News archive

Outer House case in which Mrs Hoblyn sought reduction of a decree authorising the bank to take possession of a house occupied by her, suspension (and interim suspension) of a notice of ejection against her and interdict (and interim interdict) preventing the bank from selling the house. The Court initially granted orders temporarily suspending the eviction and preventing the sale of the house. However, the bank sought recall of those orders.

The house had formerly been the matrimonial home shared by Mrs Hoblyn, her former husband and their children but it was owned solely by Mr Holbyn. Mr Holbyn had not lived in the house since the couple separated in 1994 and he was later sequestrated. The bank, which held a standard security over the house, had taken action to repossess and sell the house after the related loan account fell into arrears.

Mrs Holbyn’s ground of challenge appeared to be that the correct statutory procedure had not been followed. She gave evidence of the actings of her former husband who she said (unbeknown to her) had acted in bad faith in his financial dealings and also challenged the good faith of his sequestration, arguing that he had arranged his own sequestration to avoid debts he had incurred.

Although Lord Drummond Young sympathised with Mrs Holbyn’s predicament and accepted that she was likely to suffer hardship, he found that she had failed to make anything approaching a prima face case. It had been clear that the bank had done everything required of it by way of service on Mrs Holbyn and procedure under the legislation. The problem was that the house was subject to a standard security in respect of a loan to Mr Holbyn and that loan payments had not been made. In those circumstances the bank was entitled to enforce the security, if necessary by repossessing the house and selling it. The fundamental objectives of the law of heritable security would be frustrated if that course were not available. Consequently, Lord Drummond Young recalled the interim suspension and interdict the court had previously granted.

The full judgement is available from Scottish Courts here.

Mrs Holbyn sought and was refused an interim interdict preventing the eviction and an appeal against that decision was also refused in the Inner House ([2014] CSIH 52).

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

If you require private client or commercial property holiday or other temporary absence cover please get in touch with James Aitken: james@legalknowledgescotland.com

Legal Knowledge Scotland is looking for a litigation specialist to provide a number of litigation knowledge services.  If this is something you might be interested in please contact James Aitken:  james@legalknowledgescotland.com

Tax issues are and will continue to play a central role in the Scottish independence referendum debate.  The debate is not just about whether tax powers reside in Edinburgh or London.  What about Brussels or each local authority?  What about tax avoidance?  What about the type and form each tax takes?  If Scotland votes ‘YES’ should it retain the UK system for a number of years before any major changes are made?

The presentation is in three main parts and continues on from my blog: “Tax powers so far refused by Westminster”.  This blog can be found here.

1. The present position and the “battle for Scottish tax powers”

2. What the Unionist parties are likely to offer in the event of a ‘NO’ vote

3. Compare and contrast this with a ‘YES’ vote

If you would like to find out more about this presentation please feel free to contact me at: james@legalknowledgescotland.com

Where to start with so much happening in “tax land” just now.

Let’s start with the increasing interest by the UK and other governments in offshore tax havens and in particular the creation of “beneficial ownership registers”.  The issue here is that it is often very difficult to find out who the actual owner of an asset is.  The “legal owner”, the name stated on a land register or a share register, may be different to the so-called beneficial owner, the person who actually benefits from the asset in question.  This distinction can also be of use when trying to avoid tax and in particular hiding ownership and/or benefit from a particular tax authority.

This issue was on the agenda at the recent G8 summit in Northern Ireland.  Partial agreement was reached but it is not clear if trusts as well as companies will be included, which countries will actually set up these registers, who will have access to these registers and how long this is going to take.  More on the “Loch Erne Declaration” from the BBC news website can be found here.

There is no shortage of ideas surrounding tax these days. For example, Justin King, the chief executive of Sainsbury’s, has called on the UK Government to follow the US by introducing a “marketplace fairness tax” for online retailers and predicted that the need to revamp the corporate tax system will be a battleground at the next election.  More on this from the Telegraph can be found here.

Google only seems to be in the news these days when its tax affairs are being discussed.  The House of Common’s Public Accounts Committee has called on HMRC to fully investigate Google’s tax arrangements in a report critical of the company’s corporation tax avoidance. More on this from the Scotsman can be found here.

Ed Miliband and George Osborne have traded charges of hypocrisy over party funding as it emerged that Labour had received a donation of shares from TV shopping channel magnate John Mills. Mr Mills admitted he had given the party shares rather than cash because it was “tax efficient”. Labour suggested the Chancellor’s involvement in the matter was hypocritical, given the Tories’ own efforts to seek donations that avoided tax. More on this from the Guardian can be found here.

Now to the ever increasing range of Scottish taxes, charges and duties.  Scotland is to follow the Republic of Ireland, Wales and and Northern Ireland in introducing a charge on plastic bags.  The charge is to be 5p and the funds are to go to good causes.  Regulations will be introduced in the Scottish Parliament in time for businesses to start charging by October 2014. The information released so far seems sensible and well thought out and in particular the effort to reduce any burden on small businesses is to be welcomed.  More on this can be found here.                                                                                 

More than half-a-million Scots are in danger of being worse off when the Scottish Parliament gains new powers over income tax because the current system would not allow them to claim tax relief on their private ­pensions.  More on this from the Scotsman can be found here.  This simply confirms how ill thought out the Scotland Act’s income tax proposal is.  Dividing control of a tax between two legislatures is rarely sensible or workable.

Now to the Scottish Conservatives and their never ending debate on further powers for the Scottish Parliament.  Coverage of their recent conference was dominated by the differences of opinion on this issue within the Scottish Conservative party.  More on this can be found from the Scotsman here and the Telegraph here.

The Scottish Green party is urging the Scottish Government to be bolder on land reform and to look at measures including land value tax.  I agree that this is something that needs to be looked at.  More on this can be found here.

When I read stories such as this I know that tax simplification is never going to happen.  David Cameron has said that married couples are to be given a tax break in the near future.  The tax break will be worth up to £150.  The income tax legislation is already complicated enough and, given the state of HMRC just now, I can guess its  private reaction to ideas such as this.  More on this from the Telegraph can be found here.

I wonder what the rest of Scotland thinks of this suggestion.  If Edinburgh’s £776m tram system is to have any chance of making even a small profit over the next fifteen years a tax concession will be required.  It is claimed that a large part of somehthing called the “sinking-fund” might be tax deductible but the City of Edinburgh Council has confirmed that it has not yet made approaches to HMRC to confirm that this is indeed the case.  More on this can be found in the Times of 27 June.

Now to matters slightly further afield.  The European Commission has published its plans to require EU member states to automatically exchange information about all forms of taxpayers’ income including dividends and capital gains, as well as the bank balances of all EU residents.  This is further evidence of the increasing role the EU is playing, and intends to play, in tax and financial matters.  More on this can be found here.

In addition, Italy, Belgium, Greece, Poland and Finland’s Aland Islands have failed to implement the European administrative co-operation directive, which requires member states to automatically exchange information on their residents’ taxable income. The implementation deadline expired six months ago, and the European Commission says it will take the countries to the European Court of Justice if they persist in ignoring the directive, which is soon to be extended to cover other types of income.   More on this from Reuters can be found here.

Taxpayers have brought litigation against the Canada Revenue Agency’s use of its general anti-avoidance rule (GAAR) on 52 occasions since it was introduced, and won exactly half of them, according to new CRA figures. Three-quarters of the litigated cases turned on whether there was misuse or abuse of the GAAR or another statute.  More on this can be found here.  This is of particular interest given that we will soon have a UK GAAR.

Now to the USA and back to the “beneficial ownership” issue.  The US President’s office has promised to introduce comprehensive legislation requiring the disclosure of beneficial ownership information, which currently does not exist in the US either at state or federal level. The promise is part of an action plan issued after last week’s G8 summit.   More on this from STEP can be found here.

The US Supreme Court has held that the surviving spouse of a same-sex marriage must be granted the spousal estate tax exemption, despite provisions of the Federal “Defense of Marriage Act” restricting federal benefits to traditional mixed-sex couples.  More on this from STEP can be found here.

Lastly to Cyprus.  An expert commission appointed by Cyprus’s central bank has concluded that its financial centre can only survive if it is reformed to be less dependent on tax breaks for clients in particular countries, with strictly and visibly enforced anti-money laundering controls, and able to offer an international standard of wealth management services.  More on this from STEP can be found here.

Inner House case relating to the compulsory purchase of land required for the Borders Railway. At the centre of the case were certificates of appropriate alternative development issued to developers with an interest in the land (in terms of s25 of the Land Compensation (Scotland) Act 1963). Section 25 certificates specify the classes of development for which the land would be suitable if the compulsory purchase does not go ahead. In this case the certificates stated that planning permission would have been granted for various residential and business developments if the compulsory purchase did not go ahead. Network rail argued that the certificates should have stated that planning permission would only have been granted for the development for which the land was to be compulsorily acquired (i.e. the Borders Railway) which would have reduced the compensation payable to the developers and  appealed to the Scottish Ministers on that basis. However, when they failed to comply with the Ministers’ Reporters’ request for documentation (the certificates and applications) within the time limit, the Reporter concluded that Network Rail’s appeal was deemed to have been withdrawn. Network Rail then made a further appeal to the court.

On a construction of the Reporter’s correspondence with Network Rail, it was found that the documents had been requested and time limits imposed (there was argument to the effect that the Reporter had indefinitely suspended the time limits) in line with the legislation.

In terms of the relevant legislation (the Land Compensation (Scotland) Development Order 1975), the applicant required to “furnish” the reporter with the documents within the time limit. Network Rail contended that, although the documents had not been sent to the Reporter, they had been available on the planning authority’s website and should be treated as being “furnished” in terms of the legislation. However that contention was rejected by the court:

“The court is not satisfied that the placing of material on a website, without something more, is sufficient to amount to the “furnishing” of that material to another for the purposes of statutory interpretation. There may be circumstances in which such information may be furnished by, say, providing a hyperlink to a website, where it has been made available, or uploading the information to a particular website at the request of the intended recipient. Where a party does nothing, however, there is no act which might be construed as “furnishing” the information to anyone. The [Reporter] cannot be expected to seek out the information required … on the basis that it may or may not be in the public domain.”

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.

“By 2014 Scottish retailers will charge a minimum of 5p per bag in a bid to reduce carrier bag use.

Environment Secretary Richard Lochhead announced the move today which follows a consultation that was held last year to gauge public opinion. He said shoppers would be encouraged to reuse carrier bags to cut down on the 750 million bags used in Scotland each year.”

The Republic of Ireland, Northern Ireland and Wales have already introduced such a charge.

More on this can be found here.

Inner House case concerning 3 actions by AMA in which they sought payment of the purchase price under concluded missives for the sale of properties after the purchasers had failed to pay and advised AMA that they were unable to proceed with the purchases.

The purchasers argued that the contract was incomplete and that a seller can only sue for payment of the purchase price where no action is required by the purchaser to complete the contract. In this case, as the purchasers still had to make payment of the price and to accept the dispositions, they contended that the only option open to AMA was to accept their repudiation of the contract and sue for damages.

That argument was rejected by the court. It is a well-established rule of Scots law that if one party to a contract repudiates it, the innocent party has an option to accept the repudiation and sue for damages for breach of contract, or[1] to seek enforcement of the contract. If the purchasers’ arguments were accepted, the innocent party’s option could be negated simply by the repudiating party declining to pay the sum due in terms of the contract. Here, the purchasers were required to pay the purchase price on the date of entry. The date of entry was not dependent on anything being done by either of the parties and was not a matter within the control of the purchasers. There was no contractual obligation on the purchasers to accept a disposition and no other contractual obligations incumbent on them which had to be completed in order to render the contract complete. All they required to do was to pay the price. Their refusal to do that could not deprive the sellers of their option to seek enforcement of the contract.

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.

Inner House case considering an appeal by North Lanarkshire Council under s239 of the Town and Country Planning (Scotland) Act 1997.  It concerns a planning application by Shore Energy in respect of a waste management and renewable energy plant at Carnbroe near Coatbridge. The Council refused permission for the plant despite a recommendation by planning officials that the proposal be accepted. However, Shore Energy appealed to the Scottish Ministers against the refusal of planning permission. After an inquiry, reporters appointed by the Scottish Government granted planning permission subject to conditions. The Council then appealed to the court under s239.

The crux of the dispute was the relative weight given to local planning and environmental considerations, on the one hand, and national environmental objectives on the other. The Council’s reasons for rejecting the proposals indicate that priority had been given to local considerations whereas the reporters’ decision had treated the national need as a material consideration and regarded local considerations as subordinate to it.

Lord Stewart had refused the appeal in the Outer House and the Inner House refused a further appeal agreeing that the Council had failed to show that the reporters’ decision had been invalid. The court was not persuaded (1) that the reporters’ Decision Notice disclosed anything other than a correct understanding of the Scottish Government’s waste management policy (which had been amended  the day before the inquiry) and (2) that the reporters required to identify any geographical area other than Scotland (as a whole) as being relevant to their considerations.

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.

HMRC are holding a series of meetings to hear views on the proposed changes to the qualifying conditions for Community Amateur Sports Clubs.

More on this can be found here.

The consultation document can be found here.