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Back in Victorian times, when our railways were booming, something was needed to line the side of our many and burgeoning miles of track. The well intentioned Victorians looked to a solution from abroad. Fallopia japonica grows and covers the ground extremely quickly, is capable of tolerating a very wide range of soil types and is extremely hardy.  Unfortunately, and with the benefit of hindsight, we now know to our cost that the introduction of Japanese Knotweed (to use its common English name) was a mistake. In its native Asia, it is kept in check by fungus and insects. However, in the UK, those Asian species do not exist and the Knotweed’s expansion can continue unchecked.  Not only does it strangle and suffocate our native flora, it grows through walls, tarmac and concrete damaging property and buildings and reducing its value.  Without its natural controls, standard weed killers are hopelessly inadequate and Knotweed takes over its environment leading to it now being listed as one of the world’s 100 most invasive species.

When Donald Trump first announced his plans to build a golf course at Menie, I can only imagine the politicians’ eyes lighting up at the prospect of such substantial potential inward investment in Scotland. The then First Minister Jack McConnell immediately pushed for Trump to become a Global Scot and Alex Salmond, both as the local MSP and also the succeeding First Minister, continued to “court” Mr Trump.   This is not surprising. The politicians would not be doing their job if they did not encourage investment in our country. And billionaire, Donald Trump certainly had the potential to do a lot of good for the financial well being of the area. However, after watching Antony Baxter’s “You’ve been Trumped!” documentary, I, like many others, am beginning to wonder whether that investment may have come at too great a cost.  It appears that Mr Trump is not a man who likes to be told “no” nor put up with anything in a way other than the way he personally wants it. As Mr Trump’s demands increase, and his dissatisfaction with the extent to which the Scottish Government is prepared to continue rolling the red carpet out for him and enforce planning requirements to comply with his desires[1], I suspect that the politicians too may be starting to wonder just what has been unleashed on our country.

I should mention early on that my purpose here is not to question the merits of the decision to grant planning permission for Mr Trump’s golf course.  Although I don’t pretend to know the Menie area well, a development on the scale of Mr Trump’s scheme on a Site of Special Scientific Interest must bring with it considerable benefits to justify the environmental and other costs. However, on the face of it, the Trump plans have enormous potential to benefit the area and, in any event, that decision has now been taken. All major developments have winners and losers.  Recent examples of the difficult balancing act involved in such decisions can be seen from proposed developments such as the Aberdeen Bypass, the Forth replacement crossing, the Borders railway project and the new Portobello High School.  Our planning system is there to ensure that, where there are losers, the greater good justifies any detriment suffered by individuals.

Where there are losers, their loss (whether it is the loss of their property or the loss of amenity value in that property) can, on a personal level, be considerable.  It is important that such people are treated fairly. Watching the documentary, the most striking thing for me is the treatment of those losing out.  Property disputes (especially boundary disputes) are perhaps second only to matrimonial disputes in terms of the acrimony and vitriol they cause. It is not surprising when disputes become inflamed.  However, in this case, in terms of resources available to the protagonists, I‘ve never seen such a one sided dispute. David and Goliath does not do it justice.  Resources should not determine a property dispute but in this case there are worrying signs that Mr Trump’s vast wealth and consequent power and influence have been able to subvert the law. This, for me, is the most worrying aspect of the case.

The documentary highlights a number of disputes between Trump International Golf Links and its neighbours.  Andy Wightman spoke very well on the issues in the documentary and has written an excellent report on the controversy surrounding the golf course here.

The attitude of the company towards the boundary disputes is particularly concerning to me.  I felt very sorry for Mr Forbes as he waved his title deeds in futility at the police while Trump International’s diggers moved in to move his fishing nets and drying equipment from land they claimed belonged to them.  The police, however, were unable to help him. It was a civil dispute and they could not intervene. This is true and I would not expect the police to do or say anything else. But I would also not have expected the police to have been there in the first place.   In a letter to Andy Wightman from Grampian Police[2] it is explained that the police were there in response to a call stating that protestors were present. There were no protestors and the police just happened to be present when Trump International’s diggers moved in.

A few weeks earlier Mr Forbes had taken some unilateral action of his own. Trump International had placed some wire marker flags indicating their interpretation of boundary between the properties. Mr Forbes, believing them to be on his property, removed the markers and placed them in a pile. When the police arrived to investigate, Mr Forbes showed them the pile and said that Trump International were welcome to recover them. In this situation the police did feel able to act. Mr Forbes was charged with theft (although the charges were later dropped). Now I’m not convinced that this was theft[3], but I wonder if Grampian Police also considered charging Trump International with the same crime in respect of the removal of the fishing nets a few weeks later.

The boundary dispute with the Milnes was similarly one sided. Trump International’s lawyers wrote to the Milnes stating that their clients advised that a fence and part of a shed was on their land. In the letter they offer no justification for their client’s views but merely demand removal (of what appears in the film to be more garage than shed) within 72 hours under threat of court action. Perhaps the Milnes should be glad Trump International did not just move in and demolish the garage. However, demanding demolition of the garage without justification seems to suggest complete contempt for any need to investigate the correct legal position. They also advise that their clients will re-erect the fence “along the legal boundary” of the property. For which we should probably read: ‘along our client’s interpretation of the boundary’. I’m not sure whether court action ever took place about the garage but Trump International did reposition the fence where they saw fit (cutting off the Milne’s electricity in the process) and then issued the Milnes with a bill for nearly £3k. As it turns out, Trump International’s interpretation of these boundaries appear to be somewhat dubious[4].

In both of these cases Trump International’s approach was to act to enforce its own interpretation of the boundaries with neither dialogue nor even the offering of legal justifications for its actions to its neighbours. This is dangerous. If we were all to act in this way, the country would quickly descend into chaos. Disputes would escalate, tempers would become inflamed and we run the risk that the situation would degenerate into some sort of civilian trench warfare. Why then does Trump International feel able to act in this way?  Usually, it is inadvisable for a potential protagonist in a boundary dispute simply to act on his or her own inclinations because:

1. their inclinations might be wrong and lead to an expensive damages claim from the neighbours;
2. acting unilaterally will inflame the situation and potentially destroy any relationship they have with the neighbour; and
3. there is nothing to stop the neighbours doing exactly the same and reversing whatever the other party has done leading to… nothing other than unnecessary expense on both sides as they both act unilaterally ad infinitum.

If an amicable solution to a boundary dispute cannot be found, you would expect one party’s lawyer to write to the other party or their lawyers advising them of their clients concerns and the legal justification for those concerns. The opposing party or their lawyer will put forward their argument, then, either agreement will be reached based on the relative strength of the opposing legal arguments, or the parties will go to court to contest those arguments. Trump International’s lawyers simply wrote to the neighbours advising them of their client’s thoughts on the position and telling them of their client’s intended unilateral action based on those opinions. When you act for Trump International it very much appears that the law (or anyone else’s interpretation of it) is irrelevant.

Why were they able to do this? Let’s face it, (1), (2), and (3) are of little or no concern to you if you have the resources of Trump International (and its apparent contempt for its neighbours). Of course, in the normal world, when one party is busy taking their unilateral action, the other party may be busy taking unilateral action of its own and undoing all that the first party is doing. This has the potential to lead to frustration and an escalation of the dispute.  In this case, even if they were prepared to go tit-for-tat with the might of Trump International and its security force, (and this is where it gets sinister) there was a further deterrent. It appeared to Trump International’s neighbours that Grampian Police had begun acting on behalf of Trump International. The Police of course deny acting in a partial manner but, where they have chosen to turn up and take action, it invariably seems to have been to the benefit of Trump International.

One of the most disturbing incidents in the documentary is the police arrest of Antony Baxter and Richard Phinney. The film makers had gone to put questions to Trump International after reports that the company had cut off water to its neighbours (including an 85 year old lady) with no indication as to when it would be reconnected. Following some discussion with the green keeper at the estate office they left and went to the house of one of Trump International’s neighbours to conduct another interview. During the interview, the police arrived, told the film makers to stop filming. When asked why, one of the officers physically restrained Mr Baxter, forced him to drop the camera, handcuffed him and put him into the back of the police car. Mr Phinney was also asked to get in the car and the pair were advised that they were being detained under s14 of the Criminal Procedure (Scotland) Act 1995[5].  They were detained at the police station for 4 hours and charged with committing a breach of the peace, Grampian Police having received a report (it seems to have come from the green keeper interviewed) that a breach of the peace had occurred at the estate office. Section 14 allows detention where the police have “reasonable grounds for suspecting that the person has committed an offence”. That is all very well but, as I write this, my neighbour’s music is causing Jurassic Park style ripples in my coffee and rendering the ringer on my phone all but inaudible. I may nip down and ask him to drop the volume a notch. I would hope not to be cuffed and bundled off to St Leonards Police Station shortly afterwards if he complains about my visit. But would that be a legitimate concern if he takes exception to my request and turns out to be wealthy and influential?

Police presence and intervention or not, the legal solution here is that Trump International’s neighbours could of course take court action themselves. Commencing legal action against such a formidable opponent with such vast resources does take considerable courage but, if the position were legally correct, one would expect the courts to enforce it.  The problem is that Trump International can afford to gamble as, to a company of that size, there are no damaging repercussions if it were to lose (what to the company is) a small scale court case.  In this situation there is therefore little or no deterrent to unilateral action on a whim.  It makes me wonder whether this is an area we should be looking at further. Should there be more in the way of a legal deterrent to such unilateral action?

The planning system is treated in much the same way by Trump International as its neighbours. When it was refused planning permission (by Aberdeenshire Council), Trump International choose neither to resubmit it’s application nor follow the appeal process. It merely threatened to walk away. (Although, as fortune would have it, somewhat unusually, the Scottish Government decided to call in the application before a decision letter was issued).  The company’s attitude appears to be that it does not negotiate or compromise. Its proposals are on a ‘take it or leave it’ basis. Which is fine but, where ‘taking it’ involves bending or breaching laws, the situation becomes dangerous.

Unsurprisingly, the company also appears to have paid little attention to the planning permission it did obtain. Where Donald Trump decided he not want to see his neighbours houses, large mounds of earth were constructed around them without planning permission. As Mr Trump says in the documentary: “You know what? Who cares? It’s our property. We can do what we like with it.”

Whether it is boundary lines, planning consents or breaches of the peace, the recurring theme here appears to be that what Mr Trump and Trump International say tends to be accepted without question to such an extent that they and those acting for them no longer feel the need to offer justification for their assertions.

At every turn, if he doesn’t get exactly what he wants, Donald Trump says he will take his money and go else where.  However, we should remember Mr Trump is not acting from purely altruistic motives here. He is doing this to make more money (and possibly also to further enhance his own ego). However, even  if it were a purely philanthropic act and Mr Trump’s golf development was the best thing that could happen to Scotland, he can not be allowed to trample all over our laws and our people in order to make it happen.  The damage caused by allowing him to do that is much greater than just the financial damage caused if he did stop and go elsewhere.  When the original planning application was first refused by Aberdeenshire Council, George Sorial, the Trump Organisation’s Director of International Development was asked what sort of message it sent out to the rest of the world.  He said that it sent out “a devastating message: that if you want to do big business, don’t do it in the north-east of Scotland.”

However, we should also consider the dangers of the alternative. What sort of message does it send out to the rest of the world if we allow big business to side-step our laws and procedures? You can do what you like, when you like, to whomever you like so long as you have enough money?

There are not many people with the perceived wealth and power of Donald Trump. However, there are many who share his aspirations and, were we to send out this message, we may find that we have a rapid expansion of inward investment. Unfortunately, we may also find that it strangles and suffocates those it comes into contact with. Even worse, we may also find that it undermines, damages and devalues our laws, procedures and the institutions that enforce them.

Scotland has a proud tradition in treating people equally. Whether ‘we are all Jock Tamson’s bairns’ or ‘a man’s a man for a’ that’, the principle is that the ‘wee man’ has as much right to protection of his interests and property as the ‘big man’.  The documentary “You’ve been Trumped!” may only be one side of the story but the events on the Menie estate raise a number of questions as to the adequacy of our law, our procedures and the enforcing institutions in protecting the principle of equality. It is time for these questions to be looked at and, more importantly, answered.

Outer House case concerning a dispute over ownership of the lands of Drumpellier and Langloan (including the Bargeddie Industrial Estate) in Lanarkshire.

Following an examination of the terms of the title deeds, Lord Woolman found that Drumpelier and Mount Vernon Estates held a real right in the property. On the other hand, the title held by Mr Meehan (and others) was to the superiority only. (Superiorities were abolished with the abolition of the feudal system in 2004.)

Even if Mr Meehan’s title had included the dominium utile (or vassal’s interest in the property which was converted into outright ownership on abolition of the feudal system), one of the title deeds in the chain was a non domino (from someone who is not an owner) and would have required to have been fortified by prescriptive possession.  There was no evidence before the court that either Mr Meehan or his predecessors in title had ever possessed the property.

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.

I have updated this blog as we now have updated “GERS” figures and the Scottish Labour party has published its interim “Devolution Commission” report.  Its findings are similar to the Liberal Democrat proposal.

Although the Scottish Conservatives now appear to be moving towards arguing for the devolving of further tax powers there is as as yet no firm proposal from them.

Listed below are the taxes, duties and charges that Westminster has so far refused to pass control to the Scottish Parliament.

In bold are the additional powers the Liberal Democrats are putting forward for devolving.  This information is from its “Home Rule Commission” published in October 2012.

In red are the additional powers the Scottish Labour party might argue for devolving.  I say “might” as its report is an “interim” report only.

The figures are mostly from the “Government Expenditure & Revenue Scotland 2011-12” (GERS).  The figures are included to give an idea as to the level of revenue produced by a particular tax and are a number of millions of pounds.

1. Full control over income tax including the underlying law dealing with reliefs etc (some additional powers but not complete control)  (similar proposal from Labour) 10,790
2. National insurance contributions  8,393
3. Corporation tax (assignation of revenue only)  2,976
4. North Sea revenue  10,573
5. Fuel duties  2,296
6. Capital gains tax (partial control only) (similar proposal from Labour) 246
7. Inheritance tax (to be devolved)  (possibly)  164 
8. Other stamp duties – stamp duty and SDRT on shares (estimated)  276
9. Tobacco duties  1,129
10. Alcohol duties  (includes spirit, wine, beer and cider duties)  981
11. Betting and gaming duties  115
12. Air passenger duty (even though included in Calman) (not clear if to be completely devolved)  (similar proposal from Labour)  213
13. Insurance premium tax  251
14. Climate change levy  64
15. Aggregates levy (even though included in Calman) (not clear if to be completely devolved) (similar proposal from Labour)  52
16. Vehicle excise duty  (possibly)  475 
17. Bank levy (estimate as no separate Scottish figure)  180
18. Licence fee receipts  325
19. Crown Estate revenue  (not clear if to be completely devolved) (if Scottish Parliament accepts UK Government terms)  10
20. VAT cannot be devolved but VAT revenue could be assigned  9,554

Taxes already devolved to be devolved under Scotland Act 2012

1. Income tax (still only partial control over tax bands and will cost Scottish Parliament millions of pounds a year to administer even if not used)  (estimated partial control over)  5,395
2. Council tax  1,987
3. Business rates  1,933
4. Stamp duty land tax (Scottish Parliament control by April 2015)  330
5. Landfill tax (Scottish Parliament control by April 2015)  97

The Scotland Act 2012 also does not resolve the imbalance between the amount the Scottish Parliament is responsible for spending and which it raises.  The Scotland Act 2012 only takes us to about a third. 

Where to start.

In a speech to mark her first year as Scottish Conservative leader, Ruth Davidson outlined an aspiration to cut income tax by more than 1p when new powers come to Holyrood.  More on this from the Scotsman can be found here.  Now compare this with a survey that claims that three quarters of Scots think taxes should be raised for those with the highest incomes and wealth. More on the survey from the Herald can be found here.  These stories show how Scotland, both the politicians and the general public, are beginning to wake up to the fact that tax is not necessarily just a UK matter.

The Scottish Government has backed the latest call for control over air passenger duty to be passed to the Scottish Parliament.  This is a matter worth remembering when you hear comments from the NO campaign on how they “hope” to give the Scottish Parliament further powers.  Let’s not forget how few tax powers are included in the latest Scotland Act.  It is “Calman minus” just as the Liberals recent Home Rule Commission is “Steel minus”.  More on this can be found here.

First it was Rangers now it is Hearts that is in trouble with HMRC.  The surprise is no-one is surprised.  Hearts owe HMRC approximately £500,000 in unpaid tax.  More on this from the Scotsman can be found here.

The UK Government seems to be doing a fair bit of thinking just now which is always worrying.

The UK’s Chancellor of the Exchequer, George Osborne, has called for a change in international tax standards to reflect changes in business, such as the rise of e-commerce, which makes it easier for companies to shift taxation away from jurisdictions where profit is being generated.  More on this from the Guardian can be found here.  In addition, Danny Alexander, the Chief Secretary to the UK Treasury, has pledged to crack down on corporate tax avoidance following revelations that the supermarket chain Asda may have used overseas transfers to its parent company Walmart to avoid up to £250m in tax.  More on this from the Times can be found here.  Lots of words but can we expect real action?

The Chief Executive of HMRC, Lin Homer, has been put under pressure by the UK Treasury Select Committee to explain why multinationals have been allowed to pay less tax than small businesses in the UK.  The Comptroller and Auditor-General of the National Audit Office, Amyas Morse, said that large companies often put pressure on HMRC by threatening to pull out of the country altogether.  More on this from the Times can be found here.  A connected story from the Daily Mail and involving Margaret Hodge, chairman of the UK Public Accounts Committee, can be found here.

Under “road charging” proposals being considered by the UK Government, motorists could face a new two-tier system in which drivers would pay a lower rate of tax if they do not use the UK’s trunk road network.  Have any of the UK media outlets considered the fact that this is also a matter for the Scottish Parliament?  Of course not.  The new system would comprise a basic charge for the use of local roads, and a secondary charge for those motorists wanting to use motorways and A-roads.  More on this from the Guardian can be found here.

Is it just me or is it really the case than almost every change in the law is met with the accusation that it breaches some part of EU law?  The latest example is the UK Government’s planned changes to child benefits.  The UK Treasury has dismissed the claims by the Institute of Chartered Accountants of England and Wales.  More on this from the Telegraph can be found here.

David Gauke, Exchequer Minister to the UK Treasury, has argued that HMRC needs to pay more to recruit the best tax experts in order to combat tax avoidance by major multinational companies.  Edward Troup, Director-General for Tax and Welfare at HMRC, welcomed the proposal, saying: “I think it’s on the record now to have more staff and higher pay”.  More on this from the Times can be found here.  This is an issue that we in Scotland will also have to respond to when setting up our own tax system.

It is often claimed that that the UK Government favours London and the south-east of England. This is another such claim.  The UK Communities Secretary, Eric Pickles, has faced criticism from property groups and retailers after his announcement that a revaluation of business rates has been pushed back to 2017.  The British Property Federation said that it was unfair to expect tenants to continue to pay a levy based on “top-of-the-market” 2008 rents. The UK Government argues however that a revaluation would lead to rate increases for many businesses, especially in the south-east.  More on this from Accountancy Age can be found here.

Now to a story that keeps bubbling up to the surface and clearly is not going away.  First it involved government officials such as the head of the Student Loans Company, then it was the BBC now it is teachers.  HMRC has said that supply teachers hired via recruitment agencies using off-shore firms are causing a shortfall in National Insurance contributions.  An HMRC spokesman said: “These kinds of arrangements are not compliant with tax and National Insurance legislation and the end client, or the employment businesses, may be liable for any underpaid tax and National Insurance”.  More on this from the BBC news website can be found here.

Anyone who regularly looks at HMRC press releases will see HMRC increasingly publicising stories such as this.  An Isle of Wight tax advisor who stole £52,000 by claiming tax repayments using his clients’ names was jailed today at Newport Crown Court.  The press release from HMRC can be found here.

Let’s end with matters slightly further afield.  Hong Kong has imposed a 15% emergency tax on foreign buyers of residential property in an attempt to hold back the island’s property bubble. Stamp duty for short-term speculators has also gone up from 15 to 20%.  Similar measures have been imposed by the Singaporean Government.  More on this from the excellent STEP Journal can be found here.

One last point.  Patriotism takes many forms and that includes paying your taxes.

Have a good week.

I would recommend this book to any solicitor in Scotland that deals with trusts.  Rennie Galbraith has produced a much needed second edition of his drafting guide.  It is published by W.Green.

I particularly liked the section on the use of Scottish terminology and the influence of English law on Scottish trust law.

“The influence of English law and practice of trust is still extremely prevalent today and certainly at a more than superficial level.   The reasons for this do not reflect well on the Scottish legal profession, those responsible for teaching the profession or those responsible for Scottish legislation.  English terminology abounds and, as a result principally of “English” legislation, which refers to “settlors” rather than “trusters” and “trusts with interests in possession” rather than “liferent trusts”.  The vast bank and array of trust taxation law tends to use English terminology.  Indeed, the trust law relating to charities could be described as almost a complete transplant of English law to the law of charities in Scotland”.

Outer House case in which Mr Phimister sued D.M. Hall for professional negligence in respect of a mortgage valuation report carried out on a property in Buckie in Aberdeenshire. The report was prepared in support of Mr Phimister’s application for a residential mortgage over the property. The report valued the property at £230k and noted that the garden ground and surrounding land was said[1] to extend to approximately 1.12 acres whereas in fact it only extended to about 0.66 acres[2].

Mr Phimister contended that DM Hall owed him a duty to check the area as part of their valuation and they were negligent in failing so to do. Whilst the area of the subjects may not have affected the valuation of the subjects for residential purposes (and Mr Phimister did not argue in court that it did), the smaller area severely restricted his opportunity to develop the site.

Lord Glennie found that Mr Phimister’s claim failed. To succeed Mr Phimister had to establish that the discrepancy between the actual acreage and that represented in the sales particulars should have been “obvious” to a surveyor carrying out his valuation with reasonable care. This would depend on the type of survey the surveyor was asked to carry out. Expert evidence agreed that the purpose of a mortgage valuation report was not to check the acreage of the site but to provide a valuation for mortgage purposes. Amortgage valuation report was not the appropriate tool to assess development potential; if the purchaser wanted such an assessment, he should instruct a development appraisal. A surveyor instructed to survey the subjects with a view to ascertaining whether there was room for building a certain number of houses on plots of a certain size would require, in the exercise of reasonable care, to assess the area of the subjects. However, Lord Glennie was not persuaded that a surveyor carrying out a residential mortgage valuation on a site with buildings standing on it would necessarily have been expected to notice that the site was considerably smaller than 1.12 acres. He would not, as Lord Glennie put it, “have been looking at the site through measuring eyes”.

In some cases the acreage of the site may be a relevant factor in assessing the value for mortgage purposes and, in such cases, the surveyor would have to take care to make an accurate measurement, or check a measurement given by another.However, in this case, the value lay in the buildings and not in the size of the plot and it was found that there was no reason to place such a burden on the surveyor.

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.

Outer House case in which the Cairngorms Campaign and others  sought reduction of a decision by the Cairngorm National Park Authority to adopt the Cairngorm’s National Park Local Plan. In particular they complained about the adoption of development policies in the Local Plan which made provision for developments at Nethy Bridge (40 dwelling houses and business units),  Carrbridge (up to 117 dwelling houses), An Camas Mòr  (1,500 dwelling houses) and  Kingussie (300 dwelling houses).

In a lengthy decision Lord Glennie rejected the campaigner’s arguments finding that, in adopting the Local Plan, the Park Authority had neither acted unlawfully or illegally (in the Wednesbury sense – i.e. it had not reached a decision that no reasonable person in that position properly informed of the facts could have reached) nor had it failed to give adequate reasons for its decision, the reasons given for the decision being clear. In coming to his decision, Lord Glennie also rejected a number of more specific arguments made by the campaigners.

An important issue considered in the judgement was the Park Authority’s departure from the reporter’s recommendations following the public inquiry.  The Local Plan was implemented under the previous planning regime (which allows for wider discretion to depart from a reporter’s recommendations following an inquiry than under the new planning regime).  In that respect this case can be contrasted with recent case, Tesco Stores Ltd v Aberdeen City Council (11 October 2012) which demonstrates the stricter rules which apply where a planning authority departs from a  reporter’s recommendations under the new planning system.

The full judgement is available from Scottish Courts here.

(See also appeal to Inner House here.)

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

(The campaigners have since lodged an appeal.)

Inner house case in which Tesco sought to have the Aberdeen Local Development Plan quashed. Tesco had obtained planning permission and was intending to open a superstore on a site at the former Woodend Hospital Annexe on Rousay Drive in Aberdeen.  Morrisons had also obtained planning permission to develop a store on a site nearby at the former Summerhill School.

Tesco contended that the Council had acted unlawfully when it adopted the Local Development Plan as the plan allowed for the possibility for there to be two superstores in west Aberdeen. In his report  on the plan, the reporter had been concerned not to open up the opportunity for two stores in the area and the council must have been aware, at that time the plan was adopted, that the Woodend development was proceeding. In adopting the plan therefore, Tesco argued that the Council had contradicted the reporter’s recommendations.

The court refused Tesco’s application. It noted that the reporter’s report must be based on the material presented to him before completing his examination and it was only on the basis of that material that the reporter could propose modifications to the Plan.  The planning authority could only refuse to make modifications recommended by the reporter in very limited circumstances (i.e. that the reporter had reached an unreasonable conclusion on the material before him.)

In this case the reporter had recommended making no modifications to the proposed Local Development Plan in respect of the Woodend or Summerhill sites and there was no basis on which the Council could have altered the plan.

The full judgement is available here.

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

Where to start?  There is so much happening just now it is difficult to keep up.  It is though a fascinating time to be living in Scotland.

The signing of the Edinburgh Agreement ends the “phoney war”.  So besides this historic agreement what else has been happening?

Let’s start with the publication of the report by the Liberal Democrats Home Rule Commission.   The report can be found here.  There are a number of problems with this report.  The first is the likelihood of the Liberals being part of and having a major influence in a future UK Government.  At best the Liberals will form part of a UK coalition government where they will be a junior partner.  Even if they were to persuade the senior party to implement their plans the Scottish Parliament would not see any new powers until at best 2020.

Then there is the accusation: why should anyone take the Liberal Democrats seriously on tax and fiscal powers?  The Liberal Democrats are in power just now and all we have is “Calman minus”.  They are not even devolving control over the Crown Estate in Scotland and that is party policy.

Then there is the report itself.  The report barely goes beyond Calman.  Inheritance tax is to be devolved and also some parts of capital gains tax.  This report does not even go as far as their last fiscal powers report, the “Steel Commission”.

One last point.  It must be remembered that the Liberals have historically been willing to go further than the other main UK parties on devolving power to Scotland and the Scottish Parliament.  The Steel Commission report provides evidence for this argument.  What their latest report shows is that the Liberals are moving away from devolving serious tax and fiscal powers to the Scottish Parliament.  That is disappointing and makes you wonder.  If this is all the Liberal Democrats are offering what will Labour or the Conservatives come up with?

The answer to that question is likely to be not much.  Johann Lamont has finally announced the membership of her “further devolution commission”.  What is the likelihood of this commission coming up with a proposal close to “devo max” or even “devo plus”?  Almost none.  Why?  Remember the struggle to persuade the Labour party to legislate the Calman proposals.  Think of how few powers are contained in the Scotland Act.  Think of the reaction to senior Labour party members to any call for further tax and fiscal powers to be transferred to the Scottish Parliament. Think of Alistair Darling’s recent comments and in fact of any Labour MP who talks on this subject.  An article from the BBC news website on the Labour party’s commission can be found here.

Then there is the Conservative party.  It is clear that most Conservatives see the European Union debate as the main debate.  Scotland is but a side show.  The idea of a “Constitutional Convention” is laughable.  It simply means, let’s kick this matter into the longest of long grass for another generation.  Ruth Davidson has already got her retaliation in first and stated that corporation tax or welfare powers should not be devolved.  In any case, this convention won’t even see the light of day in any meaningful way until after the referendum.  Does anyone actually believe that the Conservatives will even consider any further powers for the Scottish Parliament if Scotland votes No?

Staying with the Conservatives, Boris Johnson, the Mayor of London, seems to be everywhere these days.  That includes arguing for greater powers for the London Assembly.  Johnson has asked George Osborne, the UK Chancellor of the Exchequer, for London to be allowed to retain any stamp duty raised on property sales.  Johnson argued that London inhabitants face higher tax rates than households elsewhere in the UK, and would use the taxes to fund house building and regeneration schemes.  More on this from the Telegraph can be found here.

The BBC is to offer staff contracts to some of its biggest names in a U-turn after months of accusations that it is enabling tax avoidance.  It is claimed that up to 25,000 people employed at the BBC do not pay tax at source.  More on the U-turn by the BBC can be found here and on the background to this story here.

I was interested to see that the Labour party at its recent conference proposed to reinstate the 50% top rate of income tax and apply a two year suspension of stamp duty on properties worth less than £250,000.  I wonder if they realize that these will be matters for the Scottish Parliament to decide as a result of the Scotland Act by the time the next UK general election takes place.

The UK Government is seemingly intensifying its attack on tax planning by corporations and wealthy individuals.  Extra measures include a 50% expansion of HMRC’s High Net Worth Unit, more resources for the Liechtenstein Disclosure Facility and a new policy of refusing to award government contracts to companies that use “aggressive tax avoidance” schemes.  More on this from HM Treasury can be found here.  When thinking about this it is worth also reading about Starbucks.  Two House of Commons committees are due to question tax officials about how Starbucks has been able to avoid paying tax on £1.2bn of sales since 2009.  More on this from the Guardian can be found here.

Plans put forward to add an additional fee to visitors’ hotel bills have been abandoned by the City of Edinburgh Council in response to objections from business leaders.  The Council planned to reduce its spending on festivals, events and promotional initiatives by setting up a “transient visitor levy”, aimed at raising more than £3m a year.  More on this from the Scotsman can be found here.

The McLaren Formula One team have successfully argued that a £32m fine they paid after a 2007 Ferrari spying controversy should be tax deductible.  McLaren had argued the fine was not a statutory penalty but one incurred under Formula One rules, making the fine a business expense.  HMRC disagreed but a tax tribunal has found in favour of McLaren.  More on this from the Telegraph can be found here.

Now to an old favourite, a Financial Transactions Tax.  European Union Tax Commissioner Algirdas Semeta says he is now sure there are enough Member States to force through an EU wide Financial Transactions Tax. Portugal, Italy, Greece, Spain, Germany, France, Belgium, Austria, Slovenia, Estonia and Slovakia have committed to this new source of new revenue.  A press release from the European Commission on this can be found here.  The UK Government has also confirmed its opposition to a Financial Transactions Tax.  More on the UK Government’s stance can be found here.  This issue provides further evidence of the growing disengagement with the European Union by the UK Government.

Germany’s Roman Catholics are to be denied the right to Holy Communion or religious burial if they stop paying a special church tax.  Can you imagine this happening in Scotland?  An article from the BBC news website on this can be found here.

The French Government is to revise its 2013 Budget proposal to raise the entrepreneurs’ rate of capital gains tax on equities from 19% to 45%.  The retreat follows a campaign against the tax by an organised group of business owners called Les Pigeons (‘The Mugs’ or ‘Suckers’).   An article on this from Reuters can be found here.

Let’s end with a story from America.  It seems that Chinese immigrants are less keen on an American passport.  Citizens of the People’s Republic of China who emigrate to America used to apply for US citizenship as a matter of course, but now America’s  world wide taxation policy is making some of them regret it.  An article on this story from the South China Morning Post can be found here.

Supreme Court decision considering an appeal from the Inner House in respect of a challenge to the schemes and orders made by the Scottish Ministers (under the Roads (Scotland) Act 1984) to allow construction of an Aberdeen bypass.

The bypass, as initially promoted by the Ministers, had its origins in a regional transport strategy published in March 2003 which, in addition to the bypass, had also considered various other proposals for reducing congestion in Aberdeen.  The Ministers decided to undertake the bypass. However, in December 2004, following a campaign against the routing of the bypass via Murtle of Camphill, previously discarded options were reconsidered and became part of a public consultation. Prior to making a decision the Minister for Transport, commissioned a report on an option which was a hybrid of two of these previous options.  That hybrid option (known as the Fastlink) which linked Stonehaven to the bypass was adopted (in December 2005) on the grounds it would also reduce congestion between Stonehaven and Aberdeen on the A90. The ministers then published Environmental Impact Assessments (EIAs) on the basis that the scheme fell within the scope of the Environmental Assessment Directive.

Following objections from Mr Walton[1] and others, a public inquiry was held into environmental and technical issues concerning the bypass. However it did not consider the more fundamental question of whether the bypass should be built at all.  Litigation then followed through the courts.

In the Supreme Court, Mr Walton’s primary contention was that the Fastlink was adopted without the public consultation required under the Strategic Environmental Assessment Directive[2].  Mr Walton also argued that common law principles of fairness required that the public inquiry should have considered the (economic, social or strategic) justifications for building the Fastlink.  Although Mr Walton only sought to quash the schemes and orders in so far as they concern the Fastlink, the Ministers maintained that if the schemes and orders were to be quashed to any extent, the scheme for the bypass would fall as a whole.

Requirement for a Strategic Environmental Assessment
In coming to its conclusion, the court took account of the differences between EIAs and Strategic Environmental Assessments (SEAs). It was noted that the EIA Directive is concerned with the assessment of the effects of “projects” on the environment. The SEA Directive, which was adopted 16 years later, is concerned with the environmental assessment of “plans and programmes” (which set the framework of future development consent of “projects”) and is intended to give consideration to environmental considerations at an earlier stage in the process[3].

The Supreme Court considered that, whereas the regional transport strategy (in March 2003) was a “plan or programme” in terms of the SEA Directive, the Fastlink was neither a “plan or programme” nor a “modification”[4] to a “plan or a programme” and did not trigger the consultation requirements under the SEA Directive.  It was instead a modification to a “project” and thus subject to the EIA Directive rather than the SEA Directive.

Compliance with common law principles of fairness
With regard to the common law principles of fairness concerning the holding of the public inquiry, in terms of the Roads (Scotland) Act 1984, the Ministers are under a duty to hold an inquiry if an objection is made to an order or scheme by any person who requires notification of the scheme (in terms of the 1984 Act) or any other person appearing to them to be affected.

As Mr Walton did not require to be notified of the scheme and nothing before the court indicated that he was regarded as a person affected, there was no suggestion that the Ministers were statutorily obliged to hold an inquiry into his objections. There was also no suggestion that he had any legitimate expectation that the remit of the inquiry would encompass the (economic, policy or strategic justifications) for building the Fastlink. No material before the court suggested that the Ministers were bound as a matter of fairness to include the justifications for the building of the Fastlink within the remit of the inquiry.

Whether remedies should have been available to Mr Walton
In the Inner House it had been observed that:

1.  if Mr Walton’s contentions had been accepted, the court would have exercised its discretion (under to the 1984 Act) to decline to grant him a remedy, the court noting that it was not contended that the schemes and orders would substantially prejudice his interests or affect his property;
2. Mr Walton was not a “person aggrieved”[5] in terms of the 1984 Act; and
3. Mr Walton would not have had standing even if the test were the same as would apply to a judicial review at common law.

Whilst reserving its opinion on the correctness of Inner House’s approach, the Supreme Court noted that, in terms of the Scotland Act 1998, the Scottish Ministers do not have the power to make subordinate legislation or exercise a function which is incompatible with EU law. It would therefore be necessary to consider the terms of the 1984 Act and the exercising of discretion under it in that context.

The Supreme Court also found that Mr Walton was a “person aggrieved” in terms of the 1984 Act. In coming to this conclusion, it noted his representations to the Ministers and his role in the local inquiry the fact that he lived in the vicinity of the bypass (if not the Fastlink) which would be busier as a result of the Fastlink. Also, his role in local environmental organisations and Road Sense helped to demonstrate that he was more than a “mere busybody interfering in things which did not concern him”.  As a consequence, the Supreme Court found him to have a genuine concern in what he argued was an illegality in the consent for a project which would have a significant impact on the environment.  In Lord Reed’s words he was “indubitably a person aggrieved within the meaning of the legislation”.

As regards the common law test, the Supreme Court found that the same factors which brought him within the definition of a “person aggrieved” would apply and he would have had standing to make an application for judicial review. Lord Reed also said:

 “Not every member of the public can complain of every potential breach of duty by a public body. But there may also be cases in which any individual, simply as a citizen, will have sufficient interest to bring a public authority’s violation of the law to the attention of the court, without having to demonstrate any greater impact upon himself than upon other members of the public. The rule of law would not be maintained if, because everyone was equally affected by an unlawful act, no-one was able to bring proceedings to challenge it.”

 The full text of the judgement is available here.