Kaur v Singh
| Jurisdiction | Scotland |
| Judgment Date | 12 June 1998 |
| Docket Number | No 19 |
| Date | 12 June 1998 |
| Court | Court of Session (Inner House - First Division) |
FIRST DIVISION
Lord Hamilton
Heritable property and conveyancingPracticeRegistration of titleRectification of registerPursuer pro indiviso proprietor of subjects and averring signatures on disposition conveying subjects to another and granting standard security in favour of a building society were forgedWhether competentWhether building society proprietor in possessionLand Registration (Scotland) Act 1979 (cap 33), sec 9(3)
Statutory interpretationWords and phrasesProprietor in possessionLand Registration (Scotland) Act 1979 (cap 33), sec 9(3)
In 1994 the pursuer and her husband became pro indivisoproprietors of a flat and their title was registered in the Land Register of Scotland. At the same time a standard security executed by both in favour of a building society was granted and also registered. The pursuer left the flat around January 1996 and March a disposition of the flat bearing to be signed by both her and her husband for onerous consideration was granted in favour of a third party. At the same time a standard of security by a third party in favour of the building society was registered. In May 1996 the purchaser gained access to the flat and thereafter resided there. She subsequently brought an action of production and reduction of the disposition in favour of the third party and the standard security signed by him. She also sought an order under sec 9 of the Land Registration (Scotland) Act 1979 seeking rectification of the Land Register. She averred that the signatures which purported to be hers on the disposition and various other documents were forgeries, someone else having impersonated her, and that she had not consented to the sale. She also averred that the third party and her husband had conspired to sell the flat against her wishes and without her consent. Her averments were to the effect that the third party, in the knowledge that the pursuer was a joint owner of the flat, in her absence from Scotland discussed its purchase with her husband in the presence of a further third party. When that third party advised them both that a sale could not be effected without the pursuer's consent,they laughed and said that they were only joking. The pursuer argued that,in respect of her case based on fraud, the averments were sufficient for the case not to be dismissed at a commercial roll debate. She also argued that the third party was not a proprietor in possession in terms of sec 9(3) since he did not live in or physically occupy the flat and, in any event, it was for him positively to plead on the matter if he intended to rely on the exception in sec 9(3) and there was nothing in sec 9(3) that equiparated the building society, as the holder of a registered interest in land, to a proprietor in possession since in possession under sec 9(3) meant in natural possession and the holder of a standard security could not be a proprietor in possession unless it took natural possession in furtherance of its remedies as creditor. The Lord Ordinary held, inter alia, that the third party's acceptance of the disposition in his favour and his subsequent registration of his title to the flat being consistent both with ignorance of any fraud perpetrated by the husband and with bona fides on his own part, as the pursuer had made no averment of knowledge by the third party and her averments at their highest only raised suspicion about the third party's actings, they should be excluded from probation. The Lord Ordinary also held that any person having interest in land such that in furtherance of that interest he might be in possession was a proprietor within the meaning of sec 9(3) so that if the holder of a registered heritable security was a person who could be in possession he might also qualify as such proprietor but the building society had not entered into possession of the flat either naturally or civilly and at best held possession by reason of a legal fiction which did not fall within the legislative intention so that the society was not a proprietor within the meaning of the subsection. The Keeper or the Registers, as third defender, and the building society, as fourth defenders, reclaimed. Anamicus curiae was appointed for a hearing before the Inner House.
Held (aff judgment of Lord Hamilton but on different grounds) (1) that the land owner and the holder of a standard security were not necessarily in essentially the same position in so far as the policy of sec 9(3) was concerned so that the term proprietor" in that subsection was to be interpreted as applying only to someone who had a title as owner of the land in question; (2) that the relevant possession was possession of the subjects rather than simply of a legal interest in the subjects; (3) that in possessionsuggested possession of land or other heritable subjects rather than possession of a legal interest; (4) that in the case of a standard security the holder was not in possession for the purposes of the subsection as that interpretation deprived the requirement that the proprietor be in possession of virtually all content; so that (5) the building society were neither proprietors nor in possession; and reclaiming motion refused.
Mrs Sukhjinder Kaur brought an action against Balbir Singh and others in which she sought production and reduction of the disposition granted in March 1996 by the second defender and purportedly by herself in favour of the first defender. She also sought production and reduction of a standard security by the first defender in favour or the Woolwich Building Society also granted in March 1996. The Keeper of the Registers of Scotland was called in the action as third defender. The building society were called as fourth defenders.
The action was raised as a commercial cause and called before the commercial judge (Lord Hamilton).
At advising, on 23 September 1997, the commercial judge disposed of certain pleas and averments as related in his lordship's opinion and ordered the case to be continued by order. See Kaur v SinghSC, 1998 SC 233.
The Keeper and the building society thereafter reclaimed.
Cases referred to:
Hamilton v Macintosh Donald LtdSC 1994 SC 304
Hayes v Nwajiaku [1994] EGCS 106
Kaur v SinghSC 1998 SC 233
Short's Trustee v Keeper of the Registers of ScotlandSCSC1994 SC 122,1996 SC (HL) 14
Textbooks referred to:
Emmet on Title (19th edn), 1, 9.024
Ruoff and Roper, The Law and Practice of Registered Conveyancing, para 4010
The cause called before the First Division, comprising the Lord President (Rodger), Lord Sutherland and Lord Caplan for a hearing on the summar roll.
At advising, on 12 June 1998, the opinion of the court was delivered by the Lord President (Rodger).
Opinion of the CourtIn April 1979 royal assent was given to the Land Registration (Scotland) Act (the 1979 Act) and two years later, in April 1981, the scheme of registration of title came into operation in the County of Renfrew. Since that time the scheme has become operational in more and more districts throughout Scotland. A start has thus been made to replacing the system of recording of deeds in the ancient Register of Sasines with a system of registration of title in the Land Register of Scotland, backed by a guarantee of indemnity from the Keeper out of money provided by Parliament. For the foreseeable future the two systems will exist in parallel and, since they proceed on entirely different principles, apparent anomalies will result when they produce different solutions to the same problems. But, because the principles are different, when the 1979 Act throws up problems, the solutions must be found within the context of the new system of registration of title and not by reference to the system which it is intended to supersede. We refer generally to the remarks of Lord Keith of Kinkel in Short's Trustee v Keeper of the Registers of Scotland at 22DE.
In any system of registration of title the holy grail is that the title as registered in the register should precisely reflect the legal position in relation to that title. In practice, however, in no system has that goal been reached. So, for instance, in the Scottish system certain interests which will affect the owner's enjoyment of his land, such as the rights of a tenant under a short term lease, are not registered. Inaccuracies will creep into the register, due perhaps to carelessness or fraud on the part of one of the parties to a conveyancing transaction, or to a clerical error in registering the title, or to a change in circumstances relating to the title. Some of these inaccuracies will cause loss to persons affected by them. A system of registration must therefore provide for the correction of inaccuracies and will often provide for indemnity to those who suffer loss. Precisely because the aim of land registration is that people should be able to rely on the registered titles, a high degree of stability in the register is desirable. Such stability would be threatened if rectification of the register were too readily available. So, a balance has to be struck between those situations where inaccuracies will be rectified and those where the entry in the register will not be altered and the person suffering loss as a result will have to make do with indemnity for his loss.
The point at which the line is drawn between the availability and non availability of rectification may vary from one system of registration to another. But, wherever it may be drawn, that line will do much to determine the character of the particular system. In the 1979 Act Parliament drew that line and determined that issue in sec 9(3). While the Keeper is given a very general power to rectify any inaccuracy in the register (sec 9(1)), this general power is excluded if rectification would prejudice a proprietor in possession. In that event the Keeper may rectify the inaccuracy in four specific circumstances only. The power of the Lands Tribunal for Scotland and of the courts...
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