NOTE
(Expenses)

Alec Taylor (Applicant) v Valerie Purves (Respondent) and The Keeper of the Registers of Scotland (The Keeper)

Introduction

[1] This Note concerns motions for expenses made by both the applicant and respondent against the Keeper. The motions have been dealt with on the basis of written submissions. The case concerned an application under section 82 of the Land Registration etc (Scotland) Act 2012 (“the 2012 Act”) seeking a finding that the respondent’s registered title is inaccurate, and for a finding as to how the land register should be rectified. The case settled on the morning of a three day hearing with agreement that the register should be rectified in favour of the applicant. Our interlocutor and note of 27 September 2017 gave effect to this agreement.

[2] At the hearing the applicant was represented by Mr O’Carroll, Advocate. The respondent represented herself. The Keeper had previously been given leave not to appear at the hearing and did not do so.

Background facts and circumstances

[3] The applicant has sasine titles for the coal cellars numbers 28 and 29 Polton Cottages, Lasswade. He had previously owned the lower flatted dwellinghouse 29 Polton Cottages. It would appear that some years ago he had carried out minor development works by joining the two cellars together and some other land for use as a single unit. According to the pleadings he used the enlarged storage building to keep his classic motor cycles and spares, amongst other things.

[4] The respondent bought the property 28 Polton Cottages with entry in February 2014. The subjects had been first registered in the land register as MID36951 in February 2003 under the provisions of the Land Registration (Scotland) Act 1979 (“the 1979 Act”). The title sheet refers to the property as an upper flatted dwellinghouse of a block and included “the coal cellar being number 28 of the block of coal cellars erected on the back green …” The red edged line of the title plan includes the block of flats as well as a larger area including the access road, back green and a long thin shape which comprised, as became apparent at our site visit, a row of coal cellars.

[5] This overlap in the titles produced a most unfortunate dispute. The applicant apparently discovered his motorcycles being advertised on ebay as a “barn find” in March 2016. The matter duly escalated to legal proceedings. The applicant’s section 82 referral of January 2017 submitted that his title to cellar 28 was better than that of the respondent and had been fortified by prescriptive possession. The respondent disputed that there was an inaccuracy and her Answers stated that she had taken possession of the coal cellar.

[6] The Keeper’s Answers stated that cellar 28 was “identified by written description within the property section of the title sheet”. The Keeper accepted that an inaccuracy existed in the land register immediately before 8 December 2014, for the purposes of the transitional provisions between the 1979 Act and the 2012 Act. Her Answers rehearsed the progress of titles leading to registration of coal cellar 28, and accepted that the progress was defective in that when a particular disponer purported to convey the cellar to a predecessor of the respondent, he had already conveyed it to the applicant. The Keeper’s Answers maintained that, with reference to section 9(3) of the 1979 Act and paragraphs 17 and 22 of schedule 4 to the 2012 Act, she was unable to adjudicate on competing claims of possession which was a matter for judicial determination. Parties proceeded to make adjustments making detailed contentions and rebuttals about possession of the cellar, now part of a larger structure, which appears to have had some history.

[7] Prior to the hearing set down for 26 September 2017, and following a site visit, the Tribunal on 22 September queried by email whether the description in the land register was apt to include an interest in the coal cellar in question. The Tribunal drew parties attention to sections 4(2)(a) and 6(1)(a) of the 1979 Act and the decision in PMP Plus Limited v The Keeper 2009 SLT (Lands Tr) 2. At the hearing counsel for the applicant indicated that he intended to submit that the respondent’s title was defective on the basis of those provisions and that decision. After an adjournment the case settled.

Submission for applicant

[8] The main issue to be explored at the hearing was the question of possession as at the designated day in terms of the 2012 Act. Following the Tribunal’s email on 22 September, the applicant’s position was that the interested party’s title to the cellar had not been validly registered as it had not been identified on the ordnance map on first registration. The Keeper did not respond to this question by the time of the hearing. It was submitted that the Keeper had been found by the Tribunal to have been at fault in accepting for registration an application which did not comply with s4(2)(a) and s6(1)(a) of the 1979 Act. The respondent had recognised this by withdrawing her resistance to the application. It was only as a result of the invalid registration of the coal cellar that the two parties had joined in litigation. It was necessary for the application to be brought in order to resolve the dispute caused by an error in the land register. The Keeper’s error in accepting an incompetent application had necessitated the litigation.

[9] Turning to the issue of possession, it was accepted that the Keeper had adopted a neutral position. It had still been necessary to litigate on the question of rectification and possession. The applicant was an innocent party whose property interests had been adversely affected by a mistake in the land register. The applicant should be entitled to recover the full expenses of the application and the cause should be certified as suitable for the employment of junior counsel.

Submission for respondent

[10] The respondent had withdrawn her opposition to the application on the basis of PMP Plus Limited v The Keeper. She sought her expenses against the Keeper in that the Keeper was at fault for accepting the application for registration which did not comply with the relevant provisions of the 1979 Act. It was only as a result of the incompetent registration of the coal cellar that she and the applicant had become enjoined in the litigation. Had it not been for the error in the land register, the dispute would not have arisen. The Keeper had not recognised the PMP Plus decision in her Answers or in prior correspondence.

[11] The respondent had incurred expenses through no fault of her own and had tried to keep these to a minimum by representing herself.

Submission for Keeper

[12] The Keeper opposed the motions. Prior to proceedings being raised she had advised parties in correspondence that she accepted that an inaccuracy existed in the register but that she did not have power to rectify while possession was disputed between the applicant and the respondent.

[13] Contrary to what was being submitted by the applicant and respondent, the Tribunal was not required and had made no determination in respect of the validity of the respondent’s title on the basis of PMP Plus.

[14] In determining expenses the Keeper referred to Gray v The Keeper and Horrell LTS/LR/2013/11 and Balfour v The Keeper 2015 SLT (Lands Tr) 185. In particular, in Gray the Tribunal said:-

“(4) … In Nevis Estates Ltd v Cameron 2011 SLCR 117 at para [64] the Court said:

‘We consider that the principle of expenses following success is the appropriate staring point although it is well established that various factors can properly lead to a departure from this principle. It is worth keeping in mind that although reference to expenses ‘following success’ is a convenient shorthand, a more reliable way of approaching the matter is to consider who caused the litigation. When a person has been put to expense by the need to litigate to establish or defend a right it is normally appropriate that he be entitled to the expense incurred.’

“(6) The appellant laid great stress on the gross error of the Keeper and on the actings before the start of the litigation which added to the confusion and ‘increased the likelihood of litigation to one of almost inevitability’. We accept that there may be circumstances in which it is appropriate to have regard to the actings of parties before the start of litigation but we are satisfied that the general position in relation to expenses is that parties must be taken to have assessed their positions at the start of litigation. Our concern is with the cause of the expense of the process of litigation, not with the cause of the dispute. There would have been no litigation in the present case if parties had been able to agree that the land should be divided as it ultimately was.

“(8) … in most cases the Keeper has a neutral role in the proceedings and the real dispute is between neighbours. As in the present case, these are cases where the Keeper would have been willing and able to rectify the title sheet if the neighbouring proprietors had been in agreement.

“(9) … the degree of fault by the Keeper was not sharply in issue before us. We were not required to make any finding about that for the purposes of our decision. If the issue of possession had not been disputed by the neighbouring proprietors there would have been no need for proceedings before us no matter how ‘gross’ the error.”

[15] The Keeper also submitted it was relevant in Balfour that there had been no criticism of the Keeper regarding the conduct of the litigation before the Tribunal.

[16] It was submitted that in the present case there was no finding of fault against the Keeper. The Keeper had accepted there was an inaccuracy in the register but had been unable to adjudicate on competing claims of possession and had therefore adopted a neutral position. The expenses occasioned by the hearing and preparation for it were not the responsibility of the Keeper. The applicant had made no submissions in support of the motion for sanction for junior counsel. The matter turned on the narrow issue of competing claims for possession. That was not difficult or complex enough to merit the employment of counsel.

[17] At this point in the written submission process it had appeared to the Tribunal that the Keeper had not commented upon the Tribunal’s pre-hearing email of 22 September 2017, querying the adequacy of the identification of cellar 28 in the respondent’s title sheet. The Tribunal raised the possibility that the Keeper might accept that the relevant provisions of the 1979 Act and PMP Plus Ltd had resulted in the title not being valid for the cellar. If so, contrary to the position set out in the Keeper’s Answers, the issue of section 9 possession would seem to be irrelevant. It was therefore queried whether the Keeper could have made an appropriate concession earlier in the proceedings.

[18] In these circumstances the Keeper made a supplementary submission on expenses. It was submitted that the present case was distinguishable from a “PMP Plus – type” situation. That case related to boundary descriptions which were dependent upon some future event which was not the case here. It was submitted that the verbal description in the deed inducing first registration was acceptable for registration “as it was sufficient for the coal cellar to be distinguished from any other such feature or plot of ground within the tenement and to be identified at the point of registration”. It was also pointed out that the relevant title sheet was for flatted property. Tenements and flatted properties were seldom mapped. The Keeper had adopted the “steading extent method” of mapping. This provided that the steading extent of the tenement is mapped by red edge enclosing the area of ground that includes the tenement and any ground, exclusive or common, that belongs to the tenement. According to para 67 of Explanatory Notes to the 2012 Act, section 16(1) “allows the Keeper to continue to use the approach of depicting a tenement as a site of single extent on the cadastral map”. Accordingly the Keeper did not accept that the logic of PMP Plus would suggest that the coal cellar was not adequately identified in the title sheet with the consequence that the title sheet did not set out a title to those subjects.

Tribunal’s consideration

[19] The applicant’s submissions touched on the question of the Keeper’s indemnity. We are conscious that claims for legal expenses incurred are in practice made by separate process under the relevant indemnity provisions. As the Inner House has pointed out (MRS Hamilton Ltd v Keeper (No.3) 1999 SLT 855) there may be an overlap between matters which can be dealt with as expenses of process and claims for reimbursement under the Keeper’s indemnity. The indemnity provisions are statutory and different in nature to the normal principles which the Tribunal would apply in determining any motion for expenses. We would therefore apply our practice, as discussed in para 11 of Gray v The Keeper, that we should approach expenses in the normal well-established way and without regard to the possibility of indemnity.

[20] In this case we have sympathy for both the applicant and respondent for the position in which they found themselves. The underlying dispute was not of their making. The inaccuracy in the register had caused a dispute which had to be resolved by one method or another. The applicant appears to have had no choice but to proceed to the Tribunal in order to preserve his property which physically extended beyond cellar 28. The respondent had a title sheet, with indemnity, stating that she was proprietor of cellar 28. Both parties were put in a position of requiring to expend time and money to investigate the respective titles and the history and degree of possession by each of them and the respondent’s predecessors. Only once this was done could a fully informed view be taken on the merits of parties’ positions. Our impression is that the adjustment process was somewhat iterative on the question of possession suggesting that a final view of the merits would need to be taken fairly late in the process. There is no question that both parties reasonably incurred expense in bringing the title overlap situation to a conclusion.

[21] Nevertheless, we think the Keeper is well founded in drawing a distinction between the cause of the expense of the process of litigation, as opposed to the cause of the dispute. While the Keeper’s action of accepting an application for registration may bring about the latter, it is generally going too far to say that it is the cause of the former, for the reasons discussed in Gray. In the present case it would appear that the Keeper’s position was known before the start of the Tribunal proceedings. She had accepted the register was inaccurate and adopted a neutral position with regard to the issue of possession. So in general terms we do not think there is a good basis in principle for a finding of expenses against the Keeper.

[22] We did have one concern as to the Keeper’s position in the proceedings. The Keeper had very properly accepted at the outset that the register was inaccurate on account of a serious irregularity in the progress of the sasine titles prior to first registration. This was an inaccuracy which, of course, might or might not be rectified depending upon the issue of possession. However, it appeared to the Tribunal that there might be a more fundamental problem with the registered title, namely the adequacy of the identification of the coal cellar. The Keeper’s Answers that cellar 28 had been “identified by written description within the property section,” apparently implied that she took the view the description was valid for the purpose of registration. If she was wrong about that, it is difficult to see how the issue of section 9 possession could have a bearing on the matter. Had the Keeper instead conceded that the description was invalid, the case might have been short circuited at an earlier stage without reference to the whole tortuous history of possession. Thus the Keeper’s position in the matter may have inadvertently prolonged the proceedings.

[23] However, the Keeper does not accept that the description of the coal cellar had been inept for registration. Having read the Keeper’s submissions we admit to remaining somewhat puzzled as to how the coal cellar can be said to have been “sufficiently described by reference to the ordnance map,” i.e. by reference to the second principle identified in PMP Plus Ltd v The Keeper at para [57]. The line of coal cellars is not described as such within the red edged area, and coal cellar 28 is not distinguished on the map at all. Indeed the title mapping may have been out of date all along since it does not show the extended and wider storage building developed by the applicant comprising cellars 28, 29 and the other area. There is nothing in the description, verbal or mapped, to show where coal cellar 28 had been or to distinguish it from the remaining cellars. However, we do not think that in present context, i.e. written motions for expenses – it is appropriate for us to take a view upon the Keeper’s practice of a “steading extent method of mapping” under the 1979 Act and prior to the introduction of section 16 of the 2012 Act. The issue is likely to have wider implications. Parties did not raise the validity issue themselves until the morning of the hearing and, due to the good sense of their agreeing settlement, the matter did not have to be determined. In these circumstances we are not disposed to find the Keeper liable for expenses.

Conclusion

[24] We shall accordingly refuse the motions.


Certified a true copy of the statement of reasons for the decision of the Lands Tribunal for Scotland intimated to parties on 18 January 2018

Neil M Tainsh – Clerk to the Tribunal