Экзамен зачет учебный год 2023 / SLC, Report on land registration. Vol 1

CASE 4

The same as Case 1, but before the invalidity of the deed by Zeb to Alan

comes to light (i) Alan, having possessed for three months, dispones to

Beth, who is duly registered as proprietor; (ii) Beth then possesses for a

further nine months; (iii) at the end of the period Beth is still in good faith.

Current law

Beth becomes owner on registration, but the Register is inaccurate. Zeb

may apply for rectification, whereby ownership would be restored to him. If

Beth is in possession at that point rectification must be refused but Zeb

gets monetary indemnity. If Beth is not in possession at the point of the

rectification application, the Register may be rectified to show Zeb as

owner, in which case Beth is entitled to monetary indemnity.

New scheme

When Beth is registered she does not become owner and so the Register

is inaccurate in showing her as such. But ownership passes to her (from

Zeb) nine months after the registration. The Register therefore ceases, at

that time, to be inaccurate in showing her as owner. So no issue of

rectification arises.

In giving Beth ownership, the integrity principle, ie realignment of rights,

removes ownership from Zeb. Zeb becomes entitled to monetary

compensation for the value of his loss. (Compensation for victims of the

realignment principle.)

CASE 5

The same as Case 2, but Beth knows before applying for registration of

the disposition in her favour that the disposition by Zeb to Alan was a

forgery. (Establishing Beth's state of knowledge may in practice require

litigation, both here and in other cases.)

Current law

Beth becomes owner on registration, but the Register is inaccurate.

Though in bad faith, Beth is probably not fraudulent or careless; and even

if she is, she has, it seems, not caused the inaccuracy in the register.

(Dougbar

v Keeper of the Registers of Scotland 1999 SC 513.) On that

basis, rectification to restore Zeb to ownership is only possible if Beth is

not in possession, in which case she is entitled to monetary indemnity. If

Beth is in possession rectification is not permitted and Zeb gets monetary

indemnity.

New scheme

Beth is in bad faith and so there is no realignment of rights. The entry of

Beth as proprietor is therefore an inaccuracy. The Register must be

rectified. The fact that Alan had been in possession for more than a year is

on these facts irrelevant: the one year period is not a prescriptive period.

Zeb is entitled to compensation for any losses arising from the fact that the

Register inaccurately showed someone else to be owner, and for any

expenses

incurred in securing rectification. (Compensation for

beneficiaries of rectification).

Although Beth has been registered without exclusion of warranty, the

warranty in her favour is ineffective because of her bad faith.

CASE 6

The same as Case 2, with Beth becoming aware that the disposition by

Zeb to Alan was a forgery after registration of the disposition in her favour.

Current law

Beth becomes owner on registration, but the Register is inaccurate. Zeb

may apply for rectification to be restored to ownership. If Beth is in

possession rectification must be refused but Zeb gets monetary indemnity.

If Beth is not in possession the Register may be rectified to show Zeb as

owner, in which case Beth is entitled to monetary indemnity.

New scheme

Beth is not in bad faith. So she gets the benefit of realignment and thus

becomes owner at the point of registration of the disposition in her favour.

The Register is not inaccurate in showing her as owner and thus the

question of rectification does not arise.

In giving her ownership, the operation of realignment takes ownership from

Zeb. He becomes entitled to monetary compensation for the value of his

loss. (Compensation for victims of the realignment principle.)

CASE 7

The same as Case 4, but Beth becomes aware that the disposition is a

forgery before expiry of the year's possession.

Current law

Beth becomes owner on registration, but the Register is inaccurate. If she

is in possession the inaccuracy cannot be rectified and so Zeb gets

monetary indemnity. If she is not in possession, rectification is possible, in

which case she is entitled to monetary indemnity.

New scheme

Beth is not in good faith at the relevant time and so the realignment

principle does not operate. Thus she never becomes owner and the

Register is inaccurate in showing her as such. When the fact of the

inaccuracy comes to the Keeper's attention the Register must be rectified.

Zeb is entitled to compensation for any losses arising from the fact that the

Register inaccurately showed someone else to be owner, and for any

expenses incurred in securing rectification. (Compensation for

beneficiaries of rectification.)

Beth has been registered without exclusion of warranty. At the time of

registration she was in good faith. Thus she is entitled to monetary

indemnity.

If she becomes aware of the problem while her application is still in the

Application Record, she has no duty to inform the Keeper.

CASE 8

As Case 7, except that the Keeper learns of the problem while the

application is in the Application Record, ie before the accept/reject

decision is made.

Current law

As Case 7 (probably).

New scheme

If the quality of evidence is such that the inaccuracy is established to the

"manifest" standard the Keeper should reject Beth's application and rectify

the Register by restoring Zeb's name. If (as would typically be the case in

practice) the evidence does not meet that standard, the Keeper's choice is

(a) to register, but with exclusion of warranty or (b) to reject.

CASE 9

The Keeper registers a disposition to Alan and thus enters Alan as

proprietor. Zeb then alleges that his signature on the disposition is a

forgery. The Keeper is unable to determine whether or not this allegation is

true. Zeb therefore raises court proceedings to have the disposition

reduced and, while the court proceedings are pending, asks the court to

place a caveat on the register. The Register is duly caveated. Alan now

dispones to Beth, and Beth is registered as proprietor. The court then

grants decree of reduction.

Current law

As the 1979 Act has no concept of caveating the register, this exact

situation cannot arise, although noting the existence of court action under

Rule 17(2) has some similarities. On registration Beth becomes owner,

and the Register is therefore inaccurate (although the inaccuracy is not

clear until the court later grants decree). Following the decree, rectification

is only possible if Beth is not in possession. (Unless the Rule 17(2) note

makes Beth fraudulent or careless but that is doubtful: Cf Dougbar v

Keeper of the Registers of Scotland 1999 SC 513.) If rectification is not

possible, Zeb is entitled to monetary indemnity.

If Beth is not in possession and the Register is rectified to show Zeb as

owner, in principle Beth is entitled to monetary indemnity. (But possibly the

Keeper may have excluded indemnity when processing Beth's registration

application.)

New scheme

Realignment does not operate in relation to a caveated title sheet. Beth

should be registered as proprietor whilst the court proceedings are

pending, but once decree has been granted it becomes apparent that

there is an inaccuracy. The Register should be rectified to show Zeb as

owner.

Zeb is entitled to compensation for any losses arising from the fact that the

Register inaccurately showed someone else to be owner, and for any

expenses incurred in securing rectification.

Since Beth acquired subject to the caveat, she is not entitled to warranty,

and thus cannot claim compensation from the Keeper if the Register is

then rectified on account of the caveated matter.

CASE 10

Arthur is registered as owner of eight hectares. This was the result of

human error at the Department of the Registers, for in fact the disposition

conveyed (and purported to convey) only seven hectares, the final hectare

being the property of Zach.

Current law

Arthur becomes owner of all eight hectares on registration, but the

Register is inaccurate as regards the eighth hectare. If he is not in

possession the Register can be rectified and indemnity is payable to him.

If he is in possession rectification is not permitted and indemnity is payable

to Zach.

New scheme

Zach remains owner of the eighth hectare and the Register is therefore

inaccurate in showing Arthur as owner. The inaccuracy must be rectified.

Zach is entitled to compensation for loss caused by the wrong person

having been named on the Register as proprietor of the additional hectare,

and to be reimbursed any expenses incurred in securing rectification.

Arthur cannot claim compensation because there is no right to warranty

where the title sheet inaccurately showed an acquisition more extensive

than the deed inducing registration bore to effect.

CASE 11

The same as Case 10, but, before the inaccuracy comes to light, (i) Arthur

possesses the additional hectare for a year and (ii) then sells it (whether or

not with the other seven hectares) to Brenda, who is duly registered as

owner. Brenda is in good faith.

Current law

Brenda becomes owner of all eight hectares on registration, but the

Register is inaccurate as regards the additional hectare. If she is not in

possession the Register can be rectified and indemnity is payable to her.

If she is in possession rectification is not permitted and so indemnity is

payable to Zach.

New scheme

Realignment operates and so Brenda becomes owner on registration.

Zach loses ownership of the additional hectare at that moment and

becomes entitled to monetary compensation as a victim of the realignment

of rights.

CASE 12

The same as Case 11, except that the additional hectare has not been

possessed for the required period.

Current law

Brenda becomes owner of all eight hectares on registration, but the

Register is inaccurate as regards the additional hectare. If she is not in

possession the Register can be rectified and indemnity is payable to her.

If she is in possession then rectification is not permitted and indemnity is

payable to Zach.

New scheme

Realignment does not operate, because the requirement of possession

for a year has not been satisfied. Zach therefore remains owner of the

additional hectare and the Register is inaccurate insofar as it shows

Brenda as owner. The inaccuracy must be rectified.

Zach is entitled to compensation for losses caused by the wrong person

having been named on the Register as proprietor of the additional

hectare, and to be reimbursed any expenses incurred in securing

rectification.

Brenda is entitled to compensation for breach of warranty. (The

disposition by Arthur to Brenda, unlike that to Arthur, will have borne to

include the additional hectare.)

CASE 13

Zelda is the registered owner of property. By fraudulent misrepresentation

Abel induces her to sign a disposition in his favour. This deed is therefore

voidable (but not void). Abel is registered as owner. Later Zelda obtains a

decree of reduction of the disposition.

Current law

Abel becomes owner and the Register is accurate in showing him as

such. On grant of the decree of reduction he continues to be owner but

the Register has become inaccurate. The inaccuracy can be rectified in

Zelda's favour whether or not Abel is in possession, as it has been

caused by his fraud. He receives no compensation.

New scheme

Abel becomes owner on registration. The decree of reduction of a

voidable deed does not make the Register inaccurate. So the Register is

not alterable by means of rectification. Instead, the extract decree is

registrable. When Zelda registers it, she becomes owner again. Abel

receives no compensation. (The Keeper warranted that Abel acquired

ownership. That warranty was true. The Keeper did not warrant that Abel

would necessarily continue to be the owner thereafter.)

CASE 14

The same as Case 13, but before Zelda can reduce, Abel sells on to Bill,

who is registered as owner. Bill knows of the original fraud. Hence Zelda

can reduce both the Zelda/Abel disposition and the Abel/Bill disposition.

Current law

Bill becomes owner, but the Register, accurate at the time of his

registration, becomes inaccurate as a result of the reduction. Although in

bad faith, Bill probably cannot be regarded as having caused the

inaccuracy by fraud or carelessness within the meaning of the 1979 Act.

(Dougbar v Keeper of the Registers of Scotland 1999 SC 513.) So if he is

in possession the Register cannot be rectified. Hence monetary indemnity

is payable to Zelda. If Bill is not in possession, rectification is permitted, in

which case indemnity is payable to Bill.

New scheme

Abel becomes owner on registration. Subsequently Bill becomes owner

on registration. Both the Zelda/Abel and Abel/Bill dispositions are

voidable. Reductions of voidable deeds are given effect by registering the

extract decree. When Zelda does this, she becomes owner again. Bill

receives no compensation.

CASE 15

Zuma, the registered owner, dispones to Alice. Alice is registered and

takes possession. The disposition was gratuitous. A few days later Zuma

is sequestrated. Zuma's trustee in sequestration obtains decree reducing

the disposition as a gratuitous alienation. The trustee wishes the Keeper

to give effect to the decree.

Current law

The decree cannot be registered: Short's Trustee v Keeper of the

Registers of Scotland 1996 SC (HL) 14. The Register became inaccurate

when decree was pronounced. The trustee could apply for rectification but

probably this would be refused. The trustee could probably then claim

indemnity under s 12(1)(b).

New scheme

The Register is not made inaccurate by the decree. The trustee can

register the decree. When that happens, Alice loses ownership. She

receives no compensation. When she was registered, the Keeper

warranted her title. There has been no breach of that warranty.

CASE 16

As Case 15, except that Alice has disponed to Bonnie, gratuitously, and

Bonnie is in possession. This is the situation in Short's Trustee v Keeper

of the Registers of Scotland 1996 SC (HL) 14.

Current law

As Case 15.

New scheme

As Case 15.

CASE 17

Oliver, the registered owner of land, seeks a minute of waiver of a real

burden. By mistake, the waiver is obtained, not from the owner of the

benefited property, but from the owner of another nearby property. On the

waiver being registered the Keeper deletes the burden.

Current law

The burden is extinguished on registration, but the Register is inaccurate

in now showing Oliver's property as unencumbered by the burden.

Presumably Oliver has been careless in obtaining a waiver from the

wrong person and that carelessness has caused the inaccuracy. If that is

so, then the Register can be rectified in favour of the owner of the

benefited property so as to restore the burden to the title sheet. No

indemnity is payable to Oliver.

New scheme

The minute of waiver being void, it does not extinguish the burden. The

Register can and must be rectified in favour of the owner of the benefited

property. When the minute of waiver was registered, the Keeper

warranted Oliver's title as being free of the burden. Whether

compensation is payable for breach of warranty depends on whether

Oliver was in breach of his duty of care to the Keeper. Since he obtained

a discharge from the wrong neighbour it would seem that he did breach

the duty of care. If so, compensation is not payable to him.

CASE 18

The same as Case 17 but Oliver re-sells to Perpetua who is registered as

owner. Perpetua is in good faith.

Current law

The burden is extinguished on the initial registration of the minute of

waiver, but the Register continues to be inaccurate. If Perpetua is in

possession, the Register cannot be rectified, and indemnity is payable to

the owner of the benefited property. If Perpetua is not in possession, the

Register can be rectified and compensation is payable to her.

New scheme

With the transfer to Perpetua a transactional error has morphed into a

Register error. (Because, at the time Perpetua acquired, the Register did

not include the burden). Realignment operates so as to make the waiver

good. Thus the burden is extinguished on the day that Perpetua acquires

the property. The Register is therefore now accurate. Compensation is

payable to the owner of the benefited property.

CASE 19

H and W own a property. A standard security is granted to Bank X. On

this deed H's signature is genuine but W's signature is forged, the forgery

being by H. The security is registered. Bank X is in good faith.

Current law

On registration Bank X obtains a real right in security but the Register is

inaccurate to the extent of half the property. Bank X is not a proprietor in

possession and so the Register can be rectified. On rectification

compensation is payable to Bank X.

New scheme

Registration does not make a bad security good. The security is void to

the extent of a half share. The Register is inaccurate and can be rectified.

On rectification compensation is payable to Bank X for breach of

warranty.

CASE 20

The same as Case 19 but Bank X assigns the security to Bank Y, which is

duly registered as the holder of the security right. Bank Y is in good faith.

Current law

As before. Indemnity is payable to Bank Y.

New scheme

Although the assignation converts a transactional error into a Register

error, standard securities are not validated by the re-alignment principle.

Thus the security is bad (to the extent of a half share) and compensation

for breach of warranty is payable to Bank Y.

CASE 21

As Case 1, but before the inaccuracy comes to light Alan grants a

standard security to Bank X.

Current law

As Case 1 as far as Alan is concerned. If the Register is rectified against

Alan it will also be rectified against Bank X. If the Register is not rectified

against Alan it would be strange to rectify against Bank X but that is what

the 1979 Act seems to require, since the entry in favour of Bank X is

inaccurate and X is not a proprietor in possession.

New scheme

The titles of Alan and Bank X are void and the Register will be rectified

against both. Compensation is payable to both.

CASE 22

Lissa is the registered holder of a 999-year lease. Morag forges her

signature on an assignation to Noreen, who is in good faith, takes

possession and is registered.

Current law

As Case 1. (Assuming that a leaseholder can be regarded as a "proprietor

in possession".)

New scheme

As Case 1.

CASE 23

As Case 22. But before the invalidity of the deed comes to light, Noreen

has possessed for a year or longer and has then sold on to Ola, who is in

good faith. Ola takes possession and is registered.

Current law

As Case 1. (Assuming that a leaseholder can be regarded as a

"proprietor" in possession.)

New scheme

As Case 2.

CASE 24

As Case 1, but before the inaccuracy comes to light Alan grants a 21-year

lease to Bertie, who is in good faith, takes possession and is registered.

Current law

Alan becomes owner on registration and Bertie acquires the right of lease

on registration. The Register is inaccurate in relation to both Alan and

Bertie. It cannot be rectified against Bertie, assuming that a leaseholder

can be regarded as a "proprietor in possession". Whether it can be

rectified against Alan is arguable, the answer depending on whether he

can be considered as being in possession.

New scheme

The titles of both Alan and Bertie are void and can be rectified.

Compensation is payable to both.

CASE 25

As Case 1, but before the inaccuracy comes to light Alan grants a 15-year

lease to Brendan, who is in good faith and takes possession.

Current law

The lease is valid as a real right. It is unclear whether Zeb can rectify. If

there is rectification it is unclear whether Brendan has a claim against the

Keeper.

New scheme

Brendan's lease is void as a real right. Brendan is not eligible for

compensation from the Keeper because he has no registered title.

CASE 26

As Case 1, but before the inaccuracy comes to light Alan grants a

servitude to his neighbour, Bertrand. Alan has been in possession for a

year. Bertrand is in good faith. The servitude is registered.

Current law

The servitude comes into being on registration, but it is an inaccuracy.

There is a conflict of authority as to whether Bertrand can veto

rectification on the basis of the "proprietor in possession" rule. (See

Yaxley v Glen 2007 SLT 756 discussed in Part 23.)

New scheme

Realignment operates. The servitude is valid and unrectifiable. Zeb, the

true owner, is entitled to compensation.

CASE 27

Adamnan is the owner. A servitude appears as a pertinent on the B

Section (Property Section). It was copied from the GRS title, where it had

been invalid. Adamnan dispones to Basil. Basil is in good faith and is

registered.

Current law

The servitude exists as a real right but is an inaccuracy. There is a conflict

of authority as to whether Basil can veto rectification on the basis of the

"proprietor in possession" rule. (See Yaxley v Glen 2007 SLT 756

discussed in Part 23.)

New scheme

The servitude is invalid. Basil is entitled to compensation for breach of

warranty.

CASE 28

Ewan is owner. There is a standard security over the property to X Bank.

Ewan forges a discharge, which is registered. He then dispones to Fraser.

Fraser is unaware of the forgery and pays the full market value of the

property, ie without any deduction to reflect the outstanding secured debt.

Current law

The security is extinguished when the forged discharge is registered. But

even after Fraser has become owner the title sheet is bijurally inaccurate

in not showing the security. The title sheet can be rectified, and thus the

security can be brought back into existence, unless Fraser is in

possession. Assuming that he is in possession, the rectifiability is

suspended. The bank has an indemnity claim against the Keeper if it

suffers loss.

New scheme

In the period between the registration of the forged discharge and the

registration of Fraser as the new owner, the security is not extinguished,

notwithstanding that it has disappeared from the title sheet. At this stage

there is only transactional error. Once Fraser is registered as owner, the

position has changed into one of Register error. The security is

extinguished on the day that Fraser is registered. The bank has a right to

compensation.