Bank of Scotland v Graham's Trustee
| Jurisdiction | Scotland |
| Judgment Date | 11 December 1991 |
| Docket Number | No. 10. |
| Date | 11 December 1991 |
| Court | Court of Session (Inner House - First Division) |
FIRST DIVISION.
Lord Milligan.
PracticeHeritable property and conveyancingRectification of documentStandard securityDefective standard securityDebtors signing standard security qua debtors but not qua proprietorsDebtors also signing schedule as relative to dispositive clauseWhether rectification competentLaw Reform (Miscellaneous Provisions) (Scotland) Act 1985 (cap. 73), sec. 8 (1).1
A married couple executed a standard security in favour of a bank over certain subjects of which they were heritable proprietors. After the husband had become sequestrated it was noticed that the standard security was defective in form in that the couple had signed the deedqua debtors but not qua heritable proprietors, the deed itself being pro forma and having blank spaces within which the name of the "debtors" and "proprietors" ought to have been inserted. The couple had also signed the schedule to the deed as relative to the dispositive clause. The bank thereafter petitioned the Court of Session for rectification of the standard security, under sec. 8 (1) of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985. The couple and the husband's trustee in sequestration were called in the petition as respondents. The Lord Ordinary (Milligan), after a procedure roll discussion, allowed a proof before answer. The trustee reclaimed and argued (a) that, on a proper interpretation of sec. 8 (1) (b)of the 1985 Act, the court had no power to rectify any part of a document which had not been granted by the grantor at the date when it was executed, so that in this case all that the couple had granted had been a personal bond, there being a total failure on their part to execute the standard security; and (b) that the court had no power to rectify a defect in the deed's execution, the power of rectification being limited to errors of expression within the terminology of the document.
Held (aff. judgment of Lord Milligan) (1) that the fact that the couple's signatures appeared beneath the schedule, which was declared to form part of the dispositive clause and to have been signed as relative thereto, was sufficient to show, from what appeared on the face of the document itself, that they were holding themselves out as proprietors of the subjects and that their purpose in signing the schedule had been to create a standard security over the subjects in favour of the bank; (2) that the phrase "express accurately" in sec. 8 (1) (b) covered a range of inaccuracies from errors of expression on the one hand to
errors of omission on the other; (3) that a case of defective form-filling would fall within the range of inaccuracies to which sec. 8 (1) (b) applied, so long as the court was not being asked to supply signatures which were not there at all or to cure other defects of such a fundamental kind that the deed could not be said to have been executed at all; and (4) that the present case fell within the permitted range of inaccuracies; and reclaiming motion refusedThe Governor and Company of the Bank of Scotland presented a petition to the Court of Session under sec. 8 (1) of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 in which they sought rectification of a standard security granted by Gordon Alexander Graham and Mrs Brenda Noble Graham over heritable subjects known as and forming 32 New Holygate, Broxburn, West Lothian. The grantors of the deed were called in the petition as first-named respondents; R. B. M. Graham, C.A., the trustee on the sequestrated estates of Gordon Alexander Graham, was called in the petition as second-named respondent. The first-named respondents failed to enter the process.
The averments of the petitioners and second-named respondent wereinter alia as follows:"(STAT. 3). In order to effect the said security, the first-named respondents instructed the firm of Messrs. Ian Sloan & Co., 4753 East Main Street, Broxburn, West Lothian (hereinafter termed the said solicitors) to act as solicitors on their behalf. The first-named respondents advised the petitioners to send loan papers in respect of the said security to the said solicitors. The petitioners did so by letter dated 9th May 1985, a copy of which is produced and held incorporated herein brevitatis causa. The said letter enclosed the petitioners' standard form security document (form no. 613) and their style of fire policy endorsement (form no. 617). In terms of their said letter, the petitioners accepted that the said security was to be postponed in favour of a standard security over the said subjects in favour of West Lothian District Council, already recorded. The said solicitors acknowledged the petitioners' said letter by letter dated 14th May 1985. By letters dated 13th and 22nd May 1985, the said solicitors took instructions from the first-named respondents to prepare the said security. By letter dated 22nd May 1985 the said solicitors intimated to West Lothian District Council the first-named respondents' intention to grant the said security. Copies of the said correspondence are produced and held incorporated herein brevitatis causa.(Ans. 3). Believed to be true that the first-named respondents instructed the said solicitors to act as solicitors on their behalf. Believed to be true that the petitioners sent to the said solicitors the petitioners' standard form security document form no. 613. The other communings by letter and otherwise between the petitioners, the said solicitors and...
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