Background
Outer House case concerning the ownership of a house in Paisley. Title of the house was held in the name of Mr and Mrs Hill, equally between them and to the survivor, and was registered in the Land Register for Scotland in 1989.

Mrs Hill died in 1991. The court heard evidence to the effect that, shortly before her death, Mrs Hill had executed a codicil to her will in which she purported to revoke the survivorship destination in favour of Mr Hill. When she died, Mrs Hill’s share of the house was included in her estate for confirmation. Her son executed a formal nomination of entitlement to Mrs Hill’s share and then registered the nomination in the Land Register.

Arguments
Mr Hill argued that Mrs Hill did not have the power to evacuate the survivorship destination, and amongst other things, sought declarator that he had acquired title to the house on his wife’s death and an order ordaining the Keeper of the Registers of Scotland to rectify the register to that effect.

On the other hand, Mr Hill’s son argued that Mrs Hill had evacuated the survivorship destination and willed her share of the house to the son. Even if Mrs Hill had not been entitled to evacuate the survivorship destination, it was contended that (1) the son had acquired title by the operation of 10 years positive prescription based on the nomination registered in the Land Register and (2) that Mr Hill was personally barred from claiming title to the property and seeking rectification of the property due to mora, taciturnity and acquiescence (i.e. that there had undue delay and failure to assert a claim (on Mr Hill’s part) in a situation in which it would be expected that Mr Hill would have spoken up and that, viewed objectively, the facts suggested that Mr Hill had accepted his son’s ownership of the property).

Decision
Lord Jones rejected the son’s arguments.

The survivorship destination
With regard to the survivorship destination, Lord Jones followed the principle in Perrett‘s Trustees v Perrett[1]: i.e. that, where both parties contribute to the purchase price of a property and the title is subject to a survivorship destination, the arrangement is contractual (and not testamentary) meaning that it is not open to either party to evacuate the destination unilaterally in a will[2]. Lord Jones also confirmed that the principle in Perrett is not restricted solely to cases in which the disposition specifically stipulates that the parties have contributed equally to the price.

Prescription
With regard to the son’s arguments on prescription, Lord Jones found that he had not demonstrated possession for a continuous period of 10 years noting that, although he lived in the property between 1992 and 1995 and claimed to have continued to have access to the property afterwards there was no specification as to when or in what circumstances the access had been taken. (It is worth noting that the court made no judgement as regards the operation of prescription on a title registered under the Land Registration (Scotland) Act 1979[3] as the parties had not provided arguments in that regard).

Acquiescence
The son’s arguments regarding mora, taciturnity and acquiescence were also rejected. Lord Jones found that the son’s title had always been open to challenge and that he had not in fact become owner of his mother’s share of the house. As such, Mr Hill could not have been said to have become aware that his son was the owner and could not be said to have delayed raising an action against his son as he had no reason to do so (until the son had raised an action of division and sale of the house in June 2015).

The full judgement is available from Scottish Courts here.

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[1] 1909 SC 522.

[2]  On the other hand, a party may be able to evacuate the destination if he or she has provided all of the funds for the property him/herself.

[3] Under the 1979 Act the operation of prescription was limited to situations where the Keeper had excluded indemnity in respect of the title. (The situation is different under Land Registration etc. (Scotland) Act 2012 which repealed the 1979 Act, however, the son’s title had been registered under the 1979 Act not the 2012 Act.)

Outer House case concerning the effect of a survivorship clause in a disposition.

Mrs Povey and her husband bought a plot of land and built a house on it between 2002 and 2003 (the purchase price and construction costs being contributed in equal portions). The disposition contained special destinations of survivorship by which Mr Povey’s share would pass to Mrs Povey in the event of him predeceasing her and vice versa. In 2008 Mrs Povey signed a power of attorney in favour of her husband (which she understood was to be used only in the event she became unwell). In April 2009 Mr Povey executed a disposition (both on behalf of himself and on behalf of his wife) which purported to revoke the survivorship destinations. Mr Povey died on 23 July 2009. The disposition revoking the destinations was submitted for registration by solicitors purporting to act for Mr and Mrs Povey on 24 July and registered in the Land Register on 27 July 2009 (the solicitors completing a question on the form 2 application so as to indicate that no party to the transaction was subject to any incapacity or disability).

Mrs Povey sought declarator that title to Mr Povey’s share of the property passed to her on his death by operation of the special destination and that she was entitled to be entered as sole proprietor of the subjects in the Land Register. Her stepson (Mr Povey’s son) who was executor of Mr Povey’s estate argued that, in terms of registration of title, there was no automatic completion of title under the special destination and that Mrs Povey only had a personal right which would not be made real until the Keeper registered the change in title. He argued that the 2009 disposition revoking the destination had been registered first.

Lord Doherty agreed with Mrs Povey’s arguments finding that there was no authority to support the stepson’s contention that there was no automatic completion of title under the special destination.

“It is erroneous to suggest that on an institute’s death a substitute acquires only a personal right to the institute’s property, and that his right does not become real until the Keeper alters the entry in the title sheet. That analysis ignores the fact that title to the subjects, including the special destination by the institute to the substitute, is registered in the Land Register before the institute’s death … On the institute’s death the substitute’s contingent right becomes a real right, by virtue of the special destination. His completion of title is automatic. It is not dependent upon the Keeper altering the title sheet to reflect the change.”

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.