HL Deb 05 December 1978 vol 397 cc72-87

5.46 p.m.

Lord KIRKHILL

My Lords, I beg to move that this Bill be now read a second time. The Bill provides for the setting up of a Land Register of Scotland, on which will be recorded all land transactions as they take place. The new Register will thus progressively supersede the existing Register of Sasines in which titles to land are presently recorded. The main provisions implement proposals in the Report of the Henry Committee on Registration of Title to Land in Scotland, 1969 (Cmnd. 4137). The Register of Sasines has existed in Scotland as a public register of title to land since 1617. It has stood up to the test of time remarkably well. But, depending as it does on an examination by solicitors of the whole series of title deeds on each occasion on which a property changes hands in order to ensure that the transferee obtains a valid title, it has plainly become far too cumbersome a system to continue to cope with the pace and scope of modern property transactions. It could be kept alive only by the deployment of steadily increasing numbers of staff in the Department of the Registers, as well as in the private firms of professional searchers. Even as matters stand, delays in obtaining a completed title can frequently be lengthy, and in the longer term they could only worsen if other measures were not set in train.

The cardinal features of the new system of registration for which the Bill provides are two-fold. First, when an application for registration is made for the first time, the Keeper of the Registers will carry out a thorough and once-for-all examination of all previous title deeds to the property. Further examination of a title, once registered, will thus be rendered unnecessary on any future occasion on which the property changes hands. Secondly, a title once entered on the Land Register will be guaranteed by the Keeper and any title holder will be indemnified against loss arising from error in the Register. The new system, once in operation, will thus eliminate the present lengthy examination of titles, and for the first time will introduce a State indemnity for error in the new Register. The latter arrangement—State indemnity—already operates in England and Wales in relation to the Land Registry system already partly in operation there. On the basis of experience in England and Wales, the number of occasions on which, as a result of error in the Registers, the State indemnity is likely to be called upon is likely to be very small indeed.

It will readily be appreciated that a major change of the kind for which the Bill provides cannot be brought into force throughout Scotland overnight, and will require to be phased over a period of years. Additional areas will be brought within the scope of the new Register year by year until all nine areas into which the country is administratively divided for land registration purposes are embraced within it. It will of course be many years thereafter—perhaps 25 or 30—before all properties recorded in the present Register of Sasines are transferred to the new Register and the Sasines Register can finally be wound up.

It may be helpful if I now say a brief word of explanation on the detailed provisions of the Bill. Part I of the Bill provides for the setting up of the new Land Register, and contains detailed provisions governing the processes of registration. Clause 1 sets up the new public register and provides for its control and management by the Keeper of the Registers for Scotland. Clause 2 describes the land transactions to be registered, and provides, subject to certain exceptions, that registration shall be the only means of creating a real right in land.

Clause 3 specifies the supporting information required with any application for registration—the main feature being the requirement as to description of the land in question. In future, this will have to be in a form sufficient to enable the Keeper to identify it by reference to Ordnance Survey map. The eventual certificate of title issued by the Keeper will be supported with an appropriate map section on which the boundaries of the property in question are delineated. Clause 3 also contains an important new provision, namely, that applications relating to land extending to two hectares or more shall disclose the precise area in question, unless already specified in the title sheet. Hectarage is sometimes stated in titles at present, but there is no requirement to do so. This will be a useful provision adding greater precision to the Register as a source of information about the extent of individual landownership. The remaining clauses in Part I of the Bill are essentially procedural.

Part II of the Bill relates to indemnity arising through loss due to error in the new Register. Clauses 11 and 12 specify the circumstances governing entitlement, and Clause 13 contains provisions for safeguarding the Crown's rights in the foreshore. Clauses 14–18, forming part III of the Bill, provide for various; simplifications in the forms of property deeds. Most of these clauses apply to the Register of Sasines as well as the Land Register.

Clauses 19–28, comprising Part IV of the Bill, are in the main procedural and consequential. Clause 19, however, makes provision to assist a special class of tenant known as tenants-at-will, to acquire the landlord's interest in the land in question and to have it recorded in the Register. Tenancies-at-will are a form of unwritten tenancy, most commonly to be found in the North-East counties. In the absence of any written title, the occupants have hitherto been unable to record title and have thus often been inhibited from carrying out improvements in their property through inability to offer security against a building society mortgage. The change proposed will I feel sure be warmly welcomed in your Lordships' House.

I do not need to say more so far as detailed explanation is concerned. While much of the Bill necessarily deals with what may appear to be legal and technical matters, especially it is concerned to effect a highly desirable modernisation and streamlining of the processes of registration of title to land in Scotland; and by means of the system of State indemnity against error in the Land Register, to introduce a degree of protection to the individual citizen hitherto lacking. The Bill will receive a warm welcome throughout the legal profession, since in the long run it will bring about an altogether speedier and surer process of registration, which can only be regarded as a boon to all concerned in property conveyancing. The more modern processes of registration should themselves in due course, once the new system is fully in operation, bring direct benefit to the public inasmuch as the rate of any increase in registration fees will be less under the new system than under the the present system were it to continue unchanged. And there should in due course be beneficial effects on conveyancing costs. I am confident that this useful measure, providing for a necessary modernising of land registration procedures, will be generally welcomed in Scotland and I confidently commend it to your Lordships' House. I beg to move.

Moved, That the Bill be now read 2a.—(Lord Kirkhill.)

5.56 p.m.

Lord CAMPBELL of CROY

My Lords, I should like to thank the noble Lord, Lord Kirkhill, for having explained the provisions of the Bill to us. I should like to make some general comments at this stage. I quickly say that I do not expect replies later this evening on matters which are bound, because of the nature of the Bill, to be technical and legal. However, I have had the benefit of seeing the first reactions of the Law Society of Scotland to the Bill and that is why I should like to put a few points now.

I presume that the Committee stage will be after the recess so that there will be plenty of time to consider these and other points which are made in this debate and made to the Government outside Parliament before that stage. I also welcome the fact that the noble and learned Lord, Lord Fraser of Tullybelton, will be taking part in the debate. As a Scottish Law Lord, no doubt he will bring his knowledge and experience to bear on the intentions in the Bill.

My comments are mainly concerned with the definitions—or lack of them—in the Bill. I start with the term "interest in land" which is contained in Clause 1(1) and thereafter throughout the Bill. It is not defined in any detail. Since the term is fundamental to the Bill it is surprising that there is no definition. One question which arises is whether a standard security is a heritable interest within the definition of the term "interest in land" contained in the definition clause, Clause 26. I would draw attention to the definition of "interest in land" contained in Section 9(8)(b) of the Conveyancing and Feudal Reform (Scotland) Act 1970 and also to the definition of "heritable security" contained in Section 9(8)(a). From comments which Professor Halliday has made on the 1970 Act it would appear that there could be no doubt whether a standard security was capable of registration in the Land Register. Surely, it should be made clear that a standard security will be registerable and therefore a more precise definition of interest in land is needed.

A further point arises on Clause 2: subsection (1) defines interests in land which may be registered. However, if subsection (1) is read in conjunction with subsection (5), it becomes clear that unless an unregistered interest in land which may be registered is in fact registered, that interest does not become a real right or obligation. This is different from a proposal contained in paragraph 11(1) of the Henry Report. I understand the Bill is based upon proposals in that report. Is not the version in the Henry Report preferable to what the Government are putting here? On Clause 3, what is the justification for the inclusion of subsection (4)? It ought to be remembered that not every area of land conveyed can be easily or readily plotted on an Ordnance Survey map. Nor can the areas of a possibly fragmented estate be determined without a lot of effort and expense. There are many estates in Scotland, the constituent parts of which are fragmented through a large section of the country, but under this subsection it would be necessary for a solicitor to employ a surveyor to determine the areas of each individual section of the estate, which would then require to be added up in order that the necessary information could be given to the person known as "the Keeper". Another situation which could be foreseen would be that registration of wayleaves by statutory authorities might require to be notified to the Keeper since, for example—and the noble Lord mentioned this—a 15-foot strip running a distance of some 10 miles would exceed the minimum requirement of two hectares. Presumably this is not in fact the intention of the Bill.

Subsection (3) deals with the procedure to be followed on receipt of an application for registration. Provision is made for the date of receipt to be deemed to be the date of registration for the purposes of the Act. It is implied in the subsection that if a deed has to be withdrawn the date of registration will not hold. However, this is not expressly stated. Should there not be an actual provision that the terms of subsection (3) apply, except where the Keeper does not complete registration in terms of Section 4?

Then as regards Clause 6 and the ranking of titles, it is assumed throughout that the only method of ranking is by the title to land; but in many instances the ranking provision will be included in a separate arrangement which is not, and should not be, registrable as falling within the definition of "deed" as contained in Clause 26, the definition clause. Surely it is necessary to make provision within this clause for a ranking determined by unregistrable agreement.

Clause 8 deals with the rectification of the register, but here no account is taken of the operation of the law of prescription in Scotland, which would give the possessor of land who holds a title to that land with 10 years' unchallenged possession a good title to the land, even if this were to the detriment of the owner of the land. In the view of the Scottish Law Society, the law of prescription is fundamental to every system of law in Western Europe. They consider that in this case it would not be possible to obtain an irreducible title to land resulting from 10 years of unfettered possession with a title, if the present terms of Clause 8 are not changed. In Clause 9, it is indicated that the intention is that the law of positive prescription should apply for the purpose of enabling a title to an interest in land to be established. This clause does not follow the proposals in paragraph 47(4)(c) of the Henry Report.

Again I come to a question of definition. Part IV of the Bill deals with tenants at will, but there is no attempt at a definition of a tenant at will. Surely this, again, will need to be looked at. I should add that in the opinion of the Law Society the provisions about tenancies at will, though in principle they are welcome, are inappropriate coming in this Bill. They feel that this is a subject which is irrelevant to the general principles of the registration of title. At this stage I simply inquire whether there should not be a definition.

The aim of this Bill has been confirmed by the noble Lord, Lord Kirkhill, as being to simplify procedures. He said it was hoped that it would be welcomed by the legal profession in Scotland as producing speedier and surer titles and situations. What we have to consider is whether in fact it will achieve that objective. I hope that, perhaps with some amendments after the comments that have been made outside Parliament and following those that will be made inside Parliament, the Bill will in due course be in the best shape to simplify procedures and make them speedier. We shall hope to consider these matters in more detail at the Committee stage, which presumably will be in January.

6.5 p.m.

Lord MACKIE of BENSHIE

My Lords, I should like to congratulate the Government on bringing forward this Bill. It is probably about 100 years overdue, and indeed I remember the late Lord Boyd-Orr of Brechin Mearn telling me of his efforts to get a Land Register started before the First Word War. I understand that in fact the register of the deeds, which is what we have been doing in Scotland these many centuries, is just as complicated—in fact slightly more so, and not as efficient—as a register of title, which is what this Bill will eventually produce.

Your Lordships will be pleased to hear that I have not been in contact with the Law Society directly, but I did telephone a friend of mine who was on the committee and asked him whether it was a good thing or a bad thing. He said it was a good thing and that in general the Law Society were for it, that they had been studying it and, I understand, co-operating with the Government for some time. So we do wish the Bill all speed.

I understand that initially it may make conveyancing rather more difficult and will make more work for the lawyers, because the first registration will need a great deal of work to make sure that it is absolutely correct. Thereafter I understand that the lawyers hope it will lead both to a more competent system of transferring land and a cheaper one—although I would doubt the latter. I should like to ask the noble Lord for an explanation of a term which intrigues me. Could he define for me what is meant by "a backhand rent" as against "a fore-hand rent"? I have no doubt he has the explanation at his fingertips. With these words, my Lords, I welcome the Bill.

6.7 p.m.

Lord HUGHES

My Lords, it is not my intention to detain your Lordships for long on this Bill, but I venture to speak because I have a triple interest in the matter. First of all, like the rest of your Lordships who wish to speak, I am a Member of this House, but I have two other interests. My second interest is in my capacity as Chairman of the Royal Commission on Legal Services in Scotland. It was a special part of our remit to look at the cost of conveyancing, and while it would not be for me at this stage to attempt to indicate anything which we might be saying in due course on that general subject, I am not giving away anything to which my colleagues would object when I say that very early on we arrived at the conclusion—supported very much by all the evidence which was submitted to us—that the introduction of a system of registration such as is in this Bill would be welcomed both by the legal profession and by those who are owners of property, particularly in the domestic field.

My third interest goes back even further. I happen to have been a member of the committee under the late Lord Reid, which as far back as 1963 recommended that this be done. The action of the Government at that time was to appoint the committee under Professor Henry, to work out details as to how such a scheme should be operated. Nine years have elapsed since the Henry Committee produced their detailed proposals. I think that probably the noble Lord, Lord Campbell of Croy, is among those Secretaries of State for Scotland into whose programme a possible Bill found itself at the beginning of every Session and then was crowded out, because one of the iniquities of political life is that a Bill which has no opponents will bring no particular votes to any particular Party and therefore does not rate a high place in the legislative programme. Perhaps one of the particular benefits to Scotland which will accrue from the Prime Minister's announcement in October that there was not going to be an election this year, is the fact that at long last it has been possible for registration of title actually to be included in a gracious Speech.

I do not propose to venture into criticism of the details of the Bill, although I can think of one or two ways in which it might be better than it is. All I am concerned to say is that I am very glad that, at long last, this very much desired reform is, in fact, to take place. I use the word "reform" advisedly, because I have no doubt at all in my mind that this will be a reform, although some of the other things that have happened in recent years—for instance, changes in local government—which have been described as "reform", would be better described merely as "change". One of the things I learned on the Royal Commission was that a judge—I do not know whether alive or one in the past—once used the expression that a change for the better was a contradiction in terms. I do not think that that could be applied to this measure. I congratulate my noble friend on having been able to introduce it today, and I hope that before we get to a General Election it will, in fact, have reached the Statute Book.

6.11 p.m.

Lord FRASER of TULLYBELTON

My Lords, I should like to join briefly in the general welcome that has been given to this Bill. The Bill was described by the noble Lord, Lord Kirkhill, and also in the Explanatory Memorandum, as being the child of the Henry Committee. The Henry Committee itself was the child of the Reid Committee, to which the noble Lord, Lord Hughes, has just referred, and I, like Lord Hughes, had the honour of being a member of that committee. So I feel that the noble Lord, Lord Hughes, and I are, so to speak, joint grandparents of this Bill and I am glad to see it making a public appearance.

The existing system in Scotland of the Register of Sasines provides a register of deeds. It has been very successful in providing complete security to the owners of heritable property, because a successful challenge of ownership of property is almost unknown if it is not properly justified. So that it has given great security, and that was the object of the system of registration of deeds. But it is a registration of deeds only, which does not guarantee the title, although it makes it possible to ascertain what the title is.

The defect of the system is that every time a heritable property changes hands, the purchaser has to examine the title and decide, or get his advisers to decide, whether or not the title is a good one. This is the cause of much expense and the principal object of the present Bill, as I understand it, is to avoid that expense by having one final examination of title and from when it is recorded in the new register it will be guaranteed as a good title by the State. Therefore, these repeated examinations of title will no longer have to be made and that ought, certainly, to result in the saving of time and money to purchasers, and a great deal of rather dull and not very remunerative work to the legal profession.

There are, however, one or two points that I should like to put. I also have seen the preliminary observations of the Law Society of Scotland, and I shall not dwell on them again as the noble Lord, Lord Campbell of Croy, has already referred to the most important ones. But I am interested to know why, in Clause 2(7), it is provided that registration is to be the only way of getting a real right to property. That is obviously an indirect compulsion to register, because nobody wants to own property unless he has a real right to it. But both the Reid Committee and the Henry Committee contemplated that there should be a direct compulsion to register at the first transfer of property after the Act had been passed. I wonder why this Bill does not follow the suggestion of both these committees of making a direct compulsion, and why it relies upon this indirect form of compulsion. It may be better, but I should be interested to know the reason.

The second question which I should like to ask—and I am sure there must be some obvious answer to it, which does not occur to me—is that in Clause 26(2) it is provided: This Act "— that is, the Land Registration (Scotland) Act— shall be deemed, for the purposes of the Scotland Act 1978, to have been passed before that Act". I am sure that there must be some explanation, but cannot see what it is and I shall be grateful if we can be told that now or at some later date.

Then there is the provision, to which the noble Lord, Lord Campbell of Croy, has already referred, in Clause 3(4) which requires that, An application which relates to land extending to 2 hectares or more shall disclose the area of the land". I wonder whether that is a wise proposal. First, it may give rise to considerable expense to have the land surveyed to ascertain the area. Secondly, how is one to know, and how is the registrar in particular to know, whether the hectorage has been correctly stated, unless the registrar checks it on his own account?

Thirdly, the subsection states that an application shall disclose the area, but, so far as I can see, it does not provide any sanction. If the area is not disclosed, or if the area disclosed is not accurate, what is to happen? I suppose that if nothing at all was said, the registrar might refuse to register. But if a figure is put in, will it be checked and by what means and, if it is inaccurate or not very accurate, what is to happen? On a large estate of 20,000 or 30,000 acres in the Highlands, is the figure expected to be accurate to the nearest quarter hectare or something of that kind? On the other hand, if it is a small residential property in a city a quarter of a hectare will obviously be a very material point. It seems to me that there ought to be some method of dealing with the variety of circumstances for which this provision is proposed to be introduced, if indeed it is to be introduced. At the moment, I regard it with some doubt.

Then there is the very important point to which the noble Lord, Lord Campbell referred, that the provisions for rectification do not seem to pay sufficient attention to the need for allowing a prescriptive title to be absolutely beyond challenge. The whole basis of land tenure in Scotland, and I think in most other countries, is that when you have held your land on an ex facie good title for a number of years—now down to 10 years—you acquire a good title to it. Prescription is needed only to bolster up a bad title. If your title is good, you do not need prescription. The whole point of prescription is to bolster up a bad or defective title. So that unless you allow full play for the prescriptive title to go on and have full effect, this proposal for rectification may be very dangerous and very subversive to good order. I am sure that this is not intended. I wonder whether sufficient attention has been given to the necessity for maintaining a very satisfactory state of certainty, with regard to titles to land in Scotland. I have already taken up too long on details but, on the whole, I think that this is a good Bill and I join in welcoming it.

6.18 p.m.

The EARL of SELKIRK

My Lords, I hesitate to speak after the two noble and learned Lords who have been studying the nature of heritable securities in Scotland and the conveyancing of heritage, but it is important to emphasise just how significant this is in Scotland. I do not know whether the noble and learned Lord will be able to tell us how many conveyances take place every year. I should guess that it is in the order of 150,000 to 200,000. I may be quite wrong in that, but there is a very large number indeed. This system ought to provide a very much cheaper method of conveyancing and for that reason it could be extremely important.

Scottish conveyancing was founded some centuries ago on certain great principles—central registration and publication—which have not yet been introduced into England, but no doubt, in due course, some steps may be taken in that direction. There is a rather long tradition of highly complicated legislation, and I should be inclined to say that this Bill maintains that long tradition, although I could have wished for greater simplification. After all, this is a matter which is complicated to solicitors, but it is something which many who are not trained in the profession should be able to understand. It is not easy reading, even for professional people.

I hesitate to reiterate the point, made by my noble and learned friend Lord Fraser, about real right. I confess that I am completely confused on that. Why have the Government not followed Professor Henry, who probably knows more about conveyancing than either the draftsman of this Bill or anyone in the Scottish Office, and who recommended compulsory registration? If compulsory registration is the only way of obtaining real right, what happens to a property which is not held in real right? How does this fall out? There must be areas where real right is no longer real. I do not know how this works out. Clearly this is a matter for the Committee stage, for which there will be a number of points.

I am not very clear why salmon fishing is not to be registered. I had always understood that salmon fishing was an incorporeal hereditary right, and I am not quite sure why it is not. I am glad that my noble friend Lord Campbell of Croy raised the question of tenants at will. I am afraid that I was never familiar with exactly who is a tenant at will, and I very much hope that some explanation will be given during the Committee stage.

I wonder whether I am right in thinking that this is the first Bill in which the word "hectare" has been used. If it is, would it not be a good idea to define in the Bill what a hectare is? I know that this information may be regarded as obtainable from other sources. I do not know whether the fraction is easy to work out. However, I should have thought that something ought to be said so as clearly to relate the existing arrangement in acres to the new system, which is in hectares. I should have thought that it would be well worth while to put into the Bill something to this effect. These are largely Committee points, but may I reiterate that this is an important measure. I only hope that the Scottish Office will ensure that it is kept up to date and, so far as possible, will make the registration of all titles as reasonably quickly as is convenient to landowners.

6.21 p.m.

Lord KIRKHILL

My Lords, it is clear from that which has been said during our short discussion this evening that the Bill is warmly welcomed by all sides of your Lordships' House. Indeed, all noble Lords who have contributed to the discussion have given a generous welcome to the Bill. I am appreciative of the fact that noble Lords have indicated that points of considerable detail will be raised during the Committee stage. The Government must, of course, listen to the consensus of debate as it emerges in your Lordships' House.

I am aware of the position which the noble Lord, Lord Campbell of Croy, raised in his earlier remarks; namely, that there is no definition of an interest in land. Certainly this is a matter which the Government will consider as we look at the Bill between now and the Committee stage. I am able to tell the noble Lord, Lord Mackie of Benshie, that a back-hand rent is one which is payable after the legal terms of payment, which, I presume, means that it is payable in arrear. I have not been told what a fore hand rent is, but I presume that it is the opposite.

I can advise the noble Earl, Lord Selkirk, that last year the number of conveyances amounted to approximately 260,000. The noble Lord, Lord Campbell of Croy, and, indeed, the noble and learned Lord, Lord Fraser of Tullybelton, criticised Clause 3(4) of the Bill, which provides for the inclusion of information as to hectarage in any application relating to land of two hectares or more, as being unduly burdensome and expensive, particularly where estates are fragmented. The Government's view at the moment, however, is that there must be few estate owners who do not already have a fairly good idea of the total hectarage in their possession. In so far as field surveys may be necessary, at most these seem likely to be required on only a limited scale, bearing in mind the amount of detailed information as to acreages already shown on large-scale ordnance maps.

Since this will be a once-for-all provision of information, it seems to the Government at this stage to be a small price for the applicant to pay as part of the process of registration, looking to the desirability of progressively building up a body of information about estate ownership which the general public may reasonably expect to have available through a register. The noble and learned Lord, Lord Fraser of Tullybelton, very properly drew attention to the need for accuracy and for a close examination of the variety of circumstances which can emerge in this kind of situation.

In response to a further point which the noble and learned Lord has made, I can say that if registration on first transaction had been made compulsory, there would have needed to be a sanction if the parties had not registered. A criminal sanction would not be appropriate. The noble Lord, Lord Campbell of Croy, and, indeed, the noble and learned Lord, Lord Fraser of Tullybelton, were both concerned that the effect of prescription to render a title unchallengeable has been overlooked. This is a reference to Clause 8. In the Government's view, this is not so. By its amendment of the Prescription and Limitation (Scotland) Act 1973, Clause 9 provides that a registered title, like a title which is recorded in the Register of Sasines, on which possession for the necessary period has followed, will be exempt from challenge to the same extent as at present. If the title is thus unchallengeable, the keeper will not, as a matter of law, have the power to rectify the title sheet.

I am conscious that concern has been expressed that tenancies at will have not been defined. Again the Government will pay close attention to matters which have arisen during the debate this evening in your Lordships' House. These detailed aspects apart, which I am sure we shall return to when the Bill receives closer examination during the Committee stage, I am glad that the general principles of the Bill have been welcomed . I can only reiterate that at first sight the Bill may seem to deal very largely with legal and technical aspects of property conveyancing. There is, indeed, no doubt that, once in operation, the new system of registration will have a very marked effect on conveyancing practice. However, I re-emphasise the point that the Bill should not be seen purely as a measure which is of interest to lawyers. In the long run, a more up-to-date and streamlined system of registration of title can only bring benefit to all house and property owners, whether through its impact on registration fees or on conveyancing costs. It was in that sense that I commended the Bill to your I Lordships' House in my earlier remarks.

On Question, Bill read 2a, and committed to a Committee of the Whole House.