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Richard Dennis, Kenneth Pattullo face probe. AN ONGOING probeof a case linked to Scotland’s top judge Lord Carloway – has revealed a Trustee acting in a sequestration of a couple who won a court action - relied on his appointment on the basis of a typo in a court document - to go on to strip the couple of all their assets.
And - files now reveal Kenneth Pattullo was paid £20,000 by offshore vulture fund Promontoria - to sell off a firebombed farm and home belonging to a couple who initially won the Court of Session case then lost out when their counsel – John Campbell QC deliberately removed most of their claim after Lord Woolman said Mr Nolan had a case against the building company – Advance Construction Scotland Ltd.
In documents now disclosed to journalists, Nicola Donnelly – a senior manager at Begbies Traynor in Glasgow – admitted in an email to the couple that Promontoria – a vulture fund which bought loans & mortgages from banks including the Clydesdale – paid Trustee Kenneth Pattullo £20,000 - to sell properties belonging to Melanie Collins, and Donal Nolan - which were once valued in the millions – for the sum of £655K.
Records from the very unusual sequestrations of both Ms Collins & Mr Nolan - show their properties were seized by Mr Pattullo of Begbies Traynor on behalf of Advance Construction (Scotland) Ltd – after the building company lost a Court of Session action raised by Mr Nolan in which Advance Construction admitted dumping toxic waste on land owned by the retired National Hunt jockey.
However, after Begbies Traynor had retained the properties on their books for four years – during which time the Clydesdale Bank sold their interest in the properties to Promontoria - the titles suddenly changed hands only a few days after PoliceScotland were called in to investigate a targeted firebombing of Mr Nolan’s farm – which saw four horses die after being torched with petrol by unknown persons.
The couple say Police Scotland believe the targeted arson attack is connected to events related to the court case and the ‘extremely motivated’ bankruptcy which then followed.
Records of land titles obtained from Registers of Scotland reveal Morningside Farm – the target of the firebombing – was sold by Kenneth Pattullo to an Andrew Kenneth Hill of Carluke, Lanarkshire on 22 May 2019 for a purchase price of £380,000 - some five days after the targeted arson attack.
Meanwhile the home of the couple – a house with land - in Newmains, Wishaw, was sold by Mr Pattullo to a “SIPS Homes Scotland Ltd” on 20 May 2019 with a purchase price listed as £255,000
Companies House reports that SIPS Homes Scotland Ltd was created on 4 March 2019 with a registered office at Crossway, Donibistle Industrial Estate, Dalgety Bay, Fife, United Kingdom, KY11 9JE – and has three directors – Mark William Dalziel, Caroline Ann Hynds and Patrick Leaonard Hynds.
A section of land at Branchal, Wishaw – belonging to the retired jockey was sold by Mr Pattullo to the same “SIPS Homes Scotland Ltd” for £20,000 on 4 June 2019.
Begbies Traynor were asked to confirm if Mr Pattullo was in charge of the properties as Trustee - during the events of the targeted arson attack, but they refused to comment.
Susan Reid of Harrogate based Appeal PR – who claim to handle all Public Relations for Begbies Traynor in Scotland stated: “Sorry to be unhelpful, but unfortunately Begbies Traynor is unable to give any information about personal insolvency cases. However, the information is a matter of public record, so you should be able to find it from official sources.”
The sequestrations of both Mr Nolan and his partner – Melanie Collins – after they had effectively won the Court of Session claim against Advance Construction (Scotland) Ltd – came about after John Campbell QC stripped out most of their financial claims for damage & legal expeses – after Court of Session judge Lord Woolman told the couple they had a case against the building company for loss of the use of the use of their property.
Commenting on Campbell’s move – the judge said he had never seen this happen in a case previously – and a probe of events has established John Campbell had not sought permission or consultation with his client to strip out the financial damages and legal expenses claims.
Mr Nolan and his partner Ms Collins were then targeted by Advance’s lawyers Levy & Mcrae – who then turned around Advance’s loss in court – and the building company’s admission of dumping toxic waste on Mr Nolan’s land – to go after the couple for hundreds of thousands of pounds in legal expenses.
Levy and Mcrae then petitioned the court for sequestration of Ms Collins on 30 March 2015 – and Mr James Robb (now at Brechin Tindall Oatts solicitors) sought sequestration of Ms Collins and the appointment of the Accountant in Bankruptcy as Trustee in her estate.
The interlocutor from Hamilton Sheriff court dated 30 March 2015 reads as follows:
The sheriff, having heard parties' solicitors, on the opposed motion of the Petitioner, having
considered the foregoing petition, together with the productions, and being satisfied that the
petition has been presented in accordance with the Bankruptcy (Scotland) Act 1985, and that:
* proper citation has been made to the debtor
* the requirements of the Bankruptcy (Scotland) Act 1985 relating to apparent insolvency have been fulfilled.
Sequestrates the estate now belonging or which shall hereafter belong to the debtor Ms Melanie Collins before the date of the debtor's discharge and Declares the same to belong to the debtor's creditors for the purposes of the said Act;
Finds the respondent liable to the petitioner in the expenses as taxed, Allows an accountant thereof to be given in and Remits same, when lodged, to the auditor of court to tax and to report;
and Appoints Accountant in Bankruptcy, 1 Pennyburn Road,Kilwinning KA136SA
to be trustee; the whole estate of said Ms Melanie Collins at 07 January 2015 is vested in and now belongs to said trustee, for the benefit of the said debtors creditors
According to financial experts, the appointment of the AIB as trustee in a sequestration is a normal move – and leads to the AIB handing the case to one of their agents – which in this case – was given to auditors KPMG.
However, after KPMG took on the sequestration, and began their work – lawyers acting for Advance approached Sheriff T Millar of Hamilton Sheriff Court – and claimed there had been a typo (administrative error) in their original petition appointing the Accountant in Bankruptcy as Trustee for Ms Collins.
In a closed hearing at Hamilton Sheriff Court on 2 April 2015 - Levy and Mcrae asked Sheriff Millar to swap out the AIB & auditors KPMG for their own preferred Trustee – Kenneth Pattullo of Begbies Traynor.
The interlocutor for the hearing before Sheriff Millar reads as follows:
The Sheriff, having seen and considered the letter of 2nd April 2015 from Levy and McRae Solicitors and it having been noted that an administrative error has been made on the interlocutor of 30th March 2015 in that the Accountant in Bankruptcy was appointed as trustee in error; Allows amendment of said interlocutor by appointing Kenneth Pattulo of Begbies Traynor (CentralLLP), FinlayHouse,10-14 West Nile Street, Glasgow, G12PP as Trustee in the Sequestration of Melanie Collins in place of the Accountant in Bankruptcy
However – according to both financial and legal experts – there was no error whatsoever in the original application to appoint the Accountant in Bankruptcy in the sequestration of Mr Nolan’s partner – Ms Collins.
And – a legal expert has said the court did not actually have the power to amend an error in a petition, rather the court could only ammend an error if the Sheriff had erred in his original decision to appoint the Accountant in Bankruptcy – which is standard practice in sequestrations,
When asked for more information on what happened in this case, and why Levy and Mcrae were able to force s Sheriff to swap the Accountant in Bankruptcy as Trustee for their own choice of Trustee – Mr Pattullo - Hamilton Sheriff Court have consistently refused to provide substantive explanations to these events and a number of addition, unusual rulings related to the sequestration of Ms Collins.
Now, Ms Collins has been told she should approach the court to recall her sequestration, on the basis the court had no power to alter the original Trustee – the Accountant in Bankruptcy – to that of Levy and Mcrae’s preference – Mr Pattullo.
However, in what has now become a battle to secure legal representation to recall the sequestration - multiple law firms have initially worked on the case, confirmed the events at Hamilton Sheriff Court are in error and should be addressed – but later the same law firms have mysteriously withdrawn from acting for Ms Collins after receiving ‘briefings’ or ‘communications’ from those with a vested interest in the case – including Begbies Traynor - the Trustees appointed by Levy and Mcrae.
In the latest attempt to recall the sequestration, Ms Collins approached solicitor Alan Cox of law firm Barton and Hendry in Cumbernauld.
Notes of a meeting between Mr Cox and Ms Collins reveal the solicitor took on the work, and wrote to Begbies Traynor.
However, in an email – dated 15 August 2019 – from Nicola Donnelly – a senior insolvency manager at Begbies Traynor to solicitor Alan Cox of Barton and Hendry – Ms Donnelly told Alan Cox in no uncertain terms that no matter who his clients approached for help – including elected politicians - there would be no change in how events would unfold – which have since led to the sale of all the couple’s properties.
In the email to Alan Cox, Nicola Donnelly states: “I would comment that your clients have instructed previous solicitors [as you are aware] and made complaints to the AiB and their MSP previously as they dispute the validity of the sequestrations. The position obviously will remain the same irrespective of how many different organisations are contacted to act on their behalf.”
Nicola Donnelly also added in her email to Mr Cox: “Eviction actions and forced asset sales are steps taken by a trustee as a last resort. Unfortunately, your clients continued lack of cooperation resulted in the trustee having no other option other than to initiate eviction actions.”
However, an ongoing media investigation has now established the eviction actions referred to by Nicola Donnelly – were undertaken by Addleshaw Goddard - a law firm where Alexander Sutherland - the son of Scotland’s top judge – Lord Carloway was based – but Carloway – real name Colin Sutherland – concealed this conflict of interest in his evidence to the Public Petitions Committee during which he faced questions from Mr Nolan’s MSP – Alex Neil.
After solicitor Alan Cox was contacted by Begbies Traynor - like all other solicitors engaged by the couple to attempt a recall sequestration - Mr Cox later said he could no longer assist in the case.
It should be noted, after Ms Collins was sequestrated in April 2015 – her partner - Mr Nolan – was then targeted by Levy and Mcrae on behalf of Advance Construction (Scotland) Ltd in an action at Hamilton Sheriff Court on 1 September 2015.
In the action to sequestrate Mr Nolan – Levy and Mcrae hired Mr Gavin Walker QC – currently of Axiom Advocates – to attend Hamilton Sheriff Court with instructions to seek the appointment of Mr Pattullo to seize the assets of Mr Nolan – despite the fact he had won the Court of Session claim against Advance Construction for dumping toxic waste on his land.
The couple are now seeking new legal representatives to take on their request to recall the sequestration of Ms Collins, and the Accountant in Bankruptcy has been asked to launch an independent investigation of events in the sequestrations of Ms Collins and her partner, Mr Nolan.
The following questions on this case were put to the Accountant in Bankruptcy (AIB) and it’s boss – Richard Dennis:
Does the Accountant in Bankruptcy have any comment on these targeted incidents of a criminal nature on Ms Collins & Mr Nolan and their farm - which led to the death of four horses and the couple being placed in a state of alarm and fear for their life?
Does the Accountant in Bankruptcy have any comment on the transfer of the titles and sale of the Morningside Farm property, and the fact these titles changed hands to persons of interest - during or only after the targeted fire attack?
Does the Accountant in Bankruptcy have any comment on the sale of this land and the main home & land at Bonkle to SIPS Homes (Scotland) Ltd, and how this sale came about?
Does the Accountant in Bankruptcy have any comment on why Mr Pattullo and Begbies Traynor have not interacted with the couple and their legal agents on various and numerous occasions?
Does the Accountant in Bankruptcy have any comment on the transactions in relation to the securities held by the Clydesdale Bank - during the sequestration of Mr Nolan & Ms Collins, and when the security was transferred during the sequestration from Clydesdale to Promontoria?
Can you clarify what are the AIB & Mr Dennis' responsibilities and liabilities - regarding the actions of trustees, agents administering sequestrations, companies & individuals employed by, and acting on their behalf.
Cam you also clarify what are the AIB & Mr Dennis' responsibilities and liabilities regarding any investigation process into the activities of trustees acting in sequestrations.
Can the AIB confirm if Mr Kenneth Pattullo and Begbies Traynor were the trustee in the sequestration of Mr Donal Nolan, and also the sequestration of his partner Ms Melanie Collins - during the dates of 17/18 May 2019 - these dates correspond to targeted fire attacks (currently under investigation by Police Scotland) which were made on Mr Nolan's farm at Morningside, Wishaw.
Richard Dennis – the Accountant in Bankruptcy - has refused to issue any comment on the above questions put to his office.
CASE BROKE ALL JUDICIAL CONFLICT OF INTEREST RULES:
Nolan v Advance Construction Scotland Ltd [2014] CSOH 4 CA132/11 is the samecase which exposed serious conflicts of interest in Scotland’s judiciary – notably where Lord Malcolm (Colin Campbell QC) failed to disclose on multiple occasions - the fact Lord Malcolm’s son – Ewen Campell - represented the defenders in the same court.
Since the sequestration of Mr Nolan and his partner took place after the conclusion of their court case - the couple have been the victim - of what some view as revenge for daring to take on a company with public contracts who illegally dumped hazardous waste on their land, where this same company was and is represented by law firms directly linked to senior figures in Scotland’s judiciary.
Mr Nolan and his partner have been evicted from their own home, lost their farm and land.
It is also worth noting the Nolan v Advance (Scotland) Ltd case drew in a series of sheriffs and judges – from not easily explained hearings at Hamilton Sheriff Court involving Sheriff Millar, Peter Watson & Levy & Mcrae – and Lord Malcolm’s son – Ewen Campbell – to Court of Session judges including Lord Brodie, Lord Menzies, Lord Woolman, Lord Bracadale (and a concealed recusal) and Lord Hodge – who later prevented the case being appealed to the UK Supreme Court without declaring he had already ruled on the case while in Edinburgh on multiple occasions.
A recent development in the ongoing media probe of this case saw publication of a witness statement from Advocate Ewen Campbell – Lord Malcolm’s son – which directly contradicts evidence given by Lord Carloway - to the Public Petitions Committee and MSP Alex Neil in a hearing on 29 June 2017.
A further development saw a court-sourced witness statement of solicitor and ex-Sheriff Peter Black Watson to the Court of Session – which confirmed Watson employed the son of Lord Malcolmin the case to represent the client – Advance Construction Scotland Ltd– which ended up being heard by Lord Malcolm - who concealed his link to his son during multiple court hearings.
During the evidence session - Lord Carloway faced questions from Mr Neil on the Court of Session case - where judge & Privy Councillor Lord Malcolm (real name Colin Campbell QC) – heard a land contamination case - up to EIGHT TIMES while his own son represented the defenders - Advance Construction Scotland Ltd in the same court room.
In response to questions from the MSP, Lord Carloway (real name Colin Sutherland) furiously claimed that Lord Malcolm’s son DID NOT have any “active involvement with the case whatsoever.”
However – the witness statement dated May 2013 - signed by Ewen Campbell – covering the time Campbell worked for Glasgow law firm Levy & Mcrae – contains a written admission Mr Campbell confirming he did in-fact represented the construction company, alongside lawyer Peter Black Watson – who was at the time a Sheriff and partner at the same law firm.
Further material sourced from the Court of Session, including digital evidence in relation to the ongoing media probe of Nolan v Advance - will be published in upcoming articles.
Ex-Sheriff Watson statement confirms judges’ son on conflict case.COURT PAPERS obtained in an ongoing probe of claims made by Scotland’s top judge at Holyrood – now reveal Peter Watson – a judicial colleague of Lord Carloway - ran the case for a construction company at the centre of a land contamination scandal linked to Court of Session judges who concealed conflicts of interest in court.
The court-sourced witness statement of solicitor and ex-Sheriff Peter Black Watson to the Court of Session - confirms Watson employed the son of Lord Malcolmin the case to represent the client – Advance Construction Scotland Ltd– which ended up being heard by Lord Malcolm - who concealed his link to his son during multiple court hearings.
The new material is a further blow to Lord Carloway – who demanded MSPs on the Scottish Parliament’s Public Petitions Committee accept his version of events in that there was no active involvement of Lord Malcolm’s son in the case whatsoever – a claim also contradiced by a witness statement from Lord Malcolm’s son: Ewen Campbell - Witness Statement - Nolan v Advance Construction
In the opening lines of Watson’s witness statement - ex Sheriff Peter Watson states: “I have been instructed by Advance Construction (Scotland) Limited (“Advance”) in relation to Mr Nolan’s action against the company. I have been running this case and acting on behalf of Advance since. I was approached by Advance in relation to defending an action raised against them by the Pursuer in this case Mr.Donal Nolan and accepted those instructions.”
Critical to the ongoing probe of Lord Carloway – Watson goes on to confirm he asked Lord Malcolm’s son – Ewen Campbell – to work alongside him in representing Advance Construction.
Watson states: ”Throughout these proceedings, I have been assisted by Mr. Ewen Malcolm Campbell and latterly, Mr. James Anthony Robb. During their involvement, both Mr Campbell and Mr Robb were also enrolled solicitors employed by the firm.”
Curiously, at no point in Mr Watson’s witness statement to the Court of Session does he refer to himself as a Sheriff and member of Scotland’s judiciary. Instead, Mr Watson refers to himself as “Professor Peter Black Watson”.
However, the admission by Watson that he employed Lord Malcolm’s son on a case in which Lord Carloway claimed Ewen Campbell had no active involvement - raises more questions of the Lord President’s evidence to the Scottish Parliament’s Public Petitions Committee at a crucial hearing during their six year probe of judicial interests and the creation of a register of judges’ declarations of interests.
At the time of the case – Nolan v Advance Construction Scotland Ltd [2014] CSOH 4 CA132/11 – Peter Watson was a Sheriff on the judicial bench alongside Lord Carloway (Colin Sutherland) – and Lord Malcolm (Colin Campbell QC).
An earlier investigation of this case revealed when Lord Woolman (who heard the proof after the case was passed to him by Lord Malcolm) - stated in court papers that Mr Nolan had a case, John Campbell QC removed – without instruction – most of his client’s own case including over £4million and a claim for legal costs – after he had discussions with the current vice dean of the Faculty of Advocates – Roddy Dunlop QC.
During the evidence session - Lord Carloway faced questions from Mr Neil on the Court of Session case - where judge & Privy CouncillorLord Malcolm (real name Colin Campbell QC) – heard a land contamination case - up to EIGHT TIMES while his own son represented the defenders - Advance Construction Scotland Ltd in the same court room.
In response to questions from the MSP, Lord Carloway (real name Colin Sutherland) furiously claimed that Lord Malcolm’s son DID NOT have any “active involvement with the case whatsoever.”
However – a witness statement dated May 2013 - signed by Ewen Campbell – covering the time Campbell worked for Glasgow law firm Levy and Mcrae – contains a written admission Mr Campbell confirming he did in-fact represented the construction company, alongside lawyer Peter Black Watson – who was at the time a Sheriff and partner at the same law firm.
During the hearing, Alex Neil - MSP for Airdrie & Shotts - asked Lord Carloway: “If, in any case—without referring to a specific case—a close relative of a judge is participating in the case, rightly or wrongly, the perception is that there may be a degree of prejudice.”
Mr Neil said there were concerns the reputation of the judiciary should be protected and added: “I would argue that, certainly in at least one case recently, which we have referred to briefly, the perception is that there may have been unfairness and prejudice in the way in which the matter was conducted, particularly as the judge concerned was involved in the case not once but on a number of occasions.”
In response – a clearly flustered Lord Carloway claimed no such events had taken place.
Carloway took a strong line against the questions, and replied to the MSP stating: “I disagree entirely with your analysis of that particular case and I repeat what I said earlier. The case that you refer to did not involve the judge’s son having any active involvement with the case whatsoever.”
However - on page one of the released witness statement of Ewen Campbell – Mr Campbell confirms he did work for the defenders – Advance Construction.
Ewen Campbell states: “In September 2011 I was asked by Professor Peter Watson (witness) to assist in a new case in which we were to act for Advance Construction (Scotland) Limited (“Advance”).”
Ewen Campbell goes on to admit he worked on the case for nearly a year: “I assisted with this case until Friday 15th June 2012. At this point I ceased assisting Professor Watson as I was informed by Senior Counsel that I was a potential witness in the matter.”
Within the statement, Lord Malcolm’s son – who Carloway told MSPs had no involvement in the case - goes on at length to document numerous on-site visits he undertook at the behest of Carloway’s then judicial colleague – ex Sheriff Peter Watson, and on behalf of the client – Advance Construction (Scotland) Ltd.
In just one example, Ewen Campbell states: “At approximately 4 p.m. I left Levy and McRae’s offices and attended at Branchal Road. I was driven by Ian Butler, a colleague at Levy Sc McRae. On arrival at the site I observed that a number of vehicles were at the gate of the site. Mr Butler and I therefore parked our vehicle just round the comer from the entrance of the site.”
Ewen Campbell is later forced to account for allegations a Grangemouth based firm - IKM Consulting Ltd – employed by Levy and Mcrae as their ‘experts’ in the case – dumped contaminated materials at a site owned by the pursuer – Mr Nolan.
Despite Lord Carloway’s abrupt statement that Lord Malcolm’s son did not have “any active involvement with the case whatsoever” - Ewen Campbell goes on to say in his witness statement he personally talked to a legal representative of the pursuer - and talked the solicitor down from his client’s initial allegation IKM Consulting Ltd dumped contaminated material during their on-site activities for Levy and Mcrae & Advance Construction (Scotland) Ltd.
Ewen Campbell states: “I contacted [solicitor] regarding this who detailed that his clients had originally stated to him that IKM had dumped contaminated materials on the site but after further questioning reduced the allegation to having dumped soil like materials on site.”
Bizarrely, Lord Malcolm’s son adds within his statement he did not instruct IKM Consulting Ltd to dump any materials during their on-site activities under his supervision.
Campbell also admits to accepting additional instructions to work on the case in which Carloway claimed he played no active role in.
Ewen Campbell further stated: “Before I ceased assisting Professor Peter Watson in relation to this case, I was instructed on a number of occasions to prepare and send letters and emails to those acting on behalf of Mr Nolan.”
It should be noted that despite Ewen Campbell’s ‘account’ of events around the IKM Consulting incident - Advance Construction were subsequently forced to admit in the Court of Session before Lord Woolman that they had in-fact illegally dumped contaminated materials on Mr Nolan’s land.
The video footage and transcript of Alex Neil’s questions to Lord Carloway can be found here:
Alex Neil (Airdrie and Shotts) (SNP): I apologise for being slightly late. I had to go to the Public Audit and Post-legislative Scrutiny Committee. I apologise in advance if I cover ground that has already been covered.
Lord Carloway, as an issue of principle, do you think that it should be left only to a judge to decide whether they are going to recuse themselves, or should you or the keeper of the rolls be able to insist on recusal if you believe that there is a potential conflict of interest?
Lord Carloway: The short answer is that I do not believe that there is any problem with the current system, which is that the judge, who knows what his connection is to the case or the parties to it, should make the initial decision. That decision is made in open court, when the parties are present, and it is subject to review on appeal. In other words, if somebody is dissatisfied with that decision and if the litigant eventually loses the case, the decision will come before three judges who will review whether it was correct. If it was incorrect, the decision on the case would fall.
Alex Neil: The person bringing the case to court may not be aware of any conflict of interest that the judge may have and may never find out that there was one, but the judge may well have been influenced by a particular interest. Surely that is not right. If there is any potential conflict of interest, surely there should be a declaration or commitment by the judge, making an explicit statement that there is no conflict of interest. People may not have the resources to appeal, for example. Is the system not balanced against people who come to court for justice?
Lord Carloway: No, it is not. I go back to something that I mentioned earlier, which is very important. Scotland does not have a corrupt judiciary. The matter has been examined by independent persons, notably the GRECO anti-corruption body that operates under the auspices of the Council of Europe, which examined the UK judiciary, including the Scottish judiciary. It was clear that, fortunately, we, as distinct from many other countries, do not suffer from corruption in the judiciary. For that reason, it did not consider that a register of interests was necessary. If one introduces such a measure, one has to be satisfied that it is necessary and also that it is proportionate. If one analyses its proportionality, one has to look at what exactly we are guarding against. If the situation were to be that there was corruption in the Scottish judiciary—which we would discover at some point or another—of course we would have to consider measures to prevent that, one of which might be a register of certain interests. Until such time as it is demonstrated that there is corruption in the Scottish judiciary, I am entirely satisfied that there is no requirement for a register of interests and that it would be positively detrimental to the administration of justice, particularly in relation to the recruitment of judges and especially at the higher level of the judiciary.
Alex Neil: I want to draw a parallel with the register of interests that members of the Scottish Parliament have to sign and regularly update. That came about not because of any allegations or belief that the system was corrupt or that members of the Scottish Parliament are corrupt. In the 18 years that we have been here, I have not heard one allegation of corruption. The register is there not because of allegations of corruption but to ensure that there is no prejudice. If I participate in a debate and I have an interest that I have not declared, I will be open to an allegation not of corruption but of prejudice. Because there is a register of interests and because I have to declare interests in a debate or in a committee meeting such as this one, there is a transparency to ensure that I do not act in a prejudicial fashion.
To go back to the case that Mr MacDonald cited as I came in—the case of Advance Construction and Donal Nolan, in which Lord Malcolm’s son was involved as a lawyer for one of the parties—the issue there was not an allegation of corruption but one of possible prejudice or perception of prejudice. That is a very good example of why either a register of interests or a more robust system of recusal—or perhaps both—might serve the judiciary very well.
Lord Carloway: I am satisfied that Lord Malcolm’s actions were entirely honourable and that he acted in accordance with the code of judicial ethics. I am not sure what is—
Alex Neil: Have you investigated it?
Lord Carloway: I am aware of the background to it.
Alex Neil: No, but have you investigated it?
Lord Carloway: I have read the papers that it involves.
Alex Neil: With all due respect, Melanie Collins and Donal Nolan have written to you on numerous occasions, and at no time have you replied to them, let alone met them, so you have not heard the other side of the case.
Lord Carloway: I am sorry, but I am not aware of letters to me by those particular persons.
Alex Neil: Your office—
The Convener: Alex, let us be careful that we do not get into anything specific on that.
Alex Neil: Yes—absolutely. My point is about how Lord Carloway can reach that conclusion if he has not heard the other side.
Lord Carloway: I have read documents emanating from the persons that you have mentioned. As far as I am aware, they were not addressed to me, but I could be wrong about that. The position is that I am aware of the circumstances of the case. I am satisfied that Lord Malcolm’s conduct was entirely correct in the circumstances. That is part of the problem that you have perhaps highlighted. That case has nothing to do with a register of pecuniary interests. The suggestion is that we should start registering what our relatives are doing, where they are working and matters of that sort, which I suspect would go way beyond even what is expected of politicians.
Alex Neil: No—we have to register what close relatives do.
Lord Carloway: Can I deal with the difference between MSPs and the judiciary, which I think I dealt with earlier this morning? It is quite a different function. A politician is by nature someone who is not independent in the sense that the public expect the judiciary to be. That is not a criticism; it is a reality. As a generality, judges do not deal with the type of issues that politicians deal with. Politicians have executive power. They are dealing with major economic interests of one sort or another. As a generality, judges are not dealing with that type of thing. They are dealing with issues that are usually between private individuals but can be between private individuals and Government or others. Judges are not dealing with the type of issues that politicians are dealing with such as planning inquiries and so on at a local level or major economic development in society as a whole.
The need for independence in the judiciary is different from the kind of independence that a politician requires, because with a politician it is primarily, as Alex Neil has pointed out, about issues of a pecuniary nature. Those are not the issues that arise in most of the recusal cases with which we are concerned. What we are concerned with as judges is that we appear to be independent of all connection with the case. It is not a question of having a pecuniary interest.
If one looks at the register of recusals in the past year, I do not think that any of them were to do with pecuniary interest at all. They were to do with social connections with people—whether someone is a friend; whether a party to the litigation is a friend of a friend; and matters of that sort. Those are the types of situations that are raised by people in the practical reality of litigation and those are the issues that are being dealt with. Unless you are suggesting a register of one’s friends—and presumably, therefore, one’s enemies—the real issue with recusal in the judicial system would not be addressed.
The Convener: Last question, please, Mr Neil.
Alex Neil: If I can just finally draw the parallel between our register and what has been talked about in terms of either recusal or financial interest, MSPs—as individuals and collectively—do not have executive power per se unless they are ministers, but what is very important is the perception of fairness and the perception that justice is being carried out.
If, in any case—without referring to a specific case—a close relative of a judge is participating in the case, rightly or wrongly, the perception is that there may be a degree of prejudice. It might be very unfair, but the point is to try to ensure that the excellent reputation of the judiciary down the years in Scotland is retained. That reputation is not just for not being corrupt, which we all accept—we are not accusing anybody of corruption. The perception of fairness and the perception of not being prejudiced are also extremely important. I would argue that, certainly in at least one case recently, which we have referred to briefly, the perception is that there may have been unfairness and prejudice in the way in which the matter was conducted, particularly as the judge concerned was involved in the case not once but on a number of occasions.
Lord Carloway: I disagree entirely with your analysis of that particular case and I repeat what I said earlier. The case that you refer to did not involve the judge’s son having any active involvement with the case whatsoever. We have very clear rules in our statement of principles of judicial ethics on how to deal with such matters and it is made very clear in that statement that if a relative is the advocate in the case before one, the modern approach is that the judge should not hear the case, or one could put it another way round—the relative should not be presenting the case. Whichever way it happens to be put, the situation that we had 20 or 30 years ago, when it was commonplace for the relatives of judges of one sort or another to be advocating the case, no longer exists.
That practice no longer exists not because it was thought that there was any actual problem with the decision making but, as you say, because of a perception of unfairness. There is a clear judicial rule about that and I am not aware of any case in which it has been breached. I myself have been in a situation in which my son was involved in a firm that was litigating before me. In such a case, the judge would be expected to declare it and the parties would then decide whether to take the point. However, if they took the point and the relative just happened to be a member of the same firm operating in a different department, I would not encourage the judge to recuse himself.
The Convener: There are no final questions, so I thank you very much for your evidence. It has been helpful to clarify many of the issues that you presented to us in written evidence and to have an opportunity to explore some of the issues around prejudice, for instance.
ADVANCE SHERIFF AT COURT: Ex-Sheriff Peter Watson resigned from judicial bench in 2018
Peter Black Watson a former partner in Glasgow based law firm Levy and Mcrae – who was named in a £28million writ linked to the collapse of bust hedge fund Heather Capital – resigned his commission as a part time Sheriff on 10 October 2018.
The information was released by the Scottish Courts and Tribunals Service in response to a Freedom of Information request in 2019 –SCTS - Sheriff Watson resignation
The SCTS stated: “I can advise that Mr Peter Watson resigned his commission as a part-time sheriff on 10 October 2018. Mr Watson did not hear any cases between the lifting of the suspension on 12 July 2018 and his resignation. Mr Watson has not submitted any claims for expenses, nor attended any events, nor carried out any judicial functions, since the suspension was lifted.”
Watson’s resignation came less than three months after Lord Carlowayhad lifted Mr Watson’s record suspension from judicial office of over three years – imposted byLord Brian Gillin February 2015
Mr Watson was suspended from theJudiciary of Scotlandon February 16, 2015 - after the then Lord President, Lord Brian Gill, was informed by a journalist of the claims in the case against Levy and McRae, and specifically against Watson, over Heather Capital’s collapse in 2010.
The move came after allegations surfaced in a £28million writ naming part time Sheriff Peter Black Watson - and his former law firm Levy and Mcrae, and a number of individuals under investigation in connection with the collapsed Heather Capital hedge fund.
In response to queries from the media in February 2015 on the contents of the writ - the Judicial Office subsequently issued a statement confirming Lord Brian Gill had suspended Sheriff Peter Black Watson (61) on 16 February 2015.
The suspension came after Gill demanded sight of the writ.
Responding to the Lord President’s request, Watson then offered to step aside temporarily – while the litigation concluded - however a Judicial Office spokesperson said “The Lord President concluded that in the circumstances a voluntary de-rostering was not appropriate and that suspension was necessary in order to maintain public confidence in the judiciary.”
Astatement from the Judicial Office for Scotlandread as follows: Sheriff Peter Watson was suspended from the office of part-time sheriff on 16 February 2015, in terms of section 34 of the Judiciary and Courts (Scotland) Act 2008.
“On Friday 13 February the Judicial Office was made aware of the existence of a summons containing certain allegations against a number of individuals including part-time sheriff Peter Watson.
The Lord President’s Private Office immediately contacted Mr Watson and he offered not to sit as a part-time sheriff on a voluntary basis, pending the outcome of those proceedings.
Mr Watson e-mailed a copy of the summons to the Lord President’s Private Office on Saturday 14 February.
On Monday 16 February the Lord President considered the matter.
Having been shown the summons, the Lord President concluded that in the circumstances a voluntary de-rostering was not appropriate and that suspension was necessary in order to maintain public confidence in the judiciary.
Mr Watson was therefore duly suspended from office on Monday 16 February 2015.”
Later in July 2018. a statement from the Judicial Office for Scotland on the continuing suspension of part-time sheriff Peter Watson stated:
Following the extra judicial settlement of the Heather Capital action in which part-time sheriff Peter Watson was named as one of the defenders, the Lord President has lifted the suspension imposed upon him in terms of section 34 of the Judiciary and Courts (Scotland) Act 2008. Sheriff Watson will resume part-time judicial duties with effect from 12 July 2018.
Sheriff Watson was suspended from the office of part-time sheriff on 16 February 2015, in terms of section 34 of the Judiciary and Courts (Scotland) Act 2008.
Watson’s former law firm - Levy & McRae, was one of several companies being sued by Heather's liquidator, Ernst & Young, after the fund's collapse in 2010.
Watson was also a director of a company called Mathon Ltd - a key part of the Heather empire.
The collapsed hedge fund Heather Capital – run by lawyer Gregory King was the subject of a Police Scotland investigation and a FIVE YEAR probe by the Crown Office.
The Crown Office later admitted there would be no prosecutions in the cases of the four individuals - lawyers Gregory King & Andrew Sobolewski, accountant Andrew Millar and property expert Scott Carmichael – who were charged by Police Scotland in connection with a Police investigation of events relating to the collapse of Heather Capital.
Peter Watson now has his own law business, PBW Law.
Watson, and his former law firm named in the Heather Capital writ - Levy and Mcrae – also represent the Scottish Police Federation.
Responding to queries from reporters, a spokesperson for the Judicial Office said: “The action, in which suspended part time Sheriff Peter Watson was among the defenders, has settled. An interlocutor to that effect has been issued. The Lord President will consider what, if any, steps now require to be taken.”
Watson subsequently resigned from the judicial bench.
Despite EY’s withdrawal of the £28million claim against Levy and Mcrae & Peter Watson, detailed claims in the Court of Session revealed the following:
[21] In the Levy Mcrae case:
On 4 January 2007, HC transferred £19 million to its client account with LM (Lord Doherty paragraph [5]).
On 24 January 2007, HC transferred £9.412 million to its client account with LM (Lord Doherty paragraph [5]).
The money was intended to be loaned to a first level SPV Westernbrook Properties Ltd (WBP) for onward lending to second level SPVs (Lord Doherty paragraph [5]).
On 9 January 2007, LM transferred £19 million to a Panamanian company (Niblick) owned and controlled by Mr Levene:the money was not therefore transferred to WBP.The transfer was undocumented and without security (Lord Doherty paragraph [5], and Condescendence 6 and 17, pages 20 and 44 of LM reclaiming print).
By a memorandum dated 17 March 2007, HC’s auditors KPMG “identified a number of concerns relating to the documentation provided in respect of these loans”.Further work and information was required (Condescendence 5, page 13 of LM reclaiming print).
On 29 March 2007, LM transferred £9.142 million to Hassans, solicitors, Gibraltar, under the reference “Rosecliff Limited” (a company controlled by Mr King):the money was not therefore transferred to WBP.The transfer was undocumented and without security (Lord Doherty paragraph [5], and Condescendence 6 and 17, pages 20 and 44 of LM reclaiming print).
In April to June 2007, amounts equivalent to the loans thought to have been made to WBP (including accrued interest) were “repaid” to HC via Cannons, solicitors, Glasgow.The directors were unable to ascertain the source of these repayments (Lord Doherty paragraph [7]).
Approaches made by HC to Mr Volpe and Triay & Triay, a firm of solicitors in Gibraltar, were met with a total lack of co-operation (Lord Doherty paragraph [8]).
At a board meeting on 6 September 2007, “KPMG could not approve HC’s accounts … Santo Volpe had executed certain loans to SPV companies where non‑standard procedures had been followed which meant that inadequate security had been given for some loans … Gregory King stated that the loans to the SPVs had been repaid in full in May 2007” (Condescendence 5, page 13 of LM reclaiming print).
By email to a non‑executive director of HC (Mr Bourbon) dated 7 September 2007, Mr McGarry of KPMG referred to the previous day’s board meeting, and expressed concerns about the situation.He asked for further information, namely “all possible evidence regarding the movement of monies out of Heather Capital into these SPVs and onwards to whatever purpose the funds were applied – ie, sight of bank statements, payment/remittance instructions, certified extracts from solicitors clients’ money accounts etc”.(It should be noted that, contrary to HC’s averment in Condescendence 5 at page 13C‑D of LM reclaiming print, the email did not restrict the inquiries requested to “explaining what information was required from Santo Volpe”:the request was much broader.)
In October 2007 the non‑executive directors of HC met with the Isle of Man Financial Services Commission (FSC) to discuss “the issues” (Lord Doherty paragraph [8]).A director also disclosed the suspicious activity and Mr Volpe’s obstruction to the Isle of Man Financial Crime Unit (FCU), who said they would investigate (Condescendence 5 page 14 of LM reclaiming print).The auditors KPMG carried out an additional full scope audit.
By letter dated 18 October 2007, FSC wrote to the directors of HC setting out further information which they required.
By letter dated 26 November 2007 Mr King advised the HC board that “some sort of fraud had been deliberately introduced with invalid land registry details on a number of the loans”.He stated that he had applied pressure to Mr Volpe and Mr Cannon, whereupon there had been “full repayment of the loans with relevant interest” which meant that “investors were secure”.
On 17 December 2007, KPMG signed the accounts and added a completion note using language such as “The risk of fraud increased to high as a result of the documentation issues surrounding the SPVs, where some form of fraud appeared to have been attempted”.In their audit report opinion, they stated “We have been unable to verify where funds advanced to the SPVs were invested.In addition, we were supplied with false documentation in relation to the SPVs which appears to have been a deliberate attempt to mislead us.Given these loans were repaid in the period, we consider that the effect of this is not so material and pervasive that we are unable to form an opinion on the financial statements [opting instead for express qualifications that loan and security documentation could not be validated] … There is uncertainty as to where the monies lent to the [SPVs] were then subsequently invested … Investigations continue to determine what party (or parties) were involved in and were accountable for these events, and whether any action should be taken against them …” (Lord Doherty paragraph [9]).
By letter to HC dated 4 January 2008, KPMG gave serious warnings about their inability to validate loan and security documentation, and lack of evidence as to the purpose for which the money advanced to SPVs was applied.In their words:
“ … Our report is designed to … avoid weaknesses that could lead to material loss or misstatement. However, it is your obligation to take the actions needed to remedy those weaknesses and should you fail to do so we shall not be held responsible if loss or misstatement occurs as a result … [Having explained the disappearance of the funds and the apparent repayments, on which legal advice had been received, KPMG warned] … these matters are extremely serious … an attempted fraud appears to have been perpetrated … We would recommend that the Board continue their investigation into this matter and formally document their decision as to whether or not to inform the criminal justice authorities …”
FIRM FIRM SLAPPED WITH COURT SUMMONS - Top legal outfit in megabucks lawsuit
Practice is linked to bust hedge fund - Briefs with ties to big business and high-profile clients
By RUSSELL FINDLAY Scottish Sun 15 February 2015
A TOP law firm has been hit with a multi-million pound writ linked to a finance company at the centre of a fraud investigation.
Legal practice Levy & McRae — which acts for footballers, politicians, cops and newspapers — faces the claim over its role in connection with £400million investment scheme Heather Capital.
It's claimed millions of pounds went missing following the collapse of the hedge fund. And The Scottish Sun told last week how four men — including tycoon Gregory King — have been reported to prosecutors probing the allegations.
King, 46, ran Heather subsidiary Mathon, where Sheriff Peter Watson — a former senior partner at Levy & McRae — was also briefly a director.
The Court of Session summons was served on the firm six months after he left the legal firm.
Watson is one of the country's most high-profile lawyers and spent 33 years with Levy & McRae before quitting to set up his own business.
The visiting Strathclyde University professor sat on an expert panel created by former First Minister Alex Salmond to look into media regulation in Scotland.
Watson also acted for former Lord Advocate Elish Angiolini after she was harassed by a campaigner who was later jailed.
'Their clients are a who's who of Scotland' And he includes ex-Glasgow City Council chief Steven Purcell among his list of clients, as well as senior police and prison officers.
The legal expert, 61 — chairman of Yorkhill Sick Kids' Hospital charity — has also acted for former Rangers owner Sir David Murray.
And a Gers supporters' group closed down its website following legal threats from Watson, who was working for under-fire directors Sandy and James Easdale.
A source said: "Watson and Levy & McRae are very well known and their clients are a who's who of Scotland."
Investors from around the world sunk their cash into Gibraltar-based fund Heather Capital, which launched in 2004.
Some of the cash was loaned to Mathon to bankroll developments across Scotland. But many of the Mathon-funded plans did not happen — and some of the cash was not repaid.
Liquidator Paul Duffy of Ernst & Young has been battling to recover investors' cash since 2010 and is suing Heather's auditors KPMG for negligence over their role. Isle of Man court documents — acquired by The Scottish Sun — claim Heather was operating a "Ponzi" scheme to dupe investors.
They alleged that as early as December 2006, senior KPMG staff feared that Heather Capital "may have been perpetrating a fraud".
And in August 2007, KPMG employee Raymond Gawne told a colleague that he was "very uncomfortable" acting for the fund which "may have acted in a criminal manner".
The claim also alleges that millions of pounds of loans passed through the client account of Glasgow lawyer Frank Cannon who acted for Heather. KPMG senior executive David McGarry sent an email to Gregory King stating: "Frank Cannon has been uncooperative, either in providing some form of explanation for all of the security documentation prepared by his firm, or in agreeing to facilitate access to Cannon's clients' money account". McGarry added he did not accept "that this is due" to Cannon.
Watson declined to comment on the writ and Levy & McRae and Cannon did not respond to our requests for comment.
The Police Scotland report naming Mr King and his associates Andrew Sobolewski, Andrew Millar and Scott Carmichael is now being considered by the Crown Office.
A spokesman for Ernst & Young confirmed: "Heather Capital, via Ernst & Young, has made a claim against Levy & McRae." And a KPMG spokesman said: "The passages in the plaintiff's summons provide a selective and misleading picture and are drawn out simply to seek to make what is a wholly unsubstantiated case.
"The allegations are completely unfounded and are being fully contested by KPMG."
GREGORY KING MARBELLA-based former Glasgow Academy pupil, 46, was a lawyer and taxi firm boss before launching Heather Capital in 2004. Family business dynasty includes nightclub boss cousin Stefan King.
PETER WATSON GREENOCK-born solicitor advocate, 61, carved out a fearsome reputation as a media lawyer during 33 years at Levy & McRae. He also dishes out justice as a part-time sheriff across Scotland.
KING'S £400million hedge fund Heather Capital loaned millions of pounds to Glasgow-based Mathon, of which Watson was briefly a director.
TOP lawyer and part-time sheriff Watson has acted for a string of high profile celebrity, political, sport and media clients in a glittering legal career:
Watson’s clients included Alex Salmond, Stephen Purcell, Elish Angiolini, Yorkhill Hospital Board, Rangers Chiefs.
and a further development reported by the Scottish Sun on the suspension of Sheriff Peter Watson:
By RUSSELL FINDLAY 25th February 2015, Scottish Sun
A SHERIFF was suspended after he was linked to a collapsed finance firm at the centre of a massive fraud probe.
Peter Watson, 61, was barred from the bench by judges’ boss Lord President Lord Gill following an inquiry by The Scottish Sun.
Watson, whose past clients include ex-First Minister Alex Salmond, was briefly a director of Mathon, a company run by Glasgow bookie’s son Gregory King, 46.
It received millions in loans from King’s hedge fund Heather Capital which crashed owing a seven-figure sum.
Watson’s suspension came 24 hours after we revealed Heather liquidators Ernst & Young filed a multi-million court demand against his former law firm Levy & McRae.
Lord Gill, 73, can suspend sheriffs and judges if it’s “necessary for the purpose of maintaining public confidence”.
Watson forged a fearsome reputation as a media lawyer over 33 years with Levy & McRae before he left the firm six months ago.
King is one of four men named in a police report which is being considered by the Crown Office.
The Judicial Office for Scotland said last night: “Sheriff Peter Watson was suspended from the office of part-time sheriff on February 16.”
Watson subsequently resigned from the judiciary later in October 2018 – which was confirmed in an FOI response from the Judicial Office in 2019.Earlier reports on the Heather Capital writ, and subsequent collapse of prosecutions in the collapsed £400M hedge fund can be viewed here:The collapsed £400M Hedge Fund with direct links to Scotland's judiciary
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