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(DISCUSSION PAPER No128)
Discussion Paper on Land
Registration: Registration,
Rectification and Indemnity
discussion
paper
Discussion Paper on Land
Registration: Registration,
Rectification and Indemnity
August 2005
DISCUSSION PAPER No 128
This Discussion Paper is published for comment and criticism and does not represent the final views of the Scottish Law Commission.
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ii
The Scottish Law Commission was set up by section 2 of the Law Commissions Act 19651 for the purpose of promoting the reform of the law of Scotland. The Commissioners are:
The Honourable Lord Eassie, Chairman
Professor Gerard Maher, QC
Professor Kenneth G C Reid, CBE
Professor Joseph M Thomson
Mr Colin J Tyre, QC.
The Chief Executive of the Commission is Miss Jane L McLeod. Its offices are at 140 Causewayside, Edinburgh EH9 1PR.
The Commission would be grateful if comments on this Discussion Paper were submitted by 30 November 2005. Comments may be made (please see notes below) on all or any of the matters raised in the paper. All correspondence should be addressed to:
Mr John M Dods
Scottish Law Commission
140 Causewayside
Edinburgh EH9 1PR
Tel: |
0131 668 2131 |
Fax: |
0131 662 4900 |
Email: |
info@scotlawcom.gov.uk |
NOTES
1.Responses to this Discussion Paper may be used in several ways –
References to responses. A summary of all responses will be posted on our website. Also, we will include in our final report on this project a list of those who have submitted responses and may also refer to those responses or quote from them in the report or in other Commission publications. If you do not wish your name or response, or any part of it, to be used in any one or more of these ways, please indicate this clearly when submitting your response.
Access to responses by third parties. All responses to this paper will be treated as public documents and may be made freely available to third parties unless the respondent specifically asks that the response, or any part of it, should be treated as confidential or we otherwise consider that it should be treated as confidential. Any third party request for access to a confidential response will be determined in accordance with the Freedom of Information (Scotland) Act 2002. Unless one of the exemptions set out in the Act applies, we cannot guarantee that access to the response will be refused.
2.Where possible, we would prefer electronic submission of comments. A downloadable electronic response form for this paper as well as a general comments form are available on our website. Alternatively, our general email address is info@scotlawcom.gov.uk.
3.The Discussion Paper is available on our website at www.scotlawcom.gov.uk or can be purchased from TSO Scotland Bookshop.
4.If you have any difficulty in reading this document, please contact us and we will do our best to assist. You may wish to note that an accessible electronic version of this document is available on our website.
1 Amended by the Scotland Act 1998 (Consequential Modifications) (No 2) Order 1999 (SI 1999/1820).
iii
Contents
|
|
Paragraph |
Page |
Part 1 |
Introduction |
|
|
Background |
1.1 |
1 |
|
The first discussion paper |
1.2 |
1 |
|
Facility of transfer v security of title |
1.3 |
1 |
|
"Positive" system v "negative" system |
1.9 |
3 |
|
An example |
1.12 |
4 |
|
The results of consultation |
1.15 |
5 |
|
The present paper |
1.16 |
5 |
|
Our proposals in summary |
1.18 |
5 |
|
Registration |
1.19 |
5 |
|
The integrity principle |
1.20 |
6 |
|
Rectification |
1.21 |
6 |
|
Indemnity |
1.22 |
6 |
|
The third discussion paper |
1.23 |
7 |
|
New terminology |
1.24 |
7 |
|
Which Parliament? |
1.25 |
7 |
|
Acknowledgments |
1.26 |
7 |
|
Part 2 |
The Land Register |
|
|
DEFINING THE REGISTER |
2.1 |
8 |
|
Component parts |
2.1 |
8 |
|
Title sheets and deeds |
2.4 |
9 |
|
Storage of data |
2.6 |
10 |
|
Proposal |
|
2.7 |
10 |
TITLE SHEETS |
2.8 |
11 |
|
Primary and secondary rights |
2.8 |
11 |
|
Principal title sheets and lease title sheets |
2.11 |
12 |
|
A need for reform? |
2.12 |
12 |
|
A PUBLIC REGISTER |
2.15 |
13 |
|
Introduction |
2.15 |
13 |
|
Content of the Register: personal rights |
2.17 |
13 |
|
Accessing information: the index of proprietors |
2.21 |
15 |
|
ECHR article 8 |
2.23 |
16 |
|
Personal safety |
2.29 |
17 |
|
Three options for reform |
2.33 |
19 |
|
OTHER INFORMATION HELD BY THE KEEPER |
2.37 |
20 |
|
Deeds |
|
2.37 |
20 |
Application forms and other documents |
2.41 |
21 |
|
Deeds as interpretative aids |
2.42 |
22 |
|
iv
Contents (cont'd)
|
|
Paragraph |
Page |
General information about land |
2.44 |
23 |
|
Spent rights |
2.45 |
23 |
|
Proposals |
|
2.49 |
24 |
Part 3 |
Registration (1): nature and eligibility |
|
|
TITLES OR DEEDS? |
3.1 |
26 |
|
Registration of titles |
3.1 |
26 |
|
Registration of deeds and other documents |
3.3 |
26 |
|
Standard v non-standard cases |
3.5 |
28 |
|
Some conclusions |
3.9 |
30 |
|
Are deeds registered? |
3.13 |
31 |
|
WHAT CAN BE REGISTERED |
3.14 |
31 |
|
Register of Sasines |
3.14 |
31 |
|
Land Register |
3.16 |
32 |
|
Overlap with rectification |
3.20 |
34 |
|
A replacement provision |
3.24 |
36 |
|
FIRST REGISTRATION |
3.28 |
37 |
|
Compulsory first registration |
3.28 |
37 |
|
Voluntary first registration |
3.35 |
39 |
|
Completing the Register |
3.39 |
40 |
|
Part 4 |
Registration (2): procedure |
|
|
DATE OF REGISTRATION |
4.1 |
44 |
|
Receipt of application or appearance on the Register? |
4.1 |
44 |
|
Conceptual difficulties |
4.4 |
45 |
|
The three stages |
4.6 |
46 |
|
Application record |
4.7 |
46 |
|
Acceptance |
4.9 |
46 |
|
ACCEPTANCE AND REJECTION |
4.11 |
47 |
|
The current law |
4.11 |
47 |
|
Requisitioning of evidence |
4.15 |
48 |
|
Applications which must be accepted |
4.20 |
49 |
|
Applications which must be rejected: introduction |
4.25 |
50 |
|
Paragraph (a): land insufficiently described |
4.26 |
50 |
|
Paragraph (d): no title number |
4.27 |
50 |
|
Paragraph (aa): superiorities |
4.31 |
52 |
|
Paragraph (b): souvenir plots |
4.32 |
52 |
|
The principle |
4.32 |
52 |
|
The details |
4.35 |
53 |
|
Paragraph (c): applications which are frivolous or vexatious |
4.37 |
54 |
|
Paragraph (e): non-payment of fee |
4.38 |
54 |
|
v
Contents (cont'd)
|
|
Paragraph |
Page |
Deed not self-proving |
4.39 |
54 |
|
Additional grounds for rejection |
4.40 |
54 |
|
Applications which must be rejected: in summary |
4.42 |
55 |
|
Exclusion of indemnity |
4.43 |
56 |
|
DEEDS GRANTED A NON DOMINO |
4.44 |
56 |
|
Positive prescription |
4.44 |
56 |
|
Ownership conferred too soon |
4.46 |
57 |
|
Speculative conveyances |
4.47 |
57 |
|
Possible solutions |
4.51 |
59 |
|
Criterion |
4.52 |
59 |
|
Mechanism |
4.54 |
60 |
|
Applications which may be accepted or rejected |
4.58 |
61 |
|
LAND CERTIFICATES AND CHARGE CERTIFICATES |
4.59 |
61 |
|
The present law |
4.59 |
61 |
|
Should certificates of title be abandoned? |
4.61 |
62 |
|
Office copies: issued automatically or on request? |
4.64 |
63 |
|
Part 5 |
Registration (3): the protection of acquirers |
|
|
CURRENT LAW |
5.1 |
65 |
|
Section 3(1) |
5.1 |
65 |
|
Three rules |
5.8 |
67 |
|
Rule (1): creation or transfer of real rights |
5.9 |
67 |
|
Rule (2): variation or extinction of real rights |
5.12 |
68 |
|
Rule (3): extinction of omitted encumbrances |
5.13 |
69 |
|
A missing rule? |
5.16 |
70 |
|
PROPOSALS FOR REFORM |
5.17 |
70 |
|
Introduction |
5.17 |
70 |
|
From three rules to two |
5.19 |
71 |
|
Integrity principle |
5.21 |
72 |
|
The first rule: registered proprietor taken to be owner |
5.22 |
72 |
|
Relevant date |
5.23 |
72 |
|
Minerals |
5.25 |
73 |
|
Pertinents |
5.28 |
74 |
|
Exceptions |
5.29 |
74 |
|
Presumption that registered proprietor is owner |
5.32 |
75 |
|
The second rule: title subject only to listed rights and overriding |
|
|
|
interests |
|
5.33 |
76 |
First registrations |
5.45 |
79 |
|
Effect of registration |
5.46 |
79 |
|
COMPETING RIGHTS |
5.51 |
80 |
|
Three cases and two principles |
5.51 |
80 |
|
Real Rights Act 1693 |
5.53 |
81 |
|
vi
Contents (cont'd)
|
|
Paragraph |
Page |
1979 Act section 7 |
5.55 |
82 |
|
TIME OF REGISTRATION |
5.59 |
83 |
|
Day or time of day? |
5.59 |
83 |
|
Equalisation: some problems |
5.61 |
84 |
|
Three examples |
5.63 |
85 |
|
Compatible rights |
5.67 |
86 |
|
Competitions with unregistered real rights |
5.68 |
86 |
|
Part 6 |
Rectification |
|
|
CURRENT LAW |
6.1 |
88 |
|
Introduction |
6.1 |
88 |
|
Actual inaccuracy |
6.2 |
88 |
|
Bijural inaccuracy |
6.4 |
88 |
|
Effect of rectification |
6.6 |
89 |
|
Restrictions on rectification |
6.11 |
90 |
|
Difficulties in summary |
6.15 |
91 |
|
PROPOSALS FOR REFORM |
6.17 |
92 |
|
Introduction |
6.17 |
92 |
|
Meaning of "inaccuracy" |
6.18 |
92 |
|
Severance of connection with indemnity |
6.20 |
92 |
|
Rectification unrestricted |
6.21 |
92 |
|
An example |
6.22 |
93 |
|
Judicial reduction and rectification |
6.24 |
93 |
|
Bringing rectification about |
6.25 |
94 |
|
Application procedure |
6.28 |
95 |
|
Proposal |
|
6.32 |
96 |
ENTRY TO THE REGISTER BY OTHER MEANS |
6.33 |
97 |
|
Diversity |
|
6.33 |
97 |
In search of unity |
6.35 |
98 |
|
Effect of entry |
6.36 |
98 |
|
Relationship to inaccuracy |
6.37 |
98 |
|
Powers and duties of the Keeper |
6.38 |
98 |
|
Rectification and registration |
6.39 |
99 |
|
Part 7 |
Indemnity (1): in principle |
|
|
CURRENT LAW |
7.1 |
100 |
|
Introduction |
7.1 |
100 |
|
Cost |
|
7.3 |
100 |
Four grounds |
7.4 |
100 |
|
The link with rectification |
7.7 |
101 |
|
vii
Contents (cont'd)
|
|
Paragraph |
Page |
Too wide |
|
7.8 |
102 |
Too narrow |
|
7.12 |
103 |
Inaccuracy not rectification |
7.17 |
104 |
|
Fraud and carelessness |
7.19 |
105 |
|
Claims by the acquirer |
7.20 |
105 |
|
Claims by the true owner |
7.21 |
106 |
|
THE KEEPER'S WARRANTIES |
7.22 |
106 |
|
Introduction |
|
7.22 |
106 |
Two warranties |
7.28 |
107 |
|
Warranty as to title |
7.29 |
107 |
|
Only registration |
7.30 |
108 |
|
Rectification |
7.33 |
109 |
|
Noting |
|
7.34 |
109 |
First registration |
7.35 |
109 |
|
Only the applicant |
7.36 |
109 |
|
Only real rights |
7.37 |
110 |
|
Only for today |
7.38 |
110 |
|
Only that the right is acquired (or varied or extinguished) |
7.39 |
110 |
|
Not for administrative mistake |
7.40 |
111 |
|
Not for bad faith |
7.41 |
111 |
|
Not where indemnity excluded |
7.45 |
112 |
|
Not for minerals |
7.46 |
112 |
|
Warranty as to encumbrances |
7.47 |
112 |
|
The need for eviction |
7.49 |
113 |
|
INDEMNITY |
|
7.52 |
114 |
Introduction |
|
7.52 |
114 |
Loss due to the integrity principle |
7.53 |
114 |
|
Loss incidental to rectification |
7.59 |
116 |
|
Loss incurred by other parties |
7.60 |
116 |
|
Mistake in information given by the Keeper |
7.62 |
117 |
|
Loss or destruction of any document while lodged with the Keeper |
7.63 |
118 |
|
SOME WORKED EXAMPLES |
7.64 |
118 |
|
Example |
1 |
7.65 |
118 |
Example |
2 |
7.66 |
118 |
Example |
3 |
7.67 |
119 |
Example |
4 |
7.68 |
119 |
Example |
5 |
7.69 |
120 |
Example |
6 |
7.70 |
120 |
Example |
7 |
7.71 |
121 |
Example |
8 |
7.72 |
121 |
Example |
9 |
7.73 |
121 |
Example |
10 |
7.74 |
121 |
viii
Contents (cont'd)
|
|
Paragraph |
Page |
Example 11 |
7.75 |
122 |
|
Example 12 |
7.76 |
122 |
|
Example 13 |
7.77 |
123 |
|
Part 8 |
Indemnity (2): Exceptions and Subrogation |
|
|
Introduction: the six heads of claim |
8.1 |
124 |
|
CASES WHERE NO INDEMNITY DUE |
8.2 |
124 |
|
Section 12(3) |
8.2 |
124 |
|
The need for inaccuracy |
8.4 |
125 |
|
The two senses of inaccuracy |
8.8 |
126 |
|
Future events |
8.11 |
128 |
|
Bijural inaccuracy |
8.11 |
128 |
|
Section 12(1)(a) |
8.12 |
128 |
|
Section 12(1)(b) |
8.13 |
128 |
|
Our proposals |
8.14 |
128 |
|
Proposals for reform |
8.15 |
129 |
|
RECOURSE AGAINST OTHERS |
8.22 |
130 |
|
Current law |
8.22 |
130 |
|
Exhaustion of remedies: transactional error |
8.23 |
131 |
|
Bad faith and professional negligence |
8.26 |
132 |
|
Beyond subrogation |
8.29 |
133 |
|
Part 9 |
Indemnity (3): Quantum |
|
|
THE PRINCIPAL LOSS |
9.1 |
135 |
|
Introduction |
9.1 |
135 |
|
Basis of valuation |
9.2 |
135 |
|
Date of valuation |
9.4 |
136 |
|
Interest |
|
9.5 |
136 |
Two models |
9.6 |
136 |
|
Improvements |
9.12 |
138 |
|
Incidental benefit |
9.14 |
139 |
|
CONSEQUENTIAL LOSS |
9.21 |
141 |
|
Introduction |
9.21 |
141 |
|
Should consequential loss be recoverable at all? |
9.22 |
141 |
|
Scope |
|
9.25 |
142 |
Cost of establishing that loss has occurred |
9.26 |
142 |
|
Loss of sale or purchase |
9.28 |
143 |
|
Relocation costs |
9.29 |
143 |
|
LIMITATIONS |
9.30 |
143 |
|
Introduction |
9.30 |
143 |
|
Loss too remote |
9.31 |
143 |
|
ix