MAN HEN LIU AGAINST ANDERSON'S SOLICITORS LLP
OUTER HOUSE, COURT OF SESSION
[2016] CSOH 169
A823/15
NOTE OF LORD WOOLMAN
In the cause
MAN HEN LIU
Pursuer
against
ANDERSON’S SOLICITORS LLP
Defender
Pursuer: Summers, QC; Kennedys Scotland
Defender: D Thompson; DWF LLP
16 November 2016
[1] In 2010 the pursuer raised an action against the defenders in Glasgow Sheriff Court. He sought damages of £500,000 for alleged professional negligence. He was represented by Yuill and Kyle, solicitors.
[2] Following a debate, Sheriff Deutsch granted decree of absolvitor in respect of one head of claim and dismissed the action in respect of the remaining heads of claim. His decision was dated 26 April 2012. The pursuer marked an appeal to this court. Following revisions to the pursuer’s pleadings, the parties agreed that the appeal should not proceed. This court therefore remitted the case to the sheriff and he fixed a five-day proof before answer to commence on 10 March 2014.
[3] By letter dated 19 February 2014, Yuill and Kyle withdrew from acting on the pursuer’s behalf. The pursuer then instructed Mr John Wilkinson of Cannons Law Practice. Mr Wilkinson told the pursuer that there was insufficient time for him to obtain the papers and carry out the preparations in order to appear at the proof.
[4] Meantime the sheriff had fixed a hearing for 26 February to determine further procedure. Mr Wilkinson was unavailable to attend that hearing, but he arranged for another solicitor to attend on behalf of the pursuer and to seek a discharge of the proof. The sheriff refused that application and by letter dated 28 February Mr Wilkinson withdrew from acting.
[5] The sheriff fixed a further hearing to take place on Friday 7 March, three days before the start of the proof, to consider matters. The pursuer attended with his son, who is not legally qualified. Because the pursuer’s English is poor, his son represented his position in court.
[6] The sheriff granted the pursuer’s motion to discharge the diet of proof, but he did so on three conditions: (a) the pursuer was liable for all of the defenders’ expenses to date, (b) the scale of expenses was on an agent and client basis, and (c) payment of the expenses was a condition precedent to further progress in the action.
[7] The pursuer again contacted Mr Wilkinson, who considered that the sheriff had erred in relation to the orders for expenses. He enrolled a motion for leave to appeal. It was due to be heard on 1 April. Unfortunately Mr Wilkinson was admitted to hospital as an emergency patient the previous day and was unable to attend. Although a locum solicitor attended in his place, he was not in a position to argue the case. The sheriff refused the motion, but he indicated that he would be minded to allow a second motion even if it was enrolled out of time.
[8] That is what happened. The sheriff heard the motion for leave to appeal on 16 April 2014 when Mr Wilkinson appeared on behalf of the pursuer. Condescendence 6 states:
“Mr Wilkinson then commenced his submission, but, before he had completed the introductory part of it, the Sheriff asked Mr Wilkinson if he was aware that the pursuer had consented to the award of expenses. Mr Wilkinson said that he was not aware that the pursuer had consented to the award of expenses, but assumed that the Sheriff’s recollection that he had was correct. Working on that assumption, Mr Wilkinson did not continue with his submission, and the motion for leave to appeal was refused by the Sheriff.”
[9] The defenders dispute this account in their Answers. In particular, they state that “the sheriff indicated (at some length) to the pursuer’s solicitor that he did not understand in what respect or respects it might be said that he had wrongly exercised his discretion regarding expenses”. As this is a debate on the Procedure Roll, I take the pursuer’s averments pro veritate.
[10] The sheriff issued a Note about the hearings at the request of the defenders. With regard to the hearing on 7 March he stated that the solicitor for the defenders indicated that she would consent to discharge, subject to the three conditions mentioned above and continued:
“The pursuer indicated that he was content to pay the expenses of the discharge, but invited the court to reserve all questions of expenses until new agents were in the saddle. I explained to the pursuer that ordinarily in such circumstances that would be the approach which I would be inclined to adopt. I went on to explain at some length that, in the particular circumstances of this case and in fairness to the defender and to the court itself, to proceed in that way was not appropriate. The case was now four years old, it had undergone a tortuous procedural history which had involved substantial amendment procedure as well as a debate and an appeal to the Court of Session, which had resolved with further amendment procedure. When eventually the case came to proof, the court would be required to adjudicate on factual matters which, when the action was first raised, were already of some antiquity. Although perhaps not personally the fault of the pursuer it appeared to me that the action had been conducted incompetently or unreasonable (sic). I considered the situation to be precisely of the kind when it was appropriate for the court to impose a sanction.”
[11] With regard to the motion heard on 16 April 2014, he stated:
“I refused it principally because I was not presented with any clear indication of how it was said that I had erred in the exercise my discretion. I do recall adding that in any event my recollection was that the pursuer had consented. Having reviewed my record of what took place on 7 March 2014, I can confirm that was not the case.”
[12] The defender’s agents then prepared an account of expenses that brought out a figure of £148,100. On 23 September 2014, the sheriff at Glasgow decerned for payment and that interlocutor was extracted on 24 October 2014. The charge was served on the pursuer on 5 November and he subsequently sought interim suspension, which was granted by Lord Kinclaven on 19 November. Subsequently he lodged an appeal against the decision of 7 March. It was heard on 30 September 2015. The sheriff principal refused the appeal on the basis that the decree for expenses had been extracted and in any event there had been delay in seeking to appeal out of time.
[13] In the present action, the pursuer seeks to reduce the sheriff’s interlocutors dated 7 March, 1 and 16 April and 23 September, all 2014, together with the sheriff principal’s interlocutor dated 30 September 2015. He also seeks to reduce the charge dated 5 November 2014. The ground of action is succinctly set out in the first plea in law for the pursuer:
“The interlocutor pronounced by the sheriff at Glasgow on 7 March 2014, having created a miscarriage of justice, and the circumstances in which reduction of it is sought being exceptional, decree of reduction should be granted.”
[14] The fact that the pursuer challenges that decision is apparent in Articles 11, 12 and 13 of Condescendence.
Legal Framework
[15] There was no dispute about the applicable legal principles which I summarise as follows. With regard to expenses:
(a) It is a question of discretion to be exercised in the light of the whole circumstances.
(b) A judge may award the whole expenses up to a certain point against one party; determine that it should pay on an agent and client basis, and make payment a condition precedent to further procedure.
[16] With regard to the remedy of reduction:
(a) The general rule is that it is incompetent to seek reduction of decrees in foro.
(b) There must be exceptional circumstances that have produced a miscarriage of justice, such as to render the whole proceedings “fundamentally null”: Adair v Colville & Sons 1926 SC (HL) 51, 67 per Lord Carson.
(c) It does not amount to a miscarriage of justice that a sheriff made a mistake in fact or law: Philp v Reid 1927 SCT 224, 229 per LJC Alness.
(d) Reduction is not normally competent when other means of review are prescribed, and these means have either been utilised or the parties have failed to take advantage of them: Adair v Colville & Sons at 56 per Viscount Dunedin.
[17] With regard to leave to appeal
(a) This is a question of discretion and not a question of law: Ure v Ure 1947 SC 305, 311 per Lord Mackay.
(b) If a sheriff refuses leave to appeal an appeal is generally incompetent: MacPhail, Sheriff Court Practice 3rd edition, 18. 48.
Submissions for the Defenders
[18] Mr Thomson submitted that it is not competent to seek to reduce a decree on the merits on the basis that it was wrong in fact or law. Rather, a pursuer must aver exceptional circumstances. That had not happened here. The thrust of the complaint is that the sheriff wrongly exercised the discretion that he possessed.
Submissions for the Pursuer
[19] Mr Summers based his submission on five propositions:
(1) The interlocutor of 16 April is reducible on the ground of miscarriage of justice if as a result of the judge giving erroneous information, the agent was dissuaded from making submissions in support of his motion.
(2) The interlocutor of 7 March is reducible if the pursuer has no other remedy.
(3) The fact that the interlocutor of 7 March states that the motion for expenses was “opposed” is not decisive as the agent (a) was entitled to assume that the sheriff was correct, and (b) received no warning of the point and had no reason to focus on the wording of the interlocutor beforehand.
(4) This court is entitled to look at the underlying merits in considering whether there has been a miscarriage of justice. Here the merits strongly favour the pursuer because (a) the sheriff failed to establish that the practical effect of his order would be to prevent the pursuer from progressing his claim for damages, (b) the sheriff was not entitled to award expenses of the cause to date as the discharge of the proof had not rendered all of the prior procedure abortive, and (c) expenses are supposed to be compensatory not punitive and there was no basis for making an award payable on an agent and client basis.
(5) There had not been delay to such an extent that this court should exercise its discretion against the pursuer.
[20] As Mr Summers developed his submission, he expressly disavowed any attempt to review the decision of 7 March. He trained his focus on the hearing on 16 April and submitted that because the sheriff had misstated the position, justice had not been seen to be done. The pursuer had been deprived of the opportunity to seek leave to appeal. He pointed out that the practical effect of the award of expenses was to prevent the pursuer from insisting in his action.
Decision
[21] The pursuer accepts that the sheriff was entitled to make the decision in respect of expenses on 7 March. It was one that was available to him. The pursuer also accepts that it is inappropriate to seek review of that decision by means of an action of reduction.
[22] That sits at odds with the written pleadings where the pursuer directs his challenge against the decision on 7 March. That is evident from the first plea in law. It is also evident from the averments, for example, the statement that “The award of expenses was Draconian” (Condescendence 12).
[23] There was a prescribed means of review against that decision: Mr Liu was entitled to seek leave to appeal. He utilised that opportunity. The hearing took place.
[24] The central thrust of the submission made at the bar is that the pursuer was deprived of the opportunity of seeking leave to appeal by reason of the intervention made by the sheriff at the hearing on 16 April. That is said to be a miscarriage of justice. I disagree.
[25] Mr Wilkinson ought to have taken instructions on what had happened on 7 March. The interlocutor clearly stated that the motion for expenses had been opposed. He decided not to press the application. The pursuer must accept responsibility for the decision.
[26] I am not satisfied that the pursuer has averred a relevant case. In my view, this is an attempt to seek review of the sheriff’s decision on expenses by another route. Accordingly I shall sustain the defenders’ second plea in law and dismiss the action.