Scottish Sheriff Court Decisions

SHERIFFDOM OF SOUTH STRATHCLYDE DUMFRIES AND GALLOWAY AT DUMFRIES

2015SCDUMF 39

NOTE

by

SHERIFF GEORGE JAMIESON

 

(Modification of expenses in small claim summary cause SA475/14)

 

PK McNAUGHT

Pursuer

 

Against

 

DAVID MILLIGAN

Defender

________________________________________________________________________

DUMFRIES:                                                       April 2015

 

Act: Ian McNaught (pursuer’s husband), Authorised Lay Representative                        

Alt: Party represented by Whitelaw, CAB, Authorised Lay Representative           

The sheriff, having resumed consideration of the cause, and in terms of  general regulation 5(a) of the Act of Sederunt (Fees of Solicitors in the Sheriff Court) (Amendment and Further Provisions) 1993, grants the defender’s motion made at the diet for approval of expenses on 9 April 2015 to the extent of modifying the pursuer’s expenses to the sum of £150.00, grants final decree in terms of rule 21.6(10) of the Small Claims Rules 2002 finding the defender liable pay to the pursuer the sum of £325.00 Sterling with interest thereon at the rate of 8% a year from 19 September 2014 with expenses of £150.00.

                 Sheriff George Jamieson

NOTE:

Issue

• [1]A small claim is a species of summary cause[1] for, amongst others[2], payment of a sum of less than £3,000[3], to which apply special rules in relation to judicial expenses. The general rules are that in defended proceedings[4] at first instance[5] -

   

  • No expenses are awarded in small claims for payment of less than £200[6];
  • Expenses not exceeding £150 may be awarded where the value of the claim is £1,500 or less[7]; and
  • Where the value of the claim is greater than £1,500, expenses may not exceed 10% of the value of the claim[8].

     

• [2]Section 36 B (3) of the 1971 Act provides, by way of exception, that these rules do not apply to defended proceedings at first instance where:

   

  • A defender, having stated a defence, has not proceeded with it[9];
  • A defender, having stated and proceeded with a defence, has not acted in good faith as to its merits[10]; or
  • There has been unreasonable conduct in relation to the proceedings on the claim on the part of a party to the proceedings[11].

     

• [3]Where one of the exceptions specified in section 36 B (3) of the 191 Act applies, the sheriff clerk must, with the approval of the sheriff, assess the amount of expenses awarded in a small claim in accordance with the applicable statutory table of fees[12]. Where, as in this case, a party is represented by an authorised lay representative, he is entitled to expenses in accordance with the Litigants in Person (Costs and Expenses) Act 1975[13], namely –

   

  1. Work done which was reasonably required in connection with the cause, up to the maximum of two-thirds of the sum allowable to a solicitor for that work under the table of fees for solicitors in judicial proceedings; and
  2. Outlays reasonably incurred for the proper conduct of the cause[14].

      

• [4]The pursuer claims the defender, while her tenant, failed to pay his final instalment of rent. The defender disputes this and seeks to adduce evidence to prove he paid all instalments due to the pursuer. A hearing was assigned for 11 December 2014. The dispute was not resolved on that date. The hearing was continued for the court to consider evidence to 2 February 2015. The defender did not appear on that date. The sheriff granted decree by default[15]. He found the defender liable to the pursuer in the expenses of the cause as assessed. The sheriff clerk assessed expenses in the sum of £629.63. The claim called before me for approval of these expenses. The defender’s representative objected to the amount assessed on the ground the amount exceeded the £150 limit for a claim of £325. She moved for modification of expenses to £150. The pursuer opposed this motion. The issue for me was whether I should grant that motion.

  Interlocutor

   

• [5]The interlocutor of 2 February 2015 was pronounced, according to the pursuer’s representative, on the prompting of the sheriff; the sheriff clerk depute advises she asked the sheriff whether the expenses were to be as assessed or they were to be on the undefended scale; in response, he indicated they were to be as assessed. The pursuer was unaware of the rule restricting expenses to a maximum of £150, or the exceptions to that rule. It appears no motion was made by the pursuer’s representative to the sheriff to find that any of the exceptions specified in section 36 B (3) of the 1971 Act applied. To complicate matters further, the interlocutor does not contain a direction in terms of general regulation 2 of the Act of Sederunt (Fees of Solicitors in the Sheriff Court) (Amendment and Further Provisions) 1993, that the pursuer’s account shall be taxed otherwise by reference to the sum decerned for. Absent such a direction, the sheriff clerk should arguably have restricted the expenses to £150 for the sheriff did not direct that expenses were to be awarded on the summary cause scale; the sum decerned for was £325, and in those circumstances, there being no finding that any of the exceptions specified in section 36 B (3) of the 1971 Act applied, expenses should have been limited to £150. General regulation 14 (f) of the Act of Sederunt (Fees of Solicitors in the Sheriff Court) (Amendment and Further Provisions) 1993 also appears to have been overlooked for all fees chargeable under chapter IV of that Act of Sederunt in respect of the actions mentioned in the left-hand column of the following table shall, unless the sheriff, on a motion in that behalf, otherwise directs, be reduced by the amount of the percentage specified opposite those actions in the right-hand column of the following table[16]:–

   

  Actions

  Percentage reduction

  1. of a value  from £1,000 to £2,500

  25%

  2. of a value of less than £1,000

  50%

   

   

  No such motion was made and the interlocutor makes no direction that the percentage reduction of 50% in this case, the value of the claim being less than £1,000, should not have applied to the assessed expenses.

   

• [6]The pursuer’s account of expenses was lodged in accordance with part III of Chapter IV of the Act of Sederunt (Fees of Solicitors in the Sheriff Court) (Amendment and Further Provisions) 1993[17]. No issue was taken by the defender’s representative in respect of the assessment of the account by the sheriff clerk in accordance with that table, adjusted in accordance with the Act of Sederunt (Expenses of Party Litigants) 1976, rule 2(1)[18]. It appears however from comparing the the pro forma table used for the assessment with the latest table inserted by the Act of Sederunt (Fees of Solicitors in the Sheriff Court) (Amendment) 2014, that an earlier version of Part III of Chapter IV of the Table of Fees was used for the assessment. The only material difference appears to be that there is no longer any allowance for posts and incidents[19]. Deducting that allowance from the fees element, and applying a 50% reduction to the resulting figure in accordance with general regulation 14(f), brings out an allowable fee of £248.50; adding the court fee as an allowable outlay, brings the total figure that should have been assessed in accordance with the Table of Fees to £321.50.

   

• [7]How am I to respond to the motion for modification of expenses to £150? The sheriff awarded expenses “as assessed”, although if he had considered the rules relating to expenses in small claims, it is unlikely, in my opinion he would have done so. No motion was made to him for expenses on the summary cause scale justified by reference to the exceptions to the limitations specified in section 36 B (3) of the 1971 Act. In the absence of such a motion expenses were due to be assessed with reference to the sum decerned for, £325, resulting in a maximum award of £150. Since the total amount due on assessment would have been £321.50, it is appropriate in my view to modify the expenses to the maximum award of £150. There is nothing in the case to suggest the defender proceeded with a defence other than in good faith; there was a case to answer based on his statement of defence and productions attached thereto. His failure to appear at the continued hearing on 2 February was due to an oversight on his part resulting from health problems correctly to record the date and a failure in CAB’s electronic diary. In my opinion, he cannot be said not to have proceeded with his defence because of this default; perhaps that may be the case with defences stated only for a dilatory purpose but in the circumstances of this case, the defender was intending to continue with his defence. I am therefore satisfied none of the exceptions specified in section 36 B (3) of the 1971 Act applied in this case. Had they done so, I would have modified expenses to £321.50 for the reasons stated above.

   

  Lessons

   

• [8]If I am correct in my understanding of the various rules relating to awards of expenses in small claims, it seems to me a number of lessons should be drawn from this case. These include:

1. Expenses awarded to a party in a defended small claim at first instance should normally be restricted by the sheriff in accordance with the rules applying to those expenses.
2. The sheriff should only pronounce an interlocutor for expenses “as assessed” in a small claim where an exception specified in section 36 B (3) applies[20].
3. The sheriff should only find an exception specified in section 36 B (3) of the 1971 Act applies on motion made by a party to the cause and after preferably giving a non-compearing party an opportunity of appearing to oppose such a motion.
4. If the sheriff does decide to award assessed expenses in a small claim he must in addition specify in the interlocutor that expenses are to be assessed on the summary cause scale, failing which they must be assessed by the sheriff clerk with reference to the sum decerned for so as not to exceed the restrictions on awards of expenses applicable to small claims[21].
5. In assessing summary cause expenses in a small claim, the sheriff clerk must reduce the fees element in accordance with the table in general regulation 14(f), unless the sheriff, on a motion made to him, has directed otherwise[22].