Inner House makes expenses award against Lord Advocate in Salvesen v Riddell case

The motion for expenses against the Lord Advocate in the case of Salvesen v Riddell came after the UK Supreme Court upheld a ruling of the Inner House that a Scots law provision enabling a general partner to continue a farming tenancy after dissolution of a limited partnership lease was incompatible with the European Convention on Human Rights because it infringed the landlord’s property rights.

The Lord President, Lord Gill (pictured), sitting with Lady Clark of Calton and Lord Wheatley, explained that the respondents were the general partners in a limited liability partnership that was tenant of the appellant’s farm.

The limited liability partnership agreement provided that the partnership would come to an end on 28 November 2008, and on 3 February 2003 the appellant gave notice of dissolution to that effect.

However, in March 2003 on the eve of the passing of the Agricultural Holdings (Scotland) Bill, an amendment was proposed by the Deputy Minister, and agreed to by the Scottish Parliament, that was “seriously detrimental” to the appellant’s interests.

The effect of the amendment was that because the notice of dissolution had been served after 16 September 2002, the respondents would be entitled to serve notice of their intention to become joint tenants of the farm.

On 12 December 2008 the respondents duly served the notice and upon receiving it, the appellant applied to the Land Court for an order under section 72(8) of the Agricultural Holdings (Scotland) Act 2003 and for removing of the respondents, but the Land Court refused the application.

In an appeal to the Court of Session in which the Lord Advocate intervened on behalf of the Scottish Ministers, the Inner House concluded that that section 72 was ultra vires, and the Lord Advocate then appealed to the Supreme Court.

Meanwhile however, the appellant settled with the respondents and the agreement was that he would obtain vacant possession and that no expenses would be due to or by either party.

In consequence of the settlement, neither the appellant nor the respondents took part in the proceedings in the Supreme Court, which held that section 72(10) of the 2003 Act was not compliant with Article 1 of the First Protocol of the European Convention and therefore “outside the legislative competence of the Scottish Parliament”.

The appellant thereafter enrolled the motion against the Lord Advocate for the expenses of process of the appeal and of the Land Court on an indemnity basis – to include the expenses occasioned by the involvement of the respondents – which failing the expenses on a party and party basis with an additional fee under Rule 42.

Lord Gill – with whom Lady Clark and Lord Wheatley agreed – held that the appellant could not seek to recover expenses from the Lord Advocate in relation to the action in the Land Court, since the challenge to the vires of section 72 had not been raised and the Lord Advocate was not convened in the proceedings.

In relation to the expenses in the Court of Session, the court considered that a “fair assessment” would be to find the Lord Advocate liable in 50 per cent of the appellant’s expenses, since he intervened in the appeal only when the Convention point was raised.

Delivering his opinion, the Lord President said: “In my view the expenses for which the Lord Advocate is found liable should be on the scale that is moved for. This was a litigation that the appellant was forced to conduct in defence of his right to vacant possession of his property against legislation that was found to be beyond the competence of the Parliament.

“In general, the court awards indemnity expenses to mark its disapproval of a party’s conduct of a litigation; but in a discretionary matter of this kind, there may be other valid reasons for its doing so. In this case the appellant has not been put to expense by the unreasonable conduct of an opponent. He has been put to expense by reason of an invalid statutory provision that, had he not challenged its lawfulness, might well have resulted in the loss of vacant possession of his farm and consequently in a substantial loss of capital value.

“The appellant was unavoidably drawn into this costly and prolonged litigation in consequence of a provision that ought not to have been passed. In all the circumstances, I conclude that expenses in this court on the scale proposed are entirely justified. I propose…that we should grant the motion in relation to 50 per cent of the expenses of the proceedings in this court only; and that those expenses should be on the scale agent and client, client paying.”