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

recommendations lose that power after ten years' prescriptive possession by the grantee of that deed.

35.36The Grand Chamber decision in Pye held that loss of property without compensation occurring as a result of a competing party obtaining title through prescriptive possession does not in itself involve a breach of Article 1 of Protocol 1. Might this particular case be treated differently?

35.37Article 1 says:

"Every natural or legal person is entitled to the peaceful enjoyment of their possessions. No one shall be deprived of their possession except in the public interest and subject to the conditions provided for by law and by the general principles of international law. The preceding provisions shall not however in any way impair the right of a State to enforce such laws as it deems necessary to control use of property in accordance with the general interest or to secure the payment of taxes or other contributions or payments."

35.38The ECtHR jurisprudence on this Article is that it has three distinct rules, matching the three sentences. We are concerned here with the second, which covers deprivation of possession and is subject to conditions. It is not impossible that Octavia's loss of the right to seek rectification could be regarded as "deprivation" of a "possession". The question would then be whether it was a deprivation that could be justified under the exception in the second rule. Clearly it would be a "deprivation" that would be "by law" given that the change would have been made by statute.

35.39Would the "deprivation" be "in the public interest"? The Strasbourg caselaw indicates that Member States enjoy a wide margin of appreciation on this point. It is also clear that deprivation of one individual in favour of another individual (eg deprivation of Octavia in favour of Kevin ) may be in the "public interest" if it occurs by reason of a wider societal purpose. As noted, the law applying to this narrow situation is currently unsatisfactory and arbitrary. The societal purposes in (i) bringing about, as soon as possible, a consistent ten year positive prescriptive period in all cases and (ii) simplifying the law are, we think, sufficient to justify the deprivation as being in the public interest.

35.40In addition, the test of proportionality must be satisfied. The court asks if any individual has been required to bear an excessive and individual burden. It might be argued that Octavia is subjected to such a burden. That can however be countered in two ways. Firstly, the court has already decided in Pye that loss without compensation to an adverse possessor is not such a burden. Secondly, Octavia is not being subjected to an individual burden but is instead to be subject to the same burden which applies to other proprietors who fail to possess their property.

35.41We are therefore of the view that the relevant provisions of the draft Bill are ECHRcompliant. Finally, we would observe that the change to Octavia's rights would not occur without notice and time to react. Section 86(3) of the draft Bill provides that the new positive prescription provisions in the 1973 Act do not apply in relation to a continuous period which has expired before the designated day. This would guarantee that anyone who might be affected would have time to raise an action, because the designated day cannot be less than six months after Royal Assent. (And in reality can be expected to be more than a year.)

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Part 36 Transition: switching over from the 1979 Act

36.

Introduction

36.1 This part of the Report deals with the process of replacing the 1979 Act by the new legislation. The change would not represent any discontinuity in the Register, any more than there is discontinuity when a new Companies Act is passed and the previous Companies Act repealed. Just as existing company registrations continue notwithstanding such legislation, so existing property registrations would also continue. But nevertheless the differences between the new legislation and the 1979 Act mean that some legislative provisions are needed to cover the change. These provisions are mainly to be found in schedule 6 of the draft Bill. On the whole they do not need much comment. Perhaps the most important provisions are about what happens to inaccuracies in the Register that exist on the eve of the commencement of the new legislation.

Making existing title sheets conform to new scheme

36.2Where an existing title sheet does not conform to the requirements of the new legislation, the Keeper should have the power to make it so conform. Examples would be information about quantum of share or about pertinents (eg the benefit of a servitude acquired by prescription) or encumbrances (eg the burden of a servitude acquired by prescription). But whilst the Keeper should clearly have the power to make existing title sheets conform, we think that in general there should be no compulsion, because of the potential costs that might be involved.

36.3There are one or two exceptions. One concerns overlaps, and is considered below.1 Another exception is that the C Section (Charges Section) of existing title sheets is renamed the Securities Section. That will happen for new title sheets, and the cost of making the change for existing title sheets should be very limited and accordingly the Keeper is required to make the change as soon as reasonably possible. A parallel requirement applies to the B Section of lease title sheets. At present this is called the Proprietorship Section, but in future will be called the Tenancy Section. That change can also be made quickly and cheaply to existing title sheets and so the Keeper is required to make the change as soon as reasonably possible. We recommend:

143.The Keeper should have the power to make existing title sheets conform to the requirements of the new legislation. But there should be no obligation to do so except to change the name of the C Section to "Securities Section" and the name of the B Section of lease title sheets to "Tenancy Section."

(Draft Bill, s 91(1), sch 6, paras 1 to 6)

1 Para 36.5.

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Common areas

36.4 The present practice is that a common area is included in the title sheet of each of the sharing properties. For example, if an amenity area is shared by twenty houses, the area is included in each of those twenty houses. The draft Bill requires the common area to have its own title sheet. The Keeper is not required to do this in relation to existing common areas

– though the power to do so exists. The requirement would apply only to the registration of new developments. What would happen if, when the new legislation came into force, a development were to be half-complete? Or if there were a completed development in which some of the titles were still in the Register of Sasines? In such cases it would be inappropriate for the title sheets created after the new legislation comes into force to have to differ from the existing ones, and accordingly an exemption applies in such cases. We recommend:

144.The requirement that a common area must have its own title sheet should apply only to developments beginning after the new legislation comes into force.

(Draft Bill, s 91(1), sch 6, paras 7 to 11)

Conflicting title sheets

36.5 The draft Bill would forbid the overlapping of cadastral units. The same land, in other words, should not be included in two title sheets.2 One such case where this happens in current practice is where there is a common area: that is the case discussed in the previous section. Another, very different, type of case is where there is a boundary problem and the Keeper simply includes the area in question in both title sheets. Here the draft Bill would require the Keeper, within ten years, to identify all such overlap cases, and to create each overlap area as a separate cadastral unit with its own title sheet. We recommend:

145.Within ten years, overlap areas should be assigned their own title sheet.

(Draft Bill, s 91(1), sch 6, paras 12 to 18)

Pending registration applications

36.6 On any given day there are many pending registration applications, ie applications that have been submitted but that have not yet been determined by the Keeper. The draft Bill provides that these would be unaffected by the new legislation. The Keeper would be obliged to treat them according to the law in force at the time of the application, namely the 1979 Act (and the 2006 Rules). We recommend:

146.Applications for registration that are pending on the day that the new legislation comes into force should be determined by the Keeper according to the law in force at the date when the application was made.

(Draft Bill, s 91(1), sch 6, para 24)

2 There are exceptions, discussed in Part 4, notably in relation to separate tenements.

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Pending rectification applications

36.7 The position for pending rectification applications should be different. In the new scheme, rectification applications would no longer have a role,3 for the Keeper would in any case have a duty to rectify inaccuracies. Hence any pending rectification application would lapse and be removed from the Application Record.4 That would not affect the applicant's position. The applicant's right that the inaccuracy should be rectified, and the Keeper's duty to rectify, would be unchanged.

Vested indemnity payment rights

36.8 Clearly, if anyone has a vested right against the Keeper for payment of an indemnity claim under section 12(1) of the 1979 Act, that right should be unaffected by the new legislation. Whilst this would no doubt be implied anyway, the draft Bill has a specific provision confirming that that would be the position.5

Inaccuracies

36.9All actual inaccuracies6 in the Register would continue to be actual inaccuracies unless and until rectified. That is simple. Less simple is the question of bijural inaccuracy.7 The new scheme abandons the idea of bijuralism, and with it a great deal of law that is unattractive, unprincipled, and uncertain. In abandoning bijuralism the legislation must also abandon the concept of bijural inaccuracy; and where such an inaccuracy is to be found in existing titles, it must either be deemed to cease to be an inaccuracy, or be re­ conceptualised as an actual inaccuracy. In DP 130 we developed an approach that was supported by respondents, and it is set forth in the draft Bill.8 The starting point is that some bijural inaccuracies should be treated in the one way (ie cease to be inaccuracies), and others in the other (ie become actual inaccuracies).

36.10The criterion is whether, on the eve of the commencement of the new legislation, a particular inaccuracy could in fact have been rectified under the rules in section 9 of the 1979 Act. If the answer is yes, then the bijural inaccuracy should be converted automatically into an actual inaccuracy. In the new scheme all inaccuracies would be rectifiable, and so this class of inaccuracies, already rectifiable before the commencement of the new legislation, would continue to be rectifiable thereafter. In effect, therefore, there would be no change – except for re-conceptualisation.

36.11But if the answer is no - if the bijural inaccuracy were to be one that could not be rectified under the rules in section 9 of the 1979 Act – then the solution we recommend is for the inaccuracy to cease to be an inaccuracy, ie for the rights of the parties concerned to be realigned so as to conform to what the Register says they are.

36.12In both cases, the result would be continuity in substance if not in form. A title that

was vulnerable to rectification would remain vulnerable to rectification; one that was

3 See Part 18.

4 Draft Bill, s 91(1), sch 6, para 25.

5 Draft Bill, s 91(1), sch 6, para 26.

6 For "actual inaccuracy" see Part 17.

7 For "bijural inaccuracy" see Part 17.

8 DP 130, Part 9.

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invulnerable (typically because rectification would have prejudiced a proprietor in possession) would be free from the possibility of rectification in the future. In view of the crucial role of possession under the current law, and in order to minimise problems of evidence, especially after the passage of time, the provision would include a presumption that the proprietor of the land was in possession immediately before the designated day; but the presumption would be weak and could readily be rebutted by evidence of contrary possession.

Worked examples of inaccuracies

36.13 We reproduce here some worked examples.

(1) A is registered as owner of land and takes possession. The disposition in his favour purports to be granted by Z, the last registered owner but, unbeknownst to A, Z's signature has been forged.

On the eve of the commencement of the new legislation. A is owner and the Register is inaccurate,9 but rectification is prevented by the fact of A's possession.10 An application for rectification by Z would be met by a refusal and by payment of indemnity.11

On and after the commencement of the new legislation. A remains owner and the Register ceases to be inaccurate. Z is entitled to compensation by the Keeper.

Comment. A's voidable title has been converted into one that is absolutely good, but in substance the parties' positions remain the same.

(2) A is registered as owner of eight hectares. In fact the disposition conveyed only seven hectares, the missing hectare being Z's. Immediately before the designated day Z continues in possession of the hectare in question.

On the eve of the commencement of the new legislation. A is owner of all eight hectares but the Register is inaccurate in respect of the additional hectare.12 As A is not in possession, Z could demand rectification.13 Indemnity would be payable to A.14

On and after the commencement of the new legislation. The Register, in showing the hectare as belonging to A, becomes actually inaccurate and is rectifiable. Z acquires ownership of the hectare. Compensation is payable to A.15

Unless and until there is rectification, no compensation is due to A. If, rectification not having happened, A were to dispone all eight hectares to B, B would become owner of only seven. That is because A only owns seven. In the new scheme, the

9 1979 Act, s 3(1)(a).

101979 Act, s 9(3).

111979 Act, s 12(1)(b).

121979 Act, s 3(1)(a).

131979 Act, s 9(1).

141979 Act, s 12(1)(a).

15This is because payment of indemnity would have been due under the 1979 Act. But in the new scheme the rule about compensation following on inaccuracies caused by administrative mistake is different: see Part 17.

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integrity principle (realignment of rights16) requires a year of possession, and A does not have possession. The same would be true for any subsequent acquisition, provided possession is retained by Z.

Comment. A's voidable title to the additional hectare has been converted into one which is void, but in substance the parties' positions remain the same. The bijural inaccuracy before the designated day has become an actual inaccuracy after that day.

(3) A fraudster impersonates the owner, Z, and grants to Bank A (which acts in good faith) a forged standard security in return for a loan. The security is registered.

On the eve of the commencement of the new legislation. Bank A holds a standard security but the Register is inaccurate.17 As the heritable creditor is not a "proprietor in possession",18 Z, the owner of the security subjects, could demand that the Register be rectified by deletion of the standard security.19 Indemnity would be payable to Bank A.20

On and after the commencement of the new legislation. The standard security is extinguished. The Register, in continuing to show it on the title sheet, is inaccurate. It is rectifiable, and as and when rectification takes place compensation would be payable to Bank A.

Comment. Bank A's voidable title to the standard security has been converted into one that is void, but in substance the parties' positions remain the same. The bijural inaccuracy before the designated day has become an actual inaccuracy after that day but in either case the Register is rectifiable.

(4) A dispones to B. The disposition is voidable. B is registered as owner of the land and takes possession. Later the disposition is reduced by Z but as yet the Register does not reflect that reduction.

On the eve of the commencement of the new legislation. B is owner and, as a result of the reduction, the Register is inaccurate. But rectification is prevented by the fact of B's possession.21 Z is entitled to indemnity.22

On and after the commencement of the new legislation. B remains owner and the Register ceases to be inaccurate. The question of rectification can no longer arise. Compensation is payable to Z.

Comment. B's voidable title has been converted into one that is absolutely good, but in substance the parties' positions remain the same.

16Draft Bill, Part 6.

171979 Act, s 3(1)(a).

18Kaur v Singh 1999 SC 180.

191979 Act, s 9(1).

201979 Act, s 12(1)(a).

211979 Act, s 9(3).

221979 Act, s 12(1)(b).

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(5) Z dispones to A, and A is registered as owner of the land and takes possession. Z was induced to dispone by A's fraud. Later the disposition is reduced by Z but as yet the Register does not reflect that reduction.

On the eve of the commencement of the new legislation. A is owner and, following the reduction, the Register is inaccurate. Although A is in possession, the effect of A's fraud is that the Register can be rectified. No indemnity is payable to A.

On and after the commencement of the new legislation. A ceases to be owner and the Register remains inaccurate. Z could rectify. No indemnity is payable to A.

Comment. A's voidable title has been converted into one which is void, but in substance the parties' positions remain the same. The bijural inaccuracy before the designated day has become an actual inaccuracy after that day.

(6) A is the owner of land encumbered by a standard security in favour of Bank Z. A forges a discharge of the security and dispones to B, who acts in good faith.

On the eve of the commencement of the new legislation. The standard security is extinguished. The Register is inaccurate, but rectification is prevented by the fact of B's possession. An application for rectification by Bank Z would be met by a refusal and payment of indemnity.

On and after the commencement of the new legislation. The standard security remains extinguished and the Register ceases to be inaccurate. Bank Z is entitled to indemnity.

Comment. The standard security is now irrevocably extinguished, but in substance the parties' positions remain the same.

(7) A is the owner of Whitemains. Whitemains is burdened by a servitude of way in favour of Blackmains. The servitude is shown on the title sheets of both properties. Subsequently it is extinguished by negative prescription.

On the eve of the commencement of the new legislation. The servitude having been extinguished, the Register is inaccurate. As this is an actual inaccuracy (ie the servitude was extinguished by ordinary property law), A could rectify the Register and have the servitude removed from both titles. No indemnity would be paid to Z, the owner of Blackmains (and former holder of the servitude).

On and after the commencement of the new legislation. The position is unchanged.

36.14 These examples have been taken, with only minor changes, from DP 130.23 One of the examples given there has, however, been omitted. It was example 424 and was about a case in which a title sheet was bijurally inaccurate in stating that the property in question had the benefit of a servitude over a neighbouring property. At that time the law appeared to be that servitudes are not protected by the "proprietor in possession" rule in section 9 of the

23DP 130, Part 9.

24DP 130, para 9.16.

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1979 Act. The law on this point is now less clear than we thought it was.25 As a result on the facts of that example it is difficult to say whether the bijural inaccuracy would be rectifiable or not. That uncertainty will carry forward, intact, to the new scheme.

Recommendations about inaccuracies

36.15We therefore recommend:

147.(a) Actual inaccuracies should be unaffected by the new scheme, ie they should continue as actual inaccuracies and accordingly continue to be rectifiable.

(b)A bijural inaccuracy that is, in terms of the 1979 Act, a rectifiable inaccuracy should be automatically converted, on the commencement of the new legislation, into an actual inaccuracy. The inaccuracy should accordingly continue to be rectifiable. The rights of the parties concerned should automatically be realigned.

(c)A bijural inaccuracy that is, in terms of the 1979 Act, an unrectifiable inaccuracy should cease to be an inaccuracy.

(d)A person who is prejudiced should be compensated by the Keeper.

(e)For the purposes of determining whether an inaccuracy could have been rectified, it should be presumed (unless the contrary is shown) that the proprietor of the land was in possession.

(Draft Bill, s 91(1), sch 6, paras 28 to 35)

25 See Yaxley v Glen 2007 SLT 756 and Part 23 of this Report.

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Part 37 Some implications for conveyancing practice

37.

Introduction

37.1The reforms put forward in this Report are predominantly under-the-bonnet reforms. The aim has been to improve the performance and reliability of the engine and to keep to a minimum the new things that the driver will have to learn. But inevitably there will be some new things for drivers to become acquainted with. Some of them – possibly not all – should be welcome, at least when the unfamiliarity has worn off.

37.2Every change recommended in this Report has potential relevance to the conveyancer: it could not be otherwise. This part of the Report merely seeks to highlight a few changes that are likely to be more prominent than others from the standpoint of the conveyancer.

Deeds and missives to be e-enabled1

37.3At present, deeds can be in electronic form, but only if used within the ARTL system. In the new scheme all conveyancing deeds would be capable of being electronic, whether used in the ARTL system or not. Electronic deeds would be capable of registration in the Books of Council and Session. There would be no compulsion to move to electronic deeds: in the future paper deeds would remain competent, as they are today. The fee differential, already applicable to ARTL transactions, is likely to continue.

37.4At present missives have to be in paper form. In the new scheme electronic missives will be competent. As with deeds, the new scheme does not require the move to e- conveyancing. Paper missives will continue to be competent.

37.5In the case of both deeds and missives, details about such matters as digital signatures will be set out in subordinate legislation. But the draft Bill does lay out a structural point that may deserve mention here. Under current law, there are two levels of formality: (i) a signed document and (ii) a signed and witnessed document. Signing serves for validity, but the higher status of probativity requires witnessing. Subject to certain qualifications, a deed has to have the higher status to be accepted by the Keeper.2 For electronic deeds there would in future be three levels of formality: validity, probativity and registrability. The difference, in this respect, from paper deeds would thus be that an electronic deed that was probative would not necessarily have a sufficiently high status for registrability.

1 See Part 34.

2 For the Register of Sasines and the Books of Council and Session this rule is statutory: Requirements of Writing (Scotland) Act 1995, s 6. For the Land Register it is the Keeper's policy.

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First registrations accelerated3

37.6The ultimate objective is that all properties should be in the Land Register and that the Register of Sasines should be closed. That was also the objective of the 1979 Act, but the new scheme would accelerate the process. The details are complicated, and what is said below is selective.

37.7In the first place, in the new scheme no disposition would be capable of being recorded in the Register of Sasines. Here are two examples. (i) Joyce owns a house, her title being in the Register of Sasines. She dispones her half share to Luke, gratuitously. Under current law this disposition would be recorded in the Register of Sasines and thus would not trigger first registration. In the new scheme, if the disposition were to be presented for recording in the Register of Sasines the Keeper would reject it. The only way that Luke could acquire title is through first registration in the Land Register. (ii) Kieran owns a house, his title being in the Register of Sasines. He dies, bequeathing it to his daughter Kate. His executor obtains confirmation and dispones to Kate. Under current law this disposition would not trigger first registration but would be recorded in the Register of Sasines. In the new scheme, if the disposition were to be presented for recording in the Register of Sasines the Keeper would reject it. Kate should present the disposition for registration in the Land Register.4

37.8In the second place, under current law the Keeper has a discretion whether or not to accept an application for voluntary first registration. In the new scheme that discretion would disappear. (Though the Keeper could be allowed a transitional period in which the discretion could be retained.)

37.9In the third place, in the new scheme the Keeper would have the power to register any as-yet unregistered property, without any application being made. If Fergus owns a house, and the title were still in the Register of Sasines, the Keeper could simply register the house in the Land Register. This process would change no one's rights, for Fergus was the owner before and he would continue to be the owner. The same would be true if the Keeper were to make a mistake as to boundaries and register him for too little. The unregistered land would still belong to Fergus. His Sasine title to that unregistered land would be unaffected. If the converse happened, and Fergus were to be registered for too much land, at the expense of his neighbour Nigel, that would not transfer ownership of anything from Nigel to Fergus. (That would indeed be the effect under current law, but in the new scheme the Keeper's "Midas touch" would disappear.5) The same would be true of any subordinate rights in the property, such as a standard security. The Keeper would enter the security on the new title sheet. But whilst the registration would change no one's rights, it would nevertheless have significant practical benefits. The source of information about the title would be moved from the opaque Register of Sasines to the transparent Land Register. The next transfer of title would become a "dealing with whole" as opposed to a first registration, simplifying the conveyancing and making the transaction ARTL-compatible.

3 See Part 33.

4 But if, instead of having received a disposition from the executor, she had received a docket transfer, she would have the option of completing title in either register. See the discussion of completion of title below.

5 See Part 13.

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