News archive

Sheriff court case concerning servitude rights over an access road near Dounby on Orkney.  Orkney Housing Association owned former garage premises on the B9057.   Mr and Mrs Atkinson owned a property known as Esgar and also an access road leading to it known as Esgar Road.

The title to the former garage was registered in the Land Register for Scotland and included a right of access over Esgar Road.  The housing association built four houses on the property and created a parking area to the rear of the property. Access to the parking area was taken via Esgar road. When the houses were almost completed Mr and Mrs Atkinson put up some fence posts between the road and the parking area so as to prevent cars reaching the parking area. The housing association raised an action and obtained interim orders against Mr and Mrs Atkinson for the removal of the fence posts. They then completed the houses and sought damages for the loss of rental income incurred as a result of the delay in completion of the houses which they said was due to Mr and Mrs Atkinson’s obstruction of the parking area.

Mr and Mrs Atkinson counterclaimed arguing that the right of access did not exist having been abandoned or extinguished by prescription before first registration of the right in the land register. At first instance the sheriff allowed a proof, appearing to be of the view that the defences were relevant, in that, if the Mr and Mrs Atkinson were able to persuade the court that the right of access had been abandoned or extinguished before first registration, then they would be entitled to seek rectification of the register.

The housing association appealed. They contended that (in terms of the Land Registration (Scotland) Act 1979) their land certificate was conclusive of the extent of the rights over Esgar Road and the right of access could only be affected if the Keeper was capable of rectifying the register.  As the housing association were proprietors in possession of the property, the register could not be rectified to their prejudice (s9 of the ‘79 Act).

The sheriff principal agreed with the housing association’s arguments.  The starting point was the description of the subjects in the property section of the housing association’s title sheet:

 “Subjects THE GARAGE, DOUNBY, ORKNEY KW17 2HX edged red on the Title Plan, together with a right of access for all purposes over the road commonly known as the Esgar Road”.

So long as this description remained unaltered, the housing association had a right of access over the access road. Even if the Keeper had included the access right in error, the housing association  as the current proprietors of the subjects would remain entitled to the right of access unless and until the error was corrected by rectification of the register.

The question then was whether it was open to the Keeper to rectify the register (or for the court or the Lands Tribunal for Scotland to order him to do so).

 The answer to that question depended on:

1. whether the housing association was a proprietor  in possession within the meaning of section 9(3) of the ’79 Act;
2. whether, if it was a proprietor in possession, it would be prejudiced by rectification, and
3. whether any of the exceptions to the prohibition on rectification against a proprietor n possession applied (ss 9(3)(i) to (iv) of the ‘79 Act).

Having considered the authorities, the sheriff principal found that the housing association were proprietors in possession. It was also plain that they would be prejudiced (and it would have made no difference if, as was argued for Mr and Mrs Atkinson, the prejudice was not “particularly significant”). It was also found that none of the exceptions to the ‘proprietor in possession rule’ applied.

The Keeper would not therefore be entitled to exercise his power to rectify the register by deleting reference to the right of access and nor would either the court or the Lands Tribunal be entitled to order him to do so. It was therefore of no relevance that the right of access may have been extinguished/abandoned and included as the result of an error on the part of the Keeper.

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.

Interesting article in the Law Society Gazette on online estate fraud.

Fraudsters are increasingly targeting the estates of the deceased for valuable internet hosted assets such as online bank accounts.  The problem is that a Will becomes a public document when you seek confirmation.   A similar procedure applies in England & Wales.

The solution is stay “low tech”.  For example leave a note of your online account details  in a sealed envelope which can be kept by your solicitor alongside your Will.

The article can be found here.

A recent article on how one in ten of Britons have or intend to include their website passwords can also be found here.

Petition for Judicial Review in which Mr McGinty sought reduction of National Planning Framework for Scotland 2 (NPF2) to the extent that it designates a new power station and transportation hub at Hunterston.

Mr McGinty’s argument was that the Scottish Ministers had not complied with their obligations relating to notice and consultation with regard to the proposed development.

Facts and background
The Ministers conducted a consultation process on the scope and content of NPF2 between February and October 2007. A discussion draft was issued in January 2008 with a consultation period from 8 January until 15 April 2008. The revised NPF2 was published in December 2008 and considered by the Scottish Parliament between 12 December 2008 and 6 March 2009. The finalised NPF2 was laid before the Scottish Parliament on 25 June 2009 and published on the Scottish Government’s website on 2 July 2009.

The Hunterston development was included as item 9 in a list of 14 national developments in the finalised NPF2 approved by the Ministers. However, it was not included in the discussion draft of NPF2 which had been issued in January 2008 (and contained only 9 proposed national developments). Hunterston had been proposed as a candidate for national development during the consultation process, the responses to which were posted on the NPF website on 8 August 2008.

On 19 September 2008 a supplementary consultation paper[1] was published on the NPF website and included 52 potential national developments including Hunterston.  At or about the same time the “NPF2, SEA Guide” and a newsletter were also published on the NPF website. Both of these publicised the supplementary paper and requested responses to it by 31 October 2008. Intimation of the supplementary paper was also made in the Edinburgh Gazette on 23 September 2008.

Arguments and decision
The Ministers contended that the publicity given to the supplementary paper was sufficient to comply with their requirements in terms of the legislation[2]. They also argued that, in any event, the petition was barred by mora, taciturnity and acquiescence and further that Mr McGinty had no title and interest to present the petition.

Mora
With regard to mora, taciturnity and acquiescence, Mr McGinty said that he first became aware of the Hunterston development’s inclusion in NPF2 at a public meeting in Largs on 28 July 2009, had contacted solicitors on 11 August and raised the petition on 23 September 2011.

Lord Brailsford found that, had the period of delay been confined to the 7 week period, there would probably have been no merit in the plea of mora. However, having formed the view that the procedure followed by the Ministers did not breach their obligations with regard to publicity, Mr McGinty ought to have been aware of NPF2 in September 2008.  Against that background Lord Brailsford was of the view that the plea of mora should be upheld.

Title and interest
With regard to Mr McGinty’s title and interest to raise the petition, the relevant facts were that Mr McGinty resided in Largs (about 5 miles from the Hunterston site). His only connection with the site, beyond the geographical proximity, was that he occasionally used it on an informal basis for recreational purposes.  Lord Brailsford said:

“Without in any sense wishing to denigrate such usage, from which I have no doubt the petitioner obtains both pleasure and benefit on the occasions that he exercises it, it cannot I think in fairness be regarded as other than somewhat vague and remote”.

At best, Lord Brailsford considered Mr McGinty may have been regarded as having title to sue in order to “prevent a breach by a public body of a duty owed by that public body to the public”. However, it was also found[3] that Mr McGinty did not have “a real and legitimate interest to protect” or “real and practical” interest to bring the proceedings. Lord Brailsford noted:

“He does not reside adjacent to the site and is not therefore a neighbour. His use of the site is limited, intermittent and non-essential. The type of usage he exercises over the site could in fact be exercised over any area of land to which the public has access at any location in Scotland. He does not sue as a member or representative of a group or organisation with title or interest. If an interest of this sort were to constitute sufficient interest to sue in a public law question then any member of the public who, on occasion, used a piece of ground for recreational purposes would have a title and interest to challenge a public law decision which affected that ground…. I do not consider that it is either desirable or, perhaps more pertinently, necessary for the discharge of public bodies to be subject to challenges by persons, no matter how well intentioned they may be, whose link with a site or subject are as remote as this.”

Publicity
There was also discussion as to whether advertising the Edinburgh Gazette was sufficient to comply with the requirements for publicity given that it is not of wide publication and is not ready available to, or even known by, members of the public.  However, Lord Brailsford took the view that the Edinburgh Gazette is the recognised method in Scots law of publishing formal and legal notices and, as long as that status remains, advertisement in it should be regarded as a proper means of bringing matters such as the supplementary paper to the public attention.

Also, although many members of the public would rarely visit the Scottish Government’s website, it too was an entirely proper means of making information available to the public.

Whilst publication in a local newspaper would be an effective means of bringing such matters to the public attention, Lord Brailsford did not consider it was the only means of doing so and, more importantly, did not consider it was a necessary requirement. Such a requirement would add considerably to the burden and cost of the administration of strategic planning and would constitute an unnecessary and onerous obligation on the Scottish Ministers.

The full judgement is available from Scottish courts here.

(See appeal to the Inner House here.)

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

Firstly to Belarus and Tax Information Exchange Agreements.  It was reported in this month’s STEP Journal that Belarusian human rights campaigner Ales Belyatsky has been arrested.  He was arrested soon after the Polish authorities gave the Belarusian authorities information relating to his bank accounts.   The Belarusian authorities had described him as a suspect in a tax investigation.  The Poles treated this as a routine request and handed over full details of his bank accounts.  He has been charged with tax evasion via a foreign bank account.  Belyatsky says the foreign bank account is used only to collect foreign contributions to his political movement.  The Polish Government has admitted it should not have disclosed Belyatsky’s bank details and has sacked the director and deputy head of its international cooperation department.

HMRC announced this week that approximately six million people are set to receive tax rebates averaging £400.  Another million people will learn they have underpaid their tax by about £600.  It is the second year that tax and National Insurance discrepancies have been identified by a new computer system.  HMRC said that the number of cases would reduce “as the new system beds in”.  Those who will be told they have not paid enough tax are expected to owe between £500 and £600 on average.  In a similar exercise last year, HMRC were criticised for being insensitive over their treatment of underpayers.  Another example of the complexity surrounding the UK tax system.

The Scottish Government announced a consultation on giving local authorities new powers to tax empty homes. The proposals would give local authorities the power to impose an extra levy of up to 100% of the standard charge. It is hoped that this could help raise millions of pounds to build new affordable houses.  The announcement stated that 25,000 properties have been empty for more than six months and are liable to pay council tax.  In Glasgow there are over 1,800 empty homes.  It is also claimed that if every local authority decide to use these powers they could raise up to £30 million per year.  I wrote about the connected issue of how local authorities are using funds gained from reducing the council tax discount in an earlier tax blog.  This blog can be found here.

This is something I have not come across before.  The Intergenerational Foundation called for tax breaks to encourage downsizing and help free up some of the estimated 25 million unused bedrooms in England.  The charity says that older people should be encouraged to move into smaller homes to help tackle England’s housing crisis.  The UK Government did not respond positively to this proposal.

Both sides in the battle over what independent schools have to do to justify their charitable status claimed victory last week.  The Independent Schools Council and the England and Wales Charity Commission are each claiming that the decision of the Upper Tax Tribunal vindicates their position. A similar debate is taking place in Scotland.  The tax issue here is the fact charities have a number of tax advantages including rates relief.

Now to the fiscal powers debate. Interesting to see Malcolm Chisholm MSP openly reject the Calman proposals. His comments mirror views recently expressed by former First Minister Henry McLeish.  Malcolm Chisholm is the first serving Labour MSP to openly reject the Calman proposals. The Scottish Government has renewed its call for control over Air Passenger Duty after the UK Government cut air passenger duty for Northern Ireland.  I also suspect that the Scotland Bill may be mentioned once or twice at the SNP conference which began yesterday.  The announcement that North Sea oil production will continue to at least 2050 ensures that oil and gas tax revenue is back at the top of the political agenda.

I have been asked to speak at Holyrood Magazine’s Scotland Bill conference on 8 November.  More information can be found here.  I can already hear myself saying: “does Scotland need a separate Registers of Scotland, Stamp Office, Companies House and Inheritance Tax office? Then again I have been making that point for 5 years now and no-one seems to be listening.

Have a good weekend.

Always a bit worrying when both sides rush to claim victory.

The view of the Charity Commission of England & Wales can be found here.

The view of the Independent Schools Council can be found here.

The Upper Tax Tribunal ruled that private fee-paying schools can qualify as charities if their trustees offer poor students more than “token” help with fees.

The lack of clarity by the Tribunal and the reaction of each side shows that this is not the end of the matter.

A similar debate is taking place in Scotland between the Office of the Scottish Charity Regulator and the Scottish Council of Independent Schools.

Once in a while politicians do something that is without question the right thing to do.  This is one such case.

More than 3,500 adult carers and young carers from across Scotland are set to benefit from a funding package for short breaks.

Fifty-eight organisations have been offered a share of almost £954,000 for a variety of short breaks projects. This includes 14 groups who help carers purchase their own breaks.

The funding will support young carers and adult carers who care for disabled children, people with dementia, mental health problems and other long-term conditions, substance misuse problems, adults with learning disabilities and adults with physical disabilities.

More information can be found here.

Firstly to Australia.  Australia’s House of Representatives has narrowly voted in favour of the Clean Energy Bill.  The Bill was passed by 74 votes to 72.   The tax will be introduced on 1 July next year.  The Australian Government plans to tax the carbon pollution caused by the burning of fossil fuels including coal and petroleum.   The closeness of the vote and George Osborne’s comments at his party conference show how far the carbon tax debate has still to run.

Rafael Nadal has defended his decision not to compete next year at the traditional pre-Wimbledon warm up at Queens.  It was also recently reported that Usain Bolt is not going to compete in the UK before the London Olympics.   They each claim that if they compete they would be out of pocket due to UK tax rules.  Under UK tax rules foreign sports stars are taxed on a proportion of their entire global income rather than the just the money they earn in the UK.

The UK Government shows no sign of changing these rules although it is worth remembering that a concession was made for the 2010 Champuons League final at Wembley.  The concession, announced in the 2010 budget was a key condition laid down by UEFA for staging the final.  A similar concession is in place for next year’s Olympics.  What though of the 2014 Commonwealth Games in Glasgow?

More bad publicity for HMRC.  Dave Hartnett, permanent secretary for tax at HMRC is facing demands to quit after being accused of lying over a deal that spared Goldman Sachs a multimillion pound tax bill for its bankers’ bonuses. The article from the Independent can be found here.

The most interesting fiscal powers announcement this week comes from Wales.   The Secretary of State for Wales, Cheryl Gillian has announced the composition of a commission to assess the way that Wales is funded.  This could result in the Welsh Assembly being granted borrowing and tax raising powers.   The Commission will be led by Paul Silk, a former clerk to the Welsh Assembly.  The fact that I have mentioned Wales gives me the chance to wish them all the best tomorrow.

The announcement that BP is to to go ahead with a £4.5bn project off Shetland re-ignited the debate over the UK Government’s recent decision to raise the supplementary tax on North Sea oil production from 20% to 32%.  Claim and counterclaim over how much oil is left or whose oil this is will no doubt continue in the run up to the independence referendum.  The amount of coverage that this announcement received shows how important the oil industry is to the UK economy and in particular the tax take for the UK Treasury.

And finally, a little bit of good news from Europe.  The European Commission has published a report showing that EU member states’ tax revenues are rising again after a marked fall in 2008 and 2009.

Have a good weekend.

Excellent article in the Law Gazette on the withdrawal of medical treatment.   The article refers to the recent case in which the Court of Protection in England ruled against the withdrawal of medical treatment.  In that case the person was in what is termed a “minimally conscious state” and not a “vegetative state” as in previous cases.

The article can be found here.   The case report can be found here.

Two Outer House cases in which Cheshire Mortgage and Blemain Finance (connected companies) were the victims of a mortgage fraud and sought to sue the solicitors instructed by the fraudsters  (the banks had instructed separate solicitors) for breach of warranty of authority.

In each case the fraudsters had pretended to be persons owning property which they were seeking to use as security for a loan (of £355,000 in one case and £203,000 in the other).  They had been able to produce evidence of their identity in the form of utility bills and driving licences to their solicitors and to the banks.  In both cases the fraudsters had approached the bank (directly in one case and via a broker in the other) before instructing their solicitors.

The banks argued that, in each case, the solicitors warranted that they had the authority of the individuals who owned the properties over which standard securities were purportedly granted. The solicitors recognised the doctrine of a solicitor giving an implied warranty of authority. However, they contended that it does not go as far as giving a warranty of the identity of the person for whom they act, nor does it include any warranty as to whether he is or is not the owner or occupier of any particular property. In effect the solicitors said that they warranted only that they had authority from persons who were already known to the banks and with whom the banks were already dealing.

Lord Glennie found in favour of the solicitors. The circumstances in which the solicitors came to transaction were of particular importance. By the time the solicitors became involved, the banks knew who they were (or who they thought they were) dealing with. They had already made the decision to lend to those individuals. The solicitors had been instructed (by the fraudsters) for the limited purpose of drawing up the loan and security documentation and liaising with the banks’ solicitors. In the words of Lord Glennie:

“The position can be viewed, perhaps more graphically, in this way. Imagine the negotiations between lender and borrower happening in a large room. Agreement in principle is reached between lender and borrower. The loan and security documentation requires input from solicitors. The lenders instruct Mellicks, who enter the room. The borrowers decide to instruct solicitors of their own to safeguard their interests. They appoint Longmuir & Co, or Balfour & Manson. They too enter the room. The solicitors begin the process of drawing up the documentation. They eventually complete it, signatures are obtained from their respective clients, the signed documentation is handed over to the lenders or to Mellicks, and the loan is advanced to the borrowers. In those circumstances, if one imagines that the lenders or Mellicks on their behalf were to ask Longmuir & Co, or Balfour & Manson, “who are you acting for?”, the terse reply would be something like: “what do you mean, we’re acting for the individuals on the other side of the room with whom you have already been in discussions and to whom you have provisionally agreed to lend money”. It is to my mind absurd to suggest that in those circumstances one could imply a promise from the solicitors that they were acting on behalf of the Cheethams of 34 Danube Street or the Morgans of 3 Menteith View, still less a promise that these individuals, calling themselves Cheetham and Morgan, did indeed own those properties”.

In one of the cases there was also discussion as to whether the solicitors were liable to the bank in terms of the letter of obligation they had granted. The bank argued that they suffered loss as a result of the solicitors’ failure to procure the title deeds recording the security in terms of the solicitors undertaking. However, Lord Glennie again agreed with the solicitors’ arguments on this point:

1. the letter of obligation was collateral to the principal transaction between the bank and the borrowers and could not be enforced if that principal transaction was void; and
2. in any event, the bank could show no damages flowing from the failure by the solicitor to produce a title encumbered with the Standard Security, since the Standard Security referred to in the letter of obligation was itself void.

The OPG has put updated Inventory & Management Plan Forms on its website.

The updated forms can be found here.