Claimant in simple procedure case entitled to uncapped expenses after accepting tender to settle

A sheriff made an order finding the respondent Paul Farrell liable to the claimant Ian Graham in the expenses of the process as taxed on the basis that the defender “has not proceeded” with his defence in terms of section 81(5) of the Courts Reform (Scotland) Act 2014, and ordered the claimant to lodge an account of expenses in his action for payment.

Tender to settle

Sheriff Kenneth McGowan at Edinburgh Sheriff Court heard that the claimant raised the action in January 2017 and, no response having been received, was granted an order for payment of the sum claimed together with undefended scale expenses of £315.87.

The claimant subsequently consented to recall of the order on the basis of certain documents had not been served with the claim form and that there was a defence to the claim.

Following an unsuccessful attempt at mediation the respondent was ordered to lodge revised answers and an evidential hearing was fixed.

In advance of the evidential hearing the respondent lodged a tender for £3,000, with the taxed expenses of process to date, in full settlement of the claim, which was accepted.

Motion for expenses of process

Thereafter the claimant lodged an application for an account of expenses and a hearing on expenses on the basis that the action was not one to which capped expenses applied, but the respondent opposed the motion arguing that the expenses should be restricted to 10% of the £3,000 decerned for, in terms of provision 3(b) of the Sheriff Court (Simple Procedure) (Limits on Award of Expenses) Order 2016.

On behalf of the claimant it was submitted that the acceptance of the minute of tender in an unqualified form set up an “enforceable obligation” on the respondent to pay to the claimant “the taxed expenses of process”, and that the level of expenses to be awarded in a defended Simple Procedure case was determined by the Act of Sederunt (Fees of Solicitors in the Sheriff Court)(Amendment and Further Provisions) 1993, as amended.

Further, it was submitted that in terms of the 1993 Act of Sederunt that the claimant’s solicitors’ account shall in any event be taxed (read to mean “assessed”) by reference to the sum “decerned” (i.e. the sum sued) for, unless the court directs otherwise, and that the plain and ordinary meaning of “the sum decerned for” was the sum “sued for”, not “the sum that is agreed in settlement of the principal sum sued for”.

The case of Tallo v Clark 2015 SLT “(Sh Ct) 181, where the Sheriff Principal upheld a sheriff’s decision that the pursuer was entitled to expenses on the summary cause scale after the defender “having stated a defence, has not proceeded with it,” following the interpretation in the appeal Fenton v Uniroyal Tyres Ltd 1995 SLT (Sh Ct) 21, should be regarded as “highly persuasive,” it was said.

Restricted expenses

But on behalf of the respondent it was submitted that the court should order that the expenses be restricted to 10% of the sum decerned for in terms of Article 3 of The Sheriff Court Simple Procedure (Limits on Award of Expenses) Order 2016 (2016/3880 and section 2 of Paragraph 2 of the Act of Sederunt (Fees of Solicitors in the Sheriff Court (Amendment and Further Provisions) 1993.

It was also argued that the sum decerned for did not mean the same as the sum claimed for: the word “decern” was defined as “a formal word meaning to give decree or judgement and authorises an extract of the decree or order”.

Sheriff McGowan agreed with the respondent that the “sum decerned for” meant the sum for which was decree was granted, but otherwise agreed with the claimant’s position.

The fact that the case was settled by tender and acceptance made no difference, as the tender had carried an offer to pay expenses.

The crucial point was the meaning of the phrase “has not proceeded with”, which was “definitively determined” in Tallo to mean “not proceeding with the hearing on evidence and obtaining a decision or judgment of the court”.

Claimant entitled to uncapped expenses

In a written note, Sheriff McGowan said: “Subject to one matter, in my opinion, the submissions for the pursuer are to be preferred. The exception is that I do not agree with the submission that the sum decerned for is the same as the sum claimed. It is clear in my view that it is the court which “decerns” by granting decree. Other than that, the legislation enacted and in force was intended to replicate that which had gone before in relation to small claims actions.

“On behalf of the respondent, I was invited to hold that since the sum (to be) decerned for was £3000, the matter was regulated by the 2016 Act of Sederunt and expenses were thus limited to £300, being 10% thereof. In my view, that is to ignore completely the meaning and effect of section 81(4) of the 2014 Act.

“It follows that the decision in Tallo, if not binding on me, must be treated as being highly persuasive. On the face of it, there is no relevant factor distinguishing the present case from that in Tallo which would entitle me not to follow it.”