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Scottish Court of Session Decisions |
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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Jones & Anor v. Wood & Ors [2005] ScotCS CSIH_31 (18 March 2005) URL: http://www.bailii.org/scot/cases/ScotCS/2005/CSIH_31.html Cite as: [2005] ScotCS CSIH_31, [2005] CSIH 31 |
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Jones & Anor v. Wood & Ors [2005] ScotCS CSIH_31 (18 March 2005)
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EXTRA DIVISION, INNER HOUSE, COURT OF SESSION |
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Lord Marnoch Lord Macfadyen Lord Clarke
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[2005CSIH31] XA154/03 OPINION OF LORD MARNOCH in APPEAL in the cause ALAN JONES and MRS BRENDA MAUREEN JONES Pursuers and Respondents; against ANDREW STUART WOOD and MRS MARGARET WOOD Defenders and Respondents; and JOHN DEREK THOMSON BOGIE Minuter and Appellant; _______ |
Act: Tyre, Q.C.; Thompsons (for John Henderson & Sons, Dumfries) (Pursuers and Respondents)
Alt: Upton; Russel & Aitken (for Whitelaw, Edgar & Baldwin, Dumfries) (Minuter and Appellant)
18 March 2005
[1] For the reasons given by the sheriff and Lord Macfadyen I agree with your Lordships that this appeal must be refused and that matters should be disposed of in the manner indicated by Lord Macfadyen towards the end of his Opinion. [2] For my own part, I wish only to emphasise that the present is a case where he who seeks to resist rectification of his neighbour's title, namely the Minuter, was not even aware that his own title ostensibly included the area of ground now in dispute. In that situation I am clear that there can be no possibility of his having "relied" on the terms of the deed sought to be rectified within the meaning of section 9(2) of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985. In other circumstances, however, the position might not be so clear and I wish to reserve my opinion as to whether, apart from actual or imputed knowledge of the detailed terms of the defective document or title sheet, there could be other situations in which "reliance" within the meaning of that sub-section might be made out.
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Jones & Anor v. Wood & Ors [2005] ScotCS CSIH_31 (18 March 2005) |
EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
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Lord Marnoch Lord Macfadyen Lord Clarke |
[2005CSIH31] XA154/03 |
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OPINION OF LORD MACFADYEN in APPEAL in the cause ALAN JONES and MRS BRENDA MAUREEN JONES, Pursuers and Respondents; against ANDREW STUART WOOD and MRS MARGARET WOOD, Defenders and Respondents; and JOHN DEREK THOMSON BOGIE, Minuter and Appellant. |
Act: Tyre, Q.C.; Thompsons (for John Henderson & Sons, Dumfries) (Pursuers and Respondents)
Alt: Upton; Russel & Aitken (for Whitelaw, Edgar & Baldwin, Dumfries) (Minuter and Appellant)
18 March 2005
Introduction
[3] The pursuers purchased subjects at East Skelston, Dunscore, Dumfries, from the defenders with entry at 16 December 1997. The plan annexed to the disposition by the defenders in favour of the pursuers was inaccurate, in that it excluded from the subjects conveyed part of the subjects which the defenders and the pursuers had agreed should be sold to the pursuers. In this action the pursuers seek rectification of the disposition in their favour by the substitution, for the inaccurate plan, of a plan which accurately delineates the boundaries of the subjects which they had agreed to purchase. They also seek declarator that they are, and have been since the date of entry, in possession of the subjects delineated in the proposed substitute plan. Thirdly, they seek rectification of the corresponding title sheet in the Land Register of Scotland (DMF 1659) so as to include the ground delineated in the substitute plan. [4] The defenders initially opposed the pursuers' claims, but withdrew their opposition in April 2003. [5] Shortly after the sale by the defenders to the pursuers, the defenders sold an adjoining area of land to a Mr and Mrs Kinnaird. In the disposition in their favour the land sold to them was described by reference to a plan which was the same as the one annexed to the disposition in the pursuers' favour. The same error as to the boundary between the two properties thus also entered the title of the land sold to Mr and Mrs Kinnaird. For convenience, the land which ought to have been included in the pursuers' title but was shown in the disposition plans as excluded from it and subsequently included in the land sold to Mr and Mrs Kinnaird will be referred to in this Opinion as "the disputed area". Mr and Mrs Kinnaird sold the land which they had purchased from the defenders (including the disputed area) to the minuter in 1998. The minuter entered the rectification process in order to resist the craves for rectification. After sundry procedure, the action proceeded to proof before answer. [6] In his pleadings and at the proof the minuter sought to rely on section 9 of the Law Reform (Miscellaneous Provisions)(Scotland) Act 1985 ("the Act"). The sheriff held that he was not entitled to do so. Before this court the minuter's submission was that the sheriff had fallen into error in his construction of section 9, and that he ought to have held that the minuter was a person entitled, in reliance on section 9, to resist rectification of the disposition and the title sheet to the effect sought by the pursuers. The minuter accepted that the disposition should be rectified in the way sought by the pursuers, but argued that the rectification should be with effect from a date no earlier than 24 October 1998 (his date of entry) or alternatively no earlier than 27 January 1998 (Mr and Mrs Kinnaird's date of entry), so as to protect his interests by preserving the priority of his title to the disputed area over that of the pursuers. He did not dispute the pursuers' entitlement to decree of declarator in terms of the second crave. He did, however, oppose outright the third crave, for rectification of the title sheet. [7] Having heard counsel for the pursuers and counsel for the minuter, I am satisfied that the sheriff analysed section 9 correctly, and applied its provisions correctly to the circumstances of this case as he found them. I do not consider that the sheriff's decision and reasoning are open to criticism in any material respect. It is only because, as counsel pointed out to us, there is very little reported authority on the proper interpretation of section 9 of the Act, that I think it appropriate to set out in full my reasons for proposing to your Lordships that we should refuse the appeal and adhere to the sheriff's interlocutor of 27 October 2003The legislation
[8] The remedy of rectification of defectively expressed documents was introduced by section 8 of the Act. The provisions of section 8 which are material for the purposes of the present case are in the following terms:|
"(1) |
Subject to section 9 of this Act, where a court is satisfied, on an application made to it, that ― |
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(a) |
a document intended to express or give effect to an agreement fails to express accurately the common intention of the parties to the agreement at the date when it was made; ... |
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it may order the document to be rectified in any manner that it may specify in order to give effect to that intention. |
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... |
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(4) |
Subject to section 9(4) of this Act, a document ordered to be rectified under this section shall have effect as if it had always been so rectified." |
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"(1) |
The court shall order a document to be rectified under section 8 of this Act only where it is satisfied ― |
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(a) |
that the interests of a person to whom this section applies would not be adversely affected to a material extent by the rectification; ... |
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(2) |
Subject to subsection (3) below, this section applies to a person (other than a party to the agreement ...) who has acted or refrained from acting in reliance on the terms of the document or on the title sheet of an interest in land registered in the Land Register of Scotland being an interest to which the document relates, with the result that his position has been affected to a material extent. |
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(3) |
This section does not apply to a person ― |
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(a) |
who, at the time when he acted or refrained from acting as mentioned in subsection (2) above, knew, or ought in the circumstances known to him at that time to have been aware, that the document or (as the case may be) the title sheet failed accurately to express the common intention of the parties to the agreement ...; or |
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(b) |
whose reliance on the terms of the document or on the title sheet was otherwise unreasonable. |
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(4) |
Notwithstanding subsection (4) of section 8 of this Act and without prejudice to subsection (5) below, the court may, for the purpose of protecting the interests of a person to whom this section applies, order that the rectification of a document shall have effect as at such date as it may specify, being a date later than that as at which it would have effect by virtue of the said subsection (4)." |
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The issues
[10] Before the sheriff there was some common ground. It was not disputed that the pursuers had satisfied the requirements of section 8(1) and were therefore entitled to rectification both of the disposition in their favour and of the relative title sheet, unless the minuter was able to invoke the protection of section 9. It was also not disputed that the pursuers were in any event entitled to declarator in terms of the second crave. The issues which were addressed were (1) whether in terms of section 9(2) the minuter was a person to whom section 9 applied; (2) if so, whether the minuter was entitled to resist rectification in terms of section 9(1)(a); (3) whether the minuter was excluded from the protection of section 9(1)(a) on the ground that he was or ought to have been aware at the time of relying on the terms of the document that it did not accurately express the common intention of the parties to it (section 9(3)(a)); and (4) whether his reliance on the document was otherwise unreasonable (section 9(3)(b)). [11] The sheriff held that in the circumstances the minuter did not qualify in terms of section 9(2) for protection of his interests under section 9. That was sufficient for the decision of the case, but the sheriff went on to express his opinion on the other issues. He held that if the minuter had been a person to whom section 9 applied, he would have been entitled to protection under section 9(1)(a) on the basis that his interests would be adversely affected to a material extent by the rectification. He also rejected the propositions that the minuter was excluded from protection by virtue of section 9(3)(a) or (b). [12] Before this court, the only live issue was whether the minuter was, in terms of section 9(2), a person to whom section 9 applied. The pursuers did not seek to re-open by cross-appeal the issues of whether the defender had satisfied the requirements of section 9(1)(a) or of whether he was deprived of section 9 protection by virtue of section 9(3)(a) or (b). It was not disputed that, if the minuter was entitled to section 9 protection, the rectification of the disposition should be postponed under section 9(4) so as to preserve the priority of the minuter's title to the disputed area, or that the title sheet should consequently not be rectified.The sheriff's decision
[13] Before I turn to the submissions made by the parties in the appeal, it is convenient to note the sheriff's reasoning in support of his decision that the minuter did not qualify for protection under section 9. He began (at page 36 of the Appeal Print) by noting the terms of section 9(2), and identifying that the minuter's entitlement to protection under section 9 depended on his falling within the scope of that subsection. He observed that the minuter's knowledge of the error in the pursuer's title was "somewhat indirect". He identified the minuter's basic submission as being that he had acted in reliance on the terms of the pursuers' disposition and title sheet "by proceeding to conclude missives and by paying the purchase price and his position had been affected to a material extent." [14] The sheriff went on the express his opinion in the following terms:"I consider that approach to the construction of section 9 of the 1985 Act to be unsound. It is in my view essential in approaching the construction of these provisions to have regard to the whole purpose underlying the provisions for 'rectification of defectively expressed documents' introduced by the 1985 Act."
After referring to sections 8 and 9, and quoting section 9(2), he continued:
"The actings in reliance on the terms of the document must, because of the whole purpose and context of these statutory provisions, relate to the defectively expressed terms of the document which are to be rectified in terms of the 1985 Act. It is in relation to this proposed rectification that the third party's interests may require to be protected. Moreover the statutory protection is only afforded to the third party if he satisfies the further aspect of the definition that his actings in reliance on the terms of the document etc. have had 'the result that his position has been affected to a material extent'. That result is clearly one which predates the rectification. The test in section 9(2) requires the result 'that his position has been affected to a material extent' [my italics]."
"The circumstances which were fully explored in the evidence led and in the submissions made thereafter simply do not provide any basis for holding that the Minuter had any regard for the aspects of the Pursuers' title or registered interest which were defectively expressed and which require rectification. Although the Minuter's Solicitor would in the course of his work in carrying out the conveyancing for the Minuter have sight of the defective plan attached to the pursuers' title I doubt whether the Minuter himself ever saw this and the disputed area was not in any way connected with the forestry aspect of the property with which the Minuter and his Solicitor were concerned. If the Pursuers' title had been correctly expressed at the date of the Disposition to them the later Disposition by the Defenders to the Kinnairds would simply have corresponded with that so far as the boundaries of the areas respectively disponed as they abutted each other and the Minuter's actings when he came to purchase the property from the Kinnairds would have been no different from the actings which he in fact took. The Minuter candidly conceded that he had not been aware that the disputed area contained a number of buildings and was included within the area of his title and agreed with the suggestion that if he was successful in his opposition to the Pursuers' claim this would be a bonus or windfall - albeit this would serve to balance to some extent the losses from the forestry investment."
"Nor did the evidence demonstrate that the Minuter satisfied the second part of the test to come within the definition in section 9(2) of a 'result that his position has been affected to a material extent'. It is not a legitimate approach to work backwards in time - to attach a value to the disputed area and then claim this as an effect at the time the Minuter was acting when purchasing the property [which was the only action prayed in aid of the statutory protection on the Minuter's behalf - arguably the provisions of section 9(2) might have extended to any actings which were pre-rectification]. The argument for the Minuter subsumes rectification having taken place and loss of the disputed area from the Minuter's title to amount to his position being affected to a material extent. Section 9(2) is however concerned with the situation pre-rectification [in contrast with section 9(1)(a) which refers to interests 'adversely affected to a material extent by the rectification' [my italics]."
The minuter's submissions
[17] Mr Upton, who appeared for the minuter, formulated the proposition on which the minuter relied in broadly the following terms. The test set by section 9(2), namely whether the minuter acted in reliance on the terms of the document (here the pursuers' disposition - the title sheet was not yet available at the time of the minuter's purchase) with the result that his position was affected to a material extent, was met where the minuter had in good faith instructed a solicitor to act for him, the solicitor had examined the pursuers' disposition in the course of examining the sellers' title, and the minuter had (through his solicitor) concluded missives to purchase the disputed area, and accepted a disposition of land including the disputed area, and registered the title thereby acquired, with the result that he had become heritable proprietor of inter alia the disputed area. The very act of taking title to the land erroneously excluded from the pursuers' title qualified the minuter under section 9(2). Contrary to the way in which the matter was recorded by the sheriff in the second full paragraph on page 36 of the Appeal Print, it was no "concession" to say that on the minuter's construction of section 9 it protected any third party purchaser who purchased property adjacent to property whose boundaries were found to require rectification. Section 9 protection was available whenever the third party or his solicitor examined the defectively expressed deed and proceeded with a purchase on the basis of what the defectively expressed deed said. In a question relating to the boundaries of the subjects acquired by a third party purchaser, if the purchaser has examined the defectively expressed disposition, which is consistent with the proposed seller to him having title to the subjects to be sold, and goes on to conclude missives acquiring what the seller appears to have title to sell according to the defectively expressed title to the neighbouring land, and thus takes title to subjects of material extent, he is entitled to the benefit of section 9. [18] In support of his submissions as to the meaning of "reliance" in section 9(2), Mr Upton cited a number of authorities. The first was Sheltered Housing Management Ltd v Cairns 2003 SLT 578. In that case, Lord Nimmo Smith said, at paragraph [14]:"I do not see how somebody could be said to have relied on the terms of the document if all he knew was that the document existed and did not know what its terms were. His position could not be said to have been affected to a material extent unless he knew about, and relied upon, the terms in respect of which rectification is sought."
The sheriff erred in treating it as necessary for the minuter to be aware of the terms of the plan. It was sufficient that the minuter's solicitor had examined it. Reference was also made to Bruce v British Motor Trading Corporation Ltd 1924 SC 908, Stair Memorial Encyclopaedia of the Laws of Scotland Vol. 16, § 1612, and Broadway v Clydesdale Bank plc 2003 SLT 707.
[19] Mr Upton also sought to support his construction of section 9 by reference to the principle of the faith of the records (Anderson v Lambie 1954 SC (HL) 43, per Lord Reid at 61; Hunter v Fox 1964 SC (HL) 95, per Lord Reid at 99). He submitted that that principle still had a role to play as a consideration affecting the construction of sections 8 and 9. That consideration was relevant despite the fact that in the present case the minuter's alleged reliance was on the unrecorded disposition (the title sheet not yet being available at the time of the minuter's purchase). Mr Upton also sought to place reliance on the so-called "offside goals rule" mentioned by Lord Justice Clerk Thomson in Rodger (Builders) Ltd v Fawdry 1950 SC 483 at 501. [20] Finally, Mr Upton made the separate point formulated in the minuter's supplementary grounds of appeal (No. 37 of process). The sheriff, in his interlocutor of 27 October 2003 bore to grant summary decree. The motion for summary decree which the pursuers had enrolled was allowed to drop on 14 August 2003. Thereafter proof was heard. Summary decree was available in terms of Ordinary Cause Rule 17.2 when there was no defence to an action or any part of it disclosed in the defences. It was incompetent to grant summary decree after proof. If the sheriff was correct in granting the decree he did, it should not have been a summary decree, and the pursuers should have been found liable in the expenses occasioned by the motion for summary decree.The pursuers' submissions
[21] Mr Tyre for the pursuers submitted that the issue was whether the minuter was a person to whom section 9 applied. That depended first on whether he acted or refrained from acting in reliance on those terms of the disposition granted in favour of the pursuer in respect of which rectification was sought. Secondly it depended on whether as a result of that reliance his position had been affected to a material extent. It was important to note that section 9(2) looks to the document rectification of which is sought. The relevant document in the present case was thus the disposition in the pursuers' favour. The sheriff had recognised that that was so. There was, however, no evidence that the minuter had relied on that disposition. He said on more than one occasion in the course of his evidence "I bought a plan" (page 137C and E of the Appendix to the Appeal Print). That had to be a reference to the plan annexed to the disposition by the defenders in favour of the Kinnairds, not the one in favour of the pursuers. [22] Mr Tyre drew attention to the only two cases in which the interpretation of section 9 has been considered. The first of these was Co-operative Wholesale Society Ltd v Ravenseft Properties Ltd (a decision of mine, 4 July 2001, unreported). Mr Tyre relied on two passages in my Opinion. At paragraph [29] I said:"In my opinion, a party who seeks to resist the rectification of a document on the ground set out in section 9 requires to address in specific averments two separate matters. Logically the first of these is whether he qualifies as a person to whom section 9 applies, and the second is whether the test set out in section 9(1)(a) is satisfied. So far as the first matter is concerned, the averments must cover the elements of qualification set out in section 9(2). In the circumstances of the present case these are:
1. that he is a person other than a party to the agreement mentioned in
section 8(1)(a);
2. that he has acted or refrained from acting in reliance on the terms of
the document of which rectification is sought; and
3. that as a result his position has been affected to a material extent.
So far as section 9(1)(a) is concerned, there must be averments that the interest of the person opposing rectification would be adversely affected to a material extent by the rectification. There is some overlap of language between sections 9(1) and 9(2) which tends to obscure the fact that they are concerned with separate matters."
Later, in paragraph [30], I said:
"The matter can be tested, in my view, by asking whether the party placing reliance on the document would have acted in the same way as he actually did if the document had at that time been in the terms in which it would be expressed after rectification. If he would not, he can in my view be regarded as having acted in reliance on the un-rectified document."
Conversely, Mr Tyre submitted, if he would in that event have acted in the same way, he cannot be regarded as having acted in reliance on the document.
[23] Mr Tyre also relied on the passage in the Opinion of Lord Nimmo Smith in Sheltered Housing Management Ltd v Cairns at paragraph [14], which I have quoted above. For the minuter to qualify in terms of subsection (2), Mr Tyre submitted, it was necessary for him (1) to have known that the disputed area was not included in the pursuers' title, (2) to have acted differently in the light of that knowledge from the way in which he would have acted if he had not had that knowledge, and (3) to have changed his position to a material extent by virtue of that reliance. [24] Mr Tyre also made reference to the Scottish Law Commission Report on Rectification of Contractual and Other Documents (Scot. Law Com. No. 79). He did so for two purposes. He referred to paragraphs 6.2 for the reasoning which underlay section 9. He also referred to paragraph 8.6 for the reasons underlying the recommendation that the court should be empowered to order rectification of the Land Register of Scotland in consequence of the rectification of the document from which the entry in the Register had been derived. It was clear, he submitted, that sections 8 and 9 were designed to innovate upon the law as it stood at the time of Anderson v Lambie and Hunter v Fox and to constitute a statutory exception to the principle of the faith of the records. [25] Turning to the sheriff's findings in fact, Mr Tyre referred to findings 7 to 9 and submitted that what was missing was any finding that the minuter had any awareness of the fact that the pursuers' title excluded the disputed area. The passage in finding 7 to the effect that the price paid by the minuter reflected the value of the estate on an acreage basis as a forestry investment was founded on the minuter's evidence at page 113 of the Appendix. Other parts of that finding were based on the evidence of the minuter at pages 134-5. It could not be said that the minuter's position had been affected to a material extent in reliance on the pursuers' disposition when the defender did not know that the pursuers' title did not include the disputed area. [26] The critical parts of the sheriff's note, according to Mr Tyre's submissions, were the passages at pages 36 and 37 of the Appeal Print which I have quoted above. The sheriff's analysis of the law was, for the most part, correct. The only respect in which Mr Tyre submitted the sheriff had erred was in the extent to which he had regarded the knowledge of the minuter's solicitor as relevant. Apart from that aspect of the matter, the sheriff had, despite the fact that the relevant cases had not been cited to him, correctly analysed section 9. He had correctly concluded that the minuter himself had probably not had sight of the defective plan. He had correctly concluded that the minuter's actings would have been no different if the plan annexed to the pursuers' disposition had been correct. On that basis he had been right to hold that the minuter had not relied upon the erroneous description of the pursuers' land in their disposition. [27] Mr Tyre submitted that for four reasons it was wrong to impute to the minuter knowledge of the fact that the pursuers' disposition did not include the disputed area. In the first place, there was no evidence that the minuter's solicitor had examined the pursuers' disposition. The sheriff appeared to have proceeded on the basis that the minuter's solicitor "would in the course of his work in carrying out the conveyancing for the Minuter have sight of the defective plan attached to the pursuers' title" (Appeal Print, pages 36 and 37), but there was no evidence that he had in fact examined the pursuers' disposition. Secondly, there was no evidence that the minuter's solicitor had knowledge of the precise position of the boundary between the land conveyed to the pursuers and the land conveyed to the Kinnairds, or that he relied on the pursuers' disposition as showing that the boundary was in a particular position. The inappropriately small scale of the plan militated against that. Thirdly, even if the solicitor did know from the pursuers' disposition the position of the boundary as shown on the pursuers' title, there was no basis for imputing that knowledge to the minuter, in face of his evidence as to the extent of his actual knowledge. Fourthly, there was no evidence that if the minuter's solicitors had been aware of the position of the boundary as disclosed in the pursuers' title, and had passed that information to the minuter, the minuter would have acted any differently. [28] In short, Mr Tyre's submissions were to the effect that the sheriff's findings in fact were in accordance with the evidence, that his analysis of the statutory provisions was correct, and that his conclusions were justified by the application of the statutory provisions to the facts as he found them. The appeal should therefore be refused.Discussion
[29] The only issue is this case is whether the minuter has established that he is a person to whom section 9 of the Act applies. As I identified in Co-operative Wholesale Society Ltd v Ravenseft Properties Ltd at paragraph [29], there are three elements which require to be addressed when considering whether a person is one to whom section 9 applies. These elements are (1) that he is a person other than a party to the agreement mentioned in section 8(1)(a); (2) that he has acted or refrained from acting in reliance on the terms of the document of which rectification is sought; and (3) that as a result his position has been affected to a material extent. In the circumstances of the present case it is clear that the minuter was not a party to the agreement for sale of the subjects at East Skelston by the defenders to the pursuers. What remains for him to establish is that he acted or refrained from acting in reliance on the terms of the disposition by the defenders in favour of the pursuers which the pursuers seek to have rectified, and that by virtue of that reliance his position was altered to a material extent. [30] In the context of rectification of a defectively expressed document, where the ability of a third party to resist rectification is made to depend on inter alia reliance on the terms of the document, it is in my opinion clear that the reliance must be on terms (a) which form part of the document as it exists before rectification and (b) which will not form part of the document if it is rectified in the way sought (Sheltered Housing Management Ltd v Cairns, per Lord Nimmo Smith at paragraph [14]). Before there can be reliance in the required sense, there must be knowledge on the part of the third party not merely of the existence of the document but also of those terms of it in respect of which rectification is sought (ibid.). [31] In the present case, therefore, the minuter required to establish that he knew that the plan annexed to the disposition in favour of the pursuers showed the boundary of the land acquired by them in such a position as to exclude from that land the disputed area. He did not do so. The sheriff recorded in finding-in-fact 7:"The Minuter was not aware that there were any buildings potentially comprised within the property that he was purchasing and was not aware that the area of 0.815 acres referred to in the previous findings-in-fact [i.e. the disputed area] apparently formed part of the subjects."
In finding-in-fact 9 he added:
"The Minuter was not aware prior to this time [August 1999] that the area in question [i.e. the disputed area] was apparently included in his title."
In his Note the sheriff said (at page 37 of the Appeal Print):
"The Minuter candidly conceded that he had not been aware that the disputed area contained a number of buildings and was included within the area of his title."
None of these passages focuses specifically on the knowledge acquired by the minuter from the pursuers' disposition (which, as Mr Tyre correctly pointed out, is the only source of knowledge relevant to the question of reliance), but they all make it clear that the minuter did not acquire from the pursuers' disposition knowledge of the fact that the land conveyed to them excluded the disputed area.
[32] Mr Upton's argument depended on the proposition that it was sufficient, as the foundation on which to base a submission that the minuter relied on the terms of the pursuers' disposition, that his solicitor had examined that document. His knowledge of its terms could then be imputed to the minuter. I am of opinion that that submission is not well-founded. There is no finding-in-fact to the effect that the minuter's solicitor learned from examination of the pursuers' disposition that the disputed area was not included in the land conveyed to the pursuers. Mr Upton did not draw to our attention any passage in the evidence which would have justified the sheriff in making such a finding-in-fact. It is true that the sheriff in his Note makes reference at two points to the minuter's solicitor's knowledge of what was shown by the pursuers' disposition. At page 36 he said:" ... the Minuter's knowledge of the incorrect document was somewhat indirect although the disposition by the defenders to the pursuers was as matter of course exhibited to and examined by the Minuter's solicitor prior to the Minuter's purchase of the property ― but the Minuter certainly had knowledge through his Solicitor of the incorrect boundaries shown for the pursuers' title ...".
Later on the same page he added:
" ... the Minuter's Solicitor would in the course of his work in carrying out the conveyancing for the Minuter have sight of the defective plan attached to the Pursuers' title ... ".
It does not seem to me, however, that there was any evidence to justify those observations. Moreover, I accept Mr Tyre's submission that in the circumstances, even if the minuter's solicitor did examine the pursuers' title, there is no proper basis for inferring that as a result of doing so he realised that the disputed area was excluded from the land conveyed to the pursuers. The scale of the plan attached to the pursuers' disposition was such as to make it difficult to see precisely where the boundary was depicted in the vicinity of the disputed area, and since that area was far from being the focus of the minuter's interest, it is quite likely that the minuter's solicitor paid no particular attention to the line of the boundary. In these circumstances I am of opinion that, even if the sheriff was right to infer that the minuter's solicitor examined the pursuers' disposition, it would be wrong to impute to the minuter on that basis knowledge that the pursuers' title excluded the disputed area. In particular, it would in my opinion be wrong to impute such knowledge to the minuter in face of the sheriff's findings-in-fact to the effect that the minuter did not in fact know that the disputed area was on his side of the boundary, and then to use such imputed knowledge as the basis for a finding of reliance on the minuter's part. For these reasons I am of opinion that the minuter has not established the requisite knowledge on his part of the defectively expressed terms of the pursuers' disposition to found a case that he acted in reliance on them.
[33] In any event, there was in my opinion no basis for a finding that the minuter acted in reliance on the terms of the pursuers' disposition. A person acts in reliance on a piece of knowledge if, because he has that knowledge, he acts differently from the way in which he would have acted if he had not had that knowledge (Co-operative Wholesale Society Ltd v Ravenseft Properties Ltd, at paragraph [30]). In the present case, there is no basis for holding that the minuter in fact acted any differently from the way in which he would have acted if the pursuers' disposition had correctly included the disputed area in the land conveyed to the pursuers. There is no finding-in-fact to that effect. The sheriff in his Note (at page 37) said:"If the pursuers' title had been correctly expressed at the date of the Disposition to them ... the Minuter's actings when he came to purchase the property from the Kinnairds would have been no different from the actings he in fact took".
That conclusion is amply justified by the points recorded by the sheriff in finding-in-fact 7: the minuter wished to purchase the Kinnairds' property as a forestry investment; he did not carry out any detailed inspection of the property or instruct a survey; the price was offered on a basis which reflected the value of the estate on an acreage basis as a forestry investment; the minuter was not aware that any buildings were included or that the disputed area formed part of the subjects he was acquiring. In short the inclusion of the disputed area in the subjects he was acquiring, or its exclusion from them, was of no moment to the minuter. As the sheriff put the matter at page 37:
" ... the disputed area was not in any way connected with the forestry aspect of the property with which the Minuter and his Solicitor were concerned."
I am therefore satisfied that the sheriff was right to conclude that there had been no reliance by the minuter on the defective terms of the pursuers' disposition.
[34] Mr Upton's submission was that there was reliance simply because the minuter, to whom knowledge of the defective terms of the pursuers' disposition could be imputed by reason of his solicitor's examination of that deed, proceeded with the purchase of the adjoining land, accepted the disposition in his favour and on the basis of it acquired a registered title to the land including the disputed area. I have already dealt with the question of imputed knowledge. I do not, however, accept the submission that completion of the purchase and the taking of title constituted reliance. As I understood Mr Upton's submission, it was that there was reliance because what the minuter did was different from what he would have done if the pursuers' disposition had been correctly expressed. He contracted to acquire, and took and registered title to, the forestry estate including the disputed area, whereas if the pursuers' disposition had been accurately expressed, he would have acquired, and taken and registered title to, the forestry estate excluding the disputed area. I do not accept that that amounts to reliance on the defectively expressed disposition. Reliance requires more than a different result. It requires the person claiming to have relied on the defective document to have acted or refrained from acting differently from the way he would have acted or refrained from acting if he had not known the terms of the defective document. It requires the adoption of a course of action motivated or influenced by the knowledge of the terms of the defectively expressed document. In the present case, there is no basis for finding that the terms of the pursuers' disposition influenced the way in which the minuter acted in any respect. [35] The minuter also in my opinion failed to establish the last necessary element of qualification under section 9(2). He did not prove that as a result of reliance his position was affected to a material extent. I agree with the sheriff that it was not legitimate to approach the matter of materiality retrospectively, by valuing the disputed area in the circumstances that now prevail. The present value of the disputed area is no doubt relevant to the separate question which would arise under section 9(1)(a), if the minuter were a person entitled to the protection of section 9 at all. But it is not relevant to the question raised by section 9(2). Having regard to (i) the purpose for which the minuter was buying the forestry estate, namely as a forestry investment, (ii) his lack of interest in the detail of what was comprised in the estate, as evidenced by his not having carried out a detailed inspection or instructed a survey, and (iii) the fact that the price he offered was a price reflecting the forestry acreage, it is in my opinion clear that the minuter's position was not affected to a material extent. [36] Finally, I am of opinion that there is no merit in the minuter's supplementary ground of appeal. The motion for summary decree was allowed to drop on 14 August 2003. That having occurred, the reference to summary decree in the interlocutor of 27 October 2003 is clearly no more than a clerical error. It is an error of no practical significance, which can readily be corrected. I do not consider it appropriate to single out the hearings relating to the motion for summary decree for different treatment with regard to expenses.Decision
[37] For the reasons which I have set out I conclude that the minuter's submissions must fail. I therefore propose to your Lordships that we should refuse the appeal, amend the sheriff's interlocutor of 27 October 2003 by deleting the word "Summary" where it appears in the second line of page 32 of the Appeal Print, and quoad ultra adhere to that interlocutor.
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Jones & Anor v. Wood & Ors [2005] ScotCS CSIH_31 (18 March 2005) |
EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
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Lord Marnoch Lord Macfadyen Lord Clarke |
[2005CSIH31] XA154/03 |
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OPINION OF LORD CLARKE in APPEAL in the cause ALAN JONES and MRS BRENDA MAUREEN JONES, Pursuers and Respondents; against ANDREW STUART WOOD and MRS MARGARET WOOD, Defenders and Respondents; and JOHN DEREK THOMSON BOGIE, Minuter and Appellant: _____ |
Act: Tyre, Q.C.; Thompsons (for John Henderson & Sons, Dumfries) (Pursuers and Respondents)
Alt: Upton; Russel & Aitken (for Whitelaw, Edgar & Baldwin, Dumfries) (Minuter and Appellant)
18 March 2005
[38] Since I am entirely satisfied that the sheriff analysed correctly both the provisions of section 9 and their application to the circumstances of the present case, I agree that this appeal must be refused and that matters should be disposed of in the manner indicated by Lord Macfadyen.
