Outer House case concerning the effect of a survivorship clause in a disposition.
Mrs Povey and her husband bought a plot of land and built a house on it between 2002 and 2003 (the purchase price and construction costs being contributed in equal portions). The disposition contained special destinations of survivorship by which Mr Povey’s share would pass to Mrs Povey in the event of him predeceasing her and vice versa. In 2008 Mrs Povey signed a power of attorney in favour of her husband (which she understood was to be used only in the event she became unwell). In April 2009 Mr Povey executed a disposition (both on behalf of himself and on behalf of his wife) which purported to revoke the survivorship destinations. Mr Povey died on 23 July 2009. The disposition revoking the destinations was submitted for registration by solicitors purporting to act for Mr and Mrs Povey on 24 July and registered in the Land Register on 27 July 2009 (the solicitors completing a question on the form 2 application so as to indicate that no party to the transaction was subject to any incapacity or disability).
Mrs Povey sought declarator that title to Mr Povey’s share of the property passed to her on his death by operation of the special destination and that she was entitled to be entered as sole proprietor of the subjects in the Land Register. Her stepson (Mr Povey’s son) who was executor of Mr Povey’s estate argued that, in terms of registration of title, there was no automatic completion of title under the special destination and that Mrs Povey only had a personal right which would not be made real until the Keeper registered the change in title. He argued that the 2009 disposition revoking the destination had been registered first.
Lord Doherty agreed with Mrs Povey’s arguments finding that there was no authority to support the stepson’s contention that there was no automatic completion of title under the special destination.
“It is erroneous to suggest that on an institute’s death a substitute acquires only a personal right to the institute’s property, and that his right does not become real until the Keeper alters the entry in the title sheet. That analysis ignores the fact that title to the subjects, including the special destination by the institute to the substitute, is registered in the Land Register before the institute’s death … On the institute’s death the substitute’s contingent right becomes a real right, by virtue of the special destination. His completion of title is automatic. It is not dependent upon the Keeper altering the title sheet to reflect the change.”
The full judgement is available from Scottish Courts here.
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