[2026] CSOH 28 — Declarator Competent to Determine Enforceability and Scope of HMRC Undertakings as Unilateral Obligations, Despite Parallel Tax Tribunal Proceedings

1. Introduction

SR Aviation Limited (the pursuer) raised an ordinary action for declarator against The Advocate General for Scotland (the defender, acting for HMRC). The dispute stems from an undertaking given by HMRC to the Court of Session on 19 May 2010 during proceedings to restore Spring Salmon and Seafood Limited (“SSS”) to the companies register. SSS had ceased trading on 31 January 2005, was struck off in 2007, and restored following Advocate General for Scotland, Petitioner [2010] CSOH 117.

The pursuer—connected to SSS through goodwill succession and family interests—contends that it is entitled to tax reliefs by reference to SSS’s losses. HMRC disputes that entitlement in ongoing tax tribunal litigation. The pursuer therefore sought declarators that: (i) the 2010 undertaking is a unilateral obligation on which the pursuer can rely; and (ii) the undertaking prevents HMRC from making further enquiries into SSS’s trading prior to 31 January 2005.

HMRC responded with preliminary pleas that the action was incompetent (it should have been judicial review and/or barred by alternative remedies), that lis alibi pendens applied due to pending tribunal proceedings, and that the pursuer lacked title and interest. The pursuer also enrolled a motion for summary decree.

2. Summary of the Judgment

• The Court held the ordinary action of declarator is competent to determine the nature, enforceability, and effect of HMRC’s undertaking to the Court (paras [11]–[17]).
• Even if judicial review procedure had been required, the Court indicated it would have transferred the action under RCS 58.15 and would not have dismissed it on “alternative remedy” grounds, given the case’s exceptional features (paras [18]–[22]).
• The plea of lis alibi pendens failed because the tribunal proceedings concern tax liability and assessments, whereas the Court of Session action concerns the meaning and enforceability of a Court undertaking as a private-law obligation; the “same issue” requirement was not met (paras [25]–[28]).
• The plea of no title and interest failed: a unilateral promise may be enforceable by a person not involved in making it, and the pursuer had an interest because the undertaking’s scope could affect its tax position (paras [31]–[32]).
• The motion for summary decree was refused in hoc statu, largely because HMRC was entitled under RCS 18.2 to lodge jurisdiction-only defences first and then amend to plead on the merits; it was premature to conclude any defence was “bound to fail” (paras [37]–[41]).

HMRC’s first three pleas-in-law were repelled, and HMRC was allowed time to amend its defences on the merits (paras [42]–[43]).

3. Analysis

3.1 Precedents Cited

Declarators, access to justice, and the limits of “bare” declarator

• Wightman v Secretary of State for Exiting the European Union [2018] CSIH 62: relied upon to support the proposition that declarators may competently be sought to clarify the law in a concrete dispute, grounded in the principle of access to justice (paras [12]–[13]). Lady Poole treated Wightman as recognising both (i) the general availability of declarator and (ii) limits (e.g., where the order would be purely academic), finding those limits not engaged because the declarator could materially assist ongoing tax litigation.
• Keatings v Advocate General for Scotland [2021] SC 329: used alongside Wightman for the same access-to-justice proposition and to demonstrate that declarator can be an appropriate mechanism even where public authorities are involved, provided the order has practical effect (para [12]).

Supervisory jurisdiction versus private-law questions

• West v Secretary of State for Scotland 1992 SC 385: the classic statement of the supervisory jurisdiction’s scope, cited to show that not all disputes involving public bodies belong in judicial review; private-law obligations (including contractual-type issues) may fall outside it. Lady Poole analogised the undertaking dispute to issues “more akin to contractual rights and obligations” (para [13]).

Tribunals as primary fora, but courts retain a residual/exceptional role

• Autologic Holdings Plc v Inland Revenue Commissioners [2006] 1 AC 118: cited for the principle that specialist tribunals are the primary venue for tax disputes, but courts may intervene in exceptional circumstances (para [14]).
• Finucane v Revenue and Customs Commissioners [2021] CSOH 38: referenced in the same vein as Autologic, recognising both tribunal primacy and the possibility of court recourse in appropriate cases (paras [14]–[15]).
• SSS v HMRC [2016] UKUT 313 (TCC): important for two reasons. First, it evidenced that a tribunal can consider the undertaking incidentally (para [21]). Second, it provided interpretive guidance (quoted later at paras [34]–[35]) indicating HMRC was “precluded by their undertaking” from certain claims—though Lady Poole treated that assistance as not eliminating the need for a merits defence and possible proof at this stage.

Alternative remedies and modern procedure (transfer rather than dismissal)

• Bridgeport Estates Ltd v Highland Council [2025] CSOH 69: cited for the general rule that judicial review is a remedy of last resort and may be barred by alternative statutory remedies, subject to exceptions (para [21]).
• Sleigh v Edinburgh DC 1987 SC 70 and Sidey Ltd v Clackmannanshire Council 2010 SLT 607: invoked by HMRC as older authority, but Lady Poole emphasised that the law and procedure have developed, particularly via the transfer mechanism in RCS 58.15 (para [19]).

Lis alibi pendens: purpose and elements

• ARQIVA LTD v KINGSBECK LTD 2020 WL 04572703 (Lands Tribunal for Scotland): cited for the rationale of the plea—preventing “improper and oppressive accumulation of diligence”—which framed the Court’s conclusion that parallel proceedings here were not oppressive (paras [25]–[28]).

Title and interest; enforceability of unilateral promise

• D & J Nicol v Dundee Harbour Trustees 1915 SC (HL) 7: relied on by HMRC for the proposition that the pursuer must be a “party” to a legal relationship; Lady Poole accepted the test but applied Nicol’s “widest sense” of “party” to the claimed unilateral obligation (paras [29]–[31]).
• Regus (Maxim) Ltd v Bank of Scotland Plc 2013 SC 331: central to the Court’s articulation of promise as a “unilateral juristic act” binding by clear words, with significant consequences and potentially enforceable even if unknown to the promisee (para [31]). It also featured as a prospective merits defence for HMRC (para [40])—that the undertaking may lack the clarity required to constitute a promise enforceable by the pursuer.
• Carlyle v Royal Bank of Scotland Plc [2015] UKSC 13: used to reinforce that a promise may be binding without consideration (para [31]).

Summary decree: “bound to fail” threshold

• Henderson v 3052775 Nova Scotia Ltd 2006 SC (HL) 85: cited (via later authority) as confining summary decree to cases where, even after a hypothetical proof, the defender is “bound to fail” (para [39]).
• Promontoria (Chestnut) Ltd v Ballatyne Property Services [2022] CSIH 17: relied upon for the modern articulation of the Henderson constraint and for the link between summary decree and decree de plano (para [39]).

3.2 Legal Reasoning

(A) Why declarator was competent (and not an impermissible end-run around tribunal primacy)

Lady Poole gave three principal reasons (paras [11]–[17]):

1. Access to justice and practical effect: Applying Wightman and Keatings, the Court treated declarator as a legitimate mechanism to resolve a live legal dispute, and rejected the characterisation of the remedy as a “bare declarator”. The declarators could materially affect how long-running tribunal proceedings progress and may assist final resolution (para [12]).
2. Private-law character of the issue: Invoking West, the Court distinguished classic judicial-review questions (ultra vires, procedural impropriety, irrationality) from the present issue: interpretation and enforceability of an undertaking as an obligation. That is closer to contract/promise and is therefore apt for ordinary action procedure (para [13]).
3. Exceptional suitability of the Court of Session: Even though tax tribunals are the primary forum for tax disputes (Autologic; Finucane), this case was about construing an undertaking given to the Court of Session itself and whether a third party may rely on it. The Court was not being asked to set tax liabilities, but to interpret an obligation potentially relevant to those liabilities (paras [14]–[16]).

(B) Transfer to judicial review and alternative remedy—why HMRC still would not have succeeded

The Court went further: even if the action should have been judicial review, it would likely have been transferred under RCS 58.15 rather than dismissed (paras [18]–[20]). The Court emphasised procedural modernisation and the permission-filter under 58.15(1)(b). It also signalled that delay would not have been fatal here because the undertaking was arguably of continuing effect and relevant to present-day liabilities (para [20]).

On “alternative remedy”, Lady Poole accepted that tribunals may be able to consider the undertaking incidentally (as occurred in SSS v HMRC [2016] UKUT 313 (TCC)) but held this case fell within the “exceptional” category: (i) the undertaking was to the Court; (ii) the dispute concerned a private-law-type obligation; (iii) it would not usurp the tribunal’s function of quantifying and determining tax; and (iv) the tribunal proceedings had been sisted while the Court of Session determined this issue (paras [21]–[22]).

(C) Lis alibi pendens—why parallel proceedings did not bar the action

The critical failure for HMRC was the requirement that the two proceedings determine “the same issue” (paras [26]–[27]). Lady Poole treated the tribunal litigation as focused on statutory appeals about assessments and tax liability, whereas the Court of Session action concerned whether an undertaking constituted a unilateral obligation and its scope—questions not identical to the tribunal’s ultimate statutory task. The Court also returned to the plea’s underlying rationale and found no oppression, particularly given HMRC’s earlier stance before the tribunal that it lacked jurisdiction over the undertaking (paras [8], [28]).

(D) Title and interest—why a third party could sue on an undertaking

The Court’s reasoning combined classic standing doctrine with Scots law of promise (paras [31]–[32]):

• Title: If the undertaking is properly characterised as a unilateral promise, it can create a legal relation enforceable by someone who was not involved in making it. Relying on Regus (Maxim) Ltd v Bank of Scotland Plc 2013 SC 331, the Court noted promise is binding by expression of will, irrevocable, and can bind even if unknown to the promisee; and Carlyle v Royal Bank of Scotland Plc [2015] UKSC 13 confirms no consideration is required (para [31]). On that basis, HMRC’s reliance on D & J Nicol v Dundee Harbour Trustees 1915 SC (HL) 7 did not defeat title: “party” is used in a “widest” sense, and the alleged promise sufficed to plead a legal relationship being denied by HMRC.
• Interest: The pursuer demonstrated a practical stake because whether it can rely on the undertaking may affect what revenue is properly due, given the interrelationship between its tax enquiries and SSS’s historic position (para [32]).

(E) Summary decree—why refused despite the Upper Tribunal’s supportive comments

The refusal was driven by procedural fairness and the stringent “bound to fail” threshold:

• RCS 18.2 entitled HMRC to lodge jurisdiction-only defences initially; having lost on jurisdiction, it must be allowed to amend to plead on the merits (paras [37]–[38]). That made it premature to strike out the defences as irrelevant or to grant decree de plano.
• Under RCS 21.2, summary decree requires “no defence” disclosed, but Promontoria (Chestnut) Ltd v Ballatyne Property Services [2022] CSIH 17 (drawing on Henderson v 3052775 Nova Scotia Ltd 2006 SC (HL) 85) confines that to cases where the defender is “bound to fail” after a hypothetical proof (para [39]).
• HMRC identified at least two arguable merits lines (para [40]): (i) proof about the surrounding circumstances as context for construction of the undertaking; and (ii) reliance on Regus (Maxim) to argue that the undertaking lacks sufficiently clear words to constitute a promise enforceable by the pursuer. Those contentions prevented the Court from concluding HMRC was bound to fail at this stage (para [41]).

3.3 Impact

• Procedural route clarified: The decision provides strong support for using an ordinary action of declarator in Scotland to determine the meaning and enforceability of an undertaking given to the Court—especially where the dispute is framed as a private-law obligation rather than a public-law challenge.
• Tribunal primacy preserved, not undermined: Lady Poole carefully delineated the boundary: the Court can decide the undertaking’s legal effect, while the tax tribunals remain responsible for quantifying and determining tax liabilities. This “division of labour” may encourage targeted court proceedings where a discrete private-law issue is blocking tribunal progress.
• Standing in promise/undertaking disputes: By treating unilateral promise doctrine as capable (at least at the title stage) of supporting enforcement by a non-party with a sufficient practical interest, the Court signals a potentially broad approach to who may litigate the effect of undertakings—subject, importantly, to the merits question of whether clear promissory intent exists.
• Modern case management and transfer: The discussion of RCS 58.15 underscores that Scottish courts should now prefer transfer (where appropriate) over the older practice of dismissing proceedings merely because the wrong form was used, thereby reducing procedural satellite litigation.
• Summary decree restraint: The judgment reinforces that summary decree is exceptional, particularly where the defender has not yet had the procedural opportunity (here under RCS 18.2) to plead substantive defences.

4. Complex Concepts Simplified

Declarator

A court order declaring what the law is (or what parties’ legal rights/obligations are) without necessarily ordering payment or performance. It must have practical utility; courts will avoid “bare” declarations that are purely academic.

Supervisory jurisdiction / judicial review

The Court of Session’s public-law control over public bodies’ decisions and actions (e.g., legality, fairness, rationality). Not every dispute involving a public body is a judicial-review matter; private-law obligations (contract/promise-like issues) may be litigated by ordinary action.

Unilateral obligation / promise

Under Scots law, a person can bind themselves by a clear expression of intent to be bound, without needing acceptance or consideration. Because it has serious consequences, the law requires clear words showing promissory intent.

Lis alibi pendens

A plea seeking dismissal (or a stay) because the same dispute is already pending elsewhere. A key requirement is that the other proceedings are truly about the same issue between the same parties.

Title and interest

The Scottish standing test. “Title” concerns a legal relationship giving a right which is infringed or denied; “interest” concerns a real practical stake in the outcome. Both are required.

Sist

A pause in proceedings (a stay). Here, tribunal proceedings were sisted pending the Court of Session’s decision on the declarator action.

Summary decree

A mechanism to decide a case without proof/trial where there is no real defence. The threshold is high: the defender must be “bound to fail” even after assuming a proof.

5. Conclusion

SR Aviation LTD against The Advocate General for Scotland [2026] CSOH 28 is principally a decision about forum and procedure, but it rests on substantive characterisation: an HMRC undertaking to the Court of Session may raise issues of private-law obligation apt for determination by ordinary declarator, even in the shadow of ongoing tribunal proceedings about tax.

The Court repelled HMRC’s preliminary objections—competency, alternative remedy framing, lis alibi pendens, and standing—while refusing to short-circuit the merits by summary decree. The judgment therefore sets a practical pathway for resolving discrete undertaking/promise disputes that impede specialist tribunal litigation, while maintaining the tax tribunals’ statutory primacy over the ultimate assessment of revenue due.