Kidd v Paull and Williamsons LLP
| Jurisdiction | Scotland |
| Judge | Lord Tyre |
| Judgment Date | 26 September 2017 |
| Neutral Citation | [2017] CSOH 124 |
| Date | 26 September 2017 |
| Court | Court of Session (Outer House) |
| Docket Number | No 14 |
[2017] CSOH 124
Outer House
Lord Tyre
Anderson v Anderson (1896) 4 SLT 36
Cameron andWaterston v Muir & Sons (1861) 23 D 535; 33 Scot Jur 272
Jaffray v Jaffray 1909 SC 577; 1909 1 SLT 234
Logan and ors (Byres' Trs) v Gemmell and ors (1896) 4 SLT 21
Mars UK Ltd v Teknowledge Ltd [1999] 2 Costs LR 44; [2000] FSR 138; (1999) 22 (10) IPD 22097
Martin & Co (UK) Ltd, Petrs [2013] CSOH 25; 2013 GWD 8–173
Tods Murray WS v Arakin Ltd [2013] CSOH 134; 2013 GWD 28–560
Vaughan v Davidson (1854) 16 D 922
Waddel v Hope (1843) 6 D 160
Maclaren, JA, Expenses in the Supreme and Sheriff Courts of Scotland (W Green, Edinburgh, 1912), pp 43, 302, 303
Expenses — Motion for interim payment to account of expenses — Whether special reasons required — Whether motion for interim payment should be granted when account not yet lodged or taxed
Robert Kidd, a former client of Paull and Williamsons LLP seeks damages from the defenders for losses which he claims to have sustained as a consequence of the sale of part of his interest in a company. Following debate, a proof before answer was fixed for 9 January 2018. By interlocutor of 25 November 2016, the Lord Ordinary (Tyre) pronounced an interlocutor finding the defenders liable to the pursuer in various expenses, all on an agent and client, client paying basis, together with an additional fee. The pursuer enrolled a motion for payment within 14 days of £2,000,000 as an interim payment of expenses, with interest at the judicial rate from expiry of the 14-day period. The motion was opposed and proceeded to a hearing before the Lord Ordinary, on 7 September 2017.
The pursuer raised an action for damages against the defenders. Before the conclusion of the action, the Lord Ordinary found the defenders liable to the pursuer (on an agent and client, client paying basis) for the expenses occasioned by a minute of amendment and the discharge of a diet of proof, as well as one-half of the expenses of the action to date except in so far as already dealt with. The Lord Ordinary also found the pursuer entitled to an additional fee. No account of expenses had yet been lodged for taxation but the pursuer enrolled a motion for payment of £2,000,000 within 14 days as an interim payment of expenses. The motion was opposed.
The pursuer submitted that special reasons were not required for the granting of such a motion and that it was a matter for the discretion of the court. However, if special reasons were required they were: (1) the conduct of the defenders which had led to an award of expenses on an agent client, client paying basis; (2) the size of the sum due; (3) the complexity of the process of making up an account of expenses; and (4) the prejudice to the pursuer in having to continue to litigate without recourse to funds to which he had been found entitled. The pursuer further submitted that it was very unlikely that a lower sum than the sum sought would be awarded after taxation.
The defenders submitted that: (1) an interim award should only be made in special circumstances of which there were none in this case; (2) no award should be made at this time because if the defenders were ultimately successful there would be a very large contra-award to set against the pursuer's award; and (3) the sum sought was excessive.
Held that: (1) it was competent to order payment of a specified sum by way of interim payment (para 12); (2) the requirement for special circumstances did not mean that an order would only be made in exceptional circumstances, rather it was within the court's discretion to make an order if there was sufficient reason for so doing (para 13); (3) the defenders’ conduct did not amount to a special reason since the court had already expressed its disapproval by making the award of expenses on an agent and client, client paying basis (para 14); (4) the size of the sum due as well as the scale, complexity and cost of the process of preparation and taxation of the account, and the fact the pursuer required to fund an ongoing litigation together afforded sufficient reason (paras 14, 15); (5) especially in the absence of any detailed exposition of the fees and outlays incurred, the court would adopt a conservative approach in assessing the quantum of the interim payment (para 17); and motion granted and defenders ordained to make an interim payment to the pursuer of the sum of £1,000,000 with interest accruing thereon at the judicial rate after 14 days from the date of the interlocutor.
Observed that, in the event that the interim award exceeds the taxed award, there is almost certainly an obligation to repay the excess interest at the judicial rate from the date of the interim payment (para 18).
Cameron and Waterson v Muir & Sons (1861) 23 D 535 and Martin & Co (UK) Ltd, Petrs2013 GWD 8–173considered.
At advising, on 26 September 2017—
Lord Tyre—
[1] In this action the pursuer, a former client of the first defender and its predecessor firm Paull and Williamsons, seeks damages from the defenders for losses which he claims to have sustained as a consequence of the sale in September 2009 of part of his interest in a company called ITS Tubular Services (Holdings) Ltd. The sum sued for is US$210 million. Further details of the factual background are set out in my opinion of 3 February 2017 ([2017] CSOH 16). Proof before answer has been allowed and is set to commence on 9 January 2018.
[2] On 25 November 2016, I pronounced an interlocutor finding the defenders liable to the pursuer for: (i) the expenses of a minute of amendment; (ii) the expenses of the discharge of a diet of proof; and (iii) one-half of the expenses of the action to date except in so far as otherwise dealt with. Each...
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