VA watchdog to say chief wrongly accepted Wimbledon tickets, airfare, but his lawyers blast findings

WASHINGTON — Department of Veterans Affairs investigators are poised to claim Secretary David Shulkin improperly accepted Wimbledon tickets and used taxpayers’ money to pay his wife’s airfare during a European trip last summer — findings Shulkin’s lawyers are blasting as questionable and unfair.

The report by the VA inspector general is scheduled to be released sometime this week, but some of its key findings can be inferred from a point-by-point rebuttal drafted by Shulkin’s lawyers and obtained by USA TODAY.

The impending report is expected to criticize Shulkin for taking a possibly unnecessary trip and using a VA employee to arrange his leisure time.

Shulkin’s lawyers criticize the impending report as unfair and inaccurate and suggest the inspector general’s investigation was biased against Shulkin from the start.

“The draft report ignores critical facts, presenting a one-sided version of events that casts aside evidence contradicting your chosen narrative,” the lawyers, Justin Shur, Eric Nitz, and Emily Damrau, wrote.

The VA inspector general’s office declined to comment late Monday.

Shulkin took the 10-day trip with his wife and other staff last July to attend meetings with health care officials in Denmark and a summit on veterans’ issues in London.

VA Inspector General Michael Missal began investigating the excursion in October after The Washington Post reported the couple spent nearly half of the trip sightseeing. Among the findings, as inferred from Shulkin’s lawyers’ rebuttal:

• That the trip may not have qualified as “essential travel” under a cost-saving directive Shulkin himself issued to VA leaders just weeks before his trip.

• His wife’s airfare should not have been paid for by the VA or approved by ethics officials at the agency and the amount of leisure time during the trip was a questionable use of taxpayer dollars.

• The couple’s acceptance of tickets to the Wimbledon tennis tournament may have been improper and the person who provided the tickets was not a personal friend as ethics officials who approved the gift had been told.

• He improperly directed VA staff on official time to arrange personal sightseeing activities.

In the eight-page rebuttal, Shulkin’s lawyers maintain the report “improperly applies the relevant regulations, at times mischaracterizing them.”

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Lawyers to implement Land probe recommendations

President Yoweri Museveni has said he will appoint senior police officers and lawyers to implement recommendations from the Commission of Inquiry into Land Matters.

Museveni made the statements at Kawumu State Lodge where he received the interim report from the, Justice Catherine Bamugemereire led commission.

He said that government would discuss the recommendations in the report when the final report is submitted in May this year.

“The recommendations will come to Cabinet through a White Paper and the public will then be informed about the adaptations,” he said.

He thanked the Commission for bringing him an assessment on land problems in Uganda and for coming up with recommendations for government to adapt.

“Land will now start being a real factor of production. This is a historical moment because there has been no other Commission since the 1924 Commission that was appointed by Governor Mitchell. The difference is that the other was simply a Commission of Inquiry but this is a Judicial Commission and if you commit perjury you can get 7 years in jail,” he added.

The interim report constitutes an update to President Museveni on the progress of the inquiry after seven months into the probe.

In 2016, President Museveni constituted a Commission of Inquiry after rampant land evictions and complaints that he had been receiving from the public. The Commission was tasked to look into the effectiveness of the law and processes of land acquisition, administration, management and registration in Uganda.

Justice Bamugemereire indicates that public response to the Commission has been overwhelming. The Commission has clocked 120 days of public hearings, received 4,900 complaints and listened to 287 of these and reviewed 600.

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Contract law week 1

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Contract Law Week 1

Formation

“Agreement between two or more parties having the capacity to make it, in the form demanded by law to perform on one side or both acts which are not trifling indeterminate  impossible or illegal”

Unilateral Contracts V Promise (Pre-contractual negotiations)

No contract = no liability (case)

UC = agreed between the parties

UP= undertaking by one party (case)

To create a contract

  1. Full agreement of important aspects ( consensus in idem)
  2. Consent of the parties ( agreement to be legally bound)
  3. Capacity to contract
  4. Formality
  5. Not prohibited by law/unenforceable

Formation of a contract

Consensus in idem “ A contract is formed when the parties have reached agreement on the essential terms of the contract always provided that they have the intention to create legal obligations”

Agreement

What is an essential term?

Certainty (case)

RTS Flexible systems LTD v Molkerei Alois Muller gmbH 2010

“It depends not upon their subjective state of mind upon consideration of what was communicated between them by words of conduct, and whether that leads objectively that they intended to create legal relations”

Essential Terms

Wight v Newton 1911 SC 762

  • Tenant (W) offered lease (in writing)
  • W in possession before lease executed
  • Draft had been prepared by Landlord (n) but not adjusted
  • When entered possession repair clause in dispute
  • After 3yrs possession W brought an action to have lease executed ( as adjusted by him – repair clause in favour)
  • N argued – no agreement on repair clause = no contract

 

Held, “ it was argued for the pursuer that the four essentials of a lease, namely the parties thereto the subjects, the duration and the rent, having been proved or admitted to have been agreed on between the parties, he was entitled to ask the court to remit to a  man of skill to determine whether *772 the particular clause should be inserted in the lease as one of the usual and necessary clauses of such a lease” – Essential terms may vary depending on the type of contract being negotiated.

 

Agreement as to form

Agreement reached but provision re writing = Not binding till in writing (Case)  K seeking specific implement re exclusive distribution

 

Subjective v Objective

Muirhead and Turnbull v Dickson 1905

  • Piano merchant ( M&T) practise of sale, hire-purchase and hire
  • Oral offer to D “at value of £26, payable 15s. per month”

“Now, of course, if the matter really was as to what in their inmost hearts people thought, I think that, taking these people as honest people on both one side and the other, what they thought would have lead me to the conclusion at which sheriff has arrived, namely, the Grant thought he was selling on HP system, and the other person thought he was buying upon some instalment plan. Commercial contracts Cannot be arranged by what people think in their inmost minds. CC are made according to what people say”

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Relationship between a bank and its customers

Q5. The relationship between a bank and its customers has been analysed as one of depositor/dispotee, principle/agent, of a fiduciary nature, or between creditor debtors. Explain these relationships applied to the banking contract. ( Courts dealing with concept of Fairness of terms and conditions) Abbey v National plc 2009. This post is sponsored by Notary public central London

Agent/Principle

An agent is a person who has the power to represent another legal party (the principal) and brings the principal into a legal relationship with a third party.
An insurance agent (or insurance broker) creates a legal relationship between yourself (principal) and the insurance company (third party)

Common law is the main source of law of agency, however the Commercial Agents ( Council Directive) Reg 1993 contains a number of special rules which apply to agency relationships.

How is an agency relationship created?  

This may be brought about by a formal agreement (written contract) but more usually by implication from the conduct of the parties. No written contract is required. Agents authority may be express, implied or apparent.

Agent’s duties to his Principal: The agent’s duty may be divided into non-fiduciary or fiduciary duties.

The first non f duty imposes an obligation on the agent to follow the principal’s instructions. If the principal’s instructions are unclear then he is not liable.  Regulation 3(2)c of the regulations impose this.

Gilmour v Clark 1853

In this case it was held that if an agent breaches the instructions of the principle, he is liable in damages for any loss suffered by the principle.

Second duty, the agent must exercise skill and care performing his obligations. Where he fails to meet the standard he will be in breach of his duty.

The final non f duty is that an agent is to keep accounts in writing or in some informal medium, depending on what was agreed between and p.

Fiduciary Duties;

Law recognises relationship between A&P is one of mutual trust and good faith. Thus, the principle duty is for the agent to act in good faith and disclose all facts and circumstances with regard to principles business (Bell principles S22)

Regulation 3(1) – builds on the common law duty of good faith, all agents must look after interests of their principles and act dutifully.

Regulation 3(2) – agent must make proper efforts to negotiate, and where appropriate, concluding the transactions he is instructed to take care of and communication all necessary info to principle

The first fiduciary duty is to consider the agents duty to account to the principle in respect of all benefits received in connection with the principles business. An agent cannot take commission without knowledge or consent from principle.

Commonwealth oil and gas v Baxter 2010

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cautionary in Scots law

Q3. Explain the function of a cautionary in Scots law and detail the rights of the cautioner as well as the extent of their liability?

Cautionary obligations

It may give lenders comfort. It is a personal obligation given by a third party in respect of an obligation of a principal debtor. It is therefore an accessory obligation. May be debt or may be obligation ad factum praestandum. May be gratuitous. Parent guaranteeing child’s obligations. May be onerous. Bank guaranteeing developes obligations under building contract.No special form

Writing – Generally, cautionary obligations do not require to be committed to writing in order to be validly constituted, but there are important exceptions to that rule. S1 (2) (a) (ii) of the Requirements of Writing (scot) Act 1995 stipulates that writing is required for the proper constitution of a cautionary obligation where it is a gratuitous unilateral obligation not undertaken in the course of business.

Where a cautionary obligation amounts to a security or guarantee for a regulated agreement under the Consumer credit act 1974 s105 states it MUST be in writing and executed by the cautioner.

Accessory obligation – A cautionary obligation is accessory in nature. Therefore, it is not an independent principle which stands on its own and it cannot exist without linkage to an independent principle obligation between a debtor and creditor

The Rights of the cautioners

Right to Relief –

  • Cautioners have rights to demand that the principle debtor relieve him of all liability incurred to the creditor, even if debt isn’t due.
  • Where cautioner pays then:
  • He has a right of relief against the debtor
  • He has a right to an assignation of any securities held by the creditor
  • He has a right of relief against co-cautioners if he has paid more than his pro rata share
  • Where there is more than one cautioner, unless each is bound only for a specific part of the debt, any who has paid more than his share may seek relief to that extent from the other cautioners

Buchanan v Main 1900

2 out of 5 co cautioners were insolvent, when two other cautioners aid the principle debt, they were entitled to require the 5th cautioner to contribute 1/3 of the debt. This presupposes that the cautioners are bound equally.

Assignation – where the cautioner has paid the principle debt in full, he can demand from the creditor an assignation of the debt, as well as any security for it, or diligence done on it. Such security must have been granted by the debtor.

  • The right does not extend to securities granted to the creditor by 3rd If the creditor holds the security over two debts, then he is entitled to retain it despite the cautioner paying the principle debt if the other debt is unpaid, unless the second debt is incurred subsequent to the cautioner paying the principle debt

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“Derivative claim” Question

Q4) Discuss whether the statutory procedure securing a process for a “Derivative claim” provides sufficient minority protection. Please support your answer with reference to relevant case law.

A derivative claim is a claim made by a nominate shareholder on behalf of the company. It is a claim made for the wrongs done to the company by a director. Prior to the introduction of part 11 of the Companies Act 2006, only under common law could a derivative action be raised. One of the disputable areas in the Companies Act 2006 (‘CA 2006′) is the provisions of derivative claim. It is believed a successful derivative claim regime should strike the right balance between ensuring effective remedies available to minority shareholders while not allowing troublesome directors impeding the carrying on of the proper business of the company. However, it seems the pendulum of the new statutory provision swings in favour of the managerial freedom. Whether it could be served as a tool to ensure directors being held accountable for their breach of duties is questionable.

The case of Foss v Harbottle leaves the minority in an unprotected position, exceptions have arisen and statutory provisions have come into being which provide some protection for the minority. By far and away the most important protection is the unfair prejudice action in ss. 994-6 of the Companies Act 2006 (UK). Also, there is a new statutory derivate action available under ss 260-269 of the 2006 Act.

Obviously, these old rulings do not protect minority shareholders from directors who commit fraud themselves and they have since been developed to provide four exceptions:

Where the transaction is ultra vires or illegal; where the transaction requires the sanction of a special majority; where the transaction infringes the personal rights of the shareholders; and where the transaction amounts to a fraud on the minority. (False assertion different from criminal)

The derivative claim at common law a shareholder did not have the right to bring an action for a wrong against a company under the common law has always been regarded as complicated and unsatisfactory. As a result, it was brought far less frequent than other shareholder remedies.

It has been long established in Foss v Harbottle that the proper claimant in an action in respect of a wrong done to a company is the company itself. The decision whether to sue or not is usually made by the board of directors acting within their normal management power. However, when the people causing harm to the company are its own directors, it is clearly unsafe to let the directors decide. Hence, under special circumstances when the company is not willing to pursue its own right, individual shareholders may be allowed to bring a derivative claim.

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Limited Liability – Corporate law revision

  1. “…the most direct response to abuses of limited liability is to remove the veil of incorporation and make the shareholders (or directors) liable for the debts and other obligations of the company where abuse occurs.” (Gower & Davis, Principles of Modern company law, 2008, Thomson/sweet and Maxwell p 1999)

Discuss the circumstances in which the corporate veil may be lifted citing appropriate case law.

https://www.incorporate.com/limited_liability_company.html

Before lifting the corporate veil, it is important to distinguish between whether the court is applying the terms of a statue or a contract at common law. When dealing with statutory cases, an important factor is to assess cases where courts disregard the separate legal personality of a company. This essentially allows the court to look at the underlying details of a company. The rationale behind this is that the law will not allow the corporate form to be misused or abused. In those circumstances in which the Court feels that the corporate form is being misused it will rip through the corporate veil and expose its true character and nature.

The salmon principle was established by the HOL in Salmon v Salmon 1897. It was states that once a company is incorporated, it becomes a legal entity separate and distinct from its shareholders. What this means that under UK company law, a company is to be treated like any other independent person with rights and liabilities appropriate to itself.

The test applied by the courts to lift the veil is when there is an indication the company is trying to conceal true facts of the business or there are signs it is mere facade. This principle was laid down in Woolfson v Strathclyde Regional Council 1979. In this case, it involved compensation payable due to a compulsory purchase of land by local authorities.  The business was called Campbell ltd which W had 999 shares and his wife 1. He also owned Solfred Ltd. He argues that, W, C and S should be treated as a separate legal entity and that he should be regarded the owner for compensation purposes. He relied on the case of DHN v Tower Hamlets BC stating they were similar situations. However, Lord Keith refused to follow this judgement based on the fact W, did not own all the shares of the business. Woolfson holds two-thirds only of the shares in Solfred and Solfred has no interest in Campbell. In my opinion there is no basis consonant with principle upon which on the facts of this case the corporate veil can be pierced to the effect of holding Woolfson to be the true owner of Campbell’s business or of the assets of Solfred.

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Company law revision questions pt.1

Q1) Explain the duties owed by the partners of a firm to each other AND                                                                B) the factors which might be construed as indicative or otherwise of the existence of a partnership by implication. And how they exist!

Definition of partnership s1

It can consist of two or more parties. Previously there was an upper limit on membership under s. 716 Companies Act 1985. A partnership must be formed for “business” “every trade, occupation or profession” as per s.45 of the 1890 Act. Partnerships must have “a view to make profit”. Does not need to be an “actual” profit but merely an intention to make a profit. Does not apply to Limited Partnerships, at its root a “partnership” is a contract.

The fundamental problem here is that, in the eyes of the law and in particular s.1 of the 1890 Act, “A partnership is a relationship that is determined by the substance of the interactions between the parties, and not by their conscious wishes or the designation which they choose to apply to that relationship.”

Rules for determining existence of partnerships. Among the different rules in s2, s2(3) is the most important. Despite the confusing words used, s2(3) is believed to mean that the court has to find a partnership if the receipt of profits is the only evidence. In reality, the court has always found other relevant evidences to consider and if so, the assistance of s2(3) would be minimal. Thus, the usefulness of s2(3) is clearly in doubt as shown by case laws and the Law commission has even suggested that the whole s2 be repealed from the Act.

Guidelines to determine if a Partnership exists s2 of 1980 act

Sharpe v  Carswell 1910, Lord  Ardwall:

“In short, joint owners are not partners, but are separate individuals holding definite shares in a common subject, but this does not render them either partners or joint adventurers.”

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