Lands Tribunal for Scotland

OPINION

Brookfield Developments Ltd
v
The Keeper of the Registers of Scotland

This is the first appeal to come before the Lands Tribunal under the Land Registration (Scotland) Act 1979. The appeal is at the instance of Brookfield Developments Ltd, 45 High Street, Paisley, for rectification of the entry in the Land Register under section 9 of the Act in relation to their property at 183 and 189 Yokermill Road, Yoker, Glasgow, and more particularly in relation to the burdens section of the relevant title sheet - title number GLA07314.

As the facts of the case are not in dispute the appeal was heard by way of legal debate at which the tenants were represented by Mr W Graeme St Clair, Solicitor, and the Keeper of the Registers by Mr Colin Campbell, Advocate.

The appellants acquired the dominium plenum of the property with entry on 24 April 1987, the property and immediate superiority having been previously consolidated by minute of consolidation registered on 15 April 1986. The property was acquired for residential development, but at the time of purchase the sellers' title was in course of registration in the Land Register. As a result of this, the sellers' land certificate was not available for examination until after the purchase had been completed. On subsequent receipt of the land certificate from the sellers' agents, it was noted that a number of burdens which had been created by a feu contract containing a feu disposition by John Erskine Campbell Colquhoun to Robert Twentyman Napier and his heirs and assignees, recorded GRS Dumbarton on 21 November 1883, were disclosed in the burdens section notwithstanding that it was the interests of the superior and feuar under this feu contract which had been consolidated.

The burdens section of the land certificate compiled in terms of section 5(2) of the 1979 Act contained the following entry and explanatory note, the significant words of which we have underlined and the separate declarations contained therein we have separately numbered for ease of reference.

"D BURDENS SECTION
Specification
Feu Contract containing Feu Disposition by John Erskine Campbell Colquhoun (First Party) to Robert Twentyman Napier (Second Party) and his heirs and assignees recorded GRS (Dumbarton) 21 Nov 1883, of the subjects in this Title contains the following conditions which may not be extinguished notwithstanding consolidation of the dominium utile interest created by the said Feu Contract with the immediate superiority thereof by Minute of Consolidation registered 15 April 1986 viz:

[1] Declaring that the second party or his foresaids shall not be entitled to convert any portion of the Villa or offices erected on the subjects in this Title into shops or warehouses, taverns or places of public resort of any kind or to employ the same for any other use or purpose than as a self contained villa or dwelling house and offices but in the event of the first party or his foresaids at any time hereafter feuing out the adjoining ground belonging to him or them situated within one hundred yards of the plot of ground hereby feued for the erection thereon of flatted tenements then the second party and his foresaids shall be entitled to erect on the plot of ground hereby feued tenements of a like description to those permitted to be erected on said adjoining ground and subject to the like conditions and restrictions imposed by the first party or his successors on the feuars of said adjoining ground. [2] And further declaring that the second party and his foresaids shall be bound and obliged to fence on the north boundary of the plot of ground hereby feued shall consist of the existing hedge or a neat wooden paling and that the fences along the remaining boundaries shall consist of hedges iron fences or neat wooden palings (no walls being permitted) and the second party and his foresaids shall maintain the said fences in good order and repair in all time thereafter and [3] further declaring that the second party and his foresaids shall be bound and obliged whenever called upon by the first party or his foresaids and the consent of the Road Trustees having first been obtained to form at their own expense a footpath of six feet in breadth along the south boundary of the said Parish Road so far as extending along the plot of ground hereby feued and to lay down a whin or hewn kerbstone and paved channel along the outer edge of said footpath and the second party and his foresaids shall thereafter maintain the said footpath kerbstone and channel so far as they extend along the plot of ground hereby feued in good and sufficient order and repair all to the satisfaction of the first party or his foresaids or their factor. [4] And further declaring without prejudice in any respect to the foregoing declarations as to the nature of the buildings to be erected on the plot of ground hereby feued or the use to be made thereof that the second party and his foresaids shall not dig or quarry any clay, stone or sand nor make nor burn any brick or potter work out of or upon the plot of ground hereby feued excepting only for the purpose of erecting houses or buildings on the same nor shall they deposit any dung or rubbish on the plot of ground hereby feued excepting what may be produced on the same nor employ the same or the buildings thereon for any other purpose which may be considered a nuisance or nauseous hurtful or disagreeable to the neighbouring feuars and disponees upon the lands and estate of Garscadden and this declaration is hereby created a servitude and burden on the plot of ground hereby feued and the second party and his successors therein not merely in favour of the first party and his foresaids but also in favour of such of the neighbouring feuars and disponees in the said lands and estate as the first party and his foresaids may confer a right on to enforce the same."

Contentions for Appellants

Mr St Clair, for the appellants, submitted that as the dominium utile and the dominium directum had been consolidated, none of the burdens contained in declarations [1] to [3] set out above should have been entered in the title sheet. To justify their inclusion, neighbouring proprietors would have to have a right to enforce these burdens, but the feu contract conferred no such express jura quaesita nor did it give any indication of a community of interest from which such rights of enforcement might be inferred. On the contrary, the feu contract specifically declared that the superiors were not "bound and obliged to follow out and observe the manner of laying out their lands of Killermont and Garscadden delineated on any feuing plan or design thereof in any manner of way but may vary and alter the same at pleasure", nor were the superiors bound to convey other portions of their lands under similar burdens. The reservation of such powers by the superiors was inconsistent with mutuality of interest - Turner v Hamilton (1890) 17R 494, per Lord President Inglis at page 499 and Lord McLaren at page 504.

With the exception therefore of the burdens contained in declaration [4] in respect of which the superiors had specifically reserved the right to give other feuars title to enforce, the burdens contained in the other three declarations should not have appeared as they were no longer subsisting burdens affecting the property.

The appellants conceded, however, that the burdens appearing within declaration [4] might still be enforceable by co-feuars and were therefore properly recorded in the burdens section: but the fact that that declaration expressly empowered the superiors to give other chosen feuars the right to enforce the conditions within that declaration precluded any such right being inferred in respect of the burdens contained in declarations [1] to [3].

The property in question, which had now been purchased by the appellants for development, lay within Garscadden estate, which had in recent years been fully developed for residential purposes. In all the circumstances therefore the conditions contained in declarations [1] to [3] should not have been included in the burdens section.

When attempting to raise the necessary finance for their proposed development the appellants had been advised that the title, containing as it did in the burdens section the conditions in declarations [1] to [3] introduced by words which "may not be extinguished", was not acceptable for purposes of security. Hence the present application for rectification of the Register. The Keeper's emphasis on the possible enforceability of these conditions had the effect of drawing attention to them in a way which would never have arisen prior to registration of title. Prior thereto, remotely enforceable burdens by unknown co-feuars as in this case would, after evaluation, have been generally accepted by legal advisers or potential lenders of finance as being of no consequence and would not have been particularly drawn to their attention as when highlighted in the present case on registration by the Keeper's words of introduction. Indeed, because the sellers' title was in course of registration when the purchase transaction was being carried through, that transaction had proceeded on the basis of an examination of the progress of titles and, with the exception of the conditions contained in declaration [4], it had been accepted that the remaining burdens in the feu contract were no longer subsisting, both by virtue of the consolidation and also by virtue of the fact that there were no third party rights of enforcement.

Under the 1979 Act the Keeper now had a duty to investigate the title position and should exclude obviously unenforceable land obligations. For in terms of section 6(1)(e) of the 1979 Act it was only enforceable conditions which should be entered in the Register. The Keeper therefore had to take a positive decision one way or another and could not adopt the neutral stance of stating "which may not be extinguished".

The Keeper had therefore erred in law and the Tribunal in terms of section 9 should order the Register to be rectified.

Contentions for the Keeper

Mr Colin Campbell, Advocate, in reply on behalf of the Keeper submitted that two main questions arose as a result of the Keeper's decision to insert as subsisting burdens the conditions referred to in declarations [1] to [3] in the burdens section of the title sheet.

The first question was as to the duties of the Keeper himself in circumstances where an argument arose and a decision was required as to whether or not a burden was enforceable. The second question was whether the present conditions were indeed still enforceable.

Referring to the opening words of the burdens section counsel submitted that the Keeper had neither expressly nor impliedly guaranteed or warranted that the burdens in question were enforceable. He had only indicated that certain burdens might not have been extinguished, despite consolidation. This therefore made no change over the pre-registration position or the position even now where a transfer occurred in a non-registration area. The Keeper, moreover, was under no duty to investigate or adjudicate upon the presence of possible tertii with rights of enforcement. Section 3 of the 1979 Act went no further than stating that the registered proprietor was vested in such real rights as were contained in his existing title. The Keeper therefore had no duty to investigate and his duty was merely an administrative one as laid down in section 6(1).

This was in contrast to those duties imposed on the Chief Land Registrar in England under the Land Registration Act 1925. Under section 13(b) he had jurisdiction to hear and determine objections subject to appeal to the Court. Under section 14 he could order evidence on affidavit and under section 15 order productions.

The Keeper's duties in contrast under section 6(1)(e) of the 1979 Act, were purely administrative. He was merely required to enter in the title sheet any enforceable real rights or burdens pertaining to the interest. Under section 6(1)(g) he could also add "such other information as the Keeper thinks fit to enter the register". His duties were therefore much more restricted and administrative.

Counsel for the Keeper also drew attention to section 3, the effect of which he said was to terminate any real burdens not disclosed on the Register. If not included therein they were therefore completely extinguished. Hence, so he submitted, it would be a brave Keeper indeed who did not disclose a burden where the possibility existed that it might be enforceable - otherwise he would lay himself open to an obligation to indemnify under section 12(1)(d). In this case the Keeper had considered the whole matter and had even struck out some obviously obsolete burdens relating to drainage and sewerage. So he had indeed applied his mind to the whole matter - although he still had no positive statutory duty to investigate.

Counsel for the Keeper finally submitted that the burdens contained in declarations [1] to [3] as set forth in the burdens section were still valid, and that the right reserved to the superior at the end of declaration [4] to introduce tertiii was not, as the appellants had suggested, limited to the burdens in that declaration but related to the burdens in the preceding declarations. He also submitted that declaration [4] applied only to the succeeding, but not to the preceding, words. Moreover, he did not agree with the appellants' solicitor that it was a question of whether such rights of enforcement could be implied in accordance with Hislop v MacRitchie's Trustees, (1881) 8 R (HC), 95, and Nicolson v Glasgow Asylum for the Blind 1911 SC 391. On the contrary they were rights which had been expressly conferred. The appellants would thus have to satisfy the Keeper that no such co-feuars still existed or that no such rights had ever been granted. They had not done so in the present case.

The crux of the present appeal was therefore the nature of the Keeper's discretion under section 6(1)(g) of the 1979 Act when read along with section 12(3) dealing with indemnities. Only if it could be shown that no reasonable Keeper would have decided as the Keeper had done in the present case would there have been a wrongful exercise of his discretion which the Tribunal could remedy. Only if he had gone wrong in law and there was an "inaccuracy" in terms of section 9 could the Tribunal order the register to be rectified. It was not, however, sufficient for the Tribunal merely to be of the view that the burdens were possibly unenforceable - they had to be of the clear opinion that they were not.

In the present case there had been no error involved in the Keeper putting on the Register a burden which did or did not exist. This was indeed a proper exercise of his discretion under section 6(1)(g).

Decision

The Tribunal's jurisdiction in this case originates from section 25(1) of the Land Registration (Scotland) Act 1979, which provides: "Subject to subsections (3) and (4) below, an appeal shall lie, on any question of fact or law arising from anything done or omitted to be done by the Keeper under this Act, to the Lands Tribunal for Scotland." Section 25(2), however, states that the above subsection is "without prejudice to any right of recourse under any enactment other than this Act or under any rule of law." So actions of declarator still remain open in the ordinary courts. But, for the first time, the Lands Tribunal is given a declaratory function in relation to registration of title. Doubtless the involvement of the Tribunal in the adjudication of disputes relating to land registration, alongside the Courts, is due to the Tribunal's related jurisdiction to vary or discharge enforceable land obligations under section 1 of the Conveyancing and Feudal Reform (Scotland) Act 1970. The Tribunal have taken the view that under the 1970 Act they have no substantive declaratory jurisdiction regarding the enforceability of land obligations. Hence an application cannot be made to the Tribunal under the 1970 Act the main purpose of which is to obtain a declaration that a land obligation is unenforceable and the application therefore unnecessary; see Solway Cedar v Henry, 1972 SLT (Lands Tr) 42. Nevertheless they have sometimes to explicate their statutory jurisdiction under section 1 by deciding whether they are confronted by an enforceable land obligation which they can then vary or discharge in terms of section 1(2) of the 1970 Act: see Macdonald, 1973 SLT (Lands Tr) 26.

The present appeal to the Lands Tribunal is under section 9 of the 1979 Act for rectification of the entry in the register relating to the applicants' property at 183 and 189 Yokermill Road, Glasgow, and in particular the entries made by the Keeper in the burdens section of the relevant title sheet. Section 9 reads as follows:-

"(1)        Subject to subsection (3) below, the Keeper may, whether on being so required or not, and shall, on being so ordered by the court or the Lands Tribunal for Scotland, rectify any inaccuracy in the register by inserting, amending or cancelling anything therein".

(2)        Subject to subsection 3(b) below, the powers of the court and of the Lands Tribunal for Scotland to deal with questions of heritable right or title shall include power to make orders for the purposes of subsection (1) above."

Subsection (3), however, provides that if rectification would prejudice a proprietor in possession, the court or the Lands Tribunal may only order the Keeper to rectify the register in certain specified circumstances.

The meaning of the word "inaccuracy" appearing in section 9(1), as a result of which corrective insertions, amendments or cancellations may need to be made should, in our opinion, be construed widely so as to include any incorrect or erroneous entry in or omission from the register.

In terms of section 5 of the Act the Keeper must complete registration by making up a title sheet for the interest in land in question and his precise duties in relation to the compilation of the title sheet (of which the land certificate is a duly authenticated copy) are contained in section 6(1) of the Act, which provides that the Keeper shall make up and maintain a title sheet of an interest in land in the register by entering therein a description of the land and other specified entries including: "(e) any enforceable real right pertaining to the interest or subsisting real burden or condition affecting the interest; (f) any exclusion of indemnity under section 12(2) of this Act in respect of the interest; (g) such other information as the Keeper thinks fit to enter in the Register."

The Tribunal consider that the opening words of section 6(1) are imperative, and require certain specified entries to be made, except that under section 6(1)(g) the Keeper may insert such other information as he thinks fit to enter. In particular, we consider that the clear direction to enter under section 6(1)(e) any enforceable real right pertaining to the interest or any subsisting real burden or condition affecting the interest imposes an obligation on the Keeper to refrain from inserting unenforceable real rights or burdens or conditions that are no longer subsisting and do not therefore affect the interest.

Section 6(1)(g), by contrast, enables the Keeper to add such other information as he thinks fit to enter. We consider this to be merely an enabling provision allowing the Keeper to insert any other relevant information; but certainly not to undermine or qualify the preceding entries. The Tribunal do not consider that this is what was intended by the words "such other information".

Counsel for the Keeper, however, has submitted that under the 1979 Act the Keeper's duties are purely administrative and his decision on enforceability cannot therefore be impugned if it was in the reasonable exercise of his discretion.

He also sought to distinguish between the Keeper's functions under the Act and the Chief Land Registrar's functions in England under the Land Registration Act 1925, to support the proposition that the Keeper had no duty to investigate, his function being merely an administrative one. Certainly the Chief Land Registrar does have judicial functions, including power to require the attendance of witnesses and the production of documents; specific powers of compulsion which the Keeper does not have. With respect, however, we cannot agree that the lack of such powers can lead to the conclusion that the Keeper has no duty to investigate, for, if his sole role was simply to register whatever was presented to him, the Register would become worthless. Furthermore, section 4(1) of the Act provides that an application for registration shall be accepted by the Keeper "if it is accompanied by such documents and other evidence as he may require"; and in terms of Rule 12 of the Land Registration (Scotland) Rules 1980 (as amended), if the applicant fails to comply with any such request, he does so at his peril, for the Keeper may then either complete registration but exclude indemnity or indeed reject the application.

Hence there is an adequate compulsitor behind the Keeper's requests for production of documents or further information which is indeed similar to that of the Chief Land Registrar under the Land Registration Rules 1925 (S & RO 1925 No 1093) Rule 322(2).

We cannot see how the Keeper can discharge his duties under section 6(1) of the Act unless he investigates the progress of titles relevant to the application subjects to the extent necessary to reach a view on what entries should be made in the title sheet and on what matters he might safely omit. It is clear in the present case that the Keeper has in fact considered carefully the burdens created by the feu contract, for he has omitted from the title sheet a number which he obviously does not consider are still subsisting. Oddly, however, given his view that jura quaesita may exist, we wonder why the obligation to keep the front ground as an ornamental garden in all time coming has been omitted. This surely is a condition which an adjoining feuar might well be interested in enforcing if he could.

However, it would be wrong to state the Keeper's duty to investigate in absolute terms. One essential difference between the Scottish and English systems of land registration is that the Scottish system does not involve any enquiry into possible opposing interests. These can, however, be clarified in due course on registration of the neighbouring interests either by a qualification of indemnity or, if necessary, by rectification of the original interest under section 9(3) - provided this does not prejudice the proprietor in possession. In England, in contrast, the general practice is to describe properties by reference to general boundaries (ie the exact line is undetermined). It is also possible, however, to seek registration with fixed boundaries, but in that case the Chief Land Registrar must notify adjoining proprietors and, if objections are taken to the proposed registration, exercise his judicial functions to adjudicate on any resulting dispute. There are, however, no such provisions in Scotland and the Keeper has no power to seek documents or information from neighbours. The only occasion on which the Keeper can advise a third party of an application for registration is in relation to foreshore, and this procedure is not to enable the Keeper to investigate the matter further and then adjudicate upon it, but rather to give the Crown an opportunity of challenging the applicant's title - see section 14 of the Act. If the Crown takes steps to do so, the Keeper nonetheless must proceed with the registration but must exclude indemnity so far as the foreshore is concerned.

Furthermore, the 1979 Act recognises that there must be a limit on the Keeper's investigation in relation to his compilation of a burdens section. Section 6(1)(e) of the Act, it should be noted, deals with two quite distinct matters; enforceable real rights on the one hand, and subsisting real burdens on the other. As regards the latter, under section 12(3)(g) of the Act indemnity is excluded in the case of loss arising because a burden so entered proves to be unenforceable, unless the Keeper expressly assumes responsibility for its enforceability. The use of the draftsman of these two different adjectives is in our view deliberate and is an acknowledgement that the Keeper quite simply will not, on many occasions, know whether a burden is enforceable or not. In our view, "subsisting" in the context can only mean appearing on the face of the titles relating to the interest in question as still remaining in being. On many occasions the Keeper may well be able to identify from the titles whether a burden is still enforceable or not. In some cases what appears on the face of it to be a subsisting burden may in fact, after enquiry, prove to be unenforceable; but we do not think that in carrying out his duties under section 6(1) of the Act the Keeper has indeed any duty to make enquiries of this nature, which in any event may not provide an answer.

The parties are agreed that the burdens in declaration [4] have been properly entered in the burdens section, although in fact that declaration does not actually confer an express jus quaesitum on any third party. It merely reserves to the superiors the right to do so. The parties have, however, not said and we would agree with this, that, before the Keeper entered these burdens as being still subsisting, he should have attempted to identify the other feuars who might be concerned and then by an examination of their titles satisfy himself as to whether some or all of them were given a right of enforcement. We cannot think that Parliament ever intended the Keeper to be involved in investigations like this and in our opinion the use of the word "subsisting" was deliberate, to make it clear that the Keeper's duties were simply to enter such burdens as appeared to him from his title examination to be still possibly enforceable. Furthermore, while the Keeper will have the indemnity provisions in mind, such consideration must not detract from his primary duty under section 6 to identify subsisting real burdens and to delete those which are no longer subsisting.

We have discussed the Keeper's role at some length because it was the subject of much of the debate but in truth the central issue before us is not, we would suggest, whether the Keeper has properly carried out his duties, but rather the simple question of whether there is an inaccuracy in the burdens section. The fact that the Keeper might have properly carried out his administrative functions in preparing the burdens section cannot, in our view, convert a burden which should have been excluded because it was in truth no longer subsisting into a subsisting one.

Turning now to this central issue, the appellants are the proprietors of the dominium plenum of the subjects at 183 and 189 Yokermill Road, Glasgow, and as a result of the consolidation of the property and immediate superiority the burdens created by the feu contract can only be subsisting burdens if third parties have a right to enforce them, since consolidation cannot defeat such rights. For a tertius to have a right to enforce conditions in another's title it is settled law, as Lord President Dunedin explained in Nicholson v Glasgow Asylum for the Blind 1911 SC 391, at page 400 "that the title of a tertius - that is to say anyone not a party to the original contract - must depend upon an agreement between the parties to the contract that the tertius should have such a title, and therefore that there must be some evidence in the title itself that it is intended that the restriction shall be enforceable by a tertius."

Now the clearest case of the existence of a jus quaesitum is where there is express agreement in the title of the burdened proprietor that third parties should have a right of enforcement. Indeed, in this present case, the parties were in agreement that the burdens contained in declaration [4] had been properly entered in the title sheet as subsisting burdens, since the superior had expressly reserved power to grant rights of enforcement to third parties. We would agree with this.

Mr Campbell, however, would go further, for he argued that the power reserved to the superior to grant such rights to third parties related not merely to the burdens in declaration [4] but to all the burdens in the feu contract. However, we cannot read the contract in this way.

As we have explained, the burdens created in the feu contract are not set out as numbered conditions but simply in a series of declarations. The declaration to which we are referring as number [4] is a nuisance provision and ends with the words "and this declaration is hereby created a servitude and burden on the plot of ground hereby feued and the second party and his successors therein not merely in favour of the first party and his foresaids but also in favour of such neighbouring feuars and disponees in the said lands and estate as the first party and his foresaids may confer a right on to enforce the same". It is these words which Mr Campbell would seek to apply to all the declarations in the feu contract. In our opinion "this declaration" can only mean declaration [4] and the words quoted cannot be read as referring back to the burdens contained in the preceding declarations.

There is thus in our view no express acceptance of a jus quaesitum in relation to the burdens contained in declarations [1], [2] and [3]. Acceptance of third party rights, however, need not be express if it can be established from the terms of the contract that by implication the burdened proprietor has given his consent to the introduction of a tertius - Hislop v MacRitchie's Trustees (1881) 8 R (HL) 95, per Lord Watson at page 102. From our examination of the feu contract, however, we can find no evidence of any mutuality of interest from which the acceptance of third party rights can be inferred. Indeed, it appears to us that express acceptance of such rights in relation to certain burdens must exclude implied acceptance in respect of the remainder; but, even if this is not so, we are unable to find any indication in the feu contract which would imply acceptance of third party rights in relation to the burdens in declarations [1] to [3]. On the contrary, the fact that the superior made it clear in the feu contract that he could lay out his remaining lands as he thought fit and further was not bound to take other feuars bound under similar title conditions, coupled with the express acceptance of third party rights in relation to one set of conditions only, rules out, in our opinion, any question of implied acceptance by the original feuar, in relation to the remaining burdens, of the existence of such a mutuality of interest between him and his neighbours that a jus quaesitum might be implied.

We find therefore that the title sheet of 183 and 189 Yokermill Road is inaccurate in terms of section 9 of the Act in that at the time of first registration the burdens contained in declarations [1] to [3] were no longer subsisting and should not have been entered in the burdens section. In terms therefore of section 9(1) of the Act, we hereby order the Keeper to rectify that inaccuracy by cancelling the entries in the title sheet relating to these burdens.

There is one further matter on which we should comment, although this is perhaps not now so relevant in view of the decision which we have reached. Mr St Clair made the point that on entering the burdens the Keeper was wrong to introduce them with the words "the following conditions which may not be extinguished". However, as only declaration [4] will now remain in the title sheet and as it itself indicates the possible existence of third party rights, Mr St Clair's objection to the phrase is perhaps not now of such force; nonetheless we have some sympathy with the point which he has made. Clearly, in cases like this the Keeper has to make some reference to the consolidation of the feu, for if he did not it would not be clear from the Land Certificate that the property was indeed the dominium plenum. However, in doing so we think that he should not include in any such note anything which might be read as an expression of opinion. We do not propose, however, to make any order on this point and indeed we are not certain that the inclusion of these words is an inaccuracy.

The parties submitted that expenses should follow success and we agree. Accordingly we award the appellants their expenses which, failing agreement, will be taxed on the Sheriff Court scale. We were also asked to certify the case as suitable for the employment of Counsel. Mr St Clair opposed this motion but, having awarded expenses as above, we do not need to consider the question of certification.