The taxpayer’s success in the case of Joseph Nicholas Hanson has been confirmed by the Upper Tax Tribunal. It echoed the lower tribunal’s view that ‒ contrary to HMRC guidance ‒ the ownership of a farmhouse does not affect its entitlement to agricultural property relief from inheritance tax. The only relevant question is who occupies the house.

My earlier blog on this can be found here.

The decision from the Upper Tax Tribunal can be found here.

Inner House case considering a claim for damages under the Occupiers Liability (Scotland) Act 1960. Mr Dawson worked as a self employed courier and was delivering a package to Ms Page’s cottage. Building works were taking place at the cottage and the surroundings resembled a building site.  After making two unsuccessful visits to the cottage to deliver the package, Mr Dawson left the package under an oil storage tank in the back garden. As he was leaving the cottage he slipped on a wet plank over a trench in the garden and injured his hand.

Mr Dawson’s claim for damages failed in the Outer House.  After noting wet planks are slippery and a notice is not required to point that out, Lord Glennie found that there was no requirement on Ms Page to exclude people from the site or give warning of the risks. The Inner House observed that the fundamental aim of the 1960 Act had been to the restore a broad test of reasonableness in relation to such claims and rejected Mr Dawson’s appeal which was based the argument that Lord Glennie should not have reached the conclusion that a state of affairs which is obvious is not a danger.

The full decision is available from Scottish Courts here.

All of our property and conveyancing case summaries are contained in the LKS Property and Conveyancing Casebook here.

My speech at this morning’s Borders Business Forum event.

Good morning

Before I start, can I just say how great it was to see Scotland win last Saturday.  Not just win, but play so well and with as usual a massive contribution from the Borders.  We will remember Stuart Hogg’s try for a long, long time.

Now to why we are here today and why I think we need a forum for businesses in the Borders.

Let’s look back for a minute.

In his book, the “Waverley Route”, David Spaven discusses some of the reasons why we lost our railway.  One of these was the fractured response from various groups and organisations in the Borders, including business organisations.

Ironically the mixed messages from the Borders also did not help the campaign for the return of our railway.  It gave a great deal of ammunition to those opposed to the re-opening of part of the Waverley line.

Then there was the campaign, in which I was involved, to save the Border Reivers professional rugby team.  Again the lack of a unified response meant there was little chance of us persuading the SRU to change its mind.

Now ask ourselves: are we really putting enough pressure on the Scottish Government on improving the A7, the A68 and the dualling of the A1 to the English Border?

Then there is the bigger picture.

It is no exaggeration to say that these are momentous times in Scotland.  There will be a referendum on Scottish independence in 2014.  Scotland could again be independent by March 2016.  There is also the possibility of a referendum on UK membership of the European Union.

It is very easy for politicians to ignore us if we are not clear in what we are asking or arguing for.

These, in my opinion, are just some of the reasons why we need a Borders Business Forum.

The idea of a Borders Business Forum is not that we will agree on everything.  Of course we won’t.

There are though certain issues that we could come together and debate and hopefully find a common voice.

These issues might include the campaign to extend the Waverley line to Carlisle, superfast broadband of which we have just heard about, the quality of our TV and media coverage and the dualling of the A1 to the English Border.  There are of course many others.

When I took over as Convener of the Scottish Borders Chamber of Commerce I made trying to organise some kind of forum for business organisations in the Borders one of my priorities.

This did not start well.  I was told by many that this could not be done including by officials here at Scottish Borders Council.  Well here we are.

I was told that it would be easier if the various business organisations simply merged.  Easier for whom?  I was also told that there were around 50 such organisations as if this was the worst thing in the world.

My response was simple.  Why is this necessarily a bad thing?  Surely we should be celebrating the fact that so many business people in the Borders freely give up some of their spare time to help other businesses.  I was then simply ignored until after the local elections last year.

So what has changed?  One of the main changes is that we have a new administration at Scottish Borders Council.

I would like to place on record my thanks to Councillor Stuart Bell and his officials for not only hosting today’s event but for making a real effort to engage seriously with the business community here in the Borders.

The role of Scottish Borders Council has been crucial in getting so many of us here today.  For one thing, the Council seemed to be the only body that had regular contact with the various Borders business organisations.

When I have thought of a Borders Business forum I have not imagined a body that imposes its thoughts and ideas on all the business organisations in the Borders.  It is not a governing body.  Business organisations, and indeed any business, can play as much of a role as they wish and that they are comfortable with.

The Borders covers a large and diverse area.  That is why we need local business organisations.  We also need special interest business organisations.  We also need business organisations that are part of larger bodies.  We already have these.

What we don’t have is a forum where our business organisations can come together as we are doing today and debate issues such as broadband.

It is for the business organisations to decide if they wish to have such a forum and if they do what it then does.

A Borders business forum might also bring other practical benefits.

We generally do different things.  Although we work well together I am sure we can do better.  I would like to see the contact details for all our business organisations made easily accessible.  The same with all our events.  I would like to see more joint events.  These are just some of the things that a Borders Business Forum might help to bring about.

There are also so many great things going on here in the Borders just now that we need to let more people know about.

The new visitor centre at Abbotsford House, Eyemouth Harbour can now receive cruise ships, our first crematorium is now in operation, a second is planned, the Borders Book Festival, the Border Union Show, the new 3G sports arena, plans are now in place for a purpose-built mountain bike chairlift at Innerleithen, our common ridings, our “Sevens” tournaments, our first palliative care unit, a site has been found for the Bill McLaren museum and of course the start of construction of our railway.   I am sure everyone here today could add to this list.

One last point.  Why am I involved with the Chamber?  To be honest, it was more luck than choice. I could have just as easily joined the FSB or another business organisation here in the Borders or in Edinburgh.  I like a lot of people am as often away from the Borders as here.

The important thing for me is that the business organisation I belong to is willing to help and speak up for businesses in the Borders.  If that is the Chamber, great.  If it is another organisation then that is great too.  My priority is the Borders.

Think of how much stronger we would be if we shared more of our knowledge and resources.

Think how strong our voice could be if we speak as one on the major business issues affecting the Borders.

Thank you

James Aitken

Convener Scottish Borders Chamber of Commerce

16 February 2013

Inner House case considering an appeal by Bagmoor against a decision of the Scottish Ministers to adopt the recommendation of their reporter and reject Bagmoor’s planning application for a 14 turbine wind farm at Stacain near Inveraray in Argyll.

The site lies within Glen Etive and Glen Fyne Special Protection Area which was created to protect golden eagles and the reporter’s recommendation to reject the application was based primarily on the effect the wind farm would have on the eagles.

In essence Bagmoor’s appeal was based on their complaint that the reporter had not given adequate reasons for his decision. This was rejected by the Inner House which found that on each substantive or determining issue the reporter had given intelligible reasons for his decision and refused Bagmoor’s appeal.

Procedure
Central to the decision was the procedure to be followed under Conservation (Natural Habitats etc.) Regulations 1994 (SI 1994 No 2716), which implement the Habitats (92/43/EEC) and Birds (2009/147/EC) Directives. Regulation 48 requires that an appropriate assessment is carried out as regards plans which are likely to have a significant effect on a European site (in this case, the Glen Etive and Glen Fyne SPA). This involves a two stage procedure, the first stage being a preliminary examination to determine whether an appropriate assessment requires to be carried out. The second stage is a detailed assessment of the plans. If plans can be clearly carried out without an effect on the site, there is no need for the more detailed assessment. The court had the following to say on the matter:

 “There is no prescribed formula as to how the two stage exercise contemplated by regulation 48 and the Court of Justice is to be carried out. There are several ways in which it might be done in the context of domestic planning legislation and, no doubt, the precise form will depend upon a range of facts and circumstances, including the nature of the permission sought and the conservation objectives to be protected. However, with an application such as the present, at least by the time the respondents elect to call it in and order a public inquiry, it ought to be made clear, at least in the normal case, that any preliminary examination stage has been passed and that what is to be carried out at the inquiry is an “appropriate assessment” in terms of regulation 48(1)(a). Public inquiries are not held in order to undertake preliminary examinations.

It may just be possible, in a rare case, for the respondents to order an inquiry yet leave it to the reporter to decide whether an appropriate assessment is required. If that were done, the first “screening” stage ought to take the form of a preliminary examination undertaken (or the form of which could be agreed) at a pre-inquiry meeting and before any assessment is embarked upon. What should not occur, as happened here, is that the reporter carry out a detailed assessment and then decide that such an assessment was required before re-assessing the same evidence to reach a substantive decision. Put another way, there was no point in the applicants adducing a body of detailed evidence and then inviting the reporter to determine whether there was any need to adduce it.”

The reporter’s decision
In coming to his conclusion the Reporter had taken account of evidence of displacement of eagles from another wind farm at Beinn Ghlas. Bagmoor argued that this evidence was too qualified or limited in character to justify a finding either that eagle’s occupation of  Beinn Ghlas had been affected by  the wind farm, or that a wind farm at Stacain would cause a similar abandonment. However the court noted that, in terms of the legislation, the reporter required to recommend approval of the application only if he could be “certain”, that the plan would not adversely affect the SPA’s integrity. In these circumstances, it had been sufficient for the reporter to find that the evidence left open the possibility that a wind farm at Stacain would lead to abandonment of part of the site by the eagles. The reporter had not therefore required to resolve every aspect of the evidence or every subsidiary issue relating to the site at Beinn Ghlas.

Bagmoor also objected to the reporter’s consideration of evidence from Scottish Natural Heritage that eagles had 99% chance of avoiding a collision with the turbines and the contribution that “behavioural displacement” (i.e. the eagles moving away from the wind farm site to avoid collisions) made to that figure. However, it was common ground the eagles would tend to shy away from use of the wind farm and that constructing the wind farm would represent a loss of foraging ground. The court found that the reporter’s reference to the 99% avoidance rate in this context was simply confirmation of what had already been clear and had been ascertained during his screening exercise. The displacement of the eagles had been “effectively confirmed” by that rate.

The full judgement is available from Scottish Courts here.

All of our property and conveyancing case summaries are contained in the LKS Property and Conveyancing Casebook here.

Merry Christmas from Legal Knowledge Scotland.

Thank you for all your support during our second year and best wishes for 2013.

Good morning everyone. 

Firstly I would like to thank everyone for attending the Annual General Meeting of the Scottish Borders Chamber of Commerce.  I am James Aitken and I am the Convener of the Chamber.   I will make further introductions as we go along.    

The order of events this morning is fairly straightforward.  I will talk about what has been happening in the Chamber over the past year and also a few other thoughts.  You will no doubt be relieved to hear I only intend to speak for 10 minutes or so.  I will then see if anyone has any questions. 

I will then ask Craig Little, the Chamber’s Treasurer, to give a review of our financial situation.  I understand that Craig has brought a number of copies of our accounts for anyone who would like a copy.

Then I will ask the other Directors if they would like to give a quick update on their respective business sectors. 

I will then invite any final questions from the floor.   

We should be finished the formal part of the AGM by around 9:15.  Please stay on if you can. 

So to the Chamber and the past year. 

The past year has seen the appointment of almost a completely new Board of Directors including myself as Convener.   

One of the first things the new Board did was to undertake a complete review of how the Chamber operates.  I will come back to this in a minute or so. 

In addition, and more importantly in my opinion, the Board asked themselves the following question:  is there still a need for a Scottish Borders Chamber of Commerce?  After lengthy discussions over a number of months, a majority of the Board said yes.  There was though a number of caveats.  These included that we must be financially viable, we must not be reliant on external funding, we must not be just another talking shop or “boys” club.  The Board also agreed to ask itself the same question at the end of this year.  I am pleased to report that progress is being made on these caveats.                    

Now to the day to day running of the Chamber.

Our finances are now in a much improved state.  However, to get to this position the Board, like many other businesses, has had to take some hard decisions in the past year to reduce our overheads.  That included the Board having to make a valued employee redundant.   In fact our sole employee.  This has meant an increased workload for the Directors. 

The Board also agreed to freeze our membership rates for this and the following year and to offer a discount for members rejoining within a month of the start of our new financial year.  As the Chamber no longer receives any external funding, and will not in fact seek further external funding, the Chamber is now almost entirely dependent on membership income.   Craig will cover our finances in more detail in a few minutes and will answer any questions you may have.

The Board has also had to deal with a number of problematic historical issues.    I am again glad to report that progress has been made on all of these historical issues and in particular the Border Works issue.   

The Board discussions have also resulted in a series of changes and improvements to the way we operate.    This is of course a work in progress and a great deal still needs to be done.    

Tne major change concerned communications and the appointment of a consultant, Harry McGrath, to deal with this vitally important task on our behalf.  Harry deals with both internal, our members, and external, the press to give an example, communications. 

This has included a new website which is regularly updated, regular emails to our members, a much improved twitter presence and more press releases.  The feedback we have received to date on these changes has been very positive. 

Other matters which we are still working on include membership, appointment of new Directors and events. 

On membership we are to begin a membership drive in August. 

As for Directors, a number of new Directors have already been appointed.  This is obviously an ongoing process.  I also intend to create an association of former Directors of the Chamber.  The advantages to the Chamber of keeping in touch with former Directors are obvious.    

On events Jim Mather, former Scottish Government Enterprise, Energy and Tourism Minister, and Alyn Smyth a Scottish Member of the European Parliament who has a particular interest in agricultural matters, have agreed to speak at events to be held in October and November respectively.   A third winter event involving Craig Little will be announced shortly. 

We are also considering holding a networking event every 2 months or so.  This is something we are going to ask our members for their views on in the next week or so. 

The review that the Board has undertaken would not be of much use if we had only looked at internal Chamber matters. 

A great deal of time has been spent considering our relationship with various bodies such as the Scottish Chambers of Commerce, neighbouring Chambers and other local business organisations, Scottish Borders Council and our local politicians.

Can I take this opportunity to thank Ged Cowans for his work with the Scottish Chambers on behalf of the Board.

Shortly after becoming Convener, Ged and I held a number of meetings with our neighbouring Chambers in the Lothians.  These Chambers were considering a merger and asked us if we also wanted to become part of a larger Chamber. 

One of the reasons why the Board unanimously rejected a merger was the amount of time taking up discussing the “City regions” policy.  I made the position of our Chamber clear.  Of course we want to work closely with our neighbouring Chambers, however, although we agree that Edinburgh is important to the Borders our links with Dumfries and Galloway and Northumberland are just as important to us. 

The Board’s position on this is straightforward.  The Borders needs a business organisation or even organisations whose priority is to represent the interests of the Borders business community.

Now to Scottish Borders Council and in particular its economic development department. 

To be clear I have not been impressed and I have made this clear to those I have dealt with.  The Chamber does not see its role to simply provide a token representative from the business community to the latest talking shop being mooted or document to sign in front of the press.   

That said, it is only a few weeks since the local elections were held.   It was clear from reading the various manifestos that each party and many of those standing as independents, see the economy as a priority.  That as far as we are concerned means a fresh start. 

I have already had a very constructive telephone conversation with Stuart Bell, the councillor now in charge of economic development.  I am meeting Stuart again in the next week or so and he has agreed to come and speak at our August Board meeting.   

I have also made it clear to Stuart that the Chamber will continue to campaign for a forum for all business organisations in the Borders.  You may be surprised to know that there are almost 50 such organisations in the Borders.  Instead of wasting time and effort trying to get these bodies to merge let’s try a different approach.   Let’s acknowledge and celebrate the fact that so many people are willing to try and help business flourish in the Borders.  I will continue to press on this.

Every politician I have met or spoken to is in favour of the idea of this forum.

That brings me nicely on to our meetings with our local politicians.

So far we have met or spoken to Michael Moore, Chic Brodie, John Lamont, Christine Grahame and a number of councillors including David Parker.  Other meetings are planned.   One interesting idea that arose from these meetings was the idea of MSPs holding surgeries specifically for businesses.   Another was arranging a meeting of all the South of Scotland Chambers.

A couple of final points. 

Let’s not forget that there are many great things going on in the Borders just now.  Eyemouth Harbour can now receive cruise ships, our first crematorium is now in operation, a second is almost complete, the Borders Book Festival, the Border Union Show, the new 3G Arena in Gala, mountain biking at Glentress, our common ridings.  I could go on and on.   

Then there is the return of our railway that should never have been taken away in the first place.  This is a fantastic opportunity for the business community in the Borders.  Let’s ensure that we fully realise its potential.   That includes making sure that Twedbank is not the final stop on this line.      

I would also like to take this opportunity to thank my fellow Directors, both past and present, for their continued support and all their hard work over the past year.  Our Directors do not even claim expenses.  In particular I would like to thank Fiona Drane, my predecessor as Convener, and Sally Scott-Aiton our former employee, for all the time and effort they put in to the Chamber. I would also like to thank Gordon and Kate for accommodating us today. 

Lastly, and by no means least, I would like to thank our members for their continued support.

The weekend before last was supposed to play host to one of the biggest electronic music events in the UK, Baselogic Productions’ Bloc Festival. Following 6 successful annual events and despite a move from Butlins holiday park to the London ‘Pleasure Gardens’ the festival sold almost 15,600 tickets out of a capacity of 18,000. Replete with techno godfathers Richie Hawtin and Carl Craig it looked set to be the event of the summer.  However, it was not to be.

The chosen site in central London, which saw the festival spread out over venues including a ship moored at the Royal Victoria docks, was not equipped to handle the crowd capacity, with most punters spending the first evening queuing rather than watching any bands and those who entered the separate venues not being able to leave due to too few exits.  Ticketing was handled by the unfortunately named ‘Crowdsurge’, who maintain the site was under capacity The plug was pulled at 12:45am Saturday morning, with 15,000 festival-goers informed that the remainder of the festival was cancelled.

Interestingly, as the dust has settled, BP have gone into administration. Unable to honour their debts to the artists due to the obligation to refund 15,600 tickets, BP find themselves in a position not faced by any other festival organiser before in the UK.  After a mere 2 weeks of lectures on the Glasgow University LLB course on corporate administration, this raised more questions than I can find answers to, from a legal perspective, given how different a festival organisers business is compared to a company that trades all year round. At face value, if they are obliged to refund all tickets for the events, this would mean their liabilities (artist payments for the artists who either played Friday night or were in London prepared to play their time slot) exceed their assets, so administration would be unavoidable. But even trying to organise thoughts on the consequences into a logical order is proving impossible, almost as hard as trying to fathom why so many people like techno….

How does a ‘festival’ trade throughout the year?
How are the administrators, appointed under the Insolvency Act 1986, going to continue trading as BP? Administrators are tasked with rescuing the company as an ongoing concern, but BP only host one event a year. A festival organiser such as All Tomorrow’s Parties host events worldwide every couple of months and have a steady stream of revenue all year long, whereas bloc presumably take in ticket sales in advance of the festival and a percentage of catering /onsite entertainment/drinks/merchandise sales for only one weekend of the year.  The amount that currently remains from the proceeds of ticket sales will depend on money already expended on upfront costs – venue rent, live music and alcohol permits, flights for performers (which some insist on in advance) and other attendant costs of putting on a festival. Assuming they have the credit facilities to last until a new festival can be organised, how will BP be able to put on another festival successful enough to recoup the money lost on the 2012 fiasco and cover the costs of the make-up festival?  Do the electronic artists that travel from all over the globe have enough solidarity with the genre and festival that they will perform out of charity? How will BP convince administrators that this could even be accomplished? Do they have financial reserves built up from previous years?

How are ingoings and outgoings handled for a festival?
Organisation starts almost immediately after the end of the prior year’s festivals. Live event permits have to be paid upfront as do the costs for renting the venues.  Organisers must take a wage, either monthly or following the completion of accounts for the previous festival. The online records available for BP’s financial year ending 31/3/2011 put ‘cash at bank’ (the same value as ‘total assets’) at £167,636 and their ‘total liabilities’ at £140,886. In short, BP look roughly £27,000 in the red.  Bloc 2011 took place on the weekend accounts were filed. Whether this means all bands fees are paid out of ticket sales prior to the festival commencing and all other percentage cuts are handled after the festival, I don’t know. This puts BPs theoretical reserves at £27,000. As a small festival, it would stand to reason that BP as a private limited company lease rather than own, which would explain why total assets are the same as cash assets in their accounts. Suffice to say, their reserves do not look substantial.

Do the festival attendees and performers both rank as unsecured creditors?
BP have not announced how ticket refunds will be handled, but affirmed that they will be. Is the consequence of administration that festival goers rank as unsecured creditors?  If so, where will they rank? There are also the performers (that actually performed, those who found out about the cancellation may have been able to mitigate their losses and avoid unnecessary travel and expense) and security staff (provided by agencies).  And before this, the administrators fees have to now be satisfied, which as witnessed in the ongoing Rangers administration case can reach up to £130 per hour per administrator.  Someone has to lose out.  The bulk of the costs will be non-recoverable: permits, venue rent, alcohol licenses etc. If ticket sales went to satisfying those costs, where will refund money for 15,800 disappointed festival-goers come from? It doesn’t exist anymore, which suggests Bloc’s audience will bear the brunt of the affair. Festivals thrive on reputation and regular annual attendees, which Bloc had up until this weekend.  The shame of it is that with the disappearance of Glade festival and Barcelona’s Sonar being a more expensive affair, Bloc has always represented an excellent festival for a cheap ticket price. It begs the question, how could something as fundamental as crowd capacity and control be handled so terribly in the festival preparation?

UPDATE: – Since starting this blog, The Guardian has revealed that BP have gone into voluntary liquidation.  Sean Michaels reports that BP’s assets are going to be sapped by liquidators fees and claims of other creditors. Refunds for ticket-holders look increasingly unlikely, but I can’t imagine 15,800 ticket holders are going to techno for an answer….

We are on holiday until Monday 18 June.  Our blogs will resume then.

Outer House case relating to a personal guarantee granted by Mr Kipling to Dunbar Bank.  The bank issued a charge for the payment of over £1m on Mr Kipling on the basis of the guarantee.

Mr Kipling argued amongst other things that he was not liable to pay as the bank had agreed to waive its right to recover under the guarantee.

Lord Pentland granted an interim suspension and interdict preventing the bank from taking diligence against Mr Kipling following on from the charge.

Subsequent to the granting of the interim interdict, Mr Kipling made amendments to his pleadings which led the bank to enrol a motion to recall the interim interdict, arguing that, given the amendments, the interim interdict was obtained in circumstances where Mr Kipling had failed to make full and frank disclosure on all matters material to his application for the interim orders and also that, following the amendments, the pleadings no longer disclosed a prima face case.

Lord Drummond Young refused the motion to recall the interim interdict.  Five general matters are relevant when considering the application for, or suspension of, such an order:

1. the court’s decision on an interim order is not a conclusive determination of the parties’ dispute;
2. the orders under consideration are merely temporary orders;
3. the court must give consideration to the balance of convenience. I.e. the prejudice that may occur to each of the parties in the event that an interim order is made or recalled (which requires a judgment as to both the likelihood and the seriousness of such prejudice);
4. the relative strength of the cases put forward by the parties;
5. the relative strength of the case that is said to justify an interim order must always be weighed with balance of convenience in the sense of likely prejudice.

As regards the matter before him, Lord Drummond Young found that, although the relative strengths of the cases tended to favour the bank (Mr Kipling’s case relied on the bank having given up its guarantee for no obvious return), given that, if the interim order were withdrawn, the bank could proceed with diligence and ultimately sequestration against Mr Kipling, Mr Kipling’s case on the balance of convenience outweighed the relative strength of the bank’s case.

The full judgement is available from Scottish Courts here.

All of our property and conveyancing case summaries are contained in the LKS Property and Conveyancing Casebook here.

Merry Christmas from Legal Knowledge Scotland.

Thanks for all the support during our first year and best wishes for 2012.