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As Lord Clarke notes at para 51, the second point does not in these circumstances arise, since the whole situation falls outside the scope of regulation 2. Ratio |
To ask how the exception permitted by regulation 7(3) and article 4(2) of the Directive might apply, when by definition it cannot, may risk giving a slightly false impression about the scope of the exception in situations to which it is potentially applicable. Ratio |
The reasons which can, as Lord Clarke demonstrates, be given for concluding that the exception would not apply to a considerable extent duplicate those given for concluding that regulation 2 does not apply. Ratio |
They are in particular that the arbitrators would not be under the direction of the parties: see paras 61 et seq. Ratio |
Accordingly, it may be appropriate to say a few words about the application of the exception in a situation in which the regulation would apply. Ratio |
If one takes a situation which is within regulation 2, say the engagement by the Ismaili community, or by any other organisation whose ethos is based on religion or belief, of an employed lawyer to undertake English law work, I would expect it to be much more difficult to maintain as valid a restriction to members of t... |
Many English as well as other lawyers believe in, are trained in and are familiar with techniques for the amicable resolution of disputes, including conciliation, mediation and arbitration. Ratio |
The value of alternative dispute resolution, particularly mediation, is also recognised at the European legal level (see eg Directive 2008/52/EC of 21 May 2008 on certain aspects of mediation in civil and commercial matters and Council of Europe Recommendation No R(2002)10 on civil mediation). Ratio |
A religious or faith-based communitys or organisations power first to select and then to direct its own employed lawyers would be a secure means of ensuring that its employed lawyers valued, understood and prioritised the handling of English law work so far as possible on a non-confrontational basis, using alternative ... |
A refusal to employ anyone other than a member of the particular religion or faith would in that context seem unlikely to be justified or proportionate. Ratio |
This appeal raises a question about what the grantee of a deed who has been provided with a defective title needs to establish in order to obtain a remedy under the granters obligation of absolute warrandice. Ratio |
By including a clause of warrandice in a disposition of property which he has sold to the grantee, the seller warrants his title as absolute owner of the property. Ratio |
But warrandice is a contingent obligation. Ratio |
It only comes into effect upon eviction. Ratio |
It has been described as an obligation to warrant the grantee against eviction of the thing sold: MP Brown, A Treatise on the Law of Sale (1821), p 240, para 329. Ratio |
Eviction, in the strict sense of the word, only takes place when a court order is pronounced which deprives a party of his right to continue to occupy the property. Ratio |
As Brown puts it, it is concerned with the loss of the subject through the enforcement of a third partys rights by the sentence of a judge: p 258, para 353. Ratio |
But Scots law has never insisted upon eviction in that sense as the only pre-condition of entitlement to proceed against the granter for recourse under his obligation of warrandice. Ratio |
There can be eviction for this purpose if eviction is threatened and there is shown to be a competing title which will inevitably prevail in competition with that which was given by the granter to the grantee. Ratio |
The question that this case raises is directed to the requirements that must be satisfied if the grantees claim for breach of warrandice is to succeed on the basis of a threat of eviction. Ratio |
It can now be taken as settled law that the claim will succeed if the challenge is made by the party with a competing title to the disputed subjects which is unquestionable and will inevitably prevail in competition with that of the grantee: Clark v Lindale Homes Ltd 1994 SC 210, 216. Ratio |
The problem that has arisen in this case is that, contrary to what was understood at the time when the grantee submitted to the threat of eviction, the party who challenged the grantees title did not at that time have a competing right to the property. Ratio |
The title to the disputed ground was vested in a third party when the threat was made. Ratio |
But the grantee offers to prove that the challenger would have been immediately able to secure title to the disputed ground in its favour and that no proceedings would ever have been required to establish its title to it. Ratio |
That assertion is disputed by the granter, who submits that the grantees claim would be bound to fail even if all the facts on which the grantee relies are proved. Ratio |
Her case is that a challenge by a party whose ownership of the disputed ground was not registered or otherwise established at the time of the threat, but who would have been able subsequently to obtain a registered title, is not sufficient to engage a remedy in warrandice. Ratio |
The situation that has arisen in this case is not one that any previous discussion of the extent of the remedy has contemplated. Ratio |
Some of the dicta might be taken as suggesting that the granter cannot succeed as the essential requirements for a successful claim are not satisfied. Ratio |
But the limits of what it is necessary to prove to establish an eviction for this purpose have never been precisely identified. Ratio |
So I think that it is open to us to address the issue as one of principle. Ratio |
But first it is necessary to set out the facts. Ratio |
The facts FAC |
The pursuer, Mr Morris, seeks an award of damages against the defender, Mrs Rae. FAC |
He is the assignee of rights formerly vested in Ransom Developments Ltd (RDL), which is now in liquidation. FAC |
On 3 August 2004 RDL concluded missives with the defender for the purchase of a plot or area of ground at 152 Dalmellington Road, Ayr. FAC |
The transaction was settled on 23 August 2004. FAC |
RDL received a disposition of the subjects in exchange for the purchase price of 140,000. FAC |
The disposition contained the words and I grant warrandice. FAC |
RDL took entry and commenced building operations on the subjects which it had purchased. FAC |
A title to the subjects had not previously been registered in the Land Register under the Land Registration (Scotland) Act 1979. FAC |
The system of registration of title which that Act introduced replaced the recording of deeds in the Register of Sasines as the principal means of creating real rights in land. FAC |
Registration of title was introduced by a phased process across Scotland, one area after another. FAC |
By the date of this transaction it had become fully operational. FAC |
So it was necessary for RDL to seek registration of the disposition in the Land Register to complete its title to the subjects. FAC |
The usual search and examination of the title as recorded in the Register of Sasines was carried out before the transaction was settled. FAC |
It did not suggest that there was any reason to think that there was anything wrong with it. FAC |
But by letter dated 8 June 2005 the Keeper of the Registers informed RDLs solicitors that an examination of the various title deeds indicated that the defender did not have, and never had, a title to part of the subjects which she had sold to RDL. FAC |
This was the part adjacent to Kincaidston Drive over which access was to be obtained from the public road to the proposed development (the disputed part). FAC |
The Keeper was therefore not able to complete the process of registration by issuing an unqualified land certificate. FAC |
He would have had to exclude a right to indemnity in relation to the disputed part under section 12(2) of the Act. FAC |
Prior to the introduction of the system of land registration a defect of the kind that the Keeper had identified might have remained undetected. FAC |
If the subjects were possessed for ten years openly, peaceably and without any judicial interruption after the recording of a deed in the Register of Sasines that was sufficient on its own terms to constitute a real right to the subjects disponed to the purchaser, the right would have been exempt from challenge by the ... |
As it was, the fact that the defect had been detected made it necessary for RDL to make further enquiries with a view to resolving the problem. FAC |
Positive prescription is available under the 1973 Act in cases where a real right has been registered in the Land Register subject to an exclusion of indemnity: section 1(1)(b). FAC |
But, unless the defect in title could be cured in the meantime, any developments carried out on the disputed part from which the Keeper had excluded the right to indemnity would not have been marketable. FAC |
The pursuer says in his pleadings that the disputed part was truly owned by James Craig Ltd (JCL), and that JCL can demonstrate that it obtained a good title to it by a disposition in its favour which was recorded in the Register of Sasines in September 1949. FAC |
It had transferred title to the disputed part inadvertently to John Stevenson Lynch by a disposition dated 30 July 1991, which was recorded in the Register of Sasines on 15 August 1991. FAC |
But Mr Lynch later acknowledged this error and accepted it. FAC |
What then happened was that by letter dated 18 November 2005 the solicitors acting for JCL asserted JCLs title to the disputed part and threatened to evict RDL from it. FAC |
The pursuer avers that in response to this threat RDL had to negotiate with JCL for the purchase of the disputed part, and that in order to do this it was obliged to pay JCL the sum of 70,000. FAC |
In exchange it obtained a disposition of the disputed part from JCL on 9 March 2006. FAC |
In recognition of the error Mr Lynch then granted a disposition of the disputed part in favour of RDL dated 30 July 2006 without any consideration having been paid to him. FAC |
This disposition was then registered by the Keeper without exclusion of indemnity. FAC |
That was the state of the pursuers pleadings when the case came before a temporary judge on the procedure roll for a debate as to their relevancy. FAC |
The temporary judge, Rita Rae QC, held that the pursuer was entitled to a proof of his averments. FAC |
The defender reclaimed, and on 5 April 2011 an Extra Division (Lords Clarke and Bracadale, Lord Bonomy dissenting) allowed the reclaiming motion and dismissed the action: [2011] CSIH 30, 2011 SC 654. FAC |
Speaking for the majority, Lord Clarke said that it appeared to him from the authorities that the question whether the evicter had an unquestionable title to the subjects in question, and thus the right to evict, had to be judged at the time that eviction was sought or threatened. FAC |
As JCL did not have a title to the disputed part which would have entitled it to demand possession immediately, there was no breach of warrandice: para 13. FAC |
Lord Bonomy said that the unquestionable nature of JCLs title could be established by evidence relating to the circumstances of the disposition to Mr Lynch and the arrangements for reconveyance, and that there was no suggestion in the pleadings that any action that JCL might have raised in its own name or with Mr Lynch... |
As a result of further enquiries which followed the raising of this action, the pursuer now states in paragraph 7 of the statement of facts and issues which he has lodged for the purposes of his appeal to this court that as at November 2005 RDL and JCL both believed that JCL held the title to the disputed part. FAC |
He offers to prove that neither party was then aware that the title had, in error, passed to Mr Lynch in 1991. FAC |
The plans attached to the relevant titles are said to have been difficult to interpret and, just as their examination did not at first reveal that the defender did not have title to the disputed part, their examination did not reveal that JCL did not have a title to it either. FAC |
JCLs threat of eviction was made in the belief that it held the title to the disputed part, and RDL yielded to that threat on the basis that there was no answer to it. FAC |
There then follow these averments: Had James Craig Ltd raised proceedings against the appellant, the above mentioned error may not have been discovered. FAC |
Even if it had been discovered, James Craig Ltd would have been immediately able to secure title to the disputed part in their favour as Lynchs subsequent acknowledgment of the error and co-operation demonstrates. FAC |
No proceedings (or proof of title) were or would ever have been required to establish the title of James Craig Ltd to the disputed part. FAC |
The defender states in her statement of facts and issues that the pursuers paragraph 7 is not agreed. FAC |
In particular she disputes the assertion that if the error had been discovered JCL would have been immediately able to secure title to the disputed part and that no proceedings to establish its title would have been necessary. FAC |
She states in her written case that it was only after she had pointed out that JCL had conveyed the disputed part to Mr Lynch in 1991 that RDL, having obtained what was essentially a worthless disposition from JCL in return for 70,000, investigated the position and obtained a further disposition from Mr Lynch. FAC |
Further complications that she has raised are that it now appears that the missives of May 1991 which preceded the disposition of 1991 in favour of Mr Lynch proceeded in the name of James Craig (Farms) Ltd, that the proposition that the disputed part was not intended to be included in that transaction may be open to so... |
It is plain that there is a substantial dispute as to the true state of the facts. FAC |
The question before us, however, is whether the pursuer is entitled to a proof of his averments. Ratio |
It is agreed that these must be taken to include what he has set out in his statement of facts and issues. Ratio |
For present purposes the assumption must be that he will be able to prove, among other things, what he avers in paragraph 7. Ratio |
The issue Ratio |
The defender states in her statement of facts and issues that the question in this case is whether a threat to evict RDL by JCL, a party whose ownership was not registered or otherwise established at the time of the threat but who subsequently was able to obtain a registered title, is sufficient to engage a remedy in w... |
The pursuer puts the point in this way: is it sufficient to engage a remedy in warrandice if the threat was made by the true owner of the disputed part, whose ownership was not yet registered at the time of the threat but to which there was no impediment to registration and which would inevitably prevail? Ratio |
I think that the issue is best approached in two stages. Ratio |
First, there is the way the defender puts the question. Ratio |
In other words, as the majority in the Extra Division held, does the question whether the evicter has an unquestionable title to the subjects in question fall to be judged at the time that eviction is sought or threatened? Ratio |
If that question is answered in the affirmative, it is clear that the pursuers averments are irrelevant. Ratio |
He accepts that, contrary to what he says was understood to be the position at the time when the threat was made, JCL did not then have a title to the disputed part. Ratio |
But if there is room for the remedy to be engaged where the threat is made by someone who does not have a real right to the disputed part at the time of the threat because his competing title has not yet been registered, there is a further question that must be answered. Ratio |
What does the party with the defective title who has incurred loss as a result of a threat need to show in order to establish that the threatened demand amounted to an eviction? Ratio |
The state of the authorities Ratio |
A convenient starting point for an examination of these questions is to be found in the observations by Lord President Hope and Lord Morison in Clark v Lindale Homes Ltd 1994 SC 210 which led the majority in the Extra Division to conclude that the pursuers averments were irrelevant. PRE |
At p 216B-C I said, with reference to section 895 of Bells Principles (10th ed): As I understand the statement of principle in that paragraph, eviction occurs when there is a loss to the buyer due to the fact that someone else has a competing title which is beyond doubt. PRE |
Later on the same page, at p 216F, I said: The warrandice is breached when there is shown to be a competing title which will inevitably prevail in competition with that which has been given to the purchaser. PRE |
But at p 220C-D, having acknowledged that more was required to justify a claim under the warrandice clause than a mere deficiency in the title of the grantee, I said: Something else was required, and according to expressions used in the authorities it is eviction which gives rise to the claim. PRE |
The word eviction might be thought to imply that the loss is in some respect due to action by the party who has the competing title to assert his rights In the present case there are no averments that any action was taken by the party with the competing title, and if the word eviction is to be understood in this sense ... |
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