Restitution Discussion Group Archives
| Sender: |
Lionel Smith |
| Date: |
Mon, 15 Mar 2004 16:19:03 –0500 |
| Re: |
From Martin Hogg: Burnett's Trustee v Grainger |
From Martin Hogg:
Perhaps I may be permitted to make a comment on the
recent discussions in this group concerning the House of Lords' decision
in Burnett's
Trustee v Grainger. The comments posted to date appear all to have
come from Common Lawyers. As a Scots Private Law academic perhaps I may
be permitted to add my tuppence.
The decision in this case appears to have produced a
lot of hand wringing and anguished cries from Common lawyers. In Scotland,
the decision has been welcomed by property lawyers (and indeed other private
lawyers) with a sigh of relief. The decision represents a firmly hammered
nail in the coffin of the prior, and much lamented, decision of the House
of Lords in Sharp
v Thomson 1997 SC (HL) 66, which came dangerously close to fatally
undermining the well accepted unified notion of ownership in Scots property
law, and the integrity of the property register. It has always been a
basic principle of the Scots legal system that one either is, or isn't,
the owner of something. There is nothing in between. In particular there
is no concept of "beneficial ownership" in Scots law - this is a Common
Law concept wholly alien to Scots Law. Sharp v Thomson undermined the
long accepted orthodoxy, and came perilously close to intruding beneficial
ownership into our law. It was rightly lamented by Scottish property academics.
Burnett's Trustee v Grainger has restricted the application of Sharp.
One hopes that such restriction will continue in future decisions, and
that (one day) their Lordships will recognise Sharp as having been wrongly
decided. Burnett's Trustee helps to restore the notion of the sanctity
of the property register: ownership proceeds from registration.
The decision of the Lords in Burnett's Trustee was NOT
about unjustified enrichment. It was an orthodox application of Scots
property law. The only judge to raise concerns about unjustified enrichment
was one of the English judges hearing the appeal, Lord Hoffmann. Neither
of the two Scottish judges who gave leading opinions in the case saw the
appeal as pled as raising any matter of unjustified enrichment. Indeed,
as one of them, Lord Rodger, a former President of the Court of Session
(Scotland's highest civil court), notes in his speech, questions of unjust
enrichment were "not argued in the appeal".
No doubt one may feel a great deal of sympathy for the
appellants, the Graingers. It may be that there ought to be some remedy
available to them (and indeed, I think there may, see below). But many
Scots lawyers are thankful that this was not achieved by attacking the
integrity of the property Register, and continuing the prior attack begun
in Sharp on the principles of Scots Property Law. I should also add that
the English concept of a constructive trust is, like beneficial ownership,
a device of the Common Law, and a solution in Scotland to any perceived
injustice in a case like this would not properly lie through utilisation
of this device.
Given what I have said above, it may be superfluous
to add that I disagree with a previous poster who talked of the regrettable
consequences of "a registration statute so inexplicit about the consequences,
vis-a-vis creditors, of non-registration". In my opinion, there is no
need for the relevant statutes concerning land registration to deal with
the question raised in Burnett's Trustee. If there is an injustice which
needs resolving, then it is one which might perhaps be addressed in the
relevant bankruptcy laws. However, a simpler solution suggests itself.
A solicitor who fails to take immediate steps to register a disposition
of heritable property, and thus imperils his client's ownership of the
relevant property, seems to me to be (arguably) negligent. I would have
thought that in a case such as this the best solution would be for the
person who finds themselves short- changed by events (in this case the
Graingers) to sue their solicitor for negligence. If, as was the case
in Burnett's Trustee, there were ongoing negotiations about a transfer
of garden ground, the solicitor ought either to have refused to settle
with the client's money on the settlement date, or have insisted on registering
the disposition leaving open the possibility of amending conveyancing
following on later. In some cases, of course, prescription may prove problematic
in a case against the solicitors, or bankruptcy of the firm of solicitors
involved, but my gut-feeling is that this is an 'injustice' which we have
to live with.
Unjust enrichment is really a red herring so far as
I can see in relation to this case. The trustee in sequestration, from
what I can see, acted wholly in accordance with his powers, and by quite
properly exercising his duties as trustee he cannot be said to be "unjustifiedly"
enriched. Enrichment perhaps, but quite in accordance with the law and
thus not unjustified.
I hope this adds something to the ongoing debate, especially
for those members of the group who may be unfamiliar with Scots law.
Martin Hogg ---------------------------------------------- Office (+44) (0)131 650 2071 **The University is on Easter vacation from 13th March
until 11th April 2004. Summer Term beings on Monday 12th April.
University of Edinburgh Law School
Martin A Hogg LLB, LLM, NP, FRSA
Convener of Undergraduate Studies
The School of Law
University of Edinburgh
Old College
South Bridge
Edinburgh EH8 9YL
Scotland
Fax (+44) (0)131 662 0724
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