Nimmo & Anor, Re Directions [2013] ScotCS CSOH_124 (11 July 2013)

Nimmo & Anor, Re Directions [2013] ScotCS CSOH_124 (11 July 2013)

A Scottish liquidator may, in principle, decline to use estate funds to meet obligations relating to land or assets, but does not have an automatic power to disclaim ownership of land or statutory licences. Where statutory regimes such as CAR expressly impose obligations on insolvency practitioners, those obligations must be met unless the relevant legislation is ultra vires. The court held that, in this case, the liquidators could not disclaim the statutory licences/permits and must use available funds to comply with environmental obligations, as required by CAR, subject to the limits of devolved legislative competence.

Citation
[2013] ScotCS CSOH_124
Parties
Petitioner: Blair C Nimmo and Gerard A Friar, Joint Liquidators of The Scottish Coal Company Limited; Respondent: Scottish Environment Protection Agency (SEPA); Respondent: East Ayrshire Council and South Lanarkshire Council (the local authorities); Respondent: The Lord Advocate on behalf of the Scottish Ministers; Respondent: Scottish Natural Heritage (SNH)
Jurisdiction
Scotland
Judgment Date
11 July 2013
Procedural Posture
Petition for Directions in Liquidation / First Instance Judgment on Application for Directions
Outcome
Directions granted in part; liquidators required to comply with statutory environmental obligations and cannot disclaim statutory licences under CAR.
Legal Topics
Liquidator's Powers, Disclaimer of Property, Environmental Obligations in Insolvency, Statutory Interpretation, Devolved Legislative Competence
Insolvency Law Environmental Law Administrative Law Property Law Liquidator's Powers Disclaimer of Property Environmental Obligations in Insolvency Statutory Interpretation +1 more

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Parties

Blair C Nimmo and Gerard A Friar, Joint Liquidators of The Scottish Coal Company Limited

Petitioner

Scottish Environment Protection Agency (SEPA)

Respondent

East Ayrshire Council and South Lanarkshire Council (the local authorities)

Respondent

The Lord Advocate on behalf of the Scottish Ministers

Respondent

Scottish Natural Heritage (SNH)

Respondent

Procedural Posture

Petition for Directions in Liquidation / First Instance Judgment on Application for Directions

Legal Issues

  1. 1 Whether a Scottish liquidator can abandon or disclaim land and statutory licences/permits to avoid environmental obligations
  2. 2 Whether such abandonment is possible under Scots law and the relevant statutory regimes
  3. 3 Whether the costs of complying with planning/environmental obligations rank as liquidation expenses or ordinary claims

Ratio Decidendi

A Scottish liquidator may, in principle, decline to use estate funds to meet obligations relating to land or assets, but does not have an automatic power to disclaim ownership of land or statutory licences. Where statutory regimes such as CAR expressly impose obligations on insolvency practitioners, those obligations must be met unless the relevant legislation is ultra vires. The court held that, in this case, the liquidators could not disclaim the statutory licences/permits and must use available funds to comply with environmental obligations, as required by CAR, subject to the limits of devolved legislative competence.

Court Disposition

Directions granted in part; liquidators required to comply with statutory environmental obligations and cannot disclaim statutory licences under CAR.

Orders

  • Liquidators must use available funds to comply with environmental obligations under CAR and seek surrender of licences as required.
  • Liquidators cannot disclaim statutory licences or permits to avoid environmental obligations.