The case comprised two main elements. The first related to the merits and the second to jurisdiction.
Put shortly Mr Hill, who acted for himself, had served a Statutory Demand for payment on RBS at its Head Office in Edinburgh. This stated that Mr Hill was due from the Bank payment of £23,583,434.55. This was in connection with a credit card debt where Mr Hill sought return of money he had paid on his credit card together with interest, costs, comprising charges for letters sent at the rate of £200 per letter; phone calls at the rate of £400 each; and research at the rate of £100 per hour, and damages of £23,029,367.09. “The only basis set out in the demand attempting to justify why the defender is entitled to restitution from the pursuers is that this is calculated as the profits made by the pursuers with the allegedly fraudulent use of the defender’s money. No information or detail is provided by the defender in relation to any such alleged fraud.”
He had taken no action to wind up the Bank once the Demand had expired without response, but had failed to agree to take no action thereon, so the Bank raised the action to reduce, or quash, the Demand.
The court decided that it was a matter for Mr Hill to establish his claim. A failure to respond to the Demand did not constitute an admission of the debt by the Bank.
As Lord Pentland said at paragraph 18:-
“In these circumstances, the statutory demand was, in my view, fundamentally null, invalid and of no legal effect. It cannot form a proper foundation for a winding-up of the pursuers since the defender has been unable to show that he was entitled to serve such a notice on the pursuers. Accordingly, the demand falls to be reduced. The defender has, in my opinion, no colourable defence to the action. His pleadings are irrelevant and lacking in specification.”
The second point relates to the matter of jurisdiction.
I leave it to His Lordship to narrate the details of the argument.
 I should add that the defender also sought to argue, on the basis of a 72 page historical analysis set out in his Note of Arguments (number 18 of process), that the court has no jurisdiction against him because he resides in Shetland, which he contends is not part of the United Kingdom. The defender’s arguments, as I understood them, rested on the proposition that the Pawning Document granted by King Christian I of Denmark and Norway in 1469 only pledged about 3 or 10 per cent of the land in Shetland. This was, according to the defender, a private arrangement relating only to the king’s lands in Shetland and it left the remainder of the land of the islands in the outright ownership of the people of Shetland. Even today that continued to be the position with the result that sovereignty over the islands continued to reside with the 90 or 97 per cent of land-owning inhabitants, who were “sovereign in their own right”.
 In my opinion, the proposition that the Court of Session does not have jurisdiction in the present case is flawed and must be rejected. It would be unsatisfactory and surprising if the Court of Session did not have jurisdiction to reduce a statutory demand served on a Scottish company at its registered office in Scotland by a person residing in Shetland. It is obvious that there are very strong factors connecting such a case with this court. It seems to me that by instituting in Scotland a legal process which could potentially lead to the winding-up of a Scottish company by the Scottish courts the defender must be taken to have impliedly accepted that it is for the Scottish courts to rule on the validity and legality of the steps taken by him as part of that legal process. So even before one comes to consider the defender’s contention that he does not live in Scotland it can immediately be seen that the present case has particularly strong and obvious connections with the Scottish courts.
 As to the historical background, it seems to me that it must now be regarded as settled in law that Shetland forms part of the United Kingdom and lies within the territorial jurisdiction of the Court of Session. Questions of the type that the defender sought to raise at the debate as to the exact nature and extent of what was pledged by the impignorations of 1468-69 nowadays fall to be addressed by historians rather than by the courts. As I understand it, one effect of the 1468-69 arrangements was that King Christian commanded those living in the Shetland Islands to pay their taxes to the Scottish Crown and to obey the Scottish king until the islands were redeemed. They never have been redeemed and the right of redemption must, I think, now be regarded as having been lost.
 From the sixteenth century Scottish law and customs increasingly infiltrated life on the islands. As the Lord Ordinary (Lord Hunter) explained in the St. Ninian’s Isle Treasure case (Lord Advocate v University of Aberdeen and another 1963 S.C. 533 at 540) from an early stage following the impignorations the Scottish Parliament assumed the right to legislate for Shetland (as well as Orkney) as part of the Kingdom of Scotland. By a gradual process the local judicial institutions and laws of the islands were encroached upon and superseded by the judicial institutions and law of Scotland.
 I note that in the Stair Memorial Encyclopaedia (Volume 24, paragraph 328) the view is expressed that there is a strong case for assuming Scotland’s acquisition of dominium over Orkney and Shetland prior to 1707 and that the Treaty of Union did nothing to displace this. The Scottish (and hence the British) title to Orkney and Shetland was well-established by 1707. There is, in my opinion, considerable force in the views on the subject expressed by the distinguished international lawyer Professor John Grant; these are quoted in the same paragraph in the Stair Memorial Encyclopaedia. Professor Grant takes the view that Shetland (and Orkney) form part of the United Kingdom. He observes that for a very long time there has been peaceful, open, continuous and effective occupation of Shetland by the British Crown. This has been coupled with a clear and unequivocal intention on the part of the Crown to act as sovereign. There is no competing claimant in modern times. For some considerable time past the United Kingdom has, Professor Grant points out, undoubtedly exercised full sovereign powers over Shetland. The long-established exercise of sovereignty over Shetland by the United Kingdom results, in his view, from the exercise of a full range of governmental and legislative functions over the islands over a large number of years without interruption or, it may be added, challenge. All this seems to me to be undoubtedly sound.
 I note also that in Lord Advocate v University of Aberdeen and another supra Lord Patrick, whose opinion was concurred in by the other members of the Inner House, said this (on page 556):
“What is certain is that since 1468 the right of sovereignty over the (Shetland) islands has belonged to the kings of Scotland and afterwards of Great Britain.”
 Lord Mackintosh observed (at page 560) that Shetland “is and has for long been under the sovereignty of the Scottish and thereafter the British Crown”.
 In my opinion, as these statements in the Inner House clearly show, it is now settled that, as a matter of law, Shetland is part of the United Kingdom. The British Crown has the right to exercise sovereignty over the islands. Scots Law applies there and the Scottish courts have territorial jurisdiction there. In the circumstances, I have no difficulty in holding that this court has jurisdiction over the defender in the present action.
 The defender urged me to allow a proof at which evidence could be led from historians on the matters discussed in his Note of Argument, but I do not consider that this would be appropriate. There would be no point in having such a proof since it is clear in law that this court has jurisdiction over the defender in the present action and that his arguments to contrary effect are misconceived
Lord Pentland found in favour of the Bank.
This case might dent the campaign by Mr Hill for independence for the state of Forvik, which he claimed to have established in 2008, as reported here in the Guardian.
He was quoted in the article saying:-
“I see a basic injustice that has continued for hundreds of years and has resulted in Shetland being cheated out of the oil money because the UK has appropriated the seabed without any prior right or title. It seems to me just a fraud and it’s time it stopped.”
The article continued:-
His case rests on a deal struck in 1469 when the king of Denmark, King Christian, effectively pawned Shetland to the Scottish monarch King James III to raise money for his daughter’s dowry. According to Hall, since the loan was never repaid and no other legal agreement signed, Shetland has remained in a constitutional limbo. “My research leads me to believe Shetland should be a crown dependency, the same as the Isle of Man or the Channel Islands,” he said yesterday.
Hill told the Guardian yesterday that his declaration of a new state – measuring one hectare (2.5 acres) – is intended to goad the government and local council into action. “You can do things which annoy the government and just keep prodding and poking until something happens … The idea is to be an annoyance.”
No one has yet volunteered to join Hill’s liberation struggle, so his first visitors may be planning officials from Lerwick. His official residence has no planning permission – provoking his first legal battle. “It’s all jolly good fun,” he said yesterday. “Every pensioner should do something like this.”
Brian Smith, a historian on Shetland and former solicitor, said: “Common sense should tell him that in the period from 1469 to the present, huge constitutional changes have taken place and, de facto, Shetlanders are part of the UK and apparently want to be. The Scandinavian kingdoms have no legal claim to Shetland, nor do they want it.”
How all this will affect Mr Hill’s sovereign state of Forvik remains to be seen.
I suspect this will not be the last of this case nor the last involving Mr Hill and his fight for Forvikian independence.
Posted by Paul McConville