(Lord McGhie, Mr D J HOUSTON)


(Application SLC 225/07 – Order of 22 October 2013)



This was an application for declarator that the tenant was entitled to nullify certain agreements in terms of Sec 5(4A) of the Agricultural Holdings (Scotland) Act 1991 as amended by the 2003 Act. The Court heard some half a dozen days of debate and a hearing of nine days. The critical findings of the Land Court were effectively overturned by findings of the Inner House on a special case, making it clear that the tenant was entitled to nullify certain agreements. A hearing was held to deal with two issues: to identify the precise agreements subject to nullification and the question of expenses. (The Note also deals with the written submissions made in respect of the Auditor’s report on taxation in respect of an award in favour of the landlords relating to one of the debates.)

Excision:- the Court had previously expressed the view that it was not necessary to strike down the whole agreement if the provisions caught by the Act could be cleanly severed from the rest and having considered the detail of various agreements, HELD that excision should be carried out and made an appropriate order. In respect of provisions of the lease which appeared to be challengeable, as these were null ab initio they should not be covered by the order.

Expenses:- HELD that it was competent to make a lump sum award in favour of a party litigant; that the sum awarded should be based on a figure no higher than two thirds of the figure a solicitor might have been able to charge had that solicitor been conducting the litigation on behalf of the party litigant; the governing principle was that expenses should follow success; but the figure required to be modified to take account of significant time and effort taken on arguments where the tenant had been unsuccessful. In relation to the taxation the Court observed that it was for the Auditor to satisfy herself by reference to vouching and the paying party was not entitled to see all files. Further HELD in relation to the taxation, that an award of expenses of a hearing which had dealt with more than one application had to be understood as limited to expenses relating to the action in which that award was made.

The Note appended to the Court’s Order is as follows:

[1] At the hearing on 23 September 2013 we heard discussion of two issues: whether it was possible to excise parts of the relevant agreements and the question of expenses. This note also deals with the written submissions made in respect of the Auditor’s report on taxation in respect of what we refer to below as “the four day hearing”.

Statutory Material

Litigants in Person (Costs and Expenses) Act 1975


Bank of Scotland v Forbes [2012] CSIH 76

Dr Nader v The Commissioners of Customs and Excise 1993 WL 963537
Kelvin v Whyte, Thomson &Co 1909 1 SLT 477
Hart v Aga Khan Foundation (UK) [1984] W.L.R. 994
Harvey v Mactaggart & Mickel Ltd 2000 SC 137
Macdonald v Macnab (No 2) 2000 SLCR 145
Oosterhof & Co v Scottish Ministers 2011 SLCR 174
Telfer v Buccleuch Estates Ltd [2013] CSIH 47; 2013 SLT 899


[2] The landlords accepted that it was necessary for us to nullify certain agreements from 22 October 2007.But at the debate on 19 and 20 January and 19 and 20 February 2009 (“the four day debate”) we heard argument dealing with the extent to which any particular agreement might fall to be nullified. In our Note of 6 May 2009 we expressed the view that it was not necessary to strike down the whole agreement if the provisions caught by the Act could be cleanly severed from the rest. We need not repeat the material set out at paragraphs [109] to [114] of that Note. Mr Telfer accepted in principle that there could be excision but his position was that this was only possible if there was no risk of prejudice to the tenant.We heard discussion under reference to three different issues: the lease, the post lease agreement (“the PLA”), and unidentified further documents in various specified categories.

[3] We start our further consideration of the matter by looking at the issues relating to the lease. As we observed in the Note, the only provision which might be said to be caught by the provisions of section 5(4A) was the short provision whereby the tenant was “responsible for providing at his own expense the haulage of all materials required in connection with the maintenance of fixed equipment and the execution of renewals and improvements”. We thought that a good example of the justification of the doctrine of severability. It would seldom produce a sensible or fair result to nullify such an elaborate agreement as this lease simply on the basis that one small clause represented a type of agreement which was now struck at by statute. The critical provision was simply that relating to haulage for execution of renewals.

[4] However, Mr Telfer contended that this was a very important clause. He appeared to suggest that the liability to provide the haulage – as opposed to merely paying for the costs of haulage – gave him rights to control the work done by the landlord. He suggested that this was the practical effect of such a clause. We accept that there would be circumstances in which the need for the tenant to provide haulage might give him some notice of work which the landlord intended to do. But it goes no further. It gives no right to be told and no right to object. We are quite satisfied that, in considering the whole bundle of rights conferred on the parties by the lease, the provision concerning haulage for renewals could properly be excised. There is no other provision of the lease which is directly affected by it. It may be added that we do not accept Mr Telfer’s broader submission that as the whole agreement was a balancing of rights and obligations between parties, removal of any provision would necessarily be prejudicial to one or both parties.

[5] At the recent hearing the landlords took the additional point that sec 5(4A) did not apply to the provisions of a lease. They contended that although the subsection was broadly expressed and wide enough to cover the lease, it was plain from its context that the scope was intended to be limited to post lease agreements. Any provision in the lease which had the effect of purporting to supersede the provisions of sec 5(2) was necessarily invalid in any event. The aim of subsec (4A) was to deal with agreements which might have been made under sec 5(3) prior to its repeal by the 2003 Act. Mr Telfer did not attempt to address us fully on this point on this occasion although he himself had raised a similar issue in the past: our Note of 3 September 2010 at [10].

[6] We were tempted simply to take a practical approach to this issue by dealing with it as if subsec (4A) did, indeed, cover it. However, we are persuaded that if a provision is properly to be seen as void ab initio it cannot be nullified from a particular date. We shall give effect to the landlords’ submission and we make no order in relation to the lease. We need not speculate about the practical implications of this distinction.

[7] In relation to the PLA, the landlords now accept that the first four clauses should be nullified. The dispute before us was over the provisions of clause FIFTH. This dealt with various improvements. It opened with a narrative “Whereas the Tenant has agreed to carry out certain improvements at his own expense”, but it then went on to deal with a number of works which had been carried out under a lease which had been superseded by the new lease in 1971. In respect of each of these works there was provision for the net cost to be written down over a stipulated period, subject always to minimum compensation of £1. The agreement concluded with a provision about maintenance of these improvements in the following terms: “and it is further agreed that the Tenant shall maintain all of the said improvements and shall insure item (Two) thereof against fire and that in the event of his failure in either respect or any of said improvements not being in tenantable repair at the termination of the lease, the Proprietor shall be under no obligation to pay compensation therefore in excess of One Pound.”

[8] The parties accepted that the provision about “maintenance” was a reference to repair and that it did not oblige the tenant to execute any work of renewal or replacement. In short, there was no explicit provision in clause FIFTH which purported to provide for the tenant executing on behalf of the landlord any replacement or renewal of any building or fixed equipment on the holding. In these circumstances, it must be said that we had some difficulty in identifying the basis of the tenant’s argument that clause FIFTH was caught by the provisions of subsec (4A). He did not shrink from the proposition that all tenants’ improvements properly carried out in terms of the relevant provisions of the 1991 Act were caught by the subsection but he was unable to explain the implications in terms which we could understand. As has happened before, we have a concern that the fault may be ours. But, as Mr Telfer was, in fact, unable to persuade us of the soundness of his argument, we cannot accept it. We understood his contention to be that, if the landlord agreed to an improvement where such consent was necessary, or did not oppose it where simple intimation was sufficient, this meant that he accepted the improvement as necessary for the efficient running of the farm. It was submitted that this meant that the landlord should have provided it in the first place. Mr Telfer did not address our decision of 15 February 2008 in the application SLC/101/07 when we held that the landlord had no obligation to upgrade: para [27]. We, accordingly, think that a fundamental plank in his argument was unsound. But, in any event, the argument did not address the specific provisions of subsec (4A). Agreements which can be nullified are those where the replacement or renewal is rendered necessary by natural decay or fair wear and tear and not where some new building is provided even if that provision was necessitated by some failure on the part of the landlord.

[9] Mr Telfer advanced other submissions in relation to the extent of a landlord’s responsibilities of renewal of tenant’s improvements. It appears that there may still be some uncertainty in this area of law but as it did not seem to have any bearing on the relevant obligations in the present case, it is unnecessary for us to say any more about it. We are satisfied that the provisions of clause FIFTH are quite distinct from those in the first four clauses and, accordingly, that there is no reason why the latter should not be nullified leaving the former to stand.

[10] The third matter discussed under the head of severability related to the tenant’s motion that various other agreements also fell to be nullified. A similar argument had been advanced at an earlier stage and we dealt with it in our Note of 6 May 2009 at [114]. We understood that the landlords were not aware of any such agreements with continuing effect from the nullification date. However, at the recent hearing we were advised that this was only so in respect of rent agreements and that it was wrong to say that the landlords would not attempt to rely on any existing agreement not disclosed in the process. We were told, for example, that there was an agreement relating to the road at Glenim which contained a variety of provisions some of which related to maintenance and renewal of fixed equipment. In their written submission the landlords advanced a number of arguments in support of the proposition that no order should be pronounced in respect of anything other than the PLA. However we understood their position to be that they would not now attempt to rely on any provisions which would be subject to subsec (4A). They accept, in other words, that any such obligations can be treated as nullified from 22 October 2007 but their concession implicitly relies on the principle of severability. There may be agreements with continuing effect which contain a nullified provision but the rest of such agreements should stand.

[11] We have no doubt that the landlords’ position is reasonable. We understood their concern about the absence of notice of specific agreements although it must be borne in mind that there was a stage where Mr Telfer did, indeed, propose to seek formal recovery of the landlords’ records to be able to identify specific agreements which he wished to challenge. We are not prepared to pronounce a blanket order which might be taken to cover agreements, or aspects of agreements, which might not be covered by sec 5(4A). The discussion of clause FIFTH above is an example of the type of difficulties which might arise. By and large we would expect to find that most obligations covered by subsec (4A) would be severable without difficulty.


[12] By its Order of 31 May 2013 the Inner House quashed our determination that no comparison fell to be made between the replacement Duntercleuch March fence and the old fence; directed us that comparison between these fences did fall to be made for the purposes of section 5(4B)(b)(ii) and remitted to us to proceed as accords. This interlocutor may be thought to follow the style appropriate to an answer to a question of law in a special case. The court did not formally quash any order of this court. However, plainly its intention was to quash our substantive Order of 25 April 2012 and we can give effect to that. Our decision of 3 November 2010 is also plainly affected. It made findings to be applied at proof and our findings in relation to question one in that decision must simply be set aside.

[13] Our Order of 3 September 2010 dealt with the expenses of the hearing on 19 and 20 January and 19 and 20 February 2009 (the “four day debate”). The substantive result of that debate was set out in our Order of 6 May 2009. That Order adopted findings at paragraphs [144] to [151] of the Note of that date. These findings did not deal with the question of whether or not there should be a comparison with the old equipment. We simply found, at [151], that if the applicant wished to rely on the state of the equipment at the outset of the agreement, the onus was on him to do so. In relation to expenses Mr Telfer had contended that some of the issues debated were irrelevant to the main issues but we considered that, as time had been spent in relation to such issues and they formed a distinct chapter of the case, the losing party should pay for the expenses of debate. There was no appeal against that decision. It does not appear to us to be affected by anything said in the opinions of the Inner House. There was some passing mention of the Order of 6 May but we are satisfied that such mention was in the context of discussion of the competency of the appeal and the question of which decisions were appealable: see Lord Menzies at paragraphs [6] to [8] and Lord Brodie [36] and [37].

[14] The matter might be tested by considering how things would have stood on 3 November 2010 had our Order of that date answered question one in the way now determined by the Inner House. Such an answer would not have led to any change in our previous decision. It would simply have been seen as another step on the way to ultimate determination of the case.

[15] We have no power to set aside our Orders unless directed to do so. We accept that having regard to the style adopted by the Inner House it is not necessary for there to be an explicit recall but we are satisfied that our Orders must stand unless a plain intention to recall them can be identified. In absence of this, we accept the submission for the landlords that the Order of 3 September 2010 in relation to the expenses of the four day debate must stand. We deal below with the separate issue of challenge to the Auditor’s report on taxation under that Order.


[16] By letter of 20 August 2013, Mr Telfer set out his submissions seeking an award of all the expenses of the process and an uplift because of the importance of the decision to his reputation, the importance to other tenants and the enormity and complexity of the productions he had had to deal with. The landlords submitted a written Note of Argument dated 27 August 2013 relating to expenses and provided a supporting set of written submissions on the morning of the hearing. We do not attempt to summarise all this material. Copies of it are held by the Court and we deal with the main matters in course of our discussion.

[17] There were three main areas of dispute. The first was the applicant’s suggestion that we should fix expenses in a lump sum. He contended that we had power to do so under our rule 95 and that this approach was particularly appropriate in a complicated case which would best be approached on a broad basis. This was vigorously resisted by the landlords. They contended that the Court had no power to award a lump sum in favour of a party litigant; that the matter had to go to the Auditor for taxation on the basis of a proper account; and that, in any event, the approach of fixing a lump sum should only be adopted in straightforward cases: Dr R Nader v The Commissioners of Custom and Excise; Macphail Sheriff Court Practice 3rd Ed para 19.09. The landlords also made the point, which was not disputed and which we entirely accept, that any sum fixed by the Court could not be fixed capriciously. The Court had to have regard to appropriate principles of law.

[18] The second issue was the substantive merits. Essentially Mr Telfer’s claim was that he had been ultimately successful. The whole vast expense had been caused by the landlords’ opposition. He should be entitled to his whole expenses. This was resisted by the landlords. They contended that, in the course of the application, they had been successful on many legal issues. They referred to this as divided success. They suggested that they should be found entitled to expenses in respect of parts where they had been successful. They recognised, however, that any award in their favour would, on taxation, be greatly in excess of any similar percentage award in favour of the party litigant and conceded that it might be fairer to balance matters very broadly by finding no expenses due to or by either party. In any event, they contended that, if there was to be any award in favour of the applicant, it should be modified to reflect the fact that he could have appealed the decision of 3 November 2010. That decision had included the critical finding that if a landlord had completely replaced an item the tenant could not compare the eventual condition of the new item with the old version. Had Mr Telfer appealed that decision much of the time taken at the proof hearing would have been unnecessary.

[19] The third broad issue related to quantification of any award in favour of the tenant. It was not disputed that he would have faced a very large bill if he had lost. No attempt was made to assess accurately what that might have been but it was discussed in terms of possible liability of £150,000. Mr Telfer had to accept that there was a ceiling of two thirds of a solicitor’s fees but contended that we were entitled to assume an uplift in such fees before applying a cap. He suggested that if someone else – such as his wife – had been allowed to act on his behalf, she would have been entitled to have a payment assessed on a quantum meruit basis under rule 98. A sound measure of the value of services spent on a successful litigation would be the expense the losing party had been prepared to commit to defence. It would be absurd if his wife could have got £150,000 if he was restricted to a significantly lower amount.

[20] In course of debate, we heard a fairly wide ranging discussion of issues bearing on quantification. Mr Telfer did not attempt to express any claim in terms of loss of actual earnings or by reference to his normal earning capacity. He did not attempt to put a figure on the time he had spent but stressed that it had been a great deal of time, much of it very anxious. Reference was made to the English rules prescribing a rate of £18 per hour for a litigant in person if no loss of earnings was established. We also had sight of material published by the Scottish Agricultural Arbiters Association suggesting figures to be allowed for farmers’ time spent in preparation of claims in an arbitration. The recommended rate was £40-£60 per hour. Reference was also made to the previous taxed accounts in litigation between the present parties. The taxed account of the respondents for the four day debate was in excess of £17,000. Mr Telfer had been allowed a sum of £2,500 in respect of a rent review application which had not even gone to proof. A taxed account in his favour for a debate in SLC/119/07 had been in the sum of £1640. The hearing on 29 and 30 November 2007 had been concerned with procedure in other cases but the bulk of the time had related to that debate. Mr Telfer made the point that, in a previous case – SLC/107/05 – he had had to pay approximately £48,000 and suggested that the present case involved approximately three times as much work. Although the restricted proof had only involved six items he had been faced with a need to mount a defence involving some forty items, 553 photographs in support of them and a schedule of equipment which had been almost incomprehensible.

Lump sum approach

[21] The authority to make awards in favour of party litigants is found in the Litigants in Person (Costs and Expenses) Act 1975. However, this is essentially an enabling provision which allows courts, such as the Land Court, to make rules for expenses to be awarded to party litigants. We are satisfied that we have power, under the scope of rule 95, to deal with expenses by fixing a figure on a broad basis. However, we must approach the matter by applying proper principles and the exercise of our discretion must be in a manner consistent with our Rules as a whole. There is no essential reason why we should not determine liability on the basis of a fixed figure. There is express provision for this in rule 97. We understand that where parties are represented by solicitors and the Auditor is able to proceed by reference to formal accounts and Tables of Fees it might be dangerous for a court to fix a lump sum in a complex case. But a broad approach seems to us entirely consistent with the approach which normally has to be taken in relation to any party litigant. Although Mr Telfer has, in the past, been able to prepare accounts on the lines of a standard judicial account it is comparatively rare for a party litigant to be able to prepare a claim in exactly the same way as a judicial account. How an auditor approaches any particular claim must be a matter of circumstances.

[22] There will be cases where a party is claiming only a modest amount and the Auditor may need to do no more than check that time claimed had indeed been spent and that the rate claimed was reasonable. But where it is necessary to have regard to the potential cap of two thirds of a solicitor’s fees – which appears in our rules and the rules of all other courts of which we are aware – the Auditor will, at some point, have to carry out the notional exercise of determining what a solicitor would have had to do to conduct the same type of litigation if he or she had been instructed on behalf of the party litigant and the fees which might have been allowed for such work.

[23] It may be worth adding that the problems and Mr Telfer’s sense of unfairness – although expressed in very moderate terms by him – were similar to those faced by the successful litigant in the Hart v Aga Khan case to which the respondents made reference. The plaintiff in that case was an actress who would have been faced with “the most enormous bill” for solicitor, junior and leading counsel and a team of experts if she had lost. She appealed against a decision of a taxing master – a position similar to an auditor – allowing her only £1443 for all her work. Sir Crispin contended that the decision in that case was binding because it involved construction of the same legislation, namely the said 1975 Act. However, as we have noted, the effect of that Act is simply to enable the making of Rules of Court to provide for allowance of expenses to a party litigant. Prior to that, such a litigant could not recover anything for his or her own time. The case involved construction of the relevant English rules and we are not concerned with the detail of the issues which arose. However, we accept the approach taken to application of the cap in relation to a claim based on hours worked. Lord Justice Cumming-Bruce explained that the work actually done by the party would often be of negligible assistance when considering what work a solicitor would have to do. The comparison was not between what that person did and how long a solicitor would have taken to do the self-same work but between what that person did – and claimed for – and what a solicitor would have done approaching the case in a proper professional way: p 105 C-D. As it happened, this point was illustrated in the present case by Mr Telfer’s reference to the 553 photographs produced by the landlords to which we return below.

[24] We are not bound by the detail of the English decision and in any event consider that our rules allow a more flexible approach. In considering whether to attempt to proceed by way of lump sum we have had regard to a number of factors, in particular the practical consequences of the alternative of proceeding by way of an award or series of awards in favour of one or other party in terms of percentage liability for all expenses or for individual stages. Where an award was in favour of Mr Telfer, he might try to set out an account of expenses following broadly a typical judicial account. But it would not be an accurate judicial account. It would be framed in terms of time rather than chargeable items. He made it clear that he had not kept an accurate record of time spent. It must be assumed that he might ultimately have simply claimed an award based on an assessed number of hours. The Auditor would have required to check this by carrying out a notional exercise of trying to determine in relation to each stage of the process what time would reasonably have been spent by a party litigant. She would have had to determine what would be a reasonable rate for Mr Telfer’s time having regard to the fact that no claim for loss of earnings was available as a comparative base. If, as we see as inevitable in the present case, she found that the potential claim was likely to exceed the two thirds cap she would require to carry out the exercise of assessing what a solicitor would have been entitled to charge to carry out the litigation in a proper way if acting on Mr Telfer’s behalf. It is plain that this exercise would not only have been enormously time consuming for the Auditor but equally time consuming for the parties who would have had to consider all the same aspects of the case in order to make submissions on the issue.

[25] We have given consideration to the pleadings, the procedures in the Court, the correspondence and the productions. A particular difficulty arises from the fact that the landlords presented their material on the state of the various items of fixed equipment by reference to detailed schedules with accompanying photographs and location plans. It is necessary to make some assessment of what work would have been required by a solicitor acting for the tenant. He would have had to obtain sufficient understanding of the material to identify the proper lines of response and find the material required to rebut the landlords’ contentions. It cannot be assumed that he would have the benefit of involvement in other litigations between the parties which would build up experience to help him understand the material and the issues.

[26] Because of our role in relation to appeals from decisions of our Auditor, we have some direct experience of the detail of solicitors’ accounts. We are satisfied that several very broad assessments would have to be made in relation to matters where the relevant criteria would be as well understood by the Court as by the Auditor. The Auditor would not have been in a better position than we are to make a proper assessment on various matters. However, we had to consider whether there was, in the material before us, sufficient to give us reasonable confidence in our broad assessments of quantum. As will be seen we have satisfied ourselves on that point and have concluded that in all the circumstances a lump sum approach would be preferable to the expensive and, at least partly, notional exercise which would otherwise be required. We are satisfied that we can make a tolerable assessment of a potential figure. As some modification of such figure is required and this would have to be done on a very broad basis, a broad approach to the initial figure is adequate for the purposes of the present case. Modification would have to be done by the Court rather than the Auditor. On any view, various fairly broad adjustments or assessments are required in this case. Taking these matters together we have concluded that we can have a sufficient degree of confidence in the fairness of an overall sum.

[27] As we have said, we are satisfied that, at some point, the Auditor would require to attempt to assess what would have been a proper charge by a solicitor instructed by Mr Telfer and doing all the necessary work himself or herself. Because we have little doubt that proper remuneration for the time spent by Mr Telfer would be likely to exceed the cap, we do not think this is a case where it would be either necessary or appropriate to start by trying to calculate the allowable time spent by the applicant and making a direct application of an assessed hourly rate. The realistic start point in this case is to identify the cap based on what a solicitor would have been entitled to charge had he, or she, been employed to conduct the litigation on the applicant’s behalf. If it is clear that a reasonable figure for Mr Telfer would exceed such cap, it is unnecessary to calculate in detail what that figure might have been.

[28] Sir Crispin was able to tell us that, to date, his instructing solicitor had recorded 370 chargeable hours in connection with this application. The presentation in court at every stage has been carried out by counsel. Counsel’s actual time in court would be matched by the solicitor’s charges for attendance along with him but it is clear that if the solicitor had had sole responsibility for preparation for court appearances a significant addition would have been required for preparation time. We do note from the taxed account of the four day debate that the solicitor regularly charged for some aspects of preparation for hearings. In other words the 370 hours will include time for preparation. However, it is clear that preparation for the actual presentation of material in court can be extremely time consuming; often taking as long as the debate itself.

[29] There were some 15 days of hearings in this case. Allowing a realistic figure for the additional preparation, the solicitor’s time could well have been of the order of 420 hours had the solicitor for the landlords been acting without counsel. This can be taken to provide a very broad guide to the time which might have been required by a solicitor acting on the other side. But it would be unlikely that time spent by the respondents in this case would exactly match the time properly spent on behalf of the applicant. Mr Telfer illustrated this by reference to the photographs lodged. The solicitor for the party lodging such photographs would not need to understand the significance of each. That would normally be left to the relevant witnesses. However a solicitor on an opposing side would face quite a different task. He would need to understand the significance of the photographs. He might do so by consultation with his client or might instruct an expert to understand and appraise each photograph. Mr Telfer made a calculation which produced a figure of £19,000 for a solicitor doing this work properly. He freely accepted that he himself would not have taken so long. He recognised much of the material and could quickly understand its significance. He did say, however, that in respect of many photographs he had had to make a special examination on site. A similar point might be made in respect of all the schedules produced. Mr Mitchell would not have required to master all the detail personally. A solicitor instructed on behalf of Mr Telfer would have had to spend more time on this material. We consider that a total of 450 hours would make adequate allowance for the overall time of such a solicitor.

[30] However, this figure must be adjusted to allow for the time spent on the four day debate where expenses have been already dealt with. We have seen Mr Mitchell’s Account of Expenses for that debate and we think that can be taken to be an adequate guide. It does not produce an exact figure because some of the time recorded by Mr Mitchell will have been reflected in items charged on a rounded up item basis rather than a strict hourly basis. It is also likely that some of his chargeable hours included time spent in relation to that debate which could not be included in a party and party account. Here again, the time spent by a solicitor on the other side would not be exactly the same. For present purposes we think it reasonable to deduct 50 hours. Another deduction must be made on the basis that had a competent solicitor been instructed, the time spent on hearings would not necessarily have been the same as the time taken by Mr Telfer. We shall return to the contention that some modification of the applicant’s entitlement should be made because of time spent inefficiently. That raises different questions but we do accept that if an efficient solicitor had been employed less time would probably have been taken. Calculation of the cap requires some allowance for this. Solicitors vary greatly in the time they take. For present purposes, we think it appropriate to deduct two days from the total which, by comparison with the preceding calculation, we take at 25 hours. We recognise that this is not an accurate process. Time spent on some aspects of the preliminaries for a debate will be incurred whether the debate lasts two days or four but the present exercise is a broad one. Put shortly we think that an auditor could reasonably have taken a figure of about 375 hours as a guide to the time which a solicitor instructed on Mr Telfer’s behalf would have had to spend to cover the ground he himself covered.

[31] Sir Crispin’s helpful Note showed a current rate for solicitors of £140 for routine work and £156.80 per hour for appearing at the proof. Fees for the earlier stages of the application would have been a little lower. However, something comfortably in excess of £50,000 might reasonably have been charged by a solicitor. In addition to a cap based on fees, the applicant would be entitled to recover outlays. He did not make any submissions in respect of outlays. However, he would, at least, incur travelling, copying and postal costs. In all the circumstance we are satisfied that for present purposes a sum of about £36,000 can be taken as a reasonable starting point.

Assessment by reference to Mr Telfer’s time

[32] Assessment of a cap would only be relevant if the Auditor was satisfied that the litigant had actually spent an amount of time at an appropriate rate which would be likely to lead to a claim in excess of it. Where a claim would be comfortably under the cap a more straightforward approach would be to satisfy herself as to the time actually spent by the party litigant and apply an appropriate rate to that time. But we have no doubt that the time which Mr Telfer required to spend on this case would be greatly in excess of the time a solicitor would properly have spent and that, applying a reasonable rate to his time would have produced a figure in excess of the cap. It is unnecessary for us to do more than comment briefly on each of these elements.

[33] Mr Telfer did not suggest that he had kept accurate records of his time. A layman involved in litigation can hardly be expected to realise that he should keep a meticulous record of the time he has spent working on it – far less on time spent simply pondering over the problems it presented. An auditor may be entitled to dismiss unvouched claims in some circumstances but in dealing with a party litigant will usually have to consider whatever evidence is available as to actual time spent and check that by reference to a professional assessment of the time likely to have been required to produce the written material, prepare for hearings etc. In the present case there is no doubt that a very considerable amount of time must have been spent. We accept that Mr Telfer quite properly required to consider all the items on the landlords initial schedule and all the items which the landlord initially relied on. Mr Telfer’s letters demonstrate the difficulty which he had in getting to grips with the detailed nature of the case made against him. Although the schedule, based on a spread-sheet, would probably have been an efficient way to handle all the material had the case gone to proof on all items, we accept that it gave rise to difficulties in responding to it.

[34] Mr Telfer stressed that much of the material had been inaccurate in its detail and misleading. He had made that point in correspondence at various stages in the case and we need not attempt to discuss it in detail. A simple example which we saw at the hearing was the use of the wrong photograph to illustrate the water-gate at Coshogle. The photograph lodged had been of a different water-gate. Mr Telfer indicated that this type of error had not been uncommon. Whatever the facts of that particular matter, we have no doubt that he required to spend a good deal of time on the detailed schedules.

[35] One difficulty which arises in taking a broad approach is that the same schedules were relied upon by the landlords in this application and in SLC/101/07. Indeed, in his pleadings on this issue in the present case, Mr Telfer simply patched a copy of his pleadings in the other case. However, the issues in 101 and 225 were quite different and there is no doubt that Mr Telfer would have had to spend a substantial time considering the implications of the productions from the point of view of the present case. For the purposes of this case it would not be necessary to say any more but we recognise that there might come a time when the question of the expense incurred in 101 would have to be examined in a more detailed way. Even if there was also to be a lump sum approach in that case, the issues bearing on modification would be likely to be different and the broad approach we favour in the present case might not be a safe guide to any award in the other case.

[36] We did have a concern that this issue might make it impossible to proceed with a lump sum approach. Although, as we have said, it can be considered broadly, even broad assessments must be grounded in evidence. However, we have considered the detail of the pleadings at different stages in the two applications and are satisfied that for the purposes of doing justice in relation to expenses, the time spent on the detailed schedules and related material in the period up to 19 August 2010 can fairly be split 50:50 between the two applications. There has been no good reason for the applicant to have to devote time to the detail of these schedules for the purposes of 101 between that date and the present. In other words, if he ever requires to establish time spent on consideration of the detail of the equipment for the purposes of 101 he will have to discount one half of the time before 19 August 2010 as we will have allowed for that as part of the present assessment.

[37] It is, of course, plain that the time spent in preparing to meet the detail of the schedule was only part of the time involved in preparation. We accept that our correspondence file does not give a very full picture of time spent but it does allow some assessment of the minimum time which must have been taken in preparation of written work and in preparation for court appearances. We have little doubt that the total time would be well in excess of twice the time properly spent by a solicitor.

[38] In relation to the appropriate rate, it is a salutary starting point to keep in mind the landlords’ motion for certification of the cause as suitable for the employment of senior counsel and also as justifying an uplift in the fees to be allowed to solicitors. We accept that it is not appropriate to apply any such uplift to Mr Telfer’s remuneration: Bank of Scotland plc v Forbes. But we are satisfied that any rate to be allowed should be at the top end of rates allowed to party litigants.

[39] Although Mr Telfer did not attempt to invite assessment by reference to any loss of earnings, we accept are not in any way bound by the English standard figure of £18 per hour which apparently applies where no such loss is claimed. We recognise that much of the time spent by Mr Telfer involved difficult law and complicated fact. He faced the stress and the worry that if he was wrong in his views of the law he would face a very large bill. He had to deal with new legislation and to deal with extremely detailed factual material some of it confused and confusing. Had we been attempting to make an accurate calculation, the figures proposed by SAAVA would have given some basic guidance but we are satisfied that a rate in excess of their higher level of £60 for an ordinary arbitration would have been reasonable in all the circumstances of this case. On any view the case presented much greater difficulties than most. It may be added that we are aware that a full two thirds of solicitor’s rate was accepted in the taxation in SLC/119/07 referred to above. On that occasion the Auditor was making an assessment based on a direct comparison with time which would have been taken by a solicitor. Applied to a normal working week such a rate would provide an annual remuneration of over £150,000. We are satisfied that – at least in absence of evidence of loss of earnings – this would rarely be an appropriate rate even where the time allowed has been assessed by reference to solicitor’s time.

[40] Our conclusion is that, on a reasonable assessment, an award based on Mr Telfer’s own work would have exceeded the cap as calculated by reference to the notional fees of a solicitor acting for him. As should be plain from the discussion above, the figure of £36,000 is not to be mistaken for a mathematically correct figure. It is simply a broad assessment. But as the exercise of considering relative success and the impact of conduct must also be approached on a broad basis, we think this figure can been taken as a sufficiently secure basis for our further assessment.


[41] The landlords strenuously opposed any lump sum award to the tenant but their primary position was to seek an award in their favour. This was said to be justified by apportionment of the overall time taken by reference to the time spent on matters on which the tenant had been successful and the matters on which the landlords had been successful. They also referred to time wasted by the tenant’s conduct of the case on three distinct bases: his failure to appeal our decision of 3 November 2010; the time spent on proof of the state of the Duntercleuch fence at the nullification date and the time wasted by his convoluted approach to cross-examination and submission. We deal with these matters in turn.

[42] We need not repeat the observations on the concept of “divided success” which we made in Oosterhof & Co v Scottish Ministers. Put shortly, it is a term which is best reserved for cases where there are a number of distinct heads of claim rather than simply a number of different heads of argument. In the latter situation, allowance may sometimes be made by way of modification for time spent unnecessarily. If the ultimate winner has advanced some distinct and separate argument which is wrong and which has taken an identifiable chapter of the case it may not be reasonable to find the other side liable to pay for his time and effort on such argument. But it is well established that overall success is a dominant consideration and it is understood that a successful party is entitled to recover his expenses even where some of the arguments he has advanced have not proved successful. This is always a question of circumstances. One example of dealing with an entirely severable chapter is where particular arguments have been dealt with by way of a separate debate. It is usual to deal with the expenses of debate as an entirely separate chapter of the case. That approach was followed in respect of the four day debate which we have discussed above.

[43] The landlords contend that they should be found entitled to 50% of the expenses of the procedural hearing on 19 August 2010. They suggest that some 50% of the time related to the present application and that they should be found entitled to their expenses in relation to it. We are satisfied, however, that this was not the type of hearing which could properly be said to be a distinct chapter. It led to the debate of 13 September 2010 and the expenses of the procedural hearing might possibly have been dealt with in connection with the expenses of the debate if it had been dealt with separately at the time.

[44] In respect of that debate, the “four questions debate”, it is now plain that Mr Telfer was successful on the first three questions. He was not successful in relation to the fourth question but, as we said in our Note of 3 November 2010, at [84], the answer to that question did not appear to us to be of critical importance to the particular dispute. Had we been making an award at the time of the debate, on the basis that our answer to question one was in favour of the tenant, it is unlikely that we would have thought that his failure on question four required any significant modification. We think it likely, having regard to our views as to the practical significance of question four, that we would have decided that the tenant should be found entitled to the expenses of the debate. In any event, we are now satisfied that the whole expenses of the debate can be treated as expenses in the cause.

[45] As we have said, the term of divided success can be misleading. However, it can properly be used in the context of the recent discussion of severability because the landlords’ success on that point has led to a restriction in the crave itself. The landlords came to the recent hearing on severability prepared to concede the principle that certain agreements required to be treated as nullified. The only dispute was about what should be excised. They were wholly successful on that point. They are entitled to a finding in their favour in that respect. However, it was not a long hearing and the issue of expenses was also discussed. In the circumstances of this case, this matter can be dealt with by way of modification.

[46] In relation to the proof itself, the respondents contended that much expense would have been saved if Mr Telfer had appealed our decision of 3 November 2010 when he first had the opportunity. Although the Inner House had accepted that an appeal was competent after our final determination, that did not prevent a practical approach to expenses. In Harvey v Mactaggart and Mickel Limited the court had expressly said that the problem created by delaying appeal could be resolved by an award of expenses. It was submitted that had question one been determined in Mr Telfer’s favour, the landlords would not have put in issue the Duntercleuch march fence, the Coshogle water-gate or the Hopetoun fence. We have no doubt that this is correct. There was never any real dispute about the state of these items at the commencement of the PLA. The landlords contended that they had had to be wholly replaced.

[47] The landlords contend that the time spent on the Duntercleuch fence issues was about 60% of the total time taken at the hearing and that the Coshogle water-gate and Hopetoun fence added about 10%. In broad terms we can accept these figures. Some 70% of the time spent at the proof would not have been necessary if Mr Telfer had followed the obvious course of appealing the critical decision before the parties incurred the expense of a proof. Had the point been clarified in advance, the landlords would not have required to prepare to deal with these issues and the stage of identifying items for a limited proof would have been simplified. The landlords advanced the submission that they were entitled to a positive finding that the tenant be liable in 70% of the expenses of the proof. However, they recognised that, having regard to the imbalance between expenses of a party litigant and those recoverable by a party with lawyers, it might be that the Court would be reluctant to make any positive finding in their favour. There should, accordingly, either be no expenses due to or by or, at the very least, the matter of the late appeal taken as an important factor in modification of any overall award.

[48] Mr Telfer said that he did not think he was obliged to appeal. He explained that he had not appealed because he had thought that the landlords would not be able to prove that equipment present at the outset had been wholly replaced by them after 1970. He was, of course, unsuccessful on that argument.

[49] There is no doubt that much trouble and expense would have been saved by an appeal. Our decision that the condition of equipment which had been wholly replaced by the landlords could not be used as a comparative measure of the state of the equipment covered by the PLA was plainly critical in relation to the three items referred to above. On the other hand, it can be said that none of that particular trouble and expense would have been necessary if the landlords have not advanced the argument to that effect.

[50] We find this a difficult issue. We accept that there is a clear indication in the comment in Harvey v Mactaggart Mickel, that an adverse award of expenses would be appropriate where a party had waited until after a full proof to appeal a point which might have been appealed earlier. That case was not on all fours with the present. It raised a sharp issue of competency. Where issues are complex, we can see that a party litigant might well decide that it was reasonable to try to win on the facts rather than go to the delay and expense of appeal. This will always depend on the type of factual issues involved. There was no real dispute about the work of replacement of the fence and we do not think that the prospect of success on this justified the delay. On the other hand, Mr Telfer also faced challenge in relation to drainage and the state of the cottage. If he had lost on either point, the expense of appeal would have been wasted. In all the circumstances we are satisfied that it would not be appropriate to find Mr Telfer liable in expenses to the respondents. Greater difficulty arises over the question of modification. Should Mr Telfer be entitled to make the respondents pay all his expenses for a lengthy proof which would have been greatly shortened if he had taken the opportunity of having the critical legal issue resolved at the first opportunity? We are not persuaded that it is appropriate to take too rigorous an approach to a party litigant. We have concluded that there should simply be some modest modification of the award to mark the fact that an early appeal could reasonably have been taken.

[51] A significant amount of time had been taken at the hearing by the tenant’s attempts to show that the Duntercleuch fence was not in an unreasonable state of repair at 22 October 2007. This was relevant to the landlords’ case under section 5(4B)(b)(i). The Court had assumed, in light of language freely used by him at debate to discuss the state of the fence, that Mr Telfer accepted that it was not in a reasonable state of repair at the nullification date. His argument was based on the proposition that a fence could be described as “done” and yet still be said to be in a reasonable state of repair because the state of repair was to be measured by reference to the tenant’s repairing obligations. We rejected that argument. He had also been highly critical of the state of the fence in the interdict proceedings in SLC/101/07. It accordingly seemed to us perverse for him to change his tune and put the landlords to the expense of the proof of their case on (i). We allowed him to do so subject to the warning that the expense of proof on that specific matter might fall to be treated as a separate chapter in relation to any question of expenses. The landlords referred to paras [97] and [98] of our Order of 3 November 2010 and letters of 9 May and 28 October 2011 dealing with this. The landlords had been successful on that point. As a separate issue it could be said to have taken up some 30% of the whole hearing. We accept that as a sufficiently accurate for broad assessment.

[52] We can see a way in which this issue might be thought to be related to the case the tenant had to make under (ii). If his intention throughout was to appeal our decision on question one, he needed to be able to show that the condition at nullification was no worse than it was at the outset. But, following our decision on that question, this was never focused as an issue. We do not doubt that it would readily have been conceded by the respondents that the fence in 2007 was in no worse state than the fence which had had to be wholly replaced in or about 1971. We accept that critical analysis of the way a party litigant conducts litigation cannot be carried too far. But this was an issue where he had full warning. Here again, we have concluded that it is not appropriate to make a positive finding against him but this is a factor which justifies a significant modification.

[53] The landlords also contended that the applicant’s whole conduct of the case had added unreasonably to the time taken. They suggested that his style of cross-examination had greatly protracted the hearing. It could have been disposed of in three days instead of nine. We have no doubt that Mr Telfer’s approach has extended the time which might reasonably have been expected to be taken had the litigation been between two competent professionals. We have made some allowance for that in the calculation above. The question is whether some further allowance should be made by way of modification.

[54] It may be said that we do not intend any personal criticism of Mr Telfer. He is a party litigant who could not necessarily be expected to present his material efficiently. Because we realised that most of the convoluted questioning would be likely to have a legitimate aim, even when that could not easily be identified in advance, we felt unable to do much to speed up the process. We were occasionally able to point out lines of questioning which would not be likely to assist our ultimate determination and, by and large, Mr Telfer accepted this guidance. At the various debates and hearings we have sometimes found it difficult to identify the precise legal points Mr Telfer was trying to make. With the benefit of hindsight it is possible to see that significant time was taken on points which have proved of little relevance to his case. His written material tended to present a mixture of assertions of fact, comment and criticism mingled with assertions of law. His presentation has rarely been done in a manner which provided any positive assistance to the court. However, there is no doubt that he did present many substantive arguments and that his cross examination was often effective in the result.

[55] We have had real difficulty knowing how to approach this particular problem. The applicant has proved his case. He has done so in face of continuing opposition on a whole range of points. The dominant principle is that expenses should follow success. It does not follow that a respondent must pay for all the time taken to achieve that success but we have no doubt that Mr Telfer was doing his best not to prolong proceedings. A total of about fifteen days was spent dealing with substantive issues in this case. Mr Telfer is already faced with the burden of paying the respondents’ taxed expenses for about a third of that time. The length of that debate was due in part to his inability to present his material clearly and that finding can be seen to make allowance for time wasted.

[56] The finding in respect of the four day debate is a factor which cannot be ignored. As discussed below, it now leaves Mr Telfer with a liability of some £15,267. We cannot change that award but the fact that the landlords can offset this from any award in his favour has a bearing on the overall fairness of the outcome. It may properly be said that this award is a separate chapter and should have no bearing on the current issue, but counsel recognised the essential unfairness to a party litigant if an award to be assessed by reference to the cost of legal representation by a solicitor and counsel was to be matched with a similar award assessed by reference to a party litigant. Awards of expenses are usually to be seen as an attempt to determine fairly who should be required to pay expense properly incurred by both parties in respect of their dispute. It is misleading to see awards of expenses as a penalty. Although courts sometimes make reference to showing their disapproval of some aspect of the conduct of a litigation, the real issue turns on the question of who should fairly pay the cost of the litigation and whether one party should pay for time wasted by the other.


[57] We have no doubt that the tenant’s success on the substantive issue means that he is entitled to an overall finding of expenses in his favour. We are also satisfied that it would not be appropriate to approach the various issues raised by the respondents by attempting to apply a series of putatively precise calculations. We have no doubt that some modification is appropriate. However, we do not consider it appropriate to apply too critical an approach to a successful party litigant. Modification is an exercise of discretion. We must use that discretion to try to achieve fairness in the application of established principles.

[58] We conclude that the modification which might have been appropriate if we were to take full account of all the individual factors discussed above would lead to an unfair result in this case. Doing the best we can to weigh all matters fairly we consider that an appropriate award would be £27,500.


[59] Mr Telfer challenged the Auditor’s Report of 4 April 2013 dealing with the taxation of the landlords’ account of expenses of the four day debate. It can be seen that there were two broad grounds of challenge: that he should have had access to the respondents’ files and that the hearing had not dealt solely with the debate in SLC/225/07.

[60] Mr Telfer points out that, because he did not have access to all the respondents’ files, he was unable to form a proper view of the charges. However we rejected a similar objection in our Note of 21 July 2008 in SLC/107/05. We need not repeat that material. The purpose of an auditor’s taxation is for the auditor to be able to satisfy herself, or himself, that accounts have been properly charged according to established principles. It is not for the paying party to tax. There is an obvious issue of confidentiality and it is sufficient that the auditor can make the necessary checks. It may be added that an auditor is entitled to require production of any material she, or he, thinks necessary to carry out a proper check but is also entitled to rely on experience in assessing what would have to be done at particular stages.

[61] Mr Telfer also challenges the Report on the basis that the Auditor should not have allowed the whole expense of the debate, only the part relating to application SLC/225/07. It is plainly correct that an order made in any application falls to be read as relating only to the expense of and occasioned by that application. Such a qualification is implicit in every order relating to expenses. We have considered the submissions for the landlords in their letter of 22 May 2012 and the references to our observations at [24] to [35] of our Order of 30 October 2008. We have studied our Orders and the material in application in SLC/101/07. It is a matter of regret that the Order was expressed in an ambiguous way. The reference to expenses of the debate has been taken to mean a reference to the whole expenses of the hearing. However, it is clear that part of the hearing related to a motion for expenses in application 101 and it is also correct to say that the hearing was set down in unqualified terms to deal with both applications.

[62] It has become apparent that where two or more applications are discussed at the same diet it would be helpful to try to reach agreement at the time as to a sensible allocation between the different applications for the purposes of any future award of expenses. This was not our practice at the time of the relevant hearings. However, the dominant consideration in construing the Order ought to have been that an order in any application can relate only to the expenses of that application. The taxation failed to distinguish between the expenses of the debate and the expenses incurred in relation to the hearing as a whole. We think the Auditor was in error in saying, implicitly, that the finding of liability for the debate covered the whole expense of the time spent at the hearing. As there is no doubt that the hearing covered more than the present application some allowance for this should have been made.

[63] We see no purpose in remitting this matter back to the Auditor. We have been able to study the files in this case and in SLC/101/07. We have no doubt that the vast bulk of the time at the hearing was spent on debate in relation to the present application. It is important to note that our concern is with the time spent ostensibly dealing with submissions addressed to this application. We are aware that Mr Telfer has contended that many of the points discussed were not relevant to this application. However, we are satisfied that they were advanced in the context of this application and we dealt with this argument at paragraphs [48] and [49] of our Note of 3 September 2010.

[64] Our notes show that while there were occasional references to 101 by way of comparison or by way of noting various issues still live in that application, there was little or no discussion which could possibly be described as aimed at resolution of any such issues. The time devoted directly to issues arising in 101 was limited to discussion of the expenses of the dispute over interdict on 29 and 30 November 2007. The time claimed by the solicitors in the taxation in SLC/101/07 as being related to the motion for expenses was 30 minutes and this was allowed by the Auditor as a good head of claim in her Report of 23 March 2010 in that case. Plainly there would be duplication if a similar time was allowed “for the debate” and this allowance shows a need for some adjustment.

[65] The whole debate ran for four days and the time spent on 101 was a very modest amount. It is not entirely clear on the face of the Account that there has been a double claim by the solicitor. However, Counsel’s fee does not appear to be apportioned in any way and as this issue was raised expressly by Mr Telfer the landlords ought to have been able to make it quite clear if they were making any allowance for the expenses motion. As it is, we must assume that the Account covered all the time spent in course of the hearing as well as in preparation. The expenses motion was a complicated one involving detailed consideration of activity in relation to the interdict. Our Note of 6 May 2010 in the 101 application, dealing with that motion, ran to four pages. In all the circumstances we think it appropriate to take a broad approach. Although our notes suggest that the matter of expenses was dealt with on the last afternoon when little else of substance was discussed, it is not possible to determine with any accuracy what total time, including preparation, was spent on it. We also accept that some of the time which Mr Telfer spent in discussion was thought by him to relate to issues required for determination of 101 although it seems clear that Counsel’s submissions were, in the event, directed only at 225. However, it is likely that some time in preparation would have been spent in consideration of the issues in 101. Making due allowance for the fact that the hearing was nominally to deal with both cases and the fact that it dealt explicitly with the separate motion in 101, it is clear that there should be some deduction. We are satisfied that a deduction of 15% from the total figure makes ample provision for these matters. This leaves Mr Telfer with a liability of £15267.53. This will have to be set off against the sum awarded to him.