MRS Hamilton v Keeper of the Registers of Scotland (No 4)
| Jurisdiction | Scotland |
| Judgment Date | 25 January 2000 |
| Docket Number | No 31 |
| Date | 25 January 2000 |
| Court | Court of Session (Inner House - First Division) |
FIRST DIVISION
Heritable property and conveyancingPracticeRegistration of titleRegistrable transactions or eventsIndemnityFailure by Keeper of Registers to register leasehold casualties in burdens section of title sheetsWhether land certificate reflecting inaccuracy of title sheet entitled to indemnificationWhether rectification capable of retrospective effectLand Registration (Scotland) Act 1979 (cap 33), secs 9 and 12(1)1
Section 9(1) of the Land Registration (Scotland) Act 1979 enacts that: Subject to subsection (3) below, the Keeper may, whether on being so requested or not, and shall, on being so ordered by the court or the Lands Tribunal for Scotland, rectify any inaccuracy in the register by inserting, amending or cancelling anything therein.Section 12(1) enacts that: Subject to the provisions of this section, a person who suffers loss as a result of(a) a rectification of the register made under section 9 of this Act; (b) the refusal or omission of the Keeper to make such rectification; (c) the loss or destruction of any document while lodged with the Keeper; (d) an error or omission in any land or charge certificate or in any information given by the Keeper in writing or in such other manner as may be prescribed by rules made under section 27 of this Act, shall be entitled to be indemnified by the Keeper in respect of that loss.
The landlords of a number of properties let on long leases in which the tenants had been under an obligation to pay leasehold casualties whenever the tenant's right under the lease was assigned, applied to the Keeper to rectify the Land Register by including the casualties in the burdens section of the title sheets of the properties. The Keeper, on the view that such casualties had fallen into desuetude, had not entered the casualties in the Land Register when the tenants' interests in the leases had been transferred and refused the landlords' request for rectification because rectification would be prejudicial to the tenants who were in possession. The landlords sought indemnification from the Keeper under sec 12(1) of the 1979 Act for loss as a result of rectification not being made from the date of the registration of the relevant interest but the Keeper disputed their right to an indemnity. The landlords appealed to the Lands Tribunal for Scotland arguing that they were entitled to indemnity under sec 12(1)(b) or (d). The Lands Tribunal inter alia allowed a proof before answer. The Keeper appealed to the Court of Session contending that rectification could not be retrospective. The landlords argued that indemnity was available under sec 12(1)(d) where the land certificate reflected an inaccuracy in the title sheet.
Held (1) that except under sec 9(3A), the Keeper had no power to rectify the Land Register with retrospective effect: any rectification had effect only from the time when it was made (pp 280F, 284C, 285C); (2) that accordingly the Keeper's obligation under sec 12(1)(b) was to indemnify any interested party for the loss which the party suffered after the Keeper omitted or refused to rectify the Land Register and as a result of that omission or refusal (pp 280G, 284B, 284H); and (3) that since sec 12(1)(d) was designed to deal with the situation where, although the relevant title sheet or entry relating to a heritable security was accurate, the certificate or office copy contained an inaccuracy when judged against the title sheet in the register, the landlords' claim based on sec 12(1)(d) was irrelevant (pp 281G, 284B, 287AB); and appeal allowed.
M R S Hamilton Limited applied to the Lands Tribunal for Scotland to be held entitled to an indemnity from the Keeper of the Registers of Scotland in respect of certain omissions from the Land Register of Scotland which the Keeper had declined to rectify under sec 9 of the Land Registration (Scotland) Act 1979. The Keeper lodged answers disputing inter alia the applicants' entitlement to indemnification for loss.
After debate the Lands Tribunal, inter alia, allowed a proof before answer.
The Keeper thereafter appealed to the Court of Session.
Cases referred to:
Kaur v SinghSC 1999 SC 180
M R S Hamilton Ltd v Keeper of the Registers of Scotland (No 1) 1999 SLT 829
Short's Trustee v Keeper of the Registers of ScotlandSC1996 SC (HL) 14
Stevenson-Hamilton's Executors v McStay 1999 SLT 1175
Textbooks, etc referred to:
Law Commission, Working Paper on Land Registration (No 45) (1972), para 96
Report of the (Henry) Committee on the Scheme for the Introduction and Operation of Registration of Title to Land in Scotland (Cmnd 4137) (1969), para 154
Scottish Law Commission, Report on Rectification of Contractual and other Documents (Scot Law Com No 79) (1983), Part VIII
Sinclair, Casualties: Suitable Cases for Treatment (1996) 1 SLPQ 125
The cause called before the First Division, comprising the Lord President (Rodger), Lord Coulsfield and Lord Caplan for a hearing on the summar roll.
At advising, on 25 January 2000
LORD PRESIDENT (Rodger)This is yet another case arising out of the provisions of the Land Registration (Scotland) Act 1979 (the Act) relating to the rectification of the Land Register of Scotland and the indemnity for loss which the Keeper of the Registers of Scotland is required to give under sec 12(1) of the Act.
In broad terms sec 3(1) sets up a system of registration of interests in land which has the effect of vesting the real right in the interest in the proprietor subject to the effect of any matter entered in the title sheet. In that situation there is a premium on the accuracy of the title sheet but, even in the best-regulated of systems, inaccuracies in the register will occur from time to time. Under sec 9 the register may therefore be rectified in certain limited situations. Section 9 provides inter alia: (1) Subject to subsection (3) below, the Keeper may, whether on being so requested or not, and shall, on being so ordered by the court or the Lands Tribunal for Scotland, rectify any inaccuracy in the register by inserting, amending or cancelling anything therein. (2) Subject to subsection (3)(b) below, the powers of the court and of the Lands Tribunal for Scotland to deal with questions of heritable right or title shall include power to make orders for the purposes of subsection (1) above. (3) If rectification under subsection (1) above would prejudice a proprietor in possession(a) the Keeper may exercise his power to rectify only where(i) the purpose of the rectification is to note an overriding interest or to correct any information in the register relating to an overriding interest; (ii) all persons whose interests in land are likely to be affected by the rectification have been informed by the Keeper of his intention to rectify and have consented in writing; (iii) the inaccuracy has been caused wholly or substantially by the fraud or carelessness of the proprietor in possession; or (iv) the rectification relates to a matter in respect of which indemnity has been excluded under section 12(2) of this Act; (b) the court or the Lands Tribunal for Scotland may order the Keeper to rectify only where sub-paragraph (i), (iii) or (iv) of paragraph (a) above applies or the rectification is consequential on the making of an order under section 8 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985. (3A) Where a rectification of an entry in the register is consequential on the making of an order under section 8 of the said Act of 1985, the entry shall have effect as rectified as from the date when the entry was made. Provided that the court, for the purpose of protecting the interests of a person to whom section 9 of that Act applies, may order that the rectification shall have effect as from such later date as it may specify
As the terms of the section show, there is no real limit to the kinds of inaccuracy in the register which may be rectified but, obviously, if the register could be rectified too freely, no-one would be able to rely on it and titles would lack stability. So, in practice there is an important limitation on the kinds of situation in which rectification can be allowed: it is usually ruled out if it would prejudice the proprietor of the relevant interest who is in possession (sec 9(3)). The policy behind this major restriction is to give security of title to proprietors who are in possession of property (Kaur v Singh). But whenever rectification is either granted or refused, various parties may suffer loss as a result. In sec 12(1) the Act therefore imposes on the Keeper an obligation to indemnify them for that loss: Subject to the provisions of this section, a person who suffers loss as a result of(a) a rectification of the register made under section 9 of this Act; (b) the refusal or omission of the Keeper to make such a rectification; (c) the loss or destruction of any document while lodged with the Keeper; (d) an error or omission in any land or charge certificate or in any information given by the Keeper in writing or in such other manner as may be prescribed by rules made under section 27 of this Act, shall be entitled to be indemnified by the Keeper in respect of that loss. It is worth observing, even at this stage, that the obligation to provide an indemnity does not rest on any element of fault on the part of the Keeperit applies irrespective of what may be the cause of the inaccuracy in the register. For instance, it applies where the inaccuracy is the result of fraud on the part of the person applying to register the interest and someone else suffers loss. The Keeper's obligation to indemnify is simply a necessary part of the whole scheme of registration of title in which, inevitably, inaccuracies in the register will occur and people will suffer loss in consequence.
The present case is one of several litigations involving M R S Hamilton Ltd. (Hamilton). Putting the matter briefly, at some...
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