Conveyances in which the granter purports to sell to themselves in the same status or capacity

1. Background

Occasionally the Keeper receives applications to register Dispositions where the grantor and the grantee in the deed are the same person acting in the same legal capacity (i.e. a Disposition by A to A or a Disposition by A and B to A and B).

These applications do not involve a non domino Dispositions on which the Keeper's policy is clear [see Dispositions a non domino.]

Rather these applications involve Dispositions where the grantor of the deed purports to convey subjects to which they already have a registered title in their name to themselves for, among other things, the purpose of:

• creating real burdens;

• creating latent positive servitudes; or

• sub-dividing registered subjects in anticipation of a possible future sale of a part of those subjects (sometimes the part that is to be sold later is burdened with a Standard Security over it)

It is possible that there are other scenarios, such as the intention of the parties to create or define rights in common. But those listed above are the most common instances of conveyances granted by A to A. The incidence of such applications is minimal, with only a small number having been presented to the Keeper in the past.

For reasons that are explained elsewhere [see 36.2], the Keeper's policy on Dispositions a non domino was modified to take into account the decision in the case of The Board of Management of Aberdeen College v Stewart Watt Youngson and another [2005] CSOH 31 in which the Court decided that a disposition by a person in favour of himself in exactly the same status or category is invalid ex facie.

But, in addition to influencing the Keeper's policy on Dispositions a non domino, this case has further implications for the Keeper's approach to the registration of Dispositions by A to A generally. That is because in Aberdeen College the Court commented that a deed that purports to convey land from the granter to himself does not involve any transfer and that transfer of property is essential for an effective conveyance of land.

There is no case-law that directly relates to the acceptability or otherwise of Dispositions by A to A that are not a non domino grants. And that is why the Keeper has not adopted a general policy in respect of Dispositions by A to A in the past. However, there is dicta (statements made by a judge in the course of a judgement) to be found in the Aberdeen College case that is of relevance.

In particular, Lord Menzies noted that:

"A person cannot contract with himself. It appears to me that this is the essence of the argument in conveyancing terms as well as in contractual terms. Transfer of property is essential for an effective conveyance in land. A person cannot dispone a piece of land from himself to himself in exactly the same status or category, because no transfer will have resulted. It may be different if the interest in land which is being disponed is different from that which is received, or where the capacity of the individual changes - for example, a person may dispone land to trustees of whose number he is one, or he may dispone land to a partnership of which he is a partner. In these examples the fact that the disponer's name appears both as disponer and amongst the disponees is neither here nor there, because his capacity is different and (at least in the example of partnership) there is a separate legal persona involved."

In order to have an effective conveyance in land there must be a transfer of property but that cannot occur if a person grants a conveyance to themselves in the same status or category. If the Keeper were to register a Disposition by A to A in which no transfer occurs he would be obliged to update the title sheet to reflect the registration of that deed even although it could not operate as a conveyance of the property that it is intended to dispone. Or, in other words, by registering the 'effect' of the deed the Keeper would reflect an aspect of that deed that does not work.

If, in the light of Lord Menzies comments in Aberdeen College, such a deed cannot operate as a conveyance there is a question as to whether it should be registered at all.

The Keeper will therefore decline to register conveyances by A to A in the same status or capacity if they are presented to him for registration.

This should pose little difficulty to the applicants, insofar as the conveyance cannot serve to fulfil their intention to transfer the subjects disponed to themselves. But, where the deed is intended to serve another purpose - for instance the creation of real burdens in anticipation of a future sale of the subjects - the Keeper's refusal to register the conveyance on the grounds that it can have no effect as a transfer will inevitably frustrate their attempt to create real burdens by registering that deed.

It is not for the Keeper to provide legal advice or to prescribe alternative methods of conveyancing that will assist applicants to achieve their aims but the Keeper recognises that there are alternative conveyancing solutions available that will achieve the creation of real burdens etc. without using a conveyance by A to A to do so.

2. Alternatives to a conveyance by a granter in favour of themselves

In the previously mentioned examples of situations in which the Keeper has been presented with applications to register conveyances by the granter(s) in favour of themselves, there are alternative approaches available to the parties to achieve their desired end. For example, a deed of conditions may be used by proprietors of a property to create rights and real burdens over it. It is unnecessary to use a conveyance by the granter in favour of themselves for this purpose. And the Title Conditions (Scotland) Act 2003 now permits an owner of a property to postpone the effectiveness of real burdens until a later date or to 'create' positive servitudes whilst the benefited and burdened properties remain in their ownership.

In a situation where an owner intends to secure part of their property in contemplation of a future sub division or sale, it is not necessary to use a conveyance by A to A as a preliminary to doing so. It is possible for the Keeper to use colour referencing to show that part of registered subjects affected by a standard security on the title plan of a registered interest, where the area in question is shown on a plan annexed to the standard security, without first having to create a new title sheet in order to do so. Otherwise, the property secured by the Standard Security can be identified by use of a verbal description (as in the case of a tenement) which will enable the Keeper to identify the part affected by it in the entry made in the Charges Section of the title sheet [see 9.8.1].

And the Title Conditions (Scotland) Act 2003 provides that it is now possible to create a real burden in a deed of any kind that is capable of being registered in the property registers ('a constitutive deed'). Before the Title Conditions Act came into force on 28 November 2004 the position was that real burdens might be created either in a conveyance or a deed of conditions. The Title Conditions Act has introduced greater flexibility by permitting real burdens to be created in any type of deed. This offers the possibility of creating real burdens in a freestanding deed which might be used to burden one property for the benefit of the other or to burden both properties. It has been suggested that such a deed might be called a 'deed of real burdens' but it might also given the more traditional title of a 'deed of conditions'. That is not a matter for the Keeper but for the conveyancer to decide.

It is possible to foresee that such deeds will occasionally be used by solicitors in the same way that a deed of servitude is employed at present.

It can thus be seen that there are options available to solicitors and their clients that do not depend upon the use of a conveyance by the owners of the property in favour of themselves.

3. An exception - conveyances for the purpose of discharging a survivorship destination

Sometimes either one, or both, of the owners of a property that is held under a survivorship destination wish to discharge or waive the survivorship destination in their title. This can be done by having them dispone the property to themselves, with no survivorship clause in the deed. In such instances there is no intention to convey the land or create rights or real burdens over the land. Rather the deed is concerned solely with the removal of a special destination so that the granters of the deed will become co-owners of the property.

Registration Officers may encounter this situation in the form of either (a) a Disposition by A and B to A or B omitting the destination or (b) a Disposition by A and B to A and B omitting the destination.
There is some academic comment to support this practice - on the basis that it is altering the terms of ownership - and the Keeper will continue to accept conveyances of this type for registration. Registration Officers are reminded that not all destinations are capable of evacuation. [see 7.9].

4. Rejection

When rejecting an application to register a conveyance by the granter(s) in favour of themselves, the normal cancellation procedures should be put in place [see 2.37]. In doing so, registration officers should take into account the comments made in the subsequent paragraphs.

Referrals should be made as necessary to a Senior Team Leader or Senior Caseworker, and as appropriate to Legal Services, if, in the circumstances, it is unclear as to whether a conveyance by the granter in favour of themselves should be accepted for registration.

An example of the type of situation that would give rise to a referral to a senior caseworker is found in the case of Kenneil v Kenneil [2006] CSOH 8, 2006 SLT 449; [2006] CSOH 95 which concerned an action of division and sale in which - among other things - the court was asked to consider whether a disposition by A, B and C in favour of A would be valid. Lord Glennie accepted the analysis in the Aberdeen Collegecase 'in the case of an ordinary transaction' but observed that 'in the context of a sale by the Court, or under the authority of the Court, it is the Reporter who enters into missives and in terms of the missives undertakes to procure a disposition. In those circumstances the signature of the owner of the subjects on the disposition is effectively ministerial. It can be dispensed with if the [Deputy Principal Clerk of Session] signs the disposition. Although he signs on behalf of the owner, he does so at the instance of the reporter. There is in such a case delivery and transfer by the reporter to the purchaser, even where the purchaser is one of the pro indiviso proprietors whose property the reporter is selling under the authority of the court. Accordingly, I see no difficulty in there being a sale by the reporter in his own name to one of the owners of the property, even though that requires a disposition signed in the name of the owner in favour of himself [Paragraph 31 refers].' In Kenneil Lord Glennie was satisfied that disposition would be valid. However the sale to one of the co-owners did not go ahead and so Lord Glennie's remarks were obiter (an opinion expressed by a judge, in giving judgement, on a point that is incidental or not essential to the decision).

It is unlikely that registration officers will often encounter the circumstances described in Kenneil. However, an application that appears to fall within the scope of that caseshould be referred to a senior caseworker for consideration.

These instructions apply to an application to register a conveyance by the owners of subjects to which they have already registered a title to themselves. If the application includes a Standard Security granted by the registered owners of the subjects over part or all of their registered title, the applicant's agent to find out whether they wish to proceed with its registration against the title in question [see 2.41].