Case from the Lands Tribunal for Scotland considering an application for rectification of a number of inaccuracies in the Land Register.

Highland Ventures was the former owner of a hotel in Crieff. The company sold the hotel (whilst retaining some land for the personal use of a director and his wife) to a Mr Sancto in 2006 (the transaction triggered first registration) and the property was registered the Land Register. The hotel was subsequently repossessed and the bank sold it to MMSL, at which point Highland Ventures became aware of inaccuracies in Mr Sancto’s registered title.

The possibility of inaccuracy in the register was raised with the Keeper in November 2014. At that time, section 9 of the Land Registration (Scotland) Act 1979 was in force. Under s9, except in very limited circumstances, it is not possible to rectify the register to the prejudice of the proprietor in possession (in this case, MMSL). The application to the Lands Tribunal was made after the “designated day” on which the Land Registration etc. (Scotland) Act 2012 came into force[1]. The tribunal found that, in terms of the 2012 Act, transitional provisions[2] applied under which there is a presumption[3] that the registered proprietor (in this case MMSL) is in possession of the property. However, in this case the Tribunal found that Highland Ventures (which led evidence of use of the property by the director and his wife) had demonstrated possession of the subjects and consequently had rebutted the presumption that MMSL possessed the subjects.

As such, the tribunal found that that register was inaccurate and that the presumption in favour of the possession of the registered proprietor had been rebutted.

The full decision is available from the Lands Tribunal for Scotland here.

 All of our property and conveyancing case summaries are contained in the LKS Property and Conveyancing Casebook here.

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[1] 8 December 2014.

[2] Contained in Schedule 4 of the 2012 Act.

[3] Para 18 of Schedule 4.

Inner House case considering whether damages were due in respect of wrongful interdict after an interim interdict was granted on the basis of a deed which was later rectified with retrospective effect.

Background
Mr Mirza was the owner of a shop and yard on Cumberland Road in Glasgow. Mrs Salim took an assignation of a lease of the premises. The parties had intended that only the shop (and not the yard) be let to Mrs Salim. However, due to an error, both the shop and yard were included in her title.

Mr Mirza commenced construction of a new shop in the yard. A dispute then arose as to who had a real right in the yard and, in February 2008, Mrs Salim sought and obtained an interim interdict preventing Mr Mirza from entering the yard and building and operating the new shop. However, in August 2009 the Court found that the yard had been included in the lease as the result of a conveyancing error (for which neither of the parties were responsible) and granted a judicial rectification[1] of the lease removing the yard from the leased subjects (the rectification being retrospective in effect). Mr Mirza then sought damages for wrongful interdict.

In the Outer House Lord Woolman refused to grant damages taking the view that, although rectification altered the deed and the register, “it did not airbrush history. It did not convert a rightful interdict into a wrongful one”.

Decision
By majority decision[2] the Inner house allowed an appeal and found that Mr Mirza was entitled to damages[3].

After construing ss8 and 9 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 (which deals with rectification of defectively expressed documents) and s9(3A) of the Land Registration (Scotland) Act 1979[4] (rectification of the Land register), the court found that the clear effect of the legislation was that rectification would act retrospectively (i.e. the rectified entry would take effect from the date the original entry was made)[5].

The court also confirmed that the obtaining of an interim interdict is at the risk of the applicant meaning that, if an application is ultimately found to be unsuccessful, the applicant will be liable for loss caused by the interim interdict. In the words of Lady Dorrian:

“The position in relation to interim interdict is clear, and well understood by practitioners, namely that such an order is sought periculo petentis [at the risk of the perpetrator].  This rule means that, in general, where loss has been caused, damages will automatically follow where an interdict has turned out to be unjustified.  A petitioner for interdict perils his case, and places himself at risk of damages if it prove to be otherwise, that he will eventually be vindicated in his claim.”

The full judgement is available from Scottish Courts here.

All of our property and conveyancing case summaries are contained in the LKS Property and Conveyancing Casebook here.

Case from the Lands Tribunal for Scotland in which Ms Rivendale sought to appeal the Keeper’s refusal to rectify the Land Register in her favour.

Background
Ms Rivendale purchased a cottage in Tarbert, Argyll in 2010 but was unable to register title to an area of ground in front of the cottage as it was included in her neighbour’s title. The tribunal found that Ms Rivendale was the “true owner” of part of the area of ground and that the register was inaccurate in that respect. However, in terms of s9(3) of the Land Registration (Scotland) Act 1979, the register cannot be rectified[1] where rectification would result in prejudice to a proprietor in possession. Ms Rivendale’s neighbour, who had used the disputed area (on part of which there was a track) to access two building plots and other land owned by her, argued that she was a proprietor in possession and would suffer prejudice if the register were rectified.

Reasoning
When considering the issue, the tribunal took the view that, in this case, it was not sufficient simply to decide whether or not the neighbour was in possession of that area as a whole. Rather, because there were two different characters of use of the area in question (Ms Rivendale used the area as garden ground and her neighbour used it as an access track), the matter became a question of finding where one use ended and the other began.

Decision
As such, the tribunal found that the neighbour was the proprietor in possession of part of the property on which there was a track but not a part which was grassed nor a part on which there were flower beds. As a consequence, Ms Rivendale was entitled to rectification of the register in respect of the part of the disputed area which extended to the edge of the track but not to the part on which the track was situated.

The full decision is available from the Lands Tribunal for Scotland here.

(See appeal to the Inner House below)

All of our property and conveyancing case summaries are contained in the LKS Property and Conveyancing Casebook here.

Outer House case considering the consequences of a judicial rectification of a lease. Mr Mirza was the landlord and Mrs Salim the tenant under a 25 year lease of a shop and yard in Glasgow. Mr Mirza built a shop on the yard. A dispute arose as to who had a real right in the yard and Mrs Salim sought and obtained an interim interdict preventing Mr Mirza from entering the yard and operating the shop in February 2008. However, in August 2009 the Court found that the yard had been included in the lease as the result of a conveyancing error (for which neither of the parties were responsible) and granted a judicial rectification[1] of the lease removing the yard from the leased subjects (the rectification being retrospective in effect). Mr Mirza then sought damages for wrongful interdict.

Mr Mirza’s action was dismissed. After considering the authorities on damages for wrongful interdict, Lord Woolman reached the following conclusions:

1. interim interdict is obtained periculo petentis (at the risk of the perpetrator);
2. the award of damages, however, depends upon an assessment of the whole circumstances of the case;
3. damages will be awarded if the interim interdict is nimious or groundless;
4. a false statement made by the person obtaining the order is likely to fall into that category;
5. a person who obtains a possessory judgment that was lawful at the time or pronouncement will not be liable in damages; and
6. it is not necessary for a pursuer to aver malice or ill will.

Lord Woolman found that, in this case, Mrs Salim had not acted in a way that was “nimious or groundless”. At the time of the action she had had a sure foundation to seek the interdict and in doing so, she had vindicated her right to exclusive possession. Lord Woolman held “that it would be a strong thing” to subject Mrs Mirza to damages taking the view that; “rectification altered the deed and the register, but it did not airbrush history. It did not convert a rightful interdict into a wrongful one”.

The full judgement is available from Scottish Courts here.

(See appeal to the Inner House here.)

All of our property and conveyancing case summaries are contained in the LKS Property and Conveyancing Casebook here.