Tag Archives: VAT registered

Colin Kennedy and the Holy Grail

The Scottish Farmer today gives space for Colin Kennedy, Convener of the Crofting Commission, to tell them about his “crofting crusade!”. This follows hot on the heals of a huge press offensive on his part over the past week with appearances/articles in Sunday Politics Scotland, The Oban Times and BBC Radio Highlands & Islands.

The story is the same: He is right and everyone else is wrong.

He has again stressed that his sole motivation is:-

to uphold crofting law, and defend the statutory rights of ordinary crofters

It has been shown that this is very much his own interpretation of crofting law and not one supported by the Scottish Government or by his fellow commissioners.

He has, however, again rounded on the Scottish Government and the cabinet secretary responsible for crofting, Fergus Ewing MSP, with The Scottish Farmer reporting Mr Kennedy as:-

bluntly accusing him [Mr Ewing] of perpetrating a cover-up of ScotGov’s historic role in a quagmire of maladministration.

He labours on about his views on the illegalities of common grazings obtaining SRDP funding which, as has been pointed out many times before, is not any business of the crofting regulator but a matter for the Scottish Government, the EU and crofters.

Mr Kennedy claims that:-

The commission has taken legal advice from Sir Crispin Agnew QC and it is my understanding that a grazing committee does not merit claiming subsidies, as only individual shareholders with grazing rights are eligible, provided that they comply with the provisions of the legislation for such activity.

Does Mr Kennedy have the approval of the Board of the Crofting Commission to discuss in public this legal advice obtained by the Commission? If not he is breaking that code of conduct again that he was keen to discuss on BBC Radio Highlands & Islands. This is, of course, true in relation to much that he has said over the past week.

Obtaining such a legal opinion was probably outwith the remit of the Crofting Commission in any event. It is understood that Mr Kennedy was instrumental in having it obtained. It is further understood that whilst the Board may have considered this legal opinion when produced they did not use it as a base for any decisions made.

The Scottish Government stated that it “wholly disagrees” with the views on SRDP funding held by Mr Kennedy. This would appear to include the legal opinion that he still clings to.

Those views, like his ones on VAT registration, were potentially all about depriving crofters of funding and had nothing to do with upholding crofting law and defending the statutory rights of ordinary crofters.

Mr Kennedy again showed the huge divide between himself and the Crofting Commission Board and the fact that he was not in fact supporting decisions taken by the Board such as accepting the Government’s position on SRDP and disbursement of funds.

Mr Kennedy proceeded, in his interview with The Scottish Farmer, to attack the former Upper Coll Grazings Committee stating that they:-

have a lot to answer on behalf of shareholders.

Again this is completely at odds with the position taken by the Scottish Government and the Board of the Crofting Commission who have issued an apology to the grazings committee in question.

Mr Kennedy’s position in such circumstances is completely untenable.

On the subject of Colin Souter, the grazings ‘constable’ at Upper Coll, Mr Kennedy denies any involvement in his appointment or that he is “his man“. He points the finger on Chief Executive, Catriona Maclean, for the appointment “without reference to the agreed board process“.

However, Freedom of Information requests reveal evidence that Mr Kennedy’s version of events may be one painted through rose tinted glasses. His memory again may not be serving him well.

A document produced by the Crofting Commission states:-

Following the Board meeting on 9th May the Convener, Vice Convener, and CEO met by phone to agree who should be appoint4ed [sic] to the post of Grazings constable in the Upper Coll Common Grazings.

So Mr Kennedy was very involved in the selection process.

The selection committee considered four potential candidates for the job and concluded that:-

Mr Souter has experience in working with crofters and grazings committe4ss [sic] through his time in the Police. An ex-chief inspector and force negotiator who comes from south Usit [sic] Mr Souter has both the skills and experience to deal with this matter and therefore he was selected to be appointed constable.

So Mr Kennedy was in fact party to and appointed Mr Souter to the post in question.

There is also evidence of direct communication between Mr Souter and Mr Kennedy. For example an e-mail from the former to the latter on 24 May 2016 which reads:-

Hi Colin

In looking to progress a meeting with the shareholders at Upper Coll, in the near future, I wanted to ensure the venue was appropriate and given you’ve been out there, I wondered if you had an idea on the best venue option and perhaps a secondary one, if circumstances require?

Kind Regards

Colin

Colin Souter

No evidence was produced from the Freedom of Information request as to whether or not recommendations were given by Mr Kennedy to Mr Souter on the comfort of the chairs at possible venues in Upper Coll. But this exchange does prove that there was indeed direct communication between the two as previously suggested on this blog.

Furthermore Mr Kennedy was taking a direct interest in matters by requesting to see minutes of meetings held by Mr Souter at Upper Coll, all as disclosed from information obtained through Freedom of Information.

Mr Kennedy in discussion with The Scottish Farmer refers to the whole grazings committee issue being “a can of worms” but stressed that to his knowledge it was only a problem specifically on Lewis. He is reported as having “quipped“:-

as previously stated in the board room things are often done differently in Lewis.

What about in Lochaber? Has Mr Kennedy also forgotten about the grazings committee he and his fellow commissioners put out of office there? Has he forgotten about how instrumental he was in ensuring the appointment of a grazings ‘constable’ there who would do his bidding?

It has, however, been commented on before that Lewis appeared to be a particular target for the convener. It is unclear why. But perhaps that will eventually come out in the wash.

Mr Kennedy is quoted by The Scottish Farmer as saying:-

But now I’ve put my head on the block in trying to get to grips with the truth. I know people are queuing up to get me out but I am not letting this rest. I’m not going to jump, so I will probably be pushed. If that happens my solicitor is standing by.

That solicitor will have a difficult hill to climb. The evidence seems to me to be firmly stacked against Mr Kennedy and has been since my first blog post on ‘The Common Clearances‘. Subsequent events and revelations from Freedom of Information requests has just fortified that position.

Mr Kennedy’s version of events, as given to the press this past week, appears to show a selective memory with many gaps to fill. I and others who post comments attempt to fill those as best we can on this blog.

Mr Kennedy, like Mr Souter, appears to be searching for a justification for his discredited actions. I doubt that he will ever find it.

Brian Inkster

Image Credits: Monty Python and the Holy Grail © Python (Monty) Pictures

Sunday Politics Scotland: Chaos on the Croft

23 Replies

Sunday Politics Scotland on BBC One Scotland this week looked at the crisis in the Crofting Commission.

Presenter Gordon Brewer introducing the topic said:-

Now Chaos on the Croft.

The body responsible for protecting and regulating Scotland’s crofting is embroiled in some dramatic internal politics of its own.

As Len Cooksley reports pressure is increasing on the head of the Crofting Commission to resign after the Scottish Government became involved.

Len Cooksley:-

Scotland has nearly 20,000 crofts overseen by the Crofting Commission.

After suspending two local grazing committees on Lewis on the grounds of financial missmanagement it was forced into a u-turn.

There were claims the commission were both heavy handed and may have acted illegally.

Now the Scottish Government’s got involved. It called on the commission and its convener, Colin Kennedy, to apologise.

Last week Mr Kennedy walked out of a commissioners meeting. Those that remained issued that apology and then passed a vote of no confidence in Mr Kennedy.

The First Minister gave her take on events in parliament earlier this week.

Nicola Sturgeon MSP:-

I note that crofting commissioners have unanimously called on the convener to resign.

The Scottish Government have requested further information from the convener in relation to last week’s events.

While the Government would not ordinarily intervene in the internal operations of an independent statutory body the legislation does give Scottish Ministers power to act if required.

Len Cooksley:-

MSPs are watching developments with interest.

Tavish Scott MSP:-

There is no doubt that there has been a fall out amongst commissioners and that has been caused by the behaviour of the convener of the Crofting Commission.

What this organisation needs now is a new convener, a reconstituted board and the ability to get back what it is meant to do and that is work for crofters right across Scotland.

Len Cooksley:-

We understand Mr Kennedy has no plans to resign but would make no further comment.

The implication is clear: either he jumps or he’ll be pushed.

Gordon Brewer:-

Well earlier I spoke to Brian Inkster who is a lawyer and blogger specialising in crofting matters.

Gordon Brewer asked:-

Well the crofting commissioners have no confidence in their leader. He won’t resign and the Scottish Government is threatening to get involved. What on earth is going on?

Brian Inkster answered:-

Well it all goes back to December time last year when they decided to put out of office a grazings committee in Lewis. The first one was Mangersta and then subsequently into 2016 they put out two other grazings committees: one in Upper Coll and the other in Lochaber.

Gordon Brewer:-

Right but what I don’t understand is that Mr Kenedy the man who is the commissioner is accused of issuing edicts on things like payments over common grazings and peoples backs are up about this. But how can he do that surely the commissioners have to decide to do this.

Brian Inkster:-

Well the commissioners should be deciding to do it. It looks as though he has been instrumental in pushing these issues forward.

There were three sort of main issues I suppose.

The first one was payment by grazings committees to shareholders in common grazings of monies that had come into grazings funds. His argument was that these monies had to be paid out immediately. So there would be immediate payment to the shareholders and if monies were required back to maintain the common grazings they would issue a levy onto the shareholders.

Nowhere in the law did it say that these immediate payments had to be made and indeed it just didn’t make any kind of logical or common sense approach to deal with it in that way.

Subsequently there were two other issues.

One was that he was seeking to stop common grazings committees receiving SRDP funding – which is really grants from the governmnet to assist in the maintenace and improvement of the common grazings.

And latterly there was an issue around VAT registration where it was being said that common grazings could not be VAT registered whereas historically they always have been.

Gordon Brewer:-

Right, now, what happened? At some point the commissioners had a vote of no confidence.

Brian Inkster:-

That was just over a week ago in Brora. That was on the back of Colin Kennedy walking out of a meeting. He closed the meeting and walked out on the basis that the commissioner for the Western Isles said he was no longer declaring an interest in the Western Isles cases which he had previously done and was now wanting to vote on any issues concerning the Western Isles.

Gordon Brewer:-

On the face of it you would think that if the commissioners have no confidence in him he has to go but he doesn’t does he because he was elected?

Brian Inkster:-

He was elected and there is nothing in the law that says if the commissioners have a vote of no confidence he must go. One would imagine that if all the commissioners are against you, if the Scottish Crofting Federation, NFU Scotland, MSPs across all cross parties and the press are all saying it’s time to go you would think what is the point of clinging on here.

Gordon Brewer:-

The Scottish Government has threatened to become involved. What can they do?

Brian Inkster:-

In terms of the Crofters (Scotland) Act 1993, Scottish Ministers have the power if they consider that a commissioner is unable or unfit to exercise the functions of a member or unsuitable to continue as a member they can then remove a member from office.

Gordon Brewer:-

Now, Brian Inkster, just to give us a little sense of what the background to this is because it is quite complicated. But is the issue underlying all this the use of land and the fact, for example, wind farms wants to come in or housing wants to come in and it is about whether the common ground is allocated to the community the funds from it or to individuals.

Brian Inkster:-

It is linked to the funds that come into a common grazings. On a common grazings, especially as you mentioned wind farming, so in recent times the potential for larger sums of money to come into a common grazings exists. And it is linked to the distribution of those monies and there was an insistance on the part of the convener that those monies had to be paid out as soon as it was received. That there was no ability to hold onto the money to use it to spend on improvements within the common grazings. The Scottish Government said that was not the correct view in law.

Gordon Brewer:-

Alright, we will have to leave it there. Brian Inkster thank you very much indeed for joining us.

Brian Inkster:-

Thank you.

Gordon Brewer:-

Well earlier I spoke to Colin Kennedy. He is the Crofting Commission boss who is in the middle of all of this controversy. I spoke to him on the telephone from Coll.

Gordon Brewer asked:-

Are you going to stay in the post?

Colin Kennedy responded:-

I have no intention of resigning.

Gordon Brewer:-

Why not?

Colin Kennedy:-

As matters stand, I believe the commission have acted wholly within the law at all times and until such times as we have legal advice to the contrary, I will maintain my position.

Gordon Brewer:-

But the Scottish Government has said it has the power to get involved. If they do get involved and say you have to go you will have to go won’t you?

Colin Kennedy:-

That will be the case, yes.

Gordon Brewer:-

So just to be clear on that. If the Scottish Government says look given that your commissioners have voted no confidence in you we don’t think you can stay in post you will have to resign.

Colin Kennedy:-

That may be the case.

Gordon Brewer:-

Why are you so determined? You walked out of the meeting didn’t you, the other week? Why have you fallen out with all of the commissioners?

Colin Kennedy:-

No I didn’t walk out of a meeting.

I formally declared the meeting closed in light of an advancement by a commissioner supported by the deputy accountable officer that they had obtained information from the standards commission which I requested sight of prior to determination which failed to materialise.

Accordingly given the nature of the business at hand I had no alternative other than to formally close the September meeting of the Crofting Commission prior to my departure.

Gordon Brewer:-

Okay, but the commissioners have said they no longer have any confidence in you. Which is not brilliant from your point of view is it?

Colin Kennedy:-

I am unaware of the commissioners having said they have no confidence in me.

Gordon Brewer:-

You are not aware of that?

Colin Kennedy:-

Correct.

Gordon Brewer:-

So as far as you are concerned what? The Crofting Commission is carrying on its work as per normal?

Colin Kennedy:-

Well I would suggest at this moment in time that the Crofting Commission conducted a meeting on 28th September which is in non compliance or in accordance with the standing orders of the Crofting Commission and therefore it would appear in my view to be ultra vires.

Gordon Brewer:-

So right. If they still have confidence in you why would they do that?

Colin Kennedy:-

I couldn’t comment on what they do at informally constituted meetings.

Gordon Brewer:-

So right. You think that they still have confidence in you but that they have held an ultra vires meeting without you for reasons that are inexplicable?

Colin Kennedy:-

Correct.

Gordon Brewer:-

The substance of this is about you, they allege, that you made various determinations about things like payments in the form of edicts – that they weren’t really consulted.

Colin Kennedy:-

Absolutely incorrect.

At no time under my leadership have any decisions been taken without full endorsement of the board and based on legal advice.

And if I could comment prior to those decisions as per the board minute of 15 September 2015, prior to taking any of those decisions a formal request was made to the Chief Executive to obtain legal advice to support the papers presented to the board on which the board took the decisions.

Gordon Brewer:-

Alright Colin Kennedy we have to leave it. Thank you very much for joining us.

Colin Kennedy:-

Thank you.

N.B. For a limited period (29 days) you can watch this episode of Sunday Politics Scotland on iPlayer (at about 54 minutes in)

Image Credits: Sunday Politics Scotland © BBC Scotland

Grazings ‘Constable’ must stand aside or be removed

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The Scottish Crofting Federation has written to the cabinet secretary for crofting, Fergus Ewing MSP, expressing deep concern that crofters’ democratic rights are being flouted by a constable appointed, perhaps illegally, by the Crofting Commission.

Chair of the Scottish Crofting Federation, Fiona Mandeville, said:-

The majority of shareholders of the Upper Coll grazings have voted, yet this constable, whose legality of appointment is refuted by lawyers, is completely ignoring them. The shareholders have demanded that the constable, Colin Souter, who was appointed by the Crofting Commission, stands down so that they can reinstate a democratically elected grazings committee. Why is he still there?

Democracy is the very foundation of grazings committees. A lack of democratic procedure by the removed Upper Coll committee is something that the constable has been trying, unsuccessfully, to find evidence of. The shareholders have the legal right to elect their own committee and Souter is standing in their way. He must stand aside or be removed.

Judging by the press releases Souter issues, he clearly has misunderstood the role of a grazings clerk, or that of an appointed constable fulfilling the duties of clerk – were his appointment legal. He seems to be either completely out of control, or under the control of the Crofting Commission, an organisation that has lost all credibility. In addition Souter and his masters are attempting to undermine the viability of crofters’ collaborative enterprises by questioning their entitlement to SRDP and registration for VAT. Are they trying to bring to an end 130 years of crofting? The only recourse is for the Scottish Government to take control of the situation and to remove him.

This incredible situation is extremely harmful, not only to the crofting community of Upper Coll, but to crofting itself. We can understand that the Scottish Government is reluctant to interfere with a democratically elected Commission, but this constable is not democratically elected, claims to be independent of the Crofting Commission who appointed him, and is flouting democracy. There is nothing to stop the Scottish Government from doing the right thing, and it must do it now.

The T-1000 Grazings ‘Constable’

3 Replies

No… No.

Like the T-1000 in the Terminator series Colin Souter keeps coming back for more.

I previously blogged about the exchange of views between myself and Mr Souter published at Scottish Legal News. Whilst the original topic had been Crofting VATgate, Mr Souter had turned this into an attack against me providing legal advice to Upper Coll Common Grazings (before the former committee were removed from office by the Crofting Commission).

I responded to those attacks although I had already done so elsewhere with my previous comments simply being ignored by Mr Souter as though they were never written.

Once more that is the approach adopted by Mr Souter in his latest (and last) letter published by Scottish Legal News yesterday. “Last letter” in that Scottish Legal News have not surprisingly now closed debate between me and Mr Souter through their pages.

Whist Scottish Legal News have understandably brought the debate to an end through their own pages I will continue it here as there is a need to correct the misleading statements, once more, made by Mr Souter. I will, as I have done before, quote sections of Mr Souter’s letter (in italics) with my analysis following each section:-

I note Mr Inkster has shared another article published on Scottish Legal News. I have no intention of inflicting this debate upon your readers as a series of articles but will merely address what I believe to be THE crucial point, missed from all of his recent writings.

The Common Grazings is about ALL the shareholders and NOT the Committee. When a Committee takes it upon itself to make decisions, other than those relating to the maintenance of the Common Grazings, without reference to shareholders, it loses its mandate…..and its credibility. I have never disputed the rights of any individual to seek professional legal advice, nor would I do so. The point which I hope will not escape readers attention is that the Committee, in accessing and spending money which belongs to ALL shareholders, has exceeded their authority, if it does not first seek shareholder approval for that spend. And that is the case, as shown in the Minute Book.

The former committee have always maintained that their meetings were open to all shareholders and decisions were not taken in isolation. They were recently reported as stating:-

“The constable seems unable to understand that in the spirit of openness and transparency over the years in Upper Coll, all meetings were advertised and open to all shareholders, that all decisions were taken by the majority of those attending and that all these decisions were minuted.”

I imagine that the former committee would normally have had meetings with much more than 4 shareholders in attendance (that being the number of shareholders out of a total of 42 that Mr Souter proceeded to conduct business with on Tuesday night).

Mr Souter has taken many decisions on his own account without any recourse to shareholders: obtaining the Opinion of a QC on VAT matters via the Crofting Commission; writing to HMRC querying the right of common grazings (anywhere it would seem and not just Upper Coll) to be VAT registered; writing to numerous parties including myself concerning various spurious matters with insinuations and threats; meeting with Western Isles Council over matters decided by shareholders 8 years or more ago; seeking to involve the Crown Office & Procurator Fiscal Service in undisclosed matters.

In all the accusations about shareholders not being consulted over matters has Mr Souter ever thought to actually ask shareholders whether or not they approved decisions previously made?

If any didn’t (I doubt if there would be many decisions, if any, that would fall into that category) then that would be a matter for any such aggrieved individual shareholder to pursue (if excluded illegally from a decision making process that should have legally included them).

This is not something that Mr Souter can pursue in any way on their behalf. He is deluded in the extreme if he thinks he has such power even were his appointment a legal one.

As a continuing course of conduct, failing to consult and seek approval from the wider body of shareholders serves only to undermine the relationship between the Committee and the shareholders. The resulting friction and rift that has opened up over time, can be traced back to an evident lack of willingness on the part of the Committee to consult, seek and record shareholders views to support Committee activity. My conclusion follows a simple analysis of the records of the Grazings, including the Minutes of meetings of both the Committee and of ordinary shareholders. Doubtless, Mr Inkster will challenge the validity of my conclusions. I can only say, on a factual point, that I am better positioned to comment by virtue of possessing the historical Minute Book, which is the place where you would reasonably expect such detail to be entered. Even disregarding the official Minute Book (and why would you?), there is the evidence offered by shareholders themselves at more recent shareholder meetings, confirming my own conclusion.

Again Mr Souter’s conclusions “follows a simple analysis of records” and not what the shareholders say the position actually was. His reference to “the evidence offered by shareholders themselves at more recent shareholder meetings, confirming” his “own conclusion” can immediately be dismissed on the basis that this is what 4 out of 42 shareholders may have told him. I understand that those 4 shareholders did not often attend shareholders meetings although it was of course open to them to do so.

The irony is that Mr Souter keeps saying that all shareholders should be consulted yet he is holding meetings with just 4 shareholders and making decisions that affect all shareholders (sometimes without any meetings at all) when he knows that at least 26 out of 42 shareholders (i.e. a clear majority) do not support him or his actions.

All parties involved have a duty to act responsibly and engage positively to help move towards a point of resolution. The most recent meeting of shareholders on 13 September saw fit to vote and unanimously support my activity in office to date, and a series of continuing actions outlined by me, to the meeting, as just one of a number of votes that took place. Many present stated this was the first opportunity they had had in recent years to vote on matters and hoped it was a sign of things to come. Shareholders also voted on a new set of Grazings Regulations, consulted upon over the last three months and once endorsed by the Crofting Commission will, I believe, go some way to improving the framework under which the grazings operates.

Again Mr Souter omits the all important numbers and actual facts as though they do not exist. The unanimous support he refers to amounts to possibly only 4 out of 42 shareholders. Mr Souter was presented with a petition by 26 out of 42 shareholders which reads:-

“I support the election of a new Grazings Committee to run the affairs of Upper Coll Township. I also request the removal of the illegally imposed Grazings Constable with immediate effect.”

The “many present” is possibly a maximum of 4. Their “first opportunity” may possibly be because it is the first time they have chosen to attend a shareholders meeting.

Mr Souter was critical of me before for not divulging numbers of attendees at a meting called by shareholders when I didn’t actually know the numbers. In that case he claimed “9 out of 42 shareholders was never a majority“. He knows the numbers in this instance and so perhaps it is he who is now painting “a rather disingenuous picture“? Especially when 4 out of 42 is certainly nowhere near a majority. But 26 out of 42 is.

Mr Souter was also of the view that those who didn’t attend meetings called by the shareholders were “voting with their feet“. On 13 September there were 11 shareholders who actually walked out on his meeting. That is voting with your feet if ever you saw it. If you follow Mr Souter’s view on shareholders meetings and actual support then 38 out of 42 shareholders voted with their feet on 13 September against Mr Souter. He must therefore accept, by his own reasoning, that he has no mandate at Upper Coll.

It is a matter for regret that Mr Inkster has failed to correspond with me, to answer my query and to confirm the existence (and provide a copy) of his letter of engagement, for review by Upper Coll shareholders. His claim that I am “illegally appointed” has been rejected by the Crofting Commission in their letter to shareholders of 8 September. It is simply his opinion on the matter but I nevertheless defend his right to hold that opinion.

Mr Souter yet again completely ignores the fact that I have in fact responded to his letters by way of a seven page letter copied to him but directed to his ultimate employer, the Scottish Government. After all Mr Souter does declare on his LinkedIn page that he is “engaged to support Scottish Government NDPB Crofting Commission, in investigative and reporting activity“.

If I take issue with his behaviour in correspondence issued by him to me, as I do, then I am well within my rights to take that behaviour up with his employers, as I have done. That is certainly not a failure to correspond.

I clearly cannot provide someone who has not instructed me with information provided to someone who did! The Law Society of Scotland would have something to say about any solicitor being persuaded to unethically do so.

My opinion that Mr Souter has been illegally appointed is shared by others and indeed rather ironically reflects the policy adopted by the Crofting Commission but mysteriously departed from by them, contrary to legal advice presumably received by them, on at least three occasions.

Any challenge on the question of the legality of the appointment of grazings ‘constables’ to the Crofting Commission has been met by a simple assertion that as it was a “final decision” of the Commission it is one that cannot be revisited by them. Even although they are unable to show where in law it is stated that they cannot revisit decisions and this is something they have been seen to do on other occasions!

Thus, in effect, the Commission are saying that they may well have made an illegal decision but they have no power to reverse or change such an illegal decision!

Should he wish to press the matter further, then he is clearly aware of the legal process to follow.

Indeed I am, which is more than the Crofting Commission appear to be aware of.

The continual misrepresentation of the situation in the press by disaffected former Committee members and the media profile enjoyed along with their followers, is a matter of ongoing disappointment. For my own part, I will continue to invite all shareholders to participate at official meetings and contribute positively to the future of their Common Grazings.

From the other side of the fence the misrepresentation is clearly on the part of Mr Souter and the Crofting Commission. A reading of this latest letter from Mr Souter alone taken together with my responses thereto is evidence enough of that.

Given the nature of the ongoing dispute, this article does not reflect the views of all Upper Coll shareholders.

Indeed. It may possibly reflect the views of 4 out of 42 of them.

Brian Inkster

Image Credit: T-1000 in Terminator: Judgment Day © Carolco Pictures; Pacific Western Productions; Lightstorm Entertainment; Le Studio Canal+ S.A.

Crofting VATgate

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Who is the VAT Inspector?

In his letter to shareholders at Upper Coll the grazings ‘constable’, Colin Souter (who was illegally appointed in my view, and in the view of others including, ironically, the Crofting Commission themselves) stated:-

Following receipt of legal opinion from Queen’s Counsel, the position of Grazings Committees being able to register for VAT as trading entities in order to reclaim VAT has come under scrutiny. The dialogue with HMRC regarding VAT status remains ongoing and once concluded, I will be able to advise on the outcome.

Why and how on earth was Colin Souter in receipt of legal opinion from Queen’s Counsel on the question of whether common grazings committees could be VAT registered?

A suggestion on this blog that Colin Souter may have instructed the Opinion was met with this response from Mr Souter:-

I should also point out that I have never sought legal advice from Queen’s Counsel in any context, since being appointed as Grazings Constable.

I then asked:-

Perhaps you can enlighten us as to how you came to be in “receipt of legal opinion from Queen’s Counsel” as stated in your letter to the Upper Coll shareholders?

Mr Souter has yet to answer my question.

So who instructed this legal opinion, who paid for it and why?

How did Colin Souter come to be in possession of it and why?

In his dialogue with HMRC is Colin Souter trying to stop VAT registration at Upper Coll Common Grazings and if so why?

It can only be assumed that the attempt to stop VAT registration of common grazings probably lies at the door of the Crofting Commission. Would this not be how a grazings ‘constable’ appointed by them would be in possession of such information?

We are already aware that the Convener of the Crofting Commission, Colin Kennedy, was of the view that common grazings should not receive SRDP funding. This very alarming notion (an issue that did not concern the crofting regulator and/or its convener in any way) was firmly quashed by Fergus Ewing MSP.

It is therefore not a giant leap to think that the Crofting Commission and/or their Convener might be behind this attempt to stop common grazings being VAT registered.

If that should prove to be the case it is scandalous.

Questions regarding whether crofters should be VAT registered or not have absolutely nothing to do with the Crofting Commission. It is a matter between crofters and HMRC.

Public money should not have been spent on the opinion of Queen’s Counsel on such matters. If that has happened Audit Scotland should be investigating the issue. Another one for them to add to the growing list for their next visit to Great Glen House.

But more significantly why is the Crofting Commission and/or their Convener intent on depriving crofters of income? First it was SRDP funding. Now it appears to be VAT.

Under and in terms of the Crofters (Scotland) Act 1993 the Crofting Commission has as one of its functions:-

promoting the interests of crofting

On their website the Crofting Commission state that it:-

regulates and promotes the interests of crofting in Scotland to secure the future of crofting.

This statement links through to a general leaflet on crofting that states:-

The Crofting Commission is working to secure the future of crofting by creating and promoting a well regulated crofting system that positively contributes to the sustainability of rural communities.

By seeking to deprive crofters of SRDP funding and now, possibly, VAT the Crofting Commission cannot be said to be promoting the interests of crofting, securing the future of crofting or positively contributing to the sustainability of rural communities. Quite the contrary.

If Commissioners are acting in such a way, completely contrary to the functions that the Crofting Commission was established to carry out, then those commissioners responsible have no place in that organisation. They should be ashamed of themselves.

They are clearly “unable or unfit to exercise the functions of a member” or “unsuitable to continue as a member”. As such the Scottish Ministers may remove them from office under and in terms of the Crofters (Scotland) Act 1993. There have been repeated calls over recent months for such action to be taken but if ‘Crofting VATgate’ does fall at the door of the Convener and/or any other Commissioners then this surely is the final straw that broke the camel’s back.

Fergus Ewing MSP, as Cabinet Secretary for the Rural Economy and Connectivity with responsibility for Crofting, should immediately launch an investigation to get to the root of ‘Crofting VATgate’, publicise his findings for the benefit of crofters and take appropriate and decisive action against those responsible.

Brian Inkster

Crofters and Lawyers

5 Replies

It isn’t just the Crofting Commission who can instruct crofting law advice!

It was reported in The Scottish Farmer this week that, as part of the ‘findings’ of the illegally appointed grazings ‘constable’ to Upper Coll Common Grazings, Colin Souter had said in a letter to shareholders that:-

I have also written to the solicitor, Brian Inkster who was apparently engaged by the former Committee, to provide them with legal advice in their dispute with the Commission. Mr Inkster was paid £600 in fees from shareholders’ funds in April 2016. There is nothing in the 1993 Act which permits shareholders’ funds to be used in this way. In addition, there is no record in the Minutes of the decision to engage Mr Inkster, the brief involved or the paying of his invoice having been put to or approved by individual shareholders. Thus, the spending of shareholders’ money in this way, was outwith the power of the Committee at that time, meaning they acted outside of the law and the legal protection normally afforded. Such arbitrary decision-making is outside of the power of the Committee, where it commits spending and serves only to undermine the trust between Committee and shareholders.

In the first letter received by me from Mr Souter on this topic he boldly states:-

Nowhere in the Act, is it provided that shareholders’ money can legitimately be used to pay for legal services when a Grazings Committee is in dispute with any organisation, body or individual. For such to even be contemplated, I would consider it necessary for at least a unanimous vote by shareholders, to support the move. However, there is no indication in the Minute records of such a meeting, discussion or vote having taken place amongst shareholders. I consider it would be highly questionable, even under such circumstances, faced with the narrow terms of statutory responsibility held by Grazings Committees, that shareholders’ money, held for spending on maintenance or improvement of the common grazing, could legitimately be spent on legal advice from any solicitor.

With acceptance of this point, comes the ethical question of receiving the money, fully understanding the source and yet presenting the cheque for payment, (as an expert in Crofting legislation), with specific knowledge of the restrictions under the Act.

He then went on to ask me, in the circumstances, to send him a cheque for £600!

In the absence of receiving such a cheque from me he wrote again this time seeking the payment once more and also asking me for copies of certain documents that he would be willing to pay me a fee to receive. A bit ironic surely that he can pay solicitors fees all of a sudden when supposedly representing shareholders who he claims cannot!

He also, in this most recent letter, went on to threaten me:-

I offer this additional and final opportunity for you to respond on the matters raised in the initial correspondence and that above, before deciding upon the necessity for further action, which if taken, may well afford the benefit of free publicity but with the detail being made public, may nevertheless impact adversely upon your professional standing.

He concludes with the threat of raising a small-claims action against me presumably in the Sheriff Court.

View from Upper Coll

This is what certain shareholders at Upper Coll have to say about the matter in a letter issued to shareholders in response to the one issued by Mr Souter:-

He questions the legality of grazings committees seeking and paying for legal advice. In our case, Inksters Solicitors, who are well versed in Crofting Law were asked by the Grazing Committee to investigate the legality of the Upper Coll shareholders having to distribute the money received from feu dispositions with such haste by the Crofting Commission. He was given a limit of up to £600 to do so. This was actioned prior to the Grazings Committee being put out of office.

Inksters in their investigations were instrumental in the Crofting Commission performing a U-turn on their directive to Upper Coll (it was found that they were in fact acting outside the law!) and saving countless grazings a considerable amount of money!

It is ironic that Mr Souter finds fault with Upper Coll shareholders employing a legal expert to successfully show the injustices of the Crofting Commission whilst he himself while acting for the Upper Coll shareholders (in his opinion!) seeks the counsel of a QC to enquire as to the legitimacy of the Upper Coll Grazings being VAT registered!!

These shareholders at Upper Coll also make the following general point:-

The constable seems unable to understand that in the spirit of openness and transparency over the years in Upper Coll, all meetings were advertised and open to all shareholders, that all decisions were taken by the majority of those attending and that all these decisions were minuted.

He is also under the mistaken impression that the clerk took actions on his own initiative. That is untrue. The clerk’s actions were always as a result of decisions and actions approved by the majority of shareholders. If the clerk was at fault so were all those present at meetings who asked him to act on their behalf.

The constable seems to place blame on successive committees, when in fact all actions were approved at open shareholder meetings. The clerk, unlike the constable, only took action after being instructed to do so by shareholders.

View from the Crofting Law Blog

Mr Souter clearly has no idea about what his role is and what he should be doing even if he was appointed legally as a grazings constable which he has not been. On one hand (according to him) shareholders cannot seek legal advice, but on the other hand he can take unilateral action on their behalf (and presumably at their cost) with no discussion or agreement from them whatsoever.

He hasn’t a clue about the law and given that he thinks shareholders cannot seek legal advice under and in terms of the Crofters (Scotland) Act 1993 he will presumably not be able to seek such advice himself to assist in his deliberations.

Having said that Mr Souter is apparently in receipt “of legal opinion from Queen’s Counsel” on whether Grazings Committees can register for VAT. It is not clear whether he, the Crofting Commission or some other party instructed this opinion. I will explore this specifically and in detail in future blog posts.

However, he seems able to instruct “agents“. It has been reported that:-

He said shareholders are “well aware” from his reports that all scheme applications due were completed by agents acting on behalf of the grazings and “processed accordingly and no financial loss has been suffered”.

A lawyer is simply an agent, no different surely from instructing any other agent to do work on your behalf that may be required?

In any event a right for crofters to instruct lawyers does not need to be contained in tablets of stone within the Crofting Acts. It is a fundamental human right. Try the Magna Carta for starters.

Shareholders in common grazings have been instructing lawyers to represent and provide them with advice in numerous matters over many years. Is Mr Souter really suggesting that all those lawyers need to repay fees received for work undertaken and advice given?

Is Mr Souter really saying that shareholders could not have a lawyer representing them in an action brought against them in the Scottish Land Court?

Does Mr Souter really think it is okay for the Crofting Commission to hire top QCs in their questionable battles against shareholders in common grazings but that those shareholders cannot be afforded access to lawyers themselves?

Has Mr Souter read the Guidance Notes issued by the Crofting Commission on the Management and Use of Common Grazings? These Guidance Notes contain an “Important note” that reads:-

The following guidance is intended to assist grazings committees with regard to the use of grazings regulations. The guidance does not constitute legal advice, and should not be construed as such. Should a grazings committee and/or shareholder require legal advice on a matter concerning common grazings, independent legal advice should be sought from a suitably qualified solicitor.

So even Mr Souter’s masters, who are not often commended for a common sense approach to matters, acknowledge and accept that shareholders can and should seek their own independent legal advice.

Should Mr Souter carry out his threat and raise court action against my law firm I will have no difficulty in defending it and calling the Crofting Commission in as a party to it. There will be a counterclaim for the time, inconvenience and costs caused to me unnecessarily by Mr Souter.

I do not recognise Mr Souter as having any legal standing or authority. His appointment was illegal and even the Crofting Commission knew this to be the case when making it.

Accordingly, I will not be replying directly to his letters. Instead I will be writing to the Cabinet Secretary for the Rural Economy and Connectivity, Fergus Ewing MSP, who has responsibility for crofting. I will, out of courtesy, copy my letter to Mr Souter.

I will be expressing my concerns to Mr Ewing about this illegal ‘constable’ being allowed to wreak havoc by the Crofting Commission. Mr Ewing has already had to rein in Convener Colin Kennedy. Now it is time for him to rein in another Colin.

Brian Inkster

Not a Grazings ‘gamechanger’

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The new, badly programmed, Robotic Grazings Cop introduced by the Crofting Commission unfortunately did not prove to be a gamechanger!

This week’s front page headline in The Scottish Farmer is Grazings ‘gamechanger’.

The news item by Gordon Davidson states that:-

New evidence has been revealed that appears to justify the Crofting Commission’s unpopular intervention in the financial affairs of a common grazings committee.

Colin Souter, the constable controversially appointed to replace the grazings committee at Upper Coll, on the Isle of Lewis, this week wrote to all its shareholders itemising examples of that committee’s “arbitrary decision making” on how shareholders money was spent.

Quite the contrary is in fact the case.

A proper analysis of the ‘findings’ of Colin Souter demonstrates his complete lack of understanding of (a) what the role of a legally appointed grazings constable is (he, of course, being illegally appointed); (b) crofting law; and (c) duties and responsibilities that a grazings constable has towards shareholders in the common grazings.

It also, alarmingly, exposes the true relationship between Colin Souter and the Crofting Commission. More significantly it also exposes a new scandal to hit the Crofting Commission, namely (assuming that Colin Souter is not solely behind it) their attempt to deprive common grazings of finance by seeking to prevent them being VAT registered.

This follows hot on the heels of revelations that the Convener of the Crofting Commission, Colin Kennedy, was seeking to prevent common grazings from receiving SRDP funding!

This attempt by the Crofting Commission and/or their Convener to meddle once more in matters that have nothing to do with their role as a regulator and seek, in so doing, to deprive crofters of finance is the real story here. That is the story that should have made front page news in The Scottish Farmer had Gordon Davidson been tuned into the actual facts involved or had contacted myself or former committee members at Upper Coll for a truer picture. Instead he appeared to rely only on the word of Ivor Matheson (the aggrieved crofter who originally complained to the Crofting Commission) and the misguided ‘findings’ of an illegally appointed grazings ‘constable’.

In subsequent posts on this blog I will consider some of the more salient ‘findings’ by Colin Souter and expose them for what they really are. I will also look at the cosy relationship that Colin Souter appears to enjoy with the Crofting Commission and the real significance of what could easily be referred to as Crofting VATgate.

Brian Inkster

Update – 4 September 2016: Crofters and Lawyers + The Wrong Grazings Committee!