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Reduction for Forgery and Equitable Exceptions: Chalmers v Chalmers

Document Cited authorities 2 Cited in Related
Vincent
DOI10.3366/elr.2016.0347
Published date01 May 2016
Pages235-238
Author
Date01 May 2016
THE FACTS AND OUTER HOUSE DECISION

In a mercifully succinct opinion delivered in Chalmers v Chalmers,1 the Inner House allowed a reclaiming motion against a decision in the Outer House2 refusing to grant a decree of reduction in relation to a forged disposition. The essential facts3 were that a man had arranged for a transfer of a house to his wife, the pursuer, without her knowledge, and she had been registered as the owner of the house in 1998.4 The wife only discovered that the property had been registered in her name when her solicitor discovered this fact during searches of the Land Register in relation to divorce proceedings between the couple in 2012.5 In the intervening time period, in 2006 a disposition of the property bearing a forgery of the wife's signature disponed the property to the couple's son, the defender in the case. Following the conclusion of a divorce minute of agreement between the couple, the wife raised an action of reduction and interdict against the son. In the Outer House the pursuer's claim had been resisted upon essentially two grounds: (1) that the pursuer's title to the property had only ever been as trustee on behalf of a partnership between her and her husband, and it had been given up by virtue of the divorce minute of agreement; and (2) that the court should refuse to exercise its discretion to grant decree of reduction apparently, though it was arguably not entirely clear,6 on the basis that the pursuer was personally barred from seeking reduction of the forged deed.7 The Lord Ordinary held as a matter of fact that the property was not partnership property,8 and the matter was not revisited in the Inner House. Therefore the question for the Inner House concerned the second argument: was the Lord Ordinary correct to refuse to grant a decree of reduction as a matter of discretion?

 INNER HOUSE DECISION

The Inner House allowed the reclaiming motion on the basis of a simple and clear principle of the law of property: a forged deed is a nullity and has no effect.9 Furthermore, the court considered that in the absence of exceptional circumstances, such as express adoption or personal bar, there is no exercise of discretion available to the court10 for cogent policy reasons:11

[W]e consider that the system of Scottish land registration could be subverted if it were possible to forge a signature on a disposition which was duly registered, and then put forward equitable circumstances supporting a contention...

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