Heritable Property – Registration of Title – Exclusion of Indemnity – Discretion of Keeper – Whether entitled to refuse indemnity on basis of doubt or of existence of dispute – Nature of Tribunal’s appeal jurisdiction – Whether limited to judicial review or open on all matters of fact and law – Land Registration (Scotland) Act 1979, Sections 12(2), 25(1)

Heritable Property – Registration of Title – Procedure – Appeal – Role of Keeper – Position where no real interest in outcome – Whether appropriate to maintain position of doubt – Whether appropriate to stand aside, leaving issue between interested parties – Land Registration (Scotland) Act 1979, Section 25(1)

Heritable Property – Registration of Title – Appeal – Remedy – Whether appropriate to give express direction to Keeper – Effect on Keeper of declaratory findings – Competency – Land Registration (Scotland) Act 1979, Section 25(1)

Heritable Property – Registration of Title – Common parts of housing development – Exclusion of indemnity – Individual house proprietors having registered titles to pro indiviso rights – Whether subsequent conveyance by developer to another party a non domino –– Houses still for sale – Validity and effect of individual proprietors’ titles – Parts “which on completion thereof shall not have been exclusively alienated” – Whether subjects sufficiently described – Definition by reference to ‘completion’ – Reference to uncertain future event – Plan attached to deed of conditions merely identifying outside boundary of development – Whether plan taken together with verbal description sufficient– Land Registration (Scotland) Act 1979, Sections 3(1), 4(2)(a), 6(1)(a),

Heritable Property – Registration of Title – Whether subjects sufficiently described –Extrinsic evidence of possession – Description by exception – Land Registration (Scotland) Act 1979, Sections 3(1), 4(2)(a), 6(1)(a)

Heritable Property – Registration of Title – Exclusion of indemnity – Risk of voidability – Common parts of housing development – Possible obligation under Deed of Conditions to use whole development subjects for dwellinghouses and common parts – Rodger (Builders) Ltd v Fawdry 1950 SC 483 – Breach of warrandice – Circumstances in which case continued for further hearing – Land Registration (Scotland) Act 1979, Sections 12(2), 25(1)

PMP Plus Ltd v The Keeper of the Registers of Scotland and Others
20 November 2008

In an appeal against the Keeper’s decision to exclude indemnity under Section 12(2) of the Land Registration (Scotland) Act 1979, the subjects of appeal comprised an undeveloped area of ground within a large residential development site. At a time when the development was largely complete but some houses remained unsold, the developer sold the subjects to a non-residential purchaser. The deed of conditions provided that various parts of the site, including areas of open space, would be the common property of all the house and flat proprietors, but also provided that the developers were permitted to make such alterations or deviations as they thought fit to any feuing plans including the layout of open spaces. The deed of conditions also referred to a plan showing the boundaries of the site and an outline layout which had been the subject of some changes. The title sheets of the registered titles of individual flats and houses provided that the subjects included a share “in common with all the proprietors of all the other dwellinghouses and flatted dwellinghouses erected or to be erected on the Steading … in and to those parts … which on completion thereof shall not have been exclusively alienated to purchasers of dwellinghouses or flatted dwellinghouses which said parts shall comprise … ”, the phrase in italics reflecting the wording in the deed of conditions and being followed by a list of specified common parts including “other areas of open space and others so far as these serve and are common to all dwellinghouses, flatted dwellinghouses or others erected on the Steading … ”

The Keeper took the view that the appellants’ title to the subjects was open to challenge. At a debate hearing, he argued that the title sheets of the individual proprietors appeared to disclose grants of pro indiviso rights to the common parts including the subjects. He also considered that even if there was no such conflicting title at the date of presentation of the appellants’ title, the proprietors might have sufficient rights against the developer in relation to the subjects as to bring the matter into what was described as “Rodgers v Fawdry territory”. The Keeper submitted that he was entitled to decide to decline to register with indemnity on the basis of reasonably held doubts, but conceded that in the present case it was only necessary to consider whether the Keeper’s view on the title was erroneous in law because he was not entitled to exclude indemnity in relation to a good title.

The appellants advanced two broad arguments: firstly, the Keeper was not entitled to refuse indemnity on the basis of a doubt about the validity of the title: he had to make a decision about it one way or another. Secondly, the appellants’ title was good because it was acquired before ‘completion’ of the development, no individual proprietors having acquired any rights in the subjects; and there was no binding obligation on the developer towards individual proprietors affecting the developer’s ability to pass title to the appellants.

Two individual house proprietors had entered appearance as ‘interested parties’ and made written submissions but did not appear at the hearing and generally adopted the Keeper’s position.

Held, (1) the Tribunal had power to consider all matters of fact or law bearing on the question whether the decision of the Keeper was correct, although there might also be circumstances where a ‘judicial review’ approach to the Keeper’s practice was required. The appellants were entitled to an adjudication on their title. The question whether the Keeper was entitled to reach a decision on the basis only of doubt might therefore never be an issue of substance: the Tribunal was concerned with his decision, not his reasons for his decision. The Keeper had a duty actively to investigate the title, but did not have a full adjudicative function. Particularly on issues of fact, but possibly sometimes (as in the present case) on an issue of law, he might not be able to resolve his doubts. He could not avoid deciding what to do, but might require to proceed on the basis of perceived doubt and difficulty. The question whether he reached his practical or executive decision because he thought the matter doubtful or because he was persuaded on a balance of probabilities would not be of significance where there was an unfettered appeal.

As to remedy, in the present case, parties were agreed that the decision could be expressed in the form of findings, without express direction. The Keeper would require to give substantive effect to such findings. There might be circumstances in which the Keeper would still be able to make use of a sensible discretion. In the present case, there was force in the suggestion that if the appeal succeeded, the Tribunal should not go so far as to direct the Keeper what to do, but it was not necessary to reach a concluded view.

The Keeper would necessarily be the primary respondent in some cases, e.g. claims involving the obligation to indemnify, but in other cases he may have no real interest in the outcome. There was no reason why he should not maintain a position of doubt in proceedings before the Tribunal. It may be appropriate for him to stand aside and leave it to the interested parties, but it would be important for other potential parties to have a clear understanding of his position before they decided whether to take an active part.

(2) The individual proprietors’ registered titles did not give them an effective title in relation to common parts. Three agreed matters of principle could be taken from property law and Sections 3(1)(a), 4(2)(a) and 6(1)(a) of the Act: (a) it is not possible to convey an area of land ascertainable only under reference to an uncertain future event; (b) it is an essential element of the scheme of the Register that property is sufficiently described by reference to the Ordnance map; and (c), in the absence of a sufficient description, a purported conveyance of property, although registered, is ineffective. The gradual development of housing sites presented difficulties for conveyancers in determining common parts, where, as was commonly the case, there was a requirement for flexibility as the work proceeded. Land still to be chosen by the developer could not be determined from the title sheet and the defect could not be cured by subsequent events. The Keeper’s first argument, that the land was adequately defined in all the dispositions, taking the deed of conditions plan as part of the description, could not be accepted. It was not possible to treat the reference to the future as being pro non scripto, the intention being clear that common parts were not to be regarded as fixed at least until a late stage. At least at the time of the earlier dispositions, the common parts were clearly not identifiable. The alternative argument, that at least some of the later titles were given at a stage when the development was complete and the common parts fixed, also failed. Although ‘completion’ might well mean practical completion, the dominant element in the provision about completion was the reference to ‘alienation’, i.e., broadly, sale of the individual houses. Reference to the deed of conditions did not support the inference that ‘completion’ was defined by reference to a fixed plan. The effect of the inadequacy of the descriptions went further than producing ‘inaccuracy’: the individual titles did not give any title to the appeal subjects at the date of the appellants’ attempted registration. This did not put the integrity of the register at risk, because no-one relying on the title sheets could say with any confidence what they purported to cover as common parts.

Two further propositions, apparently not disputed between the parties, might require further consideration. Firstly, it was not clear that extrinsic evidence of possession could be relevant to identification of subjects. Purchasers of property ought to be able to rely on the register to see the extent of the title. Secondly, there was some reservation about how far the concept of identification by exception, which underlay the reference to alienation’, could be taken.

(3) No question of breach of warrandice arose if the individual titles did not include the subjects, but the arguments advanced o behalf of the Keeper under reference to Rodgers v Fawdry justified further consideration. Because the argument was not explored in detail and the Keeper’s approach was based on reasonably held doubt, it would not be proper to express a concluded view at this stage: the interests of the respondents who did not appear at the debate may have been prejudiced by confusion as to the role of the Keeper, and the appellants also had not had an opportunity to respond fully on this branch of the case. A further hearing on the matter should be allowed. It would be necessary to have a clear understanding of the principle or principles discussed in Rodgers v Fawdry. The principle might be understood to be that one person’s right to obtain title is sufficient to prevent a subsequent purchaser from being able to obtain a good title where that purchaser knew or must be taken to have known of the prior right. It was at least questionable whether the present circumstances fell within the scope the principle. The purpose of the deed of conditions may simply have been to add burdens, but there might not be any reason in principle why such a deed could never give rise to an obligation to convey real rights. Proper construction of Clause Thirteenth, the right to vary, might be critical. The appellants’ submission that the principle could not apply unless the land involved in the alleged prior obligation could be clearly identified might provide an answer, but the individual proprietors should have an opportunity to make submissions. The Keeper would require to clarify his position and advise the other parties of his intentions in advance of the further hearing.

Authorities referred to:-

Associated Provincial Picture Houses Ltd v Wednesbury Corp [1948] 1 KB 223
Beneficial Bank plc v McConnachie 1996 SC 119
Bennett v Beneficial Bank plc 1995 SLT 1105
Brookfield Developments Ltd v Keeper of the Registers 1989 SLT (Lands Tr) 105
Candleberry Ltd v West End Homeowners Association 2006 SC 638
Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374
Dougbar Properties Ltd v Keeper of the Registers 1999 SC 513
Foster v Keeper of the Registers of Scotland 2006 SLT 513
Hunter v Fox 1964 SC (H.L.) 95
Kaur v Singh (No.1)1999 SC 180
Macdonald v Keeper of the General Register of Sasines 1914 SC 854
Millar & Bryce Ltd v Keeper of the Registers 1997 SLT 1000
MRS Hamilton Ltd v Keeper of the Registers (No.4) 2000 SC 271
Optical Express (Gyle) Ltd v Marks and Spencer plc 2000 SLT 644
Patterson v Keeper of the Registers LTS/LR/1992/2, 27.7.93 (LTS)
Rodger (Builders) Ltd v Fawdry 1950 SC 483 (“Rodgers v Fawdry”)
Scottish Power Generation Ltd v British Energy Generation (UK) Ltd 2002 SC 517
Short’s Trustee v Keeper of the Registers of Scotland 1996 SC (HL) 14
The Registration of Title Practice Book, (2nd Ed. 2000)
Stair Encyclopedia, vol. 19
Scottish Law Commission Discussion Paper No. 125, 2004, Land Registration: “Void and Voidable Titles”
Scottish Law Commission Discussion Paper No. 128, 2005, Land Registration: “Registration Rectification and Indemnity”
Halliday, Conveyancing Law and Practice, 2nd ed. Volume 2,
K G C Reid, New Titles for Old, (1984) 29 JLSS 171
Reid, Law of Property in Scotland(1996)
W S Penman, The Keeper’s Reply, (1984) 29 JLSS 175
C C Campbell, The Land Register and the Keeper’s Discretion, 1999 SLPQ 277

See full decision:  LTS/LR/2007/02 (Note 1), LTS/LR/2007/02 (Note 2), and LTS/LR/2007/02 (Expenses)