OPINION

Highland Ventures Limited (Applicants) against The Keeper of the Registers of Scotland (Respondent) and Marketing Management Services Limited (Interested Party)

1. The applicants are the former owners of the Drummond Hotel, St Fillans, Crieff. They sold it to a Robert Charles Sancto and others in February 2006. That transaction triggered the first registration of the property in the Land Register under Title Number PTH27722. In this application the applicants seek rectification of a number of inaccuracies in the Land Register resulting from that registration. The hotel is now in the ownership of Marketing Management Services Limited (“MMSL”) whose title was registered on 7 November 2013.

Procedural history

2. The application was made under sec 82 of the Land Registration etc. (Scotland) Act 2012 (“the 2012 Act”). It was lodged with the Tribunal on 6 October, 2015. It originally complained of two inaccuracies but in the course of adjustment that became four although only three were insisted upon at the end of the day.

3. The application was intimated to the Keeper of the Land Register as the respondent and to MMSL as an interested party. On 4 November 2015 the Keeper lodged answers wherein she narrated (i) that an alleged inaccuracy had been intimated to her on 22 December 2014 by agents acting for Mr Richard John Steventon, the proprietor of a neighbouring property – and a director of the applicants as appears below – but that she had been unable to comply with the request for rectification because she had not been supplied with sufficient information to satisfy the requirements of sec 9 of the Land Registration (Scotland) Act 1979 (“the 1979 Act”), (ii) that, on 6 January 2015, agents for the interested party had written to her asking that no rectification take place without full consultation with their clients, (iii) that she had replied to this letter explaining changes in her powers of rectification introduced by the 2012 Act and (iv) that she could not adjudicate on issues of possession. These answers contained no express admission that there was any inaccuracy in title PTH27722.

4. The interested party lodged answers on 30 November 2015 denying, in terms of a general denial of the applicants’ averments, that there was any inaccuracy in its title, saying that it had acquired the property in good faith and averring an intention to carry out certain developments at the property “in accordance with its title as is its right”.

5. There then followed a period of adjustment in the course of which, on 8 January 2016, the applicants adjusted so as to increase the number of inaccuracies complained of to four. This evidently resulted from a detailed survey they had instructed, the result of which is the report and plan which are productions A1 and A2. Copies of report A1 and plan A2 are annexed to this Opinion. On 22 January the Tribunal received adjusted answers from the respondent conceding three of the four inaccuracies now complained of but rejecting the fourth (being the third in terms of the applicants’ pleadings and the one which is no longer insisted upon) on the ground that it was within the tolerances of the base scale of the OS base map. Under reference to the transitional provisions contained in Schedule 4 to the 2012 Act the following averments were added:

“If the Tribunal accept that there were immediately prior to the designated day inaccuracies as averred it then falls to the Tribunal to determine whether or not the inaccuracies could have been rectified by the Keeper as at that time under Section 9 of the 1979 Act. The registered proprietor is presumed to be in possession under Paragraph 18 [of Schedule 4]. The applicant must rebut that presumption in order to establish that the inaccuracies could have been rectified under Section 9 of the 1979 Act. The Keeper cannot adjudicate on issues of possession.”

6. On 16 February 2016 the interested party lodged amended answers, again denying, in terms of their general denial, the existence of inaccuracies in their title and giving further particulars of their intended development.

7. On 11 April 2016 the Tribunal appointed the application to heard at Edinburgh on 10 and 11 May. That hearing required to be discharged on 3 May due to the illness of the interested party’s counsel and the consequent need to instruct new counsel. A hearing was then fixed for Perth Sheriff Court (due to lack of accommodation within George House and because of the possibility that a site inspection would be required) on 21 and 22 June.

8. On 7 June the interested party lodged further adjusted answers maintaining their denial of inaccuracy in their title and introducing further averments to do with possession, including an averment that they were presumed to be in possession, a presumption which the applicants would have to rebut. This was met by further specification of their possession by the applicants in adjusted pleadings lodged on 8 June 2016.

9. On 14 June the solicitor acting for the interested party emailed the Tribunal in, inter alia, the following terms:

“On further advice and consideration from Counsel, it has been decided that [MMSL] will not proceed with their defence in this case, this on the basis that the onus is on the applicant to overcome the presumption of possession in favour of our clients as registered proprietor and with regard to inaccuracy of the title. We were entitled to seek clarity in their position re possession, which clarity has now been provided which has allowed us to come to the view we have reached.”

10. Since the now uncontested application could be heard at Edinburgh, we heard it here on 21 June when Mr Heggie, solicitor, appearing for the applicants, led the evidence of a single witness, the foresaid Mr Richard John Steventon, largely on the question of possession.

Evidence

11. Prior to calling Mr Steventon, Mr Heggie asked us to accept productions A1 and A2, the foresaid survey report (PDF) and resulting plan (PDF), as what they bore to be and their contents as accurate. Since these are not now challenged, we are happy to do so.

Richard John Steventon (65)

12. Mr Steventon gave evidence that he was a director of the applicants. He and his wife had come up to Perthshire from Yorkshire in 2002. They had bought the hotel in the name of a company called Drummond Hotel Limited. After the hotel had been sold, in 2006, the company had changed its name to Highland Ventures Ltd (HVL). At the time of the sale the company had retained some land for his and his wife’s personal use. In anticipation of sale, boundary fences demarcating the retained areas had been erected in 2005. These boundaries had been agreed with Mr Sancto, one of the purchasers, who had, along with the witness, signed the sale plan (which is, we understand, that attached to the disposition, production A3). Mr Steventon and his wife now lived in Deaitch Cottage, a property adjacent to the hotel on the northeast.

13. He had only become aware of any inaccuracy in Mr Sancto’s registered title after the Bank had taken possession of the property and sold it to MMSL. More detailed plans had then been drawn up in connection with the proposed development of the hotel. That is when the first inaccuracy had been noticed. He had discussed it with one of the directors of MMSL who, he said, appeared to agree with him but was not prepared to acquiesce in having the title rectified.

14. Since the matter is not now contested it is not necessary to go into the fine detail of the respects in which the title registered in favour of the disponees was inaccurate. Mr Steventon pointed out the relevant areas on the map produced by his surveyor, production A2. There are three of them, one (the first in terms of the applicants’ pleadings) is the boundary between the hotel and Deaitch Cottage along a fence, and the other two (the second and fourth in terms of the pleadings) affect the area of the foreshore and access thereto from the public road running to the front (south) of the hotel.

15. Mr Heggie took the witness through photographs forming production A28. The first was taken from the hotel carpark to the south of the public road and looked towards two fences between which was a corridor which had been retained by Drummond Hotel Limited as an access to the foreshore at the time of the sale. That corridor had been encroached upon in the registered title (the fourth inaccuracy in terms of the pleadings). Photograph A28/2 was taken looking east along the foreshore and showed the boundary between what had been retained and what had been disponed. There had been an encroachment of about 4.5 metres on the applicants’ retained property along the foreshore (the second inaccuracy in terms of the pleadings). The corridor and foreshore were used by the witness and his wife to get to their boat, seen moored at the jetty in A28/2, and occasionally by friends for launching their own boats. Although he described use of this area as infrequent and irregular, no one else used it without their permission. There was a chain across the access corridor leading into it and the sign shown in A28/2 said “Private No Access”. In addition to accessing the slipway and their boat, the witness and his wife would sometimes tidy up this area of foreshore to clear it of debris coming down the loch. They had been doing all of these things since 2002 without interruption.

16. The third area of inaccuracy (the first in terms of the pleadings) was part of the garden of Deaitch Cottage. Photograph A28/4 showed the fence that had been erected before the hotel had been sold. It marked the boundary in terms of the disposition granted to Mr Sancto and others. It ran, conform to that disposition and the plan annexed thereto, parallel with and at a distance of 7.85 metres from the hotel wall. The registered plan, on the other hand showed a wedge-shaped encroachment onto the retained land, beginning at the south and widening as it went north.

17. Mr Steventon and his wife had possessed the garden of Deaitch Cottage within that fence since that time (and indeed since 2002). His wife had planted a shrubbery and there was a eucalyptus tree (we infer planted by the Steventons) in this area which was now 35 feet tall, giving an indication of the length of time it had been there. The new owners of the hotel (MMSL) had thought the fence was a new fence but it wasn’t. It had been substantially repaired with new panels following a storm in 2007. There was a panel in the fence which was a different colour from the rest of it (seen where the fence adjoins the shed in photograph A28/6). This was a section that had been used as a gate from the hotel into the grounds of the cottage when the Steventons still had the hotel. The MMSL people thought that the fence was new but the repair work had been carried out on the existing fence line. No one other than themselves used their garden, nor had used it since the original fence was built.

Submissions

18. Mr Heggie confirmed that rectification of only three of the four inaccuracies was being insisted upon. That was because he accepted that the fourth (the third in terms of the pleadings) was within the tolerance allowed by the OS base map. He invited us to be satisfied as to possession in respect of the other three areas. In closing it occurred to him that the application should have been brought under sec 9 of the 1979 Act, not sec 82 of the 2012 Act. That was because of the transitional provisions contained in Schedule 4 to the latter. Mr Heggie took us to them and they are set out below. He moved us to be allowed to amend the application accordingly. We deal with that below.

19. After a brief discussion, it was agreed that expenses would best be left for submissions following the issue of our decision but Mr Heggie gave notice that he intended to seek expenses against the Keeper and the interested party jointly and severally until January 2016, when the Keeper admitted three of the four inaccuracies, and against the interested party solely since then.

Tribunal’s consideration and decision

20. The inaccuracies complained of in this application have been on the Land Register since some time in 2006 (strangely the pleadings do not disclose the date of registration of the title in favour of Mr Sancto and others). At that time sec 9 of the 1979 Act was in force.

21. It appears from correspondence produced in the course of this application that the possibility of an inaccuracy in the Register was first raised with the Keeper in November 2014, shortly before the “designated day” for the introduction of the 2012 Act (8 December 2014). It appears rectification under the sec 9 procedure was not going to be possible by then, simply in terms of time (see Keeper’s letter to the agents acting for Mr & Mrs Steventon dated 25 November 2014, production A12). The next communication from a member of her staff to Mr & Mrs Steventon’s agents, of which we have had sight at least, was on 5 January 2015 (production A14), by which time the new provisions were in play. In that letter, the writer, Mr David Grieve, referred to the transitional provisions of Schedule 4 of the 2012 Act and said that the material submitted was insufficient to show that the registered proprietor consented to amendment of their title and went on “insufficient evidence has been submitted which demonstrates that the conditions required for rectification under section 9 of [the 1979 Act] have been met and that an inaccuracy now exists that could be rectified”. The Keeper was unable to comply with their request for rectification. In a further letter mis-dated 5 January 2015 but sent in August 2015 (production A20), Mr Grieve sees the difficulty in the way of rectification as being the lack of sufficient evidence of possession to overcome the presumption of possession by the registered proprietor contained in para 18 of Schedule 4.

22. The relevant provisions of Schedule 4 are as follows:

“17. If there is in the register, immediately before the designated day, an inaccuracy which the Keeper has power to rectify under section 9 of the 1979 Act (rectification of the register) then, as from that day –

(a) any person whose rights in land would have been affected by such rectification has such rights (if any)) in the land as that person would have if the power had been exercised, and

(b) the register is inaccurate in so far as it does not show those rights as so affected.

18. For the purpose of determining whether the Keeper has the power mentioned in paragraphs 17 and 22, the person registered as proprietor of the land is presumed to be in possession unless the contrary is shown.”

23. The inaccuracies complained of here are such as would have been rectifiable under sec 9 subject to the constraints contained in subsec (3) where rectification would prejudice the proprietor in possession. If rectification would have prejudiced the interested party then the Keeper would not have had power to rectify unless one of the exceptions of subsec (3)(a) applied. In terms of the foregoing transitional provision, an applicant seeking to rectify a pre designated day inaccuracy after that day now has to overcome a presumption of possession in favour of the registered proprietor (before the designated day) which wasn’t there before.

24. We are satisfied that this onus has been discharged by the applicants in this case. Corporations not being able to possess anything physically, the form of HVL’s possession was civil possession, through Mr & Mrs Steventon. There is no evidence to the contrary and no evidence of competing possession. In particular there is no evidence of possession by MMSL. The presumption of possession by them, as registered proprietors, contained in para 18 of Schedule 4, is, therefore, rebutted. It has been demonstrated that the applicants, in the persons of Mr & Mrs Steventon, were in possession as at 7 December 2014. The Keeper therefore had power to rectify the register under sec 9. The consequences are, in terms of para 17 of the transitional provisions, (i) that since the designated day the applicants are deemed to have the rights they would have had had rectification taken place under sec 9 by that day, and (ii) that the register is inaccurate in so far as it does not show those rights.

25. Mr Heggie’s motion to amend so as to make this an application under sec 9 of the 1979 Act is unnecessary and, indeed, inappropriate since this is an application made after the designated day. It could, arguably, have been raised under sec 103 rather than sec 82 of the 2012 Act, as an appeal against a decision of the Keeper not to rectify the register, but sec 82 is within the part of the Act, Part 8, dealing specifically with “Rectification of the Register” and refers to questions relating to the accuracy of the register. It therefore seems to us to be more apt as a vehicle for rectification than sec 103.

26. Accordingly we have found that the Register is inaccurate in the three respects complained of (and insisted upon) and that the presumption of possession by the registered proprietor contained in para 18 of the transitional provisions has been rebutted. Consequently we have made an order determining the inaccuracy under reference to this Opinion and to the plan annexed, being a copy of production A2 prepared by Land Surveys, the accuracy of which, along with the report – production A1 – we accept as aforesaid.

Expenses

27. We have made our usual order reserving expenses and invite motions and written submissions on the question.


Certified a true copy of the statement of reasons for the decision of the Lands Tribunal for Scotland intimated to parties on 28 June 2016

Neil M Tainsh – Clerk to the Tribunal


Annexes to this Opinion (PDF):