SHERIFFDOM OF GLASGOW AND STRATHKELVIN AT GLASGOW
JUDGMENT
of
Sheriff MUNGO BOVEY QC
in the cause
CARR BERMAN CRICHTON LIMITED
pursuers
Against
THOMAS JONES
defender
COURT REF NO SA1126/13
Act: McNairney instructed by Carr Berman Crichton, Solicitors, Glasgow
Alt: party litigant
Glasgow, January 2014
The Sheriff, having resumed consideration of the cause finds the defender liable to the pursuers in the expenses of the cause on the summary cause scale; certifies the cause as suitable for the employment of junior counsel at the hearing on 9 January 2014.
Sheriff
NOTE
(1) This £100 dispute has given rise to a number of difficult issues.
A The terms of the settlement
(2) The pursuers brought this small claim for professional fees in the sum of £2,496.
(3) On 9 January 2014, it called before me. I was told that it had called before me on 7 August 2013 at a diet set out for a full hearing. At that stage, Mr Paul Fairbridge, a solicitor employed by the pursuers appeared for them and the defender appeared for himself. In light of what I was told, I discharged the hearing set down for that day.
(4) A dispute subsequently arose as to what I was told on 7 August and, in due course, the matter was again before me on 9 January. Unfortunately, as I had not been alerted to the reason for this allocation in advance, I did not check my notes from August or bring them to court. Given the small sum that was between the parties, I was reluctant to continue the matter to another day to make reference to them. Perhaps for the same reason, neither party took up my suggestion that another sheriff should decide the matter.
(5) In relation to the August hearing, the Clerk of Court made the following entry in the register of small claims:
"act: fairbridge alt pp- having heard from the pursuers' agent and form the def personally in respect that the def has agreed to pay the sum of £1,800 [to] the pursuers in two instalments, the first instalment of £1,000 within 4 weeks from todays date and the 2nd instalment of £800 within 6 weeks of today's date, thereafter continues the cause to the small claims roll of 27/9/13 at 10am to enable the said payments and in the event of payments being made the cause can be dismissed on that day."
(6) The process did not disclose any authentication by me of this entry as rule 5 of the small claims rules[1] requires.
(7) At this stage, I had no recollection of the hearing in August let alone its content. In the circumstances, I found myself in the unusual position of hearing evidence as to what had happened in my own court.
(8) Mr Jones' account was that Mr Fairbridge had said that the parties were near to settlement and had asked for a decree which I had refused. Rather I had "moved the date forward 3 months". He had said the figure was much less than that sued for. He had "no recollection" of a conversation with me or the Clerk giving settlement figures. He had paid £1,000 but no more. He had no explanation for the terms of the minute. He had not heard any sum mentioned in Court. He could only assume that Mr Fairbridge had mentioned it to the Clerk after the hearing.
(9) In cross-examination, reference was made to an email the defender sent to Mr Fairbridge on 17 September 2013 in response to a message from Mr Fairbridge that the whole £1800, being still outstanding, was due the next day:
"...it may be first thing in the morning before I transfer [the 1000] over.
"Also the agreement was for £1700 not £1800
"Please advise me asap as to your position regarding my date for second payment"
(10)His response was that this was not the first occasion on which he had challenged the £1800 figure. Between 7 August and this email, he had offered to pay that sum if given time to pay. In fact, I think this must be a reference to a further email he sent on 21 October 2013 in the following terms:
"...These circumstances have an effect on my finances which continues to be acute and which effects my ability to pay the 800 this week
"In view view of this I propose to pay you 200 tomorrow and a further 200 next week and thereafter 100 per week till it is paid
"The irony here is clear and I expect you to agree to these terms
"In the event that you are unwilling to accept this in the circumstances I will have no alternative other than to take the following action
" I will attend court and defend my position. I will advise that you have changed the agreed amount from £1700 to £1800 and will write to the legal complaints commission regarding what I believe and can prove was your solicitors attempt to fraudulently obtain fees from me
"I will not be intimidated any more and I am unconcerned at your threats of decrees...."
(11)In his evidence, Mr Fairbridge told me that the case was due to be heard on 7 August by another Sheriff who had indicated that lack of judicial time meant it had poor prospects of going ahead. This was not the first time. He then shuttled between the solicitor whose fees were at stake who was in the agents' room and the defender. At the last stage, his instructions were to accept £1900 while the defender was offering £1800. The Clerk had then advised that because the matter was settling, I was available to deal with the settlement. This arose because the Clerk mistook his talk of settlement as being an indication that settlement had been achieved. With the Court imminent, he had taken the decision to accept the £1800. He advised me that settlement was not quite reached; a figure had been agreed for which he wanted a decree. He didn't at that stage mention the amount as it was still being discussed on a without prejudice basis. I indicated that, in the context of a settlement, I couldn't grant a decree without the agreement of the defender which was not forthcoming. Time to pay was asked for. They hadn't had time to discuss this. I had then facilitated an agreement whereby a substantial payment would be made in four weeks and the rest paid two weeks after that. After that, I had then asked what the sums involved were and he told me they were £1000 and £800.
(12)As I listened to Mr Jones, I was concerned at his use of the expressions that he had "no recollection" of a conversation with me or the Clerk giving settlement figures and "had not heard" any sum mentioned in Court. These were less certain than I was looking for in contradiction of the contemporaneous record contained in the minute. Mr Fairbridge's evidence awoke in me a recollection of the events which corresponded with his account. I would not have heard him as to the amounts involved outwith the presence of the defender. There was no reason why the amounts should have been privately communicated to the Clerk after the hearing before me.
(13) In the circumstances, I accepted that the minute recording the Court of 7 August is an accurate one. I have since had the opportunity of consulting the notes I took at the time. Although they support Mr Fairbridge's account, they stop short of the point at which the sums agreed were disclosed to the Court. They do, however, indicate that he was concerned that if I was not prepared to grant a decree, the pursuers should be able to prove the terms of the settlement. This seems supportive of the idea that the agreed sum was said in open Court and not privately to the Clerk.
(14)In the circumstances, I found that settlement at £1800 was agreed and that £800 was still outstanding. There seemed to be little alternative to granting decree for that sum which I did.
B Expenses
(15)Counsel for the pursuer sought an award of expenses on the summary cause scale as taxed. He did so by reference to section 36B of the Sheriff Courts (Scotland) Act 1971[2].
(16) A "small claim" is a form of summary cause process used for the purposes of such descriptions of summary cause proceedings as are prescribed by the Lord Advocate by order[3].
(17)Section 36B is in the following terms:
Expenses in small claims.
(1) No award of expenses shall be made in a small claim in which the value of the claim does not exceed such sum as the Lord Advocate shall prescribe by order.
(2) Any expenses which the sheriff may award in any other small claim shall not exceed such sum as the Lord Advocate shall prescribe by order
(3) Subsections (1) and (2) above do not apply to a party to a small claim-(a)who being a defender- (i)has not stated a defence; or (ii)having stated a defence, has not proceeded with it; or (iii)having stated and proceeded with a defence, has not acted in good faith as to its merits; or
(b)on whose part there has been unreasonable conduct in relation to the proceedings or the claim; nor do they apply in relation to an appeal to the sheriff principal.
(4)An order under this section shall be by statutory instrument but shall not be made unless a draft of it has been approved by a resolution of each House of Parliament.
(18) Counsel sought summary cause expenses under subsections (3)(a)(ii) and (3)(b).
B1 section 36B(3)(a)(ii)
B1.1 whether a defence was stated and not proceeded with
(19)The defence stated was in two parts, that excessive fees were deducted from the defender's share of the proceeds of the matrimonial home and that the solicitor acting in his divorce failed to follow his instructions and misrepresented his position. A counterclaim was lodged and, on 3 May 2013, withdrawn. The defence was departed from to the extent that the settlement of 7 August superseded both the claim and the defence.
(20) In the present case, the settlement was for a sum several hundred pounds lower than that sued for. In Gilmour v Patterson[4] Sheriff Principal Macleod considered section 36B in a case where the defender stated a defence but then paid the sum sought.
(21) It appears[5] that the Sheriff had held that a defender who had reached a settlement might escape the detriment of the provision. However, at page 12C, Sheriff Principal Macleod said: "Settlement involves resolving the question of expenses." This statement seems to be essential for the issue the Sheriff Principal was deciding. It does not seem to depend on the fact that the defender had paid the whole sum rather than negotiating a compromise one. I am driven to hold that having stated a defence, the defender has not proceeded with it.
(22)In Semple v Black[6] Sheriff Principal Wheatley in Tayside Central and Fife considered this issue in the context of a case where a compromise had been reached[7]. Even on the more nuanced approach in that case, the result seems to be the same here. It is certainly the same on the basis of the decision in Glover v Deighan[8] where Sheriff Principal Hay in North Strathclyde declined to distinguish Gilmour on the basis that the case before him had been a compromise settlement and Fenton Uniroyal Englebert Tyres Ltd [9]where Sheriff Principal Nicholson reached the same result by a slightly different route.
B1.2 whether, if a defence was stated and not proceeded with, any award of expenses must be on the summary cause scale
(23)In that event, argued Counsel, I had no discretion but had to award expenses on the summary cause scale.
(24)In Gilmour Sheriff Principal Macleod applied the rule then relevant[10] to the effect that a where a defender has stated a defence but not proceeded with it, "...rule 88 of the Summary Cause Rules (expenses) shall apply to the determination of expenses in a small claim as it applies to the determination of expenses in a summary cause." Rule 88 of the Summary Cause Rules[11] provides: "The fees an outlays of solicitors ...shall, subject to the approval of the sheriff, be fixed by the sheriff clerk in accordance with the statutory table of fees appropriate to the summary cause."
(25)Rule 21. 6 of the current small claims rules[12] deals with Expenses:
(1) This rule applies, subject to section 36B of the 1971 Act, to the determination of expenses-
(a)in a claim, where the defender has-
(i)not stated a defence;
(ii)having stated a defence, has not proceeded with it; or
(iii)having stated a defence, has not acted in good faith as to its merits; and
(b)in an appeal to the sheriff principal.
(2)...Subject to paragraphs (3) to (5), the sheriff clerk must, with the approval of the sheriff, assess the amount of expenses including the fees and outlays of witnesses awarded in any claim, in accordance with the statutory table of fees of solicitors appropriate to a summary cause.
(26)Sheriff Principal Macleod dismissed[13] the Sheriff's reliance on the proviso to the Act of Sederunt (Fees of Solicitors in the Sheriff Court)[14] which is in the following terms: "The pursuer's solicitor's account as between party and party shall be taxed by reference to the sum decerned for unless the sheriff otherwise directs."
(27)He reasoned that rule 88(1), in this particular respect, directs attention exclusively to the Table of Fees in the schedule to the 1989 regulations. "It thus excludes the discretion expressed in paragraph 2". This approach appears to deny the Sheriff of any discretion as to the scale to be applied in expenses in summary causes.
(28)In Semple, Sheriff Principal Wheatley said that the Sheriff in that case was "....entitled to exercise what appears to be an absolute discretion as to what level of expenses is appropriate in terms of the proviso to paragraph 2 to schedule 1 to the Act of Sederunt (Fees of Solicitors in the Sheriff Court) (Amendment and Further Provisions) 1993"[15]: "2. The pursuer's solicitor's account shall be taxed by reference to the sum decerned for unless the court otherwise directs." The 1993 regulations appear still to be in force.
(29)Left to my own devices, I should very much prefer the discretion as to scale which Sheriff Principal Wheatley found in Semple to the approach of Sheriff Principal Macleod in Gilmour v Patterson[16] and the other cases to which I have referred.
(30)In that event, I would exercise my discretion against awarding expenses on the summary cause scale under this provision. In terms of rule 9.2 the Sheriff is required before noting the defence to "seek to negotiate and secure settlement of the claim between the parties." I would not regard this duty as coming to an end when a defence is stated. It is certainly my practice when cases call for a hearing to encourage and facilitate settlement. I would consider it detrimental to the prospects of achieving settlement if I were required to penalise a defender who settles after stating a defence by finding him liable for summary cause rather than small claims expenses. These considerations apply with full force to the present case which is typical to the extent that this was not the first diet and a lack of Court time meant that a substantive hearing could not take place on the day settlement was negotiated. What went wrong went wrong after the settlement.
(31)However, if in point, Gilmour is binding on me. In that regard, I find that the direction in the current rule that the sheriff clerk must, with the approval of the sheriff, assess the amount of expenses awarded in any claim, in accordance with the statutory table of fees of solicitors appropriate to a summary cause to be just the kind of reference to a table of fees that Sheriff Principal Macleod decided[17] excluded the discretion Sheriff Principal Wheatley has found.
(32)In these circumstances, it seems that, as the defender has stated and not insisted in a defence, his liability for expenses must be on the summary cause scale.
B2 section 36B(3)(b)
(33)I accept the submission that Mr Jones is guilty of unreasonable conduct in relation to the proceedings. In general I do not consider that a party whose evidence has been rejected is by virtue of that rejection guilty of unreasonable conduct - even where he has been disbelieved.
(34)However, I consider his attitude to the settlement proceedings on 7 August to be obstruction for the sake of it. I am concerned that his email of 21 October suggests a conditional quality to his intention to make complaint in court about the conduct he alleged against Mr Fairbridge of having agreed £1700 and having had £1800 put in the Court records. I reject his submission that he has acted in good faith in this regard.
(35)Having said all that, I consider that Mr Jones' unreasonable behaviour dates only from the date of settlement. He is to be commended for having reached a settlement agreement.
(36)Had I the discretion to which I have referred above, I would use it to distinguish different parts of the litigation. In these circumstances, I would find the defender liable to the pursuer for the expenses of the cause on the basis that up to 7 August they are taxed as a small claim and thereafter on the summary cause scale.
(37)As it is, it appears that, having found this provision to be satisfied,I am obliged to find him liable for summary cause expenses in relation to the whole action.
C Sanction for Counsel
(38)Counsel sought sanction for the employment of junior counsel in the hearing before me on 9 January 2014. His involvement falls on any view into the period of summary cause expenses which opens the door to such a motion.
(39)Counsel referred me to paragraph 12.25 of Macphail Sheriff Court Practice[18] where the test was said to appear to be whether the employment of counsel is appropriate by reason of circumstances of difficulty or complexity, or the importance or value of the claim. He recognised that the sum in dispute was very small but relied upon the next sentence in Macphail:
(40)"A claim of small value may involve imputations on the personal or professional character of a party of such seriousness that representation by counsel is appropriate. "
(41)This proposition seems to be vouched by the case cited for it[19].
(42)It seems to me that the allegation that Mr Fairbridge, a solicitor and an employee of the pursuers, had substituted a higher sum than that agreed was an imputation on the professional character of that party. It was also an imputation of a similar nature on the professional character of their lawyer. In my view, these imputations were of such seriousness that it is entirely understandable that the pursuers and Mr Fairbridge would wish representation by counsel. In this context, I note that the substantive defence made allegations as to the professional conduct of another solicitor in the pursuers. The threat in the defender's email of 21 October quoted above to "...write to the legal complaints commission regarding what I believe and can prove was your solicitors attempt to fraudulently obtain fees from me..." might relate to this matter or the merits of the action. Even if it were the latter, I consider it understandable that the solicitors were very exercised about the prospect of the allegation of dishonesty being made against Mr Fairbridge. The steps taken to protect themselves by engaging counsel were entirely reasonable.
(43)While I have viewed this matter primarily from the point of view of the party who employed counsel, I do not lose sight of the impact on the party who will be required to pay for him if I grant this motion. In that regard, I take into account the fact that the circumstances that prompted the pursuers to employ counsel were brought about by the defender himself.
(44)In the whole circumstances, the employment of counsel on 9 January was appropriate and I shall grant sanction accordingly.
Mungo Bovey QC
Sheriff
January 2014