Экзамен зачет учебный год 2023 / SLC, Land Registration. Void and Voidable Titles

Part 8 Summary of Provisional Proposals

THE PROPOSALS

1.(a) Positive prescription should apply to all titles registered in the Land Register.

(b)Positive prescription which is founded on a deed recorded in the Register of Sasines should not be considered as interrupted by first registration in the Land Register.

(Paragraph 3.11)

2.(a) The title of a bona fide acquirer should continue to be guaranteed in respect of Register error.

(b)"Register error" is an inaccuracy which already affected the Land Register at the time of the acquisition.

(Paragraph 3.20)

3.(a) The title of a bona fide acquirer should continue to be guaranteed in respect of transactional errors arising out of the invalidity of the conveyance in the acquirer's favour.

(b)"Transactional error" is a defect or error other than a Register error (as defined in proposal 2(b)).

(Paragraph 3.34)

4.The title of an acquirer should cease to be guaranteed in respect of rights conferred or omitted due to administrative mistake.

(Paragraph 3.41)

5.It should continue to be possible for the Keeper to exclude indemnity at the time of registration.

(Paragraph 3.45)

6.(a) Any scheme for the allocation of property and indemnity must, as minimum, both –

(i)ensure that the "true" owner is not deprived of property without notice and the opportunity to object (the "notification principle"), and

(ii)relieve the acquirer of the need to consult prior conveyances (the "curtain principle").

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(b)Are there other issues of legal policy which need be taken into account?

(Paragraph 4.36)

7.(a) The title of a bona fide acquirer should be subject to rectification in respect of transactional error.

(b)The title of a bona fide acquirer should be immune from rectification in respect of Register error provided that, for a prescribed period prior to registration of the acquirer's title, the property was possessed by the person from whom he acquired (or from a predecessor of that person).

(c)In the event of rectification, indemnity should be paid to the acquirer.

(d)In the event of a refusal of rectification, indemnity should be paid to the "true" owner.

(e)In paragraph (b) should the period prescribed for possession be –

(i)one year

(ii)two years, or

(iii)some other period (please specify)?

(Paragraph 4.52)

8.In the acquisition of a subordinate real right (other than a long lease), the guarantee should continue to take the form of indemnity rather than retention of the right.

(Paragraph 4.55)

9.Registration should not always result in the conferral of a real right. Whether a real right is conferred should depend on the ordinary rules of the law of property (as amended by proposal 7(b)).

(Paragraph 5.44)

10.Reductions of voidable deeds should be given effect as of right by an appropriate entry on the Land Register.

(Paragraph 6.18)

11.As a general rule indemnity should not be paid in respect of rights lost by reduction of a voidable deed.

(Paragraph 6.23)

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12.In determining the applicability of the title guarantee mentioned in proposals 2 and 3, the fraud and carelessness test of the current law should be replaced by a test based on good faith.

(Paragraph 7.7)

13.(a) For the purposes of proposal 12 good faith should be measured by reference to –

(i)in the case of Register error, that which the acquirer actually knew, and

(ii)in the case of transactional error, that which the acquirer actually knew or ought reasonably to have known.

(b)The relevant date for assessing knowledge should be the date of registration (ie the date on which the application for registration is received).

(Paragraph 7.20)

14.(a) Should the title guarantee mentioned in proposals 2 and 3 be extended to donees?

(b)If so, should the guarantee take the form of –

(i)the retention of the property in respect of Register error and the payment of indemnity in respect of transactional error (as proposed for acquirers for value), or

(ii)the payment of indemnity in all cases?

(Paragraph 7.35)

EFFECT OF THE PROPOSALS IN SUMMARY

8.1If the provisional proposals just listed were fully adopted, the result would be a system along the following lines.

8.2The legislation on land registration would no longer contain a second system of property law. Instead questions of title would be determined by the ordinary law of property (including a restored positive prescription) but with the additional rule that, in favour of a person acquiring in good faith and for value from a registered proprietor in possession, the registered proprietor would be taken to be owner.

8.3The result can best be understood by considering the position of a bona fide acquirer for value. Two things can go wrong with a conveyancing transaction. One is that the seller does not own the property. The other is that the disposition is so defective as to be invalid. The first is called in the paper "Register error" and the second "transactional error". Neither is common. In respect of the first of these, the acquirer is fully protected, provided that the seller is in possession and is the registered proprietor of the land. On registration, therefore,

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the acquirer becomes owner, notwithstanding the absence of title in the seller. In respect of the second, ownership is not transferred but the acquirer is entitled to indemnity from the Keeper.

8.4Occasionally ownership, initially acquired by registration, can be set aside on the ground that the title is voidable. Here the legislation would leave the ordinary law substantially undisturbed. But since, under that law, a bona fide acquirer for value is fully protected, the broad result would be for void and voidable titles to be treated alike.

8.5An example shows how legislation based on these proposals would work:

A is the registered owner of land. B impersonates A and grants a disposition to C in which A's signature is forged. C registers the disposition and is entered on the Register as proprietor. C is in good faith and gives value for the disposition.

On these facts A remains as owner, for, as a matter of ordinary law, no title can pass on a forged deed. The forgery is a transactional error. The Register is therefore inaccurate and can be rectified at the instance of A. On rectification C is entitled to indemnity from the Keeper. If, however, A failed to rectify, he would in time lose ownership of the property. This could happen in one of two ways. One is where C dispones the land to D. If (i) C had possessed the land for at least a year and (ii) D was in turn a bona fide acquirer for value, the result would be for ownership to pass to D on registration. In a question with D the forgery is a Register error and not a transactional error. A's ownership, accordingly, would fall, but he would have a claim for indemnity from the Keeper. The other is where C retains the land and possesses for ten years.1 At the end of that period the infirmity of title would be removed by prescription, and ownership would pass from A to C. Since A's loss was attributable to the general law and not to a special rule of the registration statute, there would be no claim for indemnity.

1 Since the conveyance to C was forged, prescription would run only if C continued to be in good faith. See Prescription and Limitation (Scotland) Act 1973 s 1(1A)(b).

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Appendix 1

List of law reform publications on land registration

Alberta Law Reform Institute

Report for Discussion on Towards a New Alberta Land Titles Act (No 8, 1990)

Report on Section 195 of the Land Titles Act (No 63, 1993)

Report on Proposals for a Land Recording and Registration Act for Alberta, 2 volumes (No 69, 1993)

Joint Land Titles Committee: Canada

Renovating the Foundation: Proposals for a Model Land Recording and Registration Act for the Provinces and Territories of Canada (1990)

Renovating the Foundation: Proposals for a Model Land Recording and Registration Act for the Provinces and Territories of Canada: Final Revisions (1993)

Law Commission

Working Paper on Transfer of Land: Land Registration (1st Paper) (No 32, 1970)

Working Paper on Transfer of Land: Land Registration (2nd Paper) (No 37, 1971)

Working Paper on Transfer of Land: Land Registration (3rd Paper) (No 45, 1972)

Property Law: Report on The Implications of Williams & Glyn's Bank Ltd v Boland (Law Com No 115, 1982)

Property Law: First Report on Land Registration: Boundaries, Conversion of Title, Leases, Minor Interests (Law Com No 125, 1983)

Property Law: Second Report on Land Registration: Inspection of the Register (Law Com No 148, 1985)

Property Law: Third Report on Land Registration A. Overriding Interests; B. Rectification and Indemnity; C. Minor Interests (Law Com No 158, 1987)

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Property Law: Fourth Report on Land Registration (Law Com No 173, 1988)

Transfer of Land: Land Registration Law. First Report of a Joint Working Group on the

Implementation of the Law Commission's Third and Fourth Reports on Land Registration (Law Com No 235, 1995)

Consultative Document on Land Registration for the Twenty-First Century (Law Com No 254, 1998)

Report on Land Registration for the Twenty-First Century: A Conveyancing Revolution (Law Com No 271, 2001)

Law Reform Commission of Victoria

Discussion Paper on The Torrens Register Book (No 3, 1986)

Report on The Torrens Register Book (No 12, 1987)

Discussion Paper on Priorities (No 6, 1988); Report on Priorities (No 22, 1989)

Discussion Paper on Easements and Covenants (No 15, 1989)

Manitoba Law Reform Commission

Report on Improved Methods of Enforcing Support Orders Against Real Property (No 36, 1979)

Report on The General Register (No 44, 1980)

Report on Certificates of Lis Pendens (No 54, 1983)

Discussion Paper on Towards a New Manitoba Real Property Act (1991)

New South Wales Law Reform Commission

Issues Paper on Torrens Title: Compensation for Loss (No 6, 1989)

Discussion Paper on Torrens Title: Compensation for Loss (New South Wales Law Reform Commission DP No 19 and Law Reform Commission of Victoria DP No 16, 1989)

Report on Torrens Title: Compensation for Loss (No 76, June 1996)

New Zealand Property Law and Equity Reform Committee

Report on The Decision in Frazer v Walker (1977)

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Ontario Law Reform Commission

Report on Land Registration (No 32, 1971)

Queensland Law Reform Commission

Discussion Paper on Real Property Acts (No 1)

Report on A Bill to Consolidate, Amend, and Reform the Law Relating to Conveyancing, Property and Contract and to Terminate the Application of Certain Imperial Statutes (No 16, 1973)

Working Paper on A Bill to Amend the Real Property Acts with Respect to Writs of Execution, Bills of Encumbrance and Bills of Mortgage, and Caveats (No 25, 1982)

Working Paper on A Bill in Respect of an Act to Reform and Consolidate the Real Property Acts of Queensland (No 32, 1989)

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Appendix 2

List of those who responded to the October 2001 consultation

1.Archibald Campbell & Harley, WS

2.Bell & Scott, WS

3.J C Bowie, Solicitor

4.Brechin Tindal Oatts, Solicitors

5.Campbell Connon, Solicitors

6.Craxton & Grant, SSC

7.Esslemont & Cameron, Solicitors

8.A R Hart, Solicitor

9.G A Hay, Solicitor

10.Henderson Boyd Jackson, WS

11.D A Johnstone, Solicitor

12.Ledingham Chalmers, Solicitors

13.Maclay Murray & Spens, Solicitors

14.I W McDonald, Solicitor

15.M D McMillan, Solicitor

16.J & H Mitchell, WS

17.G L K Murray, Solicitor

18.J I Ness, Solicitor

19.Paull & Williamson, Solicitors

20.J & R A Robertson, WS

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21.Stuart, Wilson, Dickson & Co, Solicitors

22.A S M Thornton, Solicitor.

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