Abandonment of Land and the Scottish Coal Case: was it Unprecedented?

DOI10.3366/elr.2018.0490
Date01 May 2018
Pages301-306
Published date01 May 2018
Author
INTRODUCTION

Owners of land do not usually wish to abandon it. Land is scarce and is normally a valuable commodity. It seems strange that there might be circumstances where someone would seek to relinquish a slice of Scotland in exchange for no benefit. Notwithstanding, the liquidators of a landowner recently tried to do this in relation to certain sites that had been used for coal mining. In the Scottish Coal case,1 those liquidators petitioned the Court of Session for guidance as to whether it was possible to abandon land and, if so, the proper procedure for doing so. It was ultimately held that it was not competent to abandon land in Scots law.

As we shall see, the case prompted some useful contemporary commentary, which this note will develop. It will also seek to analyse one specific and as yet unaddressed point raised in the course of proceedings. Both the Outer and Inner Houses recognised that there was a distinct lack of authority as regards the abandonment of land. As Lord Hodge stated, “Counsel were not able to find any authority which supported the idea that an owner could abandon land in Scotland”.2 Likewise, the Inner House observed the “simple fact” that “no-one in the court was aware of any instance in which a person (corporate or otherwise) had “abandoned” or “disclaimed” heritable property, so as to render it ownerless”.3 This may seem surprising in a system as developed as Scots law. After outlining the matters raised in the case, this note will consider why the legal point had not arisen prior to the particular circumstances of Scottish Coal, and highlight some issues for further consideration.

FACTS OF THE CASE

The Scottish Coal Company Limited owned sites used for open-cast mining in Ayrshire, Lanarkshire and Fife. When the court ordered the winding up of the company, the petitioners were appointed as joint liquidators. Several sites or part-sites remained unsold. The cost of future compliance with environmental regulation with regard to these sites was estimated to be around £478,000 per month.4 Such costs would swallow up the assets of the Scottish Coal Company. In order to protect unsecured creditors and the holders of a floating charge, the liquidators sought direction from the court on several questions.

The question of central importance in this note was whether the liquidators could disclaim (abandon) ownership of the land.5 If this was possible then the liquidators, released from the environmental costs, would have some assets left to distribute to the creditors. Due to the environmental damage and the ensuing costs (which would still have to be met by...

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