In this case Tesco Stores Limited ("Tesco") apply to the Tribunal by way of appeal under section 25 of the Land Registration (Scotland) Act 1979 against a decision of the Keeper refusing to rectify the Land Register in respect of an entry relating to subjects in the middle of White Cart River at Lonend, Paisley and, separately, apply to the Tribunal for an order requiring the Keeper to rectify the Register in relation to these subjects. The application is opposed by Safeway Stores plc ("Safeway")who were conjoined as an Interested Party. The nominal respondent is the Keeper who resists the appeal but takes a neutral position in relation to the application.
The appellants are currently proprietors of subjects at Lonend, Paisley which are registered under the title number REN93746. The subjects comprise a narrow irregular shaped area of land lying to the south side of the White Cart Water and including part of the alveus of the river. It is bounded on the west by the east edge of a footbridge across the river. The subjects, as currently shown on the Register, extend on their north side to the centre line of the river. The north boundary is about 5 metres long. The subjects have been registered, in the circumstances set out more fully below, under express exclusion of indemnity. We shall refer to these subjects as the "Tesco subjects" although the subjects as registered include the disputed overlap area described below.
Safeway are currently proprietors of extensive subjects known as the Anchor Mills site at Lonend, registered under the title number REN56654. There is no qualification of indemnity in relation to this title. The subjects lie within a wide loop of the White Cart Water. One part of the subjects, including the footbridge and an area immediately to the west of it, extends to the southern bank of the river. For the most part, however, the boundary on the south, west and north is the centre line of the river. The present dispute arises from the fact that title REN56654 shows the south boundary immediately to the east of the footbridge on a line which is some 2 metres to the south of the centre line. In other words, there is, at that point an overlap of titles REN93746 and REN56654. A small area in the middle of the river, immediately to the east of the footbridge appears in both titles. It is convenient to refer to this area as the "overlap area". It is this area which is the subject of the dispute before us.
It is not disputed that the original title plan REN56654 did not include the overlap area. The boundary at the relevant point was initially, and correctly, shown as the centre line. It is common ground that the current title plan is inaccurate and that the inaccuracy is entirely due to an internal administrative error by the Keeper's staff arising at the time when the map base used by them was "digitised". It is also common ground that the inaccuracy cannot be rectified if rectification would "prejudice a proprietor in possession" within the meaning of section 9(3) of the Act. It was agreed that, as far as our powers were concerned, nothing of substance turned on the distinction between the appeal and the application for rectification. The main issue for determination was whether, in the particular circumstances, Safeway were "proprietors in possession" of relevant subjects and, if so, whether rectification would be to their "prejudice".
We heard this application on 6, 7, 8, 9 and 13 March 2001. At the hearing the appellants were represented by Roy L Martin, QC, and Sarah P L Wolffe, Advocate, instructed by Messrs Brodies, Solicitors. The Keeper was represented by Ruth Crawford and Safeway Stores plc by Laurence Murphy, QC. By agreement of parties Mr Murphy presented his case first. He led evidence from Gordon J M Keir BSc MRICS currently Project Director of Highland Properties (Scotland) Limited who had formerly been Regional Estate Manager for Safeway during the relevant period; Iain J Michie MRTPI MRICS of Montagu Evans, a planning consultant; and, Peter Lyttle B.Eng MICE, a civil engineer with Halcrow Crouch.
Thereafter Mr Martin led evidence from David J Conway B Sc, Area Manager Barr Construction; Kenneth Blackwood, civil and structural engineer and Director of Goodsons Associates; William R Fraser, HNC (Construction), Barr Construction; Patrick W Maguire, Senior Case Officer, Registers of Scotland; and, Valerie A J Clough, Legal Director, Senior Legal Group, Registers of Scotland.
It may be observed that the parties' careful examination of the whole background facts and circumstances gave us a fairly full picture and allowed any significant issues of potential dispute as to fact, to be resolved. It became apparent that the issues between the parties turned essentially on questions of law. We considered it unnecessary to carry out any site inspection.
History of the title
The history of the formal dealings with the titles is helpful to an understanding of how the present problem arose and we accordingly start by setting this out in chronological order.
Title to the Safeway, Anchor Mills, site was first registered on 1 October 1984 when the reference REN56654 was allocated. The relevant part of the south boundary was shown as the centre line of the river. On 9 September 1996 an office copy of the Title Sheet as at that date and showing that boundary was issued, and on 10 September, Michael Johnston was registered as proprietor.
A disposition of 4 July 1997 by Botany Investments Ltd to J & P Coats (UK) Ltd was the first title of which we had evidence relating to the appellants' subjects. The subjects were described only by plan. The representation of the relevant subjects on plan was very small. The north boundary appeared to be shown as touching the centre line of the river but running south west at an angle from it. Because of its scale the plan is difficult to interpret with any degree of confidence. However, for present purposes it can be accepted that the subjects, thus conveyed, were the same as the subjects now comprised in REN93746 including the overlap area. This was a disposition a non domino. The subjects had not previously been registered and this particular transaction did not trigger registration in terms of section 2 of the Act because it was not for valuable consideration. The disposition was, however, registered in the Register of Sasines on 11 August 1997.
In about July or August 1997 the plan indicating the area of the registered title REN56654 was altered consequent upon the digital conversion of the mapbase. This error occurred internally in the Keeper's office. Unsuccessful attempts have been made to determine precisely what happened and when. It is clear that the title sheet was revised and that the revision was consequent upon a change to the Ordnance Survey mapbase. As a result of this revision the relevant part of the southern boundary was shown on the title sheet to lie some 2 metres south of the centre line of the river. This was a change from its previous position on the centre line. The title sheet as held by the Keeper is in electronic form and there is nothing to suggest that anyone was aware that there had been any change in boundary at that time.
In the course of 1997 Safeway acquired Mr Johnston's interest in the whole subjects REN56654. For reasons connected with the financial arrangements for conversion to flats of part of the subjects, known as the Abbey Mill, disposal of the whole site was made in two parts. Firstly, the Abbey Mill subjects were effectively broken away from REN56654 and separately registered under a title number REN92375 in the name of Anchor Developments Limited, a company controlled by Safeway. By Disposition dated 30 September 1997 Mr Johnston conveyed to Safeway the "subjects registered in the Land Register of Scotland under the title number REN56654" under exception of the Abbey Mill subjects. The plan attached to this disposition showed the boundary of the excepted subjects but not the external boundary of the subjects conveyed. At that stage the subjects held in electronic form on the Register under the title REN56654 included the overlap area. As we shall see, however, neither party to the transaction had any reason to be aware of this. Safeway applied for registration of the subjects in REN56654 under exception of the subjects in REN92375. The latter subjects were wholly surrounded by dry land included in REN56654. For present purposes, the subjects comprised in REN56654 and REN 92375 can conveniently be referred to as the "Safeway subjects". The title to each was registered on 8 October 1997.
The appellants acquired title to the Tesco subjects from J & P Coats (UK) Ltd by Disposition in their favour dated 23 December 1997. That disposition described the north-east boundary as being, 'the medium filum of the White Cart Water'. The nominal date of entry was 30 December 1997. This Disposition was submitted to the Keeper for registration. It was registered on 14 May 1998. This was the first registration in respect of any part of the Tesco subjects. It was given the registration number REN93746. The title plan in the original REN93746 showed the north boundary of the subjects on the line then shown in the Register as the south boundary of REN56654 at the relevant point. In other words the subjects described as the overlap area were not included in the original REN93746.
In March 1998 solicitors acting for Safeway had obtained from the Keeper an office copy of the title sheet of REN56654. This in fact included the overlap area which had been part of the registered title, held electronically, since the revision in about July 1997. However, it was not established that the significance of the position of the relevant south boundary was recognised by anyone at that time. In June, a further office copy of the title plan was requested and was received by Safeway's solicitors on 23 June 1998.
In or about September 1998, solicitors acting on behalf of Tesco discussed the state of the registered titles with the Keeper's staff and wrote on 16 September setting out the detail of the change in the title REN56654. They made various further representations to the Keeper as discussed below. The Keeper declined to rectify REN56654 but agreed to alter REN93746 to include the overlap area. Indemnity in respect of that area was excluded on two grounds. The first ground, which covered the whole Tesco subjects, was in respect of the fact that the title was based on an a non domino Disposition. In relation to the overlap area, however, there was a specific exclusion in the following terms "As regards the part tinted blue on the Title Plan, Indemnity is excluded in terms of Section 12(2) of the Land Registration (Scotland) Act 1979 in respect that the said part tinted blue was registered under Title Number REN56654 on 8 October 1997 and ranks prior to the Disposition to Tesco Stores Limited registered 14 May 1998 on which the entitlement of the said Tesco Stores Limited was founded".
In the result, therefore, Safeway are shown to have the effective registered title to the overlap area. This area is also shown in the current title of the appellants but its inclusion in their title will be of no practical significance unless the Safeway title is rectified.
Actings of the parties
In November 1996 Mr Johnston obtained outline planning permission to erect a supermarket, car park and filling station on the Anchor Mill site. Various derelict industrial buildings were to be cleared. The old Abbey Mill building had to be retained and the permission included conversion of this building to flats. The footbridge, a listed structure, was to be relocated to the west and a new vehicular bridge was to be built in its place. The planning consent required this access. Safeway acquired the subjects with the intention of developing them within the scope of this planning permission.
They took entry to the Safeway subjects in or about October 1997. However, they were not able to make any active use of them, at that time. Their planning for use of the site had started before conclusion of missives but much further planning work was required. Actual physical occupation of the site was limited to the routine attendance of security guards and visits by a variety of personnel including joiners, engaged from time to time in the securing of parts of the subjects, and engineers and surveyors. A palisade was erected round the mill buildings. Public access to the Safeway subjects from the south was prevented by a secure gate, closing the footbridge at its south end. When Safeway acquired the subjects they were unaware of the erroneous change in the south boundary and assumed that their title to the east of the footbridge ran only to the centre line of the river. They proceeded to prepare plans for the full development of the site. For present purposes, we are concerned only with the planning for the vehicular bridge. This was only one aspect of the many matters engaging the attention of Safeway and their advisers as they worked up proposals for development of the site.
The constraints of the boundaries and in particular the location of the south east corner of the said Abbey Mill in a position close to the northern land fall of the existing pedestrian bridge gave rise to difficulty in respect of the scope for width and alignment of the proposed new vehicular bridge. It required to have three carriageways and two footpaths. There were constraints in respect of road levels and other physical aspects of the connection of the bridge and the existing dual carriageway on the south bank of the river. Safeway required to demonstrate to the Roads authority and to the Planning authorities that adequate access could be provided. As a basis for their measurements they had a detailed topographical study carried out for previous owners by Masons, Land Surveyors in October 1995. They were assisted by ground position stations established at the time of that survey. The original solution developed by engineers to meet the various difficulties was to design a curved and skewed bridge which would meet the relevant planning and engineering criteria within the constraints imposed by the need for the bridge to fit between the said corner of the Abbey Mill building and the relevant boundary of the site. At that time this was assumed to be the centre line of the river and the critical "pinch" point to be where that line met the east edge of the existing footbridge. By August 1997 a satisfactory design solution for a curved bridge had been found and selected. The design was then worked up to a level of detail sufficient for submission to the Roads authority for approval.
It was recognised that acquisition of what we have referred to as the Tesco subjects would have been advantageous to Safeway. Not only would ownership of these subjects have allowed a straight bridge to be accommodated, it would have made construction of such a bridge a much easier project. We heard evidence to the effect that Safeway had initially expected to be able to acquire these subjects but had discovered that Mr Johnston had no title to them. It is clear from the fact that the appellants' title depends on the said a non domino Disposition in 1996 that doubt exists as to the true state of the title. It appeared that the missives between Safeway and Mr Johnston obliged him to try to obtain title to this land for the benefit of Safeway.
The circumstances in which Tesco came to acquire the title were not explored and we heard no evidence of any intended use. Mr Keir described the acquisition as "strategic" on Tesco's part. We understood that Tesco wished to be able to develop a supermarket on an adjacent site. It may be assumed that planning permission would not have been available for both supermarkets but we heard no evidence about this. However, it was established that representations were made on behalf of Tesco that Safeway would be unable to provide adequate access to their development, broadly on the basis that a suitable bridge could not be fitted between the corner of the Abby Mill and the said "pinch point".
It was clear that space for an adequate bridge was extremely limited. The design required to allow not only for the physical presence of the completed bridge but to allow for its construction without encroaching on Tesco airspace. As we have seen, the precise position of the relevant boundary restraint was thought to depend upon establishing the point of intersection of the centre line of the river and the east edge of the footbridge. This bridge was constructed with supporting spars which projected some half metre east of the main line of the bridge. The title plan did not attempt any separate identification of these projecting spars. A question arose as to whether the boundary followed the outer edge of the projecting spars or the main line of the bridge. This required investigation of the title. On or about 15 June 1998 Mr Lyttle received a copy title sheet from Safeway's solicitors. This was a photo copy of the title sheet issued in March 1998. Using this he realised that the boundary seemed further to the south than he had previously assumed and that a straight bridge could be accommodated. He reported this at a meeting of the project team on 22 June 1998. Because of the small scale and the dangers of distortion in copying and because the precise position of the relevant boundary point in the centre of the river was of critical importance to construction of the bridge there was a reluctance to rely on the available copy. Mr Keir instructed solicitors expressly to report on the title. As we have seen they obtained a further office copy of the title REN56654 on 23 June 1998.
Because of the original understanding that the relevant boundary was the centre line, Mr Reid raised expressly with the solicitors, the question of whether he could rely on the copy title sheet as issued by the Keeper. He was assured that he could. Although it is clear that there was a distinct change in understanding as to the location of the boundary, there was no evidence that anyone acting for Safeway at the time realised that the title sheet itself had been changed. The scale of the title sheet is comparatively small. Although the change is immediately obvious on direct comparison between the original title sheet and the current one it might not have been obvious on examination of the current sheet on its own. It may, of course, be assumed that solicitors instructed to report on this specific issue would recognise that there had been a change in the boundary but we heard no evidence of this.
In reliance on the revised boundary, in other words on the assurance that what we now refer to as the overlap area was within the Safeway title, Mr Lyttle proceeded to develop plans for a straight bridge. Space remained limited and construction methods would be constrained but a straight bridge could be built. Plans for this were submitted to the roads and planning authorities. It was clear on the evidence that Mr Lyttle proceeded with this work after clarification of Safeway's title and confirmation from their solicitors that the title as registered could be relied upon. However, what precisely was said to others about the title was not established. There was reference to the fact that the plans for the straight bridge made obvious use of land to the south of the centre line at the critical spot and that these plans were discussed openly with local roads and planning authorities. The precise dates of such discussions were not established. Mr Keir made it clear that they had not wished any publicity to be given to any suggestion of a dispute between Safeway and Tesco. He told us that the authorities accepted his assurances but whether these were assurances that space was available for the bridge or express assurances that Safeway had a title which extended south of the centre line was not spelled out.
We heard evidence that the application to the roads authority would have three stages. The first was to obtain technical approval in principle. It appears that this did not require any specific formalities. It was a matter of discussion with technical staff. Drawings were submitted and discussed before the end of July 1998 which did show the new south boundary. A drawing was issued to Safeway's planning consultants on 8 July 1998 for use in connection with the planning application. These drawings showed a line in the river to the east of the footbridge which in fact ran along the new south boundary as shown in the title. The plans were not marked to indicate that the line in the river showed the Safeway boundary. Indeed, to the west of the bridge a similar line was shown lying in about the middle of the river. This made no attempt to follow the actual line of the boundary of Safeway's title which, at that point, actually extended to the south bank. Whether the significance of the lines in the river lying south of the true centre line was recognised by the roads authority or by the planning authority was not spoken to. No formal decisions were taken in the period up to 7 August 1998 and there was no evidence of any formal decision taken thereafter which required to rely on Safeway having a good title to the overlap area. Halcrow Crouch's records show that drawings of the bridge were issued to Renfrewshire Council for approval in principle on 3 September 1998. That drawing showed the centre line of the river and did show the line of Safeway's boundary lying to the south of it. After Technical Approval there would be a requirement to obtain formal permission to construct. That stage might be deferred until after full planning permission.
A Renfrewshire Council Decision Notice for Planning Consent dated 13 November 1997 showed the boundary as the centre line and there was no formal revision of the application plan. It is clear that there were discussions throughout 1999 in which reference was made to the Boundary as lying to the South of the centre line. For example, an application for approval of reserved matters made on 29 October 1999 was accompanied by a plan showing the boundary lying to the south of the centre line and other plans were exhibited to the planning authorities which showed that boundary. It was not established that these authorities were concerned with issues of title but the evidence can be accepted as establishing that Safeway were openly representing themselves as having control of the overlap area.
Tesco were aware of the importance for Safeway of the precise position of the boundary. They wished to assert that they were in possession of the Tesco subjects - including the overlap area. We have some difficulty in reaching a conclusion as to Tesco's state of knowledge of the title in the period before September 1998. They did not attempt to lead direct evidence on that issue. We heard that, in or about March 1998 it was being asserted on behalf of Tesco or an associated party, that Tesco owned land which prevented Safeway from providing proper access. A Mr Forbes who wished to advance a competing development made this assertion at a public meeting under reference to a Disposition which he had in his hand. It may be assumed that this was a copy of the title of Tesco or their predecessors. As we have seen that title can be accepted for present purposes as showing ownership of the south side of the river east of the footbridge extending to the centre line. At that time, any doubt about their title to the land extending to the centre line turned only on the fact that their title was based on an a non domino disposition. Tesco did not raise with the Keeper any question about the mistake in the registered title until September 1998. Their title, as registered in May 1998, did not include the overlap area but there was no positive evidence to suggest that this was recognised at that time. Mr Martin did say, in submission, that when, on 17 July 1998, Tesco learned of the mistake, they put in hand installation of the markers. However, we have been unable to identify evidence of Tesco becoming aware of the mistake on that date. They might well have become aware at that time that Safeway were showing their boundary as going beyond the centre line. Tesco clearly can be taken to be aware that their own title was susceptible to challenge. On the evidence, however, it is doubtful whether they were aware of the mistake in the title as registered prior to receipt of a letter from Safeway's solicitors dated 8 September 1998. Indeed, the terms of their solicitor's response on 14 September suggest that, even at that stage, the significance of what was shown in the Register was not realised. The solicitors for these two parties discussed the matter by telephone and, by letter of 15 September, Safeway's solicitor confirmed the discussion in terms which showed his apparent acceptance that Tesco were not aware that the titles as registered showed the boundary as being to the south of the centre line. We heard no evidence of any issue to Tesco by the Keeper of a copy title sheet at any time prior to that date and no explicit mention of the issue of such a sheet in the correspondence thereafter. We heard from Mr Blackwood, an engineering contractor, that Tesco convened a discussion on site on 27 July 1998 to arrange for markers to be placed in the river. The markers were to show their title extending to the centre line. Mr Blackwood's understanding at the time was that Tesco thought their title did extend to that line. He was led by Mr Martin to confirm that he understood that they had had solicitor's advice before the meeting. The nature of the advice was not elicited but on the face of these letters of 14 and 15 September it seems clear that the particular problem of the overlap area had not been detected at that time. The whole actings on behalf of Tesco are consistent with their belief that they had a good title up to the centre line when they caused the first posts to be positioned, subject, of course, to an awareness that their own title was not based on a prescriptive progress.
They made arrangements for marker posts to be placed on the alveus of the river including two poles immediately to the south of the centre line. The precise position for the poles was predetermined by a survey. The work of positioning the markers was carried out by Barr Construction on 7 August 1998 using a crane and supervised by an engineer in a boat on the river. The poles had concrete bases of about one cubic metre. The bases of the poles nearest the bridge were placed about a metre away from it to avoid risk of fouling the bridge while they were being lowered by the crane. Notices were displayed on the poles which read: "Private property of Tesco Stores Ltd. Unauthorised access prohibited". Subsequently Tesco were required by the local authority to remove debris in the river which had collected round the poles. They made arrangements for regular inspection of the river and the removal of debris. The local authority was given the telephone number of Barr Construction for emergency call-out in case any blockage occurred. It was realised that although the poles had been positioned to the south of the centre line, the concrete bases lay over the line. Barr Construction were instructed on 18 September to adjust the position of the bases to leave them wholly to the south of the centre line. This work was completed by 21 September.
If Tesco did know of the mistake before 7 August 1998 and deliberately set up their attempts at possession with an eye on the provisions of sec 9(3), less weight might fall to be accorded to these actings in any competition as to possession. But the actings could not be ignored and, indeed, it was on the basis that they did know of the mistake that submissions were advanced. On the evidence, however, we find on balance of probability that Tesco were not aware of the mistake in the title when the markers were first positioned.
When Safeway became aware of the presence of the markers, they instructed their engineers to carry out a survey to determine the exact location of the posts. The survey was carried out on 24 August 1998. The survey was carried out by optical measurement techniques using the ground position markers established by Masons in October 1995. The surveyors did not require to go in or on the river. Safeway did not take any physical action in respect of the poles.
Safeway did not take steps to have the markers removed because they did not wish to give any public credence to the claims by Tesco. There was a concern that even if Tesco claims could be proved ill-founded, the very existence of a dispute might have an adverse effect on the progress of their planning applications. Safeway were aware of proposals for a competing development. They instructed solicitors to assert their rights direct to Tesco. This was duly done. The first letter of 8 September was followed by the letters referred to above and later, following involvement of the Keeper as discussed below, a substantial exchange of correspondence among the parties. A witness accepted Mr Murphy's description of this as a " tennis match." Nothing of substance turns on this correspondence.
At some point during the winter of 1998 the two poles in the centre of the river were washed away by floods. One was carried to a position against the bank. On 21 May 1999 Tesco placed new marker posts in the river. They instructed Barr Construction to place two new posts within the overlap area. The bases were 2 metres square and 0.5 metres deep. The intention was that these markers would better resist the force of the water and remain in position. Because of the irregular shape of the bed of the river, the bases were placed on sandbags. The bags were positioned by divers who walked on the bed of the river. The positioning of the bases was assisted by these divers. Notices were mounted on the poles as before.
On the morning of 21 May, Safeway became aware of Tesco's activities and delivered a letter to Tesco requiring them to vacate the overlap area failing which it was said that Safeway would instigate interdict proceedings. However, the posts remained. Safeway did not proceed with court action. They arranged for their engineers to confirm the location of the posts. They then instructed contractors to remove the posts and place them on the southern side of the river within the land admittedly owned by Tesco. This was done on 21 June 1999. This activity on 21 June was the only activity by or on the part of Safeway which involved any physical use of the overlap area. Tesco made no attempt to replace the posts. They made formal application to the Keeper and later to the Tribunal for rectification of the title.
Communications with the Keeper
On or about 15 September 1998, Tesco's solicitors made contact with the Keeper's staff to find out more about the apparent problem. On 16 September they wrote to the Keeper seeking clarification of the northern boundary of their subjects. On 10 November the Keeper wrote to Tesco's solicitors stating that as Safeway asserted possession it would not be possible for the Keeper to correct the Register as he had no authority to arbitrate. Correction would be possible by agreement and he was at that time still awaiting a response from Safeway. On the same date he wrote to Safeway's solicitors referring to the error and proposing that it should be corrected. On 11 November and 1 December 1998 solicitors acting for Safeway wrote to the Keeper asserting that Safeway were in possession of the overlap area. In particular they asserted that Safeway owned, occupied and possessed all of the land delineated in red on the title plan which was provided and that they "continually carry out surveying, engineering and construction works specific to the southern boundary and the White Cart Water". They also asserted that Safeway had procured the removal of material encroaching on their land. The assertions were, to say the least, ambiguous. They were, presumably, based on Safeway's possession of the REN56654 subjects as a whole. We heard no evidence of any engineering and construction works related in any way to the overlap area. The only evidence which might have been a basis for the assertion that Safeway had procured the removal of material encroaching on their land at any relevant place was that relating to Tesco's actions in adjusting the position of the concrete bases to keep them out of Safeway's undisputed part of the river. Safeway had, in fact, had no direct physical dealings with, or use of, the overlap area. Their surveying activities involved optical sighting across the overlap area but no form of physical intrusion of the relevant air space.
Similar assertions were repeated in a letter of 22 March 1999 which also asserted that "[Safeway had] obtained certain Local Authority approvals and consents in relation to construction works affecting the area of land delineated in red on the said Title Plan."
By letter of 1 April 1999 intimation was made to Safeway's solicitors of the Keeper's decision "to issue your client's Land Certificate without exclusion of indemnity as regards the inclusion of the area that was shown in error on the title plan to the office copy". On said date intimation was given to solicitors acting for Tesco that the Keeper had concluded that deletion of the overlap area from REN56654 was " beyond his present authority". It was proposed that the overlap area would be added to REN93746, but marked so as to provide a reference to the competing title REN56654 and with a note of exclusion of indemnity.
Following further correspondence the appellants submitted applications to the Keeper in the form provided by the Land Registration (Scotland) Rules 1980, Rule 20 for an Application for Rectification of the Register. A letter of 29 October 1999 was sent on behalf of the Keeper setting out the extent of rectification which would be made. This letter was based on the decision taken by the Keeper prior to 1 April 1999 and in terms similar in effect to the letters of that date. A Land Certificate giving effect to that decision was issued to the appellants on 9 December 1999.
Mr Murphy set out the detail of the statutory provisions for Registration of Title. He stressed the importance of the integrity of the Register and made the point that the Act was concerned with "interests in land": section 1. The issues for the Tribunal turned on the provisions of section 9 and, in particular, the question of whether rectification of the Register would prejudice a proprietor in possession. He referred briefly to the provisions for appeal: section 25. An appeal involved challenge of a particular decision. This had to be contrasted with an application to the Tribunal for rectification which would be by hearing de novo. He accepted that we had heard a hearing de novo and that ultimately nothing turned on the distinction in the present case.
The question of whether section 9(3) applied turned, in his submission, on whether Safeway were proprietors; whether they were in possession; and whether they would be prejudiced. These questions raised the issue of what had to be possessed. He submitted that it was the interest in land registered as REN56654 and not simply the overlap area. The Keeper was concerned with the subjects on the title sheet. His obligation of indemnity related to this. Although his contention was that, in the present case, it did not matter whether possession was assessed by reference to the whole site or the overlap area, he submitted that the former was in accordance with the statutory framework and was the only way in which the provisions of section 9 made sense. There was no warrant for looking at the matter narrowly. The application was to rectify the registered interest.
Mr Murphy next carried out a careful examination of various authorities dealing with the proper approach to the Act. Kaur v Singh 1999 SC 180 was an important case. It set out the proper approach to the Act. It supported the following propositions: (a) Before rectification one would expect to be able to identify "exceptional circumstances"; (b) The most important factor is the policy of the Act to protect the proprietor in possession; and (c) Possession of the "subjects" means subjects identified by reference to an interest in land.
In the context of that case the issue of physical possession had not required elaborate discussion. It established that what had to be possessed was the land rather than a legal interest in it, but Mr Murphy submitted that the only way to identify the land in question was by reference to the land certificate. It would be artificial, in his submission, to look only at tiny pieces of land. There was an important distinction to be drawn between evidence of possession necessary for prescription and evidence for the purpose of registration. He referred to dicta at page 193 G-I. The case also provided some support for reference to English authority although this admittedly required care. Mr Murphy referred us to the decision in Kingsalton Ltd and Another v Thames Water Developments Limited and Others (a decision of the Court of Appeal of 19 January 2001). He accepted, however, that the comment at paragraph 21 of the judgement under reference to section 5 of the Land Registration Act 1925 suggested that English law might have a concept of an "estate of fee simple in possession". If the Court in that case was dealing with such a recognised concept, dicta about a presumption of possession might well turn on specialities of English law. Although he referred to a passage indicating that on registration of a title to disputed land in England, the registered proprietor must be taken to have possession unless and until dispossessed, he accepted that no real reliance could be placed on the decision without a full understanding of the background of English law involved.
It is convenient to note in relation to possession that in his reply to Mr Martin's submissions, Mr Murphy referred to the general discussion of possession in Gordon Scottish Land Law 2nd ed. chap. 14 and in particular the passage at para. 14.09. He also referred to para. 12.18 dealing with possession in the context of the Land Register.
On the question of prejudice, Mr Murphy stressed that we were concerned with prejudice consequent on rectification. In Dougbar Properties Ltd v Keeper of the Registers of Scotland 1999 SC 513 the Court had to consider a claim for indemnity following rectification. It was held that loss was to be assessed by comparison of the situation immediately before and after rectification not by reference to the situation before the inaccuracy arose. He submitted that this approach also applied to assessment of prejudice.
Mr Murphy then turned to consider the circumstances of the present case. He submitted that it was obvious that Safeway were proprietors of the disputed area. He did not deal at length with this
iin his opening submission but returned to it in response to Mr Martin. He emphasised the importance to be given to the Register and adopted Miss Crawford's submissions on the issue. Safeway were registered proprietors since the time, in or about July 1997, when the title sheet was altered or, at least, since the issue of the title certificate in March 1998. They were obviously to be regarded as proprietors for the purposes of sec 9(3).
Possession was proved of the subjects as registered. Safeway had taken possession of the Anchor Mill Site as a whole. It was not necessary to look at the overlap on its own. He made no positive attempt to found on the action of Safeway in removing the Tesco marker poles in June 1999 as supporting possession. This was part of what he described as the "tennis match" of contrived possession which he said should be disregarded.
Mr Murphy emphasised the importance of identifying the interest in land. That was what was to be corrected. The relevant interest in land was the whole interest shown by the title sheet. It was possession of that interest as a whole which had to be established. An attempt was made to test this submission by reference to the hypothetical case of an estate owner possessing a large country estate on a registered title which inaccurately failed to show that a lodge house, apparently an integral part of the estate, had been split-off on a previous sale. Circumstances could easily be envisaged in which the proprietor of the estate proceeded to make plans for the estate on the assumption that he had title to the lodge house. Mr Murphy accepted that actings which might normally be of sufficient quality to demonstrate possession of the estate as a whole would not necessarily suffice to establish possession of the lodge. It would be a question of circumstances. Proof of adverse possession of the lodge house would show that the estate proprietor did not in fact have possession of it. The Register could therefore be rectified to show the true interests. Mr Murphy put his submission on the basis that "the quality of possession should be tested as a matter of evidence by reference to the registered subjects as a whole". In relation to the present case, all factors relevant to development of the site could be taken into consideration including the physical presence of joiners, security staff, engineers, development staff etc.
If the test was to be limited to the overlap area, various matters should also be kept in mind. He submitted that nothing could be taken from the competing actings of parties after the dispute arose. This was the tennis match. These actings were artificial and misleading. The critical time was June 1998 when Safeway altered their position in reliance on the title. Thereafter their actions showed that they regarded themselves as in possession. Although he observed that it was very important that they had acted in good faith in reliance on the title, he accepted that good faith was not relevant to his submission. The important matter was that they did in fact act in reliance on their title as shown at that time. Having regard to the nature of the subjects no more was needed. A subjective disposition towards use was all that could be expected from a proprietor with title to part of a river. Physical actings in relation to the overlap area included the actings of Safeway engineers plotting the position of the original Tesco marker poles. He accepted that the physical removal of the second set of markers was not relevant to the appeal because the Keeper had made his decision before that time. It was, however, a factor to which the Tribunal could have regard.
Safeway actings in reliance on the right to possess the overlap were overt. They developed a straight bridge. Their plans clearly showed the new boundary. These plans were made openly and publicly in their submissions to the council. In summary, he submitted that proof of possession of the particular overlap area was irrelevant when proof of possession of the registered subjects as a whole had clearly been established. However, if proof of possession of the overlap was necessary he submitted that there was sufficient material. In any event, he submitted that, if the issue was balanced, the policy of the Act favoured Safeway as proprietors.
He submitted that prejudice had clearly been established. This did not involve a balancing of equitable considerations. There was no need to have regard to a broad picture. It was a simple matter. The Act referred to 'prejudice' tout court. There was no justification for introduction of words such as 'substantial' or 'material'. As matters stood Safeway were proprietors of the overlap area. On rectification they would not be. That was sufficient prejudice on the approach shown in Dougbar. In the present case there was clear evidence of specific prejudice which would arise from such a change. They would face greater difficulty in construction of a bridge. A curved bridge would cost a further £280,000 or so. They would have lost the wasted expense in design of the abortive straight bridge. If a straight bridge could be fitted in it would cost over £20,000 extra to build because the contractors would not be able to work over the overlap area.
Mr Martin also took us in some detail through the statutory provisions. He stressed that, due to the exclusion of indemnity, if Tesco lost the overlap area, they would have no remedy under the Act although the problem was entirely due to the unilateral and unexplained action of the Keeper creating an inaccuracy. The exclusion of indemnity was for a reason quite unconnected with the problem.
He submitted that the starting point was to consider whether there was any proper registered interest in the overlap area. An apparent interest had become registered owing entirely to spontaneous actings by the Keeper. There had been no conveyance of any interest to Safeway and certainly no conveyance for value. There had been nothing to trigger registration in terms of section 2(1)(a). The Keeper did have power to register in other circumstances on application but there had been no application. There was no purported application and certainly no application complying with the provisions of section 4. He submitted that there was, accordingly, no registered interest in the overlap area. For the purposes of the Act " register" must mean a register of properly registrable interests in land. Section 9 had to be understood as referring to the proprietor of a registered interest. The fact that the overlap area was shown with a registered number was simply a matter of internal administration. It could not be accepted that a red line related to a number created a registered interest. Without a proper registered interest, section 9 simply did not come in to play.
If, contrary to this submission, the Tribunal held that there was now a registered interest in the overlap area, the next question was one of construction of section 9. He submitted that the phrase "prejudice a proprietor in possession" should be looked at as a whole. The evidence bearing on possession could be assessed by reference to potential prejudice. The question was whether Safeway could be said to be in possession in such a way as to suffer prejudice. This could be put on the basis that certain types of possession should be ignored de minimis if the potential prejudice was insignificant.
Mr Martin suggested that underlying the submission for Safeway was the concept that the registered area was an individual entity which had to be treated as such, even if the boundaries changed. But it was illogical to test possession by reference to such an entity where the boundaries had in fact changed. In any event, prejudice could not arise from Safeway losing an area which they did not expect to receive and did not pay for. That was why it was necessary to test possession and prejudice by reference to the specific area affected. It was not possible to isolate prejudice from possession.
The Dougbar Properties Ltd case was quite a different situation. It was a case about indemnity for loss under the provisions of section 12. It was not about physical occupancy of a spontaneously registered interest. The issues at indemnity stage were purely issues of quantum. The approach taken in that case was not appropriate at the section 9 stage of assessment of possession and prejudice.
Mr Martin submitted that the relationship between possession and prejudice was important and required examination of the facts in each case. There might, for example, be a large area of land which was entirely worthless so that loss would not lead to prejudice. There might be a small area of land which was of high value. In this case the overlap area was not a ransom strip. Development could proceed. It was simply a question of money. To assess prejudice to Safeway, the Tribunal would need to know the overall profitability expected from the development site. Indeed, he agreed that on this approach it might be necessary to know the overall profitability of the company to determine whether it was truly prejudiced by having to incur extra cost.
In what was referred to as a subsidiary point, supporting the argument that there had been no proper registered interest in the overlap area, Mr Martin dealt with the provisions of section 6(1) which provide that the Keeper is to make up a title sheet of the interest in land with a description "based on the Ordnance Map". That term is defined by Schedule 1 of the Interpretation Act 1978 to mean "a map made under powers conferred by the Ordnance Survey Act 1841". Section 12 of that Act provides that " the Act or any Clause Matter or Thing herein contained shall not … in any way affect … the Boundary or Boundaries of any Land or Property, with relation to any Owner or Owners, or Claimant or Claimants of any such Land respectively, nor to affect the Title of any such Owner or Owners …". On the evidence, the change in the title sheet was based on a change in the Ordnance Map. Such a change could not affect title. It might have been different if the map had shown a different line for the medium filum but the change in question could not be explained on that basis.
Turning to deal with possession as a separate issue, Mr Martin submitted that, to establish possession there must be: (a) actual rather than notional possession; (b) possession of a particular subject to be affected by rectification; and (c) possession sufficient to overcome competing possession.
He accepted dicta in Kaur v Singh as the highest available authority bearing on possession. This confirmed that possession for the purposes of registration was quite different from the test of possession in establishing a prescriptive title. The passage at page 191F could not be disregarded as obiter. The Lord President plainly decided that what was required was actual physical possession of land. If physical occupancy was necessary it must refer to a physical area. Physical possession could not be inferred from a title or from possession of a legal interest. That was a fatal flaw in the Safeway approach.
It was to be noted that if the Register was rectified, Safeway would not be evicted from anything. They would lose the overlap area of which they had never had possession.
Mr Martin also took from Kaur v Singh the proposition that English cases might have some value as a guide. He referred to the decision of the Court of Appeal in Simpson v Fergus 2000 79 P & CR 398. In that case Robert Walker, L J had quoted from a decision of the House of Lords in the Scottish case of Lord Advocate v Young 1887 12 App Cas 544. Possession meant "possession of that character of which the thing is capable". Possession meant occupation or physical control of the land. At page 401 the Court had said: "Possession of a flat with a front door which can be locked is obviously different from possession of part of an unfenced moor or hillside. But in either case there must be exclusive possession, in the sense of occupying and controlling the land in question to the exclusion of others". Mr Martin accepted that this observation might be directed at a particular English concept whereby certain heritable rights could be established from possession without prior title. That appeared to have been the issue in Simpson v Fergus. In Scotland a court might - at least in the context of prescription - require to determine between competing bodies of evidence of possession: Duke of Richmond v Earl of Seafield 1870 8 MacP 530. He accepted that Simpson v Fergus could not be relied on in a Scottish context.
Although there had been an attempt by Safeway to rely on the decision in Kingsalton Ltd & Another v Thames Water Developments Ltd and others, this case could not be relied on. It dealt with English concepts. The title to the disputed subjects had been deliberately registered and a consideration had been paid for them. The English provision gave the Court a discretion to rectify.
On the specific issue of the effect of evidence of possession of the registered subjects as a whole, he accepted that this might be of evidential value but the real issue was whether possession of the part had been adequately proved. Unless possession was to be taken to be established by mere title, it was always a question of fact.
There was no act of overt possession of the overlap area by Safeway. Initial entry plainly did not extend to these subjects. They had no knowledge of the registered title. Entry was based on the terms of the disposition and the original registered title REN56654. Their actings thereafter were based on assumption of a boundary to the centre line. They planned their bridge to fit this. After 16 June 1998 when they learned of the new line of the boundary they did nothing to assert possession. They had no physical possession. They deliberately did not seek to enforce their right in Court or Tribunal. In this context there was, in his submission, no basis for distinguishing between "real" and "artificial" possession. When there is a dispute there is an obvious need to take positive action. Mr Martin stressed that when Tesco learned of the Keeper's mistake they took immediate public steps to assert their possession. We have noted him as relating this to their awareness of the mistake on 17 July 1998. His substantive point was that they took action when they learned of the problem. They then applied to the Keeper for rectification.
The only physical act by Safeway was in June 1999 when the second set of markers were removed. There was a technical argument that this was not an act of possession. By principles of accession certain additions to land became heritable. The marker blocks were of substantial weight and were intended to be permanent. They were, accordingly, to be viewed as heritable: Scottish Discount Co Ltd v Blin 1985 SC 216. It followed, in his submission, that removal by Safeway was not an act of possession. It was a single act removing part of the heritage. It did not have the quality of possession.
Turning finally to deal with prejudice as a separate issue, Mr Martin repeated the submissions that the decision in Dougbar Properties Ltd was not in point. It was too narrow an approach for the context of section 9 which required examination of the whole circumstances relative to the overlap area and possession by Safeway. It was important to recognise that at the section 9 stage, although the nature of any change would, of course, vary according to the nature of the inaccuracy, it was inevitable that there would be a change on rectification. To focus closely on the effect of the change as sufficient to establish prejudice would mean that there would always be prejudice. It was also important that the reference to "prejudice to a proprietor in possession" was in no way qualified or restricted to a before and after assessment.
In the present case, if the title was rectified, Safeway would be in no worse position than they intended at the time of acquisition. The only prejudice would be loss of an opportunity to exploit an error. That was not a material prejudice on the facts of this case. Indeed Mr Martin submitted that it would be rare for true prejudice to arise in these circumstances although it was conceivable that someone might have bought property in reliance on an inaccuracy which was not known to others. Further, on any view, in the present case any prejudice could be measured in monetary terms. The overlap area was not a ransom strip. Safeway could build a curved bridge. This would cost more but the Keeper's indemnity would cover the extra cost. Mr Martin pointed out that the waste of costs incurred in the development of an abortive straight bridge would logically be matched by the ability now to take a benefit from initial costs spent developing a curved bridge.
Mr Martin also dealt with the progress of the appellants' own title. Tesco or their predecessors could have had possession as proprietors since 11 August 1997. They had a real right in the overlap area from that date.
Miss Crawford made submissions on certain aspects of the case with a view to clarifying the position of the Keeper and assisting the Tribunal rather than supporting one or other side on the merits. She recognised, of course, that because of the indemnity position the Keeper might be thought to have an interest in supporting Safeway. However it was not her intention positively to do so. We found her analysis of the statutory provisions, particularly those relating to the role of the Keeper, to be of considerable assistance. It is unnecessary for present purposes to attempt to summarise her material. We shall refer briefly only to submissions on matters bearing directly on the merits. We record that in relation to 'inaccuracies' which might be corrected she referred to Kaur v Singh at p182C and M.R.S. Hamilton v the Keeper 2000 SC 271 (at page 273B-D). In relation to the scheme generally, she referred to the well known passages from the speech of Lord Keith in Short's Trustee, and made extensive reference to both Kaur v Singh and Dougbar Properties Ltd.
She disputed Mr Martin's submissions that there was no registered title to the overlap area and, accordingly, no proprietor for the purposes of section 9. She submitted that the argument was misconceived and counter to the scheme of the Act. The policy of the Act was clearly that the public should be entitled to rely on the title sheet. There was no right to look behind it to establish its validity. The Register itself was the start and finishing point. The title sheet is the measure of the interest in land. Support for this, if necessary, could be found in Dougbar Properties Ltd at page 531D-F where the Register was described as "the sole source and measure of the proprietor's rights".
As the Register was the measure, the conveyance to Safeway in October 1997 under reference to REN56654 was a conveyance which included the overlap area because the error had been made by that date. It was irrelevant that the copy title sheet in the hands of parties at the time did not show the change. The issue of the copy title sheet in March 1998 did not alter this. Even if, in theory, the "true" position was that there was no properly registered interest in the overlap area, this could only be given effect, by rectification under section 9 and on the face of it Safeway were proprietors.
Miss Crawford submitted that the reference to the Ordnance Survey Act 1841 was irrelevant and misleading. The Keeper was not acting under powers conferred by that Act. Any change was effective not by reason of the change in the mapbase but because of the effect of the provisions of the 1979 Act.
In relation to the role of the Keeper in cases of dispute, we need only record Miss Crawford's submission that criticism of the Keeper's decision to issue a Land Certificate showing Safeway as proprietors of the overlap area was misconceived. The decision simply reflected the Register at the time and the Keeper could not rectify in face of an assertion of possession. The Scottish Act, unlike provisions relative to the English Register, did not provide a mechanism for the Keeper to resolve disputed issues of fact. He did have power to require material to be produced and required to exercise his judgement on the material before him: Brookfield Developments v The Keeper 1989 SLT (Lands Tr) 105 at 109L-110E. However, he had no power to conduct a full enquiry. It was thought that the Keeper had no power to refer disputed issues to the Tribunal. It was up to interested parties under the provisions of section 25. This allowed a full review of the Keeper's decision on fact and law. Even if the Keeper had acted entirely properly and correctly on material available to him it was not in doubt that the Tribunal could assess matters afresh on evidence presented to it.
Miss Crawford made certain submissions bearing on the issue of possession. It required both a physical act of holding the subjects and an act of mind, in other words an intention to hold for the possessor's own use. She referred to Stair II.1.18; Stair Encyclopaedia Vol. 18, page 117. There could be only one proprietor at a time, op cit page 118. In her submission the words "prejudice", "proprietor" and "possession" in section 9 were separate and had to be considered separately. There was no justification for treating the meanings as interdependent although, of course, the whole phrase had to be construed in context.
Mr Murphy made certain submissions in response to Mr Martin but we have, where necessary, given effect to these in our summary of his arguments.
Mr Martin in response to Miss Crawford's analysis of the effect of the Act stressed that it was misleading to look at the matter in terms of reliance on the Register. Rectification was an inherent part of the scheme. If the Keeper had improperly created an interest in land by accident of registration, the Register could be rectified. He instanced as an example a mistake by the Keeper which had the effect of creating a new servitude. This would create servient and dominant tenements. The dominant interest would, however, be entirely fictional. There would never have been such an interest. There was no reason why the Register should not be corrected. It was a fluid document. It changed from day to day to reflect transactions.
It is appropriate to deal first with the submission based on sec.12 of the Ordnance Survey Act 1841. That section provides, in effect, that no change in title can be brought about by Ordnance Survey mapping activities. If the submission was well founded it would seem to avoid need for consideration of the 1979 Act. However, we are satisfied that the provisions of sec 12 have no bearing on the circumstances of the present case.
A change in title cannot be effected by mapping activities carried out in exercise of powers conferred by the 1841 Act. However, this does not mean that a revised map cannot be the basis of a title which differs from some previous title to the same land. The change derives from the legal effect of the formal conveyancing and not from the map itself. Under the Sasine system this would, we think, be obvious.
The matter is, of course, less patent in relation to the Register. A change in the map base might have produced, simultaneously, a change in the boundaries shown in the title sheet. A causal link between the activities of the map makers and the change in title might thus seem obvious but we think this more apparent than real. We heard nothing to suggest that the change in the present case was due to the activities of parties acting under powers conferred by the 1841 Act. As Miss Clough put it, the title sheet has its own status under the 1979 Act, it is not the same as the OS map on which it is based. In any event, there was no evidence that the problem arose at the map making stage even if that term is applied to "digitisation of the mapbase". We heard nothing to suggest that the map makers concern themselves with the boundaries of land interests held by the Keeper or that maps produced under the power of the 1841 Act show, or purport to show, title boundaries as such. The experience of the Tribunal tends to suggest the contrary. Although the evidence did not disclose precisely how the error arose, we are satisfied, on the evidence, that it can be described as an error by the Keeper's staff in matching the title boundary to the digital map. In any event, we are satisfied that the inability of parties to go back to the "true" boundary is entirely attributable to the effects of the 1979 Act and in no direct way attributable to the 1841 Act.
If the answer to the issues in this case does not lie in sec 12 of the 1841 Act, it was agreed that must be found in a proper construction of the provision " prejudice a proprietor in possession" in sec 9(3) of the 1979 Act.
We did not find persuasive Mr Martin's submission that the three elements fell to be construed together as a whole. We accept, of course, that the three identifiable elements in that phrase must be construed in context. We are also aware that examples of use of the phrase 'proprietor in possession' to be found in Kaur v Singh, might suggest that it referred to a single concept. The decision in that case turned in part on the implications of the word 'possession' on the construction of 'proprietor'. However, in Kaur v Singh, the Lord President said, at p192D, "It is plain that the requirements that the relevant person be 'a proprietor' and that he be 'in possession' are distinct." We find no warrant for treating the reference to 'prejudice' in any different way. In any event, as will be seen, on the view we take of 'prejudice' we are not persuaded that Mr Martin's approach to construction would advance the appellants' case. In short, we accept Mr Murphy's submission that there are three separate elements to consider. We follow his order in dealing with them. This is consistent with the approach in Kaur v Singh (see p185F).
The first question is whether, in relation to the overlap area, Safeway are to be regarded as a 'proprietor' within the meaning of the section. It is not disputed that the Register now shows Safeway as proprietors of an area of land which includes the overlap area. It is also clear that there was no deliberate decision to register any interest in that area prior to the dispute. None of the statutory procedures for registration of an interest in that land was followed. Mr Martin contended that the term "register" must mean the register of properly registrable interests and that "proprietor" for the purposes of the section could only be understood as meaning the proprietor of a properly registered interest. The submission would require us to go behind the Register but, as he pointed out, a power of rectification implies a need to look behind the register.
We do not accept this submission. We see no need to cite at length dicta from Shorts Tr v the Keeper, and Kaur v Singh, dealing with the policy and effect of the scheme for Registration under the 1979 Act. Reference may be made to the summary by the Lord President in the latter case at pages 187E - 188H. The material bearing on the weight to be given to the Register is now well known. Although Miss Crawford's submissions may go too far in suggesting that the Register is the start and finishing point, we are satisfied that it is the starting point. Section 9 makes provision for rectification but provides constraints on the exercise of the power to rectify. There can be no doubt that the intention of the Act is that the proprietor of an interest in land is to be identified by reference to the Register. There can be no change by way of rectification if this would be to the prejudice of the proprietor. The only potential proprietor who could be affected by the change is the proprietor as determined by the Register as it stands.
"In Short's Tr it was a matter of agreement between the parties to that litigation that 'the term "proprietor in possession" must mean the person appearing as proprietor on the face of the Land Register, that is in the present case, the second respondent' … No question, it seems, was raised judicially at any stage about that proposition," per Lord Hamilton in Kaur v Singh in the Outer House, 1998 SC 233 at 241C-D. This matter passed without comment in the Inner House.
We are satisfied that once the Register shows a proprietor, the starting point of any question of rectification is the Register as it stands. Safeway are therefore to be treated as proprietors of the overlap area for the purposes of section 9(3).
We consider that the substantive issue in this case is that of possession. It was not contended that possession could be based simply on title. The difficulty arose from the particular nature of the subjects in issue in this case and the question of what was required by way of physical possession. As we understood it, parties were agreed that the effect of the Act was to direct attention to the Register as it related to "interests in land". However, they had differing contentions as to the implications of this. If the focus of rectification was the particular entry in the Register identified by a registration number duly allocated in terms of Rule 3(2) of the Land Registration (Scotland) Rules 1980, it would be relevant to look at the nature of possession appropriate to the whole subjects covered by that entry. If, however, the proper focus was on the land itself, what would have to be considered would be evidence bearing directly or indirectly on occupation of that specific parcel of land, in this case the overlap area in the middle of the river.
Mr Murphy's initial submission was on the basis that possession - in the sense broadly of physical occupation as proprietor - of the registered unit shown as REN56654 was sufficient to afford the protection of sec 9 in respect of every part of that unit. That submission was beguiling in the context of the present subjects where the area in dispute was not only comparatively tiny but was of a nature in respect of which direct physical possession would not normally be expected. For example, Mr Murphy invited consideration of the rest of the north portion of the river. Would it be denied that Safeway had possession of it since their entry to the subjects as a whole?
We accept that, in the nature of things, disputes over boundaries are quite likely to involve small sections of land at the periphery of occupied subjects. Evidence of physical actings demonstrative of possession may be hard to find. It is tempting to say that to force a registered proprietor to positive proof of possession of every part of the subjects covered by his title weakens the status of the Register. We have come to the conclusion, however, that this is essentially a matter of circumstances. If the nature of subjects covered by the registered title is such as to justify an inference of possession of the whole without direct evidence of physical possession of every single part, necessary possession may be established. If the nature of the physical subjects covered by the title does not invite that inference other evidence may be required.
In an attempt to illustrate the practical implications of the different approaches in a context remote from the river, there was initially some discussion of what would happen if the Register accidentally failed to show the boundary between two adjacent houses. However, a more refined example was developed, instancing a proprietor of a large estate where, for some reason, the break-off title to a former lodge had been missed. It was not difficult to envisage circumstances in which the new laird might take possession of the estate as a whole without in fact being aware that his purchase had not included the lodge. He might, indeed, have made plans for development which included using part of the lodge garden to enlarge his gateway. Mr Murphy conceded that evidence of direct possession by the "true owner" of the lodge would prevail and that possession of the estate as a whole would not prevent rectification. Mr Murphy accepted that it would simply be a question of evidence bearing on possession of the subjects in dispute.
Rectification can make practical sense if it is the Register as it relates to each piece of land which is the critical focus. We have come to the view that there is no reason for a different approach. The Register is a register of interests in land. The purpose is to provide a public record of the state of the title in relation to any identified piece of land. That is the justification for a plan based register. It is, in other words, designed to show the interests in land not the extent of the land in which any particular proprietor holds an interest. The importance of the Register as having a high degree of stability relates to identifiable land.
Dicta in Kaur v Singh bearing on the issue of possession are consistent with this approach although none are directly in point. The Lord President clearly accepts that 'possession' refers to physical possession of the subjects:191G. He then discusses the treatment of the comparable English provisions in two English text-books (cited by him at p192A-B). Ruoff and Roper is said to speak of 'physical occupation of the registered property' while Emmet is quoted as starting from the position that the term refers to 'actual physical occupation of the land'. We were not referred in more detail to either textbook and we assume that parties considered that no assistance could be derived from further study of them. It is unlikely that either was dealing with the specific problem of a possible distinction between the 'registered property' and a limited part of it. The Lord President was content to adopt the view that 'in possession' was to be interpreted as referring to 'possession of the land'. Our approach is consistent with this but it must be recognised that the distinction was not in any way relevant to the case before him.
It may, however, be observed that in his discussion of the policy behind the reference to possession in the context of sec 9(3), the Lord President made the point that the concept only comes into play in the situation where the person seeking rectification may ex hypothesi have a better title to the land than the proprietor whose name appears on the register. In that situation: "Possession is then relevant, not because it shows that the registered proprietor has a better claim to the title but because, for reason of policy, the law chooses not to disrupt the proprietor who is in possession." (page 194A-B). Where the conflict is between the "true" title, however ascertained, and the title shown on the register, it is clear that the evidence supporting the competing "true" title may bear no relationship to the area which happens to be covered by the registered title. To give the latter area a status in relation to the issue of rectification provides another hurdle for the "true" owner.
Such a hurdle would, of course, provide additional protection for the integrity of the Register. A registered proprietor would be able to rely on possession of the substance of his registered subjects as sufficient to cover every bit of them. Where, as here, the disputed land would not normally be subject to separate possession that is attractive as a policy. On the other hand it could lead to absurd results if the disputed land was identifiably distinct. We are not satisfied that there is sufficient justification in policy terms for rejecting the land itself as the proper focus in the application of the rectification provisions.
The term 'possession' can be used in various senses but we are satisfied that in the present context it must include the sense of physical use and enjoyment. In other words it embraces the concepts of mental and physical control. We heard no argument to the contrary and it is unnecessary to refer at length to the passages cited from Stair II.1.16; Erskine II.20; and Gordon, op cit, 14.02 and 14.03.
We have no doubt that physical possession of a particular piece of land can be established by evidence of physical possession of a unit of which it forms part. A new proprietor can be expected to establish possession of his whole house and garden without ever setting foot in the garden. Physical occupancy of the house would, in normal circumstances at least, be equivalent of possession of the garden as well. It is, however, essential to determine the unit which is being possessed.
An important question is whether or not the boundary as shown in the register has any part to play in characterising the appropriate unit of possession. The problem is sharply illustrated by the present case. Where subjects lie beside a river it may be taken that they extend at least to the edge of the water. In most circumstances it could be accepted as a natural assumption that they extend to the centre line. Miss Clough accepted that this was a well known boundary and it is, of course, one well known to lawyers. When considering the physical unit in absence of the evidence of the title plan, there would be no question of the unit of possession extending beyond the centre line. Possession of the dry land might justify an inference of possession of the river to the centre line but would not, of itself, justify any inference beyond it.
Although Mr Murphy accepted that possession required more than title, his primary submission was based implicitly on the view that once it was recognised that the title covered the overlap area, the unit of possession also covered that area. We prefer Mr Martin's submission that the evidence of physical possession cannot be based on the title. That element must be based on physical facts and circumstances. The natural physical boundary, if there is one, is an important circumstance. Its importance is not displaced, in our view, by a line on a plan. To argue that the plan is of special significance because of its status as part of the register is, in effect, to treat title as indicative of physical possession. While title is obviously of importance in relation to the mental element of possession we are aware of no justification in principle or authority for treating it as an element relevant to physical possession. We are accordingly satisfied that evidence of occupation of the Safeway subjects as a whole would not itself suffice to establish possession of the overlap area.
Once possession is established, it may be presumed to persist. However, establishment of initial possession is an important stage. "In the first acquisition of possession, actual detention is an essential requisite; for if a bare act of the mind were sufficient, possession would be too vague and uncertain." Erskine, cit supra.
In certain circumstances the change in mental element is of critical importance. For example, a tenant may acquire title as proprietor, or a depositary may acquire title as owner. In both cases there will have been use and control of the subjects, the character of which will change to possession as proprietor. In such situations, possession follows the act of mind. Accordingly, if there was evidence indicative of some physical use or control prior to June, the realisation by Safeway that their title as proprietors extended to the revised boundary line might convert that use to 'possession' within the meaning of the section.
We turn to look at the circumstances of the present case. It is accepted that Safeway made no physical use of the overlap area at any time prior to the decision of the Keeper to make no rectification of their title. It was not disputed that the Tribunal could look at the whole facts and circumstances and could take account of events following that decision, but the full ramifications of this were not explored. For present purposes it is sufficient to say that we do not accept that actings of parties can be dismissed as a 'tennis match' simply on the grounds that they were contrived to assert possession. We are satisfied that little if any significance can be attached to the actings of Safeway in removing the Tesco markers on a single day in June 1999 at a stage well after the dispute had been put to the Keeper and his decision received. However, the actings of Tesco in taking immediate public steps to demonstrate their possession when they first became aware of a difficulty, fall into a different category.
We are satisfied that there is no basis for any concept of possession of the overlap area by Safeway or their predecessors in the period from the change in the electronic register to June 1998. During that period they were registered proprietors but they did not know it. They had neither physical nor mental use or control of the land in question.
It is agreed that from discovery of the state of the title in June 1998 until at least 7 August there was no direct physical possession of the overlap area. Mr Murphy founded on the inferences to be drawn from the evidence of actings indicative of possession of the site as a whole. However, there was no evidence of any conscious change in the way the site as a whole was organised or occupied. If the actings before June did not support an inference of possession of the overlap area, it is not easy to see a basis for such inference thereafter.
We have been unable on the evidence to identify any stage at which Safeway could reasonably be said to have been established as proprietors in physical possession. If they had been so established before Tesco took physical steps to assert their rights, these steps might have been able to be disregarded as part of a "tennis match". As matters stand, however, we think they can properly be seen as evidence not only of an assertion of right but as the taking of possession by Tesco of the relevant part of the river.
In relation to the use of marker poles, we admit to having some difficulty in following to its conclusion Mr Martin's submission based on the principle of accession discussed in Scottish Discount Co. Ltd. v Blin. If, as he contended, the markers, because of their size, weight and intended permanence became part of the land itself, that might detract from the submission that Tesco were occupying the land with these markers. However, the contention was made only in respect of the more substantial markers placed with the assistance of divers on 21 May 1999. We heard no submission that the first markers were anything other than moveable items owned by Tesco and placed to demonstrate their possession of that part of the river.
The substantive argument based on accession sought to qualify the nature of Safeway's actings in moving the markers as being an interference with heritage and not an act of possession. We did not find the argument persuasive. If, for example, Safeway had, in June 1998, set in train a process of excavation to prepare foundations for a bridge, that would have been clear evidence of possession even if the activity involved removal of part of the land itself. Similarly, if there had been old markers present and Safeway had had them removed when they realised the extent of their title, this would have been evidence of possession. We think that no weight can be attached to the actings of Safeway on 21 June 1999 because any inference to be drawn from their actings on the one day does not stand comparison with the actings of Tesco as demonstrative of possession and, further, because matters had reached a stage where their actings on that date cannot properly be regarded as having evidential significance in relation to the present issue.
Whether the first markers are to be treated as positive evidence of possession of the river by Tesco or simply as the start of a "tennis match", it must follow that if Safeway are to demonstrate any relevant possession they must do so by reference to the state of affairs prior to 7 August 1998. We heard no evidence bearing on possession and specific to the period between that date and the matter being taken up with the Keeper.
Having concluded that possession of the registered unit as a whole does not justify an inference of possession of the part in dispute and there being no evidence bearing directly on that part, we are forced to the conclusion that Safeway have not established that they fall to be treated as proprietors in possession of the relevant land. We have not required to reach a conclusion on the question of whether overt public assertion of possession might, in some circumstances be treated as equivalent to physical occupation. Nothing of that nature was clearlyestablished in the period up to 7 August 1998 and for the period thereafter, we do not think Safeway have established any sufficient public assertion of possession to compete with the acts of possession by Tesco.
Although our conclusion in relation to possession is sufficient for determination of the issues before us, the issue of prejudice was discussed at length and it is appropriate to express our views on that matter.
If Safeway did fall to be regarded as proprietors in possession, it is clear that unless the Register was rectified they would be entitled to deal with the overlap area as owners. That the land has a value to them cannot be doubted. If the register is rectified, they will lose their rights as owners. It is important not to lose sight of the words of the statute: "If rectification … would prejudice a proprietor in possession." It is undeniable that on a straightforward use of language, an effect which produces loss of heritable rights can be described as being to the prejudice of the proprietor of those rights at least when these rights have some identified value.
The contrary argument was that assessment of prejudice had to have regard to the whole circumstances. These, it was contended, included the facts that Safeway did not expect to have title to the overlap area; that they did not pay for it; and that compared either with their potential gain from development of the site or with their profitability as a company the sums involved were insignificant. The relevant circumstances also included the fact that Safeway had a right to indemnity. The adverse impact of loss of title would be economic only and therefore capable of being met by indemnity.
We are satisfied that there is no warrant for going beyond the immediate provisions of sec 9(3) in assessing prejudice. Rectification would have a clear adverse impact on the registered proprietors. How they came to acquire the rights shown, would not in any way alter the impact of rectification in practical terms - although contemplation of the fortuitous nature of the acquisition of the rights as registered might help them bear the loss philosophically; as would the fact that their pockets were deep enough to bear it financially. We accept that any rectification which involved an inaccurate boundary would tend to lead to the same result but that would not necessarily be the case and, in any event, we do not think that consideration a justification for seeking an alternative construction. All inaccuracies need not involve boundaries. However, even if correction of any inaccuracy without consent of the proprietor would be likely to be contrary to the perceived interests of the proprietor and, on a straightforward construction, to his prejudice, we cannot accept that this, in itself points to a need for another construction. The straightforward construction is consistent with the policy that the Register be secure.
The conclusion we reach is also consistent with the views of Lord MacFadyen in Dougbar Properties Ltd . Put in simple terms for present purposes that was a case where a land certificate included the right of use of an adjacent car park. The certificate also made reference to a Minute of Agreement which showed that the right in respect of the car park was one of passage only. Prior to registration the proprietors were aware of the whole circumstances including the terms of the Minute of Agreement. In circumstances which need not concern us, the Keeper came to rectify the register in a way which had the effect of removing the apparent right of use for parking. The proprietor claimed indemnity for loss said to arise from the rectification. In answer to that claim it was argued that they had no loss because the rectification simply put them in the position they all along knew they ought to have been in. The Court dealt with that argument in the following terms: "It seems to me, however, that to approach the question of loss in that way does, … in some measure undermine the central principle that the register is the sole source and measure of the proprietor's rights. An inaccurate entry in the register is rectifiable … But so long as it remains unrectified, the inaccurate entry is nevertheless the measure of the proprietor's rights. It would, in my view, be illogical to accept that before rectification the proprietor who has all along been aware of an inaccuracy in his favour does have the inaccurately augmented right, yet to hold that once the rectification has taken place he is not entitled to measure his loss by reference to the effect of the removal of that augmented right. Yet it would, in my opinion, be wrong to hold that before rectification the proprietor does not have the right which the title sheet bears to give him if he knows that the right constitutes an inaccuracy in the register. To adopt either of these approaches would be to derogate from the principle reflected in the dicta from Short's Trustee [at 1994 SC 141A and cit. supra 19E]… There is in my view nothing in the Act which justifies the conclusion that a proprietor can only claim to have suffered loss as a result of rectification if the rectification removes an inaccuracy of which he was unaware when he acquired the interest. To express the substance of the point in a different form, there is no justification in the Act for assessing whether a rectification has caused loss, in the case of a proprietor who was aware of the inaccuracy, by reference to a comparison of the post-rectification title with the 'true' position rather than with the pre-rectification registered title": page 231 D-H.
Mr Martin pointed to the distinction between assessment of prejudice and assessment of loss. However, we consider the principle enunciated by Lord MacFadyen to be soundly based and to be consistent with the terminology used in each section. It accords with the conclusion we reach as to the proper construction of sec 9(3). It finds an echo in the rhetorical question of Lord Jauncey of Tullichettle in Shorts Tr., "How can you suffer a loss without being prejudiced?" (at 28A)
We have no doubt that the Act does not require us to go into degrees of prejudice and accordingly does not warrant enquiry into the finances of Safeway either locally or nationally. We are also satisfied that there is no warrant for enquiry into motive or expectation at some date prior to the date of proposed rectification. The stress laid on the expectation of Safeway at the date of conveyance might be matched by reference to the expectation of Mr Reid based on legal advice that the Register was the measure of their rights.
We have, however, had more difficulty with the submission that assessment of prejudice should take account of the provisions for indemnification. We accept the need to construe statutory language in context. It can be argued that the overall policy of the Act would allow an approach which permitted rectification if full indemnity would exclude any ultimate prejudice. However, we are satisfied that that in itself is not a justification for departure from the plain meaning of the words used. In any event, it is clear that the scheme of the Act is to deal first with rectification and then with indemnity. The only place in the Act where rectification expressly depends in any way on the provisions relating to indemnity is at sec 9(3)(a)(iv) by which rectification is permitted to the prejudice of the proprietor in possession where indemnity has been excluded. There is nothing in this provision which would justify a direct inference that the nature of the potential indemnity should be examined to assess prejudice.
It is clear that if the intention of the Act had been to allow rectification wherever it was thought that financial compensation would be capable of fully compensating for any loss of title, this could have been expressed explicitly. There can be little doubt that the direct policy of promoting the stability of the register is better achieved by making rectification difficult, rather than by reliance on indemnity. We see no reason to doubt that this was intended.
It should also be said that financial compensation for loss of land is not easily determined. No doubt the direct cost of a curved bridge compared with a straight bridge could readily be ascertained. Accurate assessment of the adverse impact of delay on the development as a whole and the extra difficulties of construction is more problematic. The prejudice which would follow rectification would not necessarily be capable of full compensation in money terms.
We, accordingly, are satisfied that if Safeway fell to be regarded as proprietors in possession rectification of the register would be precluded by the provisions of sec 9(3). However, having concluded that the proper focus of rectification is the land in dispute and that Safeway could not properly be regarded as being in possession of that land at any material time, it follows that we consider that the Register can properly be rectified. In relation to REN56654, it was accepted that any order should follow the lines sought by the appellants in their application. However, on further consideration it appears that this goes too far. Safeway do have a good title to subjects to the south of the centre line and lying to the west of the east edge of the footbridge and rectification must not affect that area. Rectification of the whole line of error to the east goes beyond the subjects in which the appellants have an interest. However, it is clear that the only area of contention is the overlap area discussed above and as the proposed correction further east to return the boundary to the centre line was not the subject of any separate submission it is appropriate to grant the order as sought in that respect. In relation to REN93746 it was agreed the rectification proposed in the pleadings was not entirely apt. That title plan currently does show the north boundary of the subjects as the medium filum of White Cart Water but is subject to the exclusion of indemnity referred to above. In the circumstances it was agreed that the appropriate rectification would be removal of that exclusion.
It can be said that we accept that there is no basis for criticism of the Keeper in relation to his treatment of the requests for rectification in this case. The contentions of parties were fully considered and the decision reached in light of these contentions was, as it seems to us, an entirely reasonable one. It is unnecessary to go further. Parties were agreed that it in procedural terms it did not matter whether the Tribunal sustained the appeal or dealt with the matter as an application under section 9. In this case, we can, accordingly, simply make an order requiring the Keeper to rectify the Register on the lines set out above.