of the judgment the Deputy Chamber President of the Upper
Tribunal and Chamber President of the First Tier Tribunal observed:
"24. ... An assessment of whether behaviour is unreasonable requires a value judgment on
which views might differ but the standard of behaviour expected of parties in tribunal
proceedings ought not to be set at an unrealistic level. We see no reason to depart from the
guidance given in Ridehalgh v Horsefield [1994] Ch 205 at 232E, despite the slightly
different context. "Unreasonable" conduct includes conduct which is vexatious, and
designed to harass the other side rather than advance the resolution of the case. It is not
enough that the conduct leads in the event to an unsuccessful outcome. The test may be
expressed in different ways. Would a reasonable person in the position of the party have
conducted themselves in the manner complained of? Or Sir Thomas Bingham's "acid test":
is there a reasonable explanation for the conduct complained of?
25. For a professional advocate to be unprepared may be unreasonable (or worse) but for a
lay person to be unfamiliar with the substantive law or with tribunal procedure, to fail
properly to appreciate the strengths or weaknesses of their own or their opponent's case, to
lack skill in presentation, or to perform poorly in the tribunal room, should not be treated as
unreasonable.
26. ...tribunals ought not to be over-zealous in detecting unreasonable conduct after the
event and should not lose sight of their own powers and responsibilities in the preparatory
stages of proceedings...typically those who find themselves before the FTT are inexperienced
in formal dispute resolution; professional assistance is often available only at
disproportionate expense. It is the responsibility of tribunals to ensure that proceedings are
dealt with fairly and justly."
19.
Applying that guidance, it is clear that before considering whether to exercise its
discretion to award expenses the Upper Tribunal must first be satisfied that there has
been unreasonable behaviour in the conduct of the proceedings. Even if such a finding
is made, the Upper Tribunal still has a discretion whether expenses should be awarded.
Only if satisfied would it move on to determine what expenses to award.
20.
The Upper Tribunal is satisfied that there is nothing within the behaviour or conduct
of the appellant that comes close to behaviour (per Willow Court) that was vexatious,
and designed to harass the other side rather than advance the resolution of the case.
That she was unsuccessful is not misconduct. The appellant advanced what on the face
of it was a reasonable explanation for the conduct complained of that she genuinely
believed that the respondent had erred. There is nothing within the papers to suggest
otherwise.
21.
That the appellant, as a lay person unfamiliar with the substantive law or with tribunal
procedure, might have failed properly to appreciate the strengths or weaknesses of her
own or her opponent's case, or lacked skill in presentation, or performed poorly in the
tribunal room, is not reason enough to treat her behaviour as unreasonable.
22.
The Upper Tribunal reminded itself that tribunals ought not to be over-zealous in
detecting unreasonable conduct after the event and that those, such as the appellant,
who find themselves before it or the FTS are typically inexperienced in formal dispute
resolution. The Upper Tribunal also reminded itself of the overriding objective to
ensure that proceedings are dealt with fairly and justly.
23.
That the appellant was unsuccessful before the FTS and advanced broadly the same
argument in her application for permission to appeal does not, of itself, amount to
behaviour or conduct that would engage the first requirement for an order under Rule
12. The application for expenses is refused.
Member of the Upper Tribunal for Scotland
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