Sharp v Thomson

Last updated

Sharp v Thomson 1997 SC(HL) 66 is a United Kingdom House of Lords decision regarding the status of an unrecorded disposition in Scots Property Law. [1] The case was brought by Sharp as receivers for Albyn Construction Ltd, a building company who had sold a house in Aberdeen to the Thomsons, a brother and sister. Albyn had agreed to sell the house to the Thomsons leading to the completion of the missives and the delivery of the disposition and the payment of the purchase price. However, before the disposition was registered by the Thomsons, Albyn defaulted on a loan taken by them from the Bank of Scotland. The default lead to the attachment of a floating charge held by the bank over all of Albyn's "Property and Undertaking", and Sharp was appointed Receiver to collect this for the Bank. [1]

Sharp raised an action before the Court of Session contesting that, since the disposition hadn't been registered, the ownership of the house remained with Albyn at the time of attachment and that it and the purchase price was available to the Bank as holder of the charge. The Thomsons responded that the act of delivering the disposition divulged Albyn of any "Beneficial Interest" in the house and that this was enough to remove it from the scope of the charge. [1] The Inner House of the Court of Session found in favour of Sharp. In giving the leading opinion, The Lord President (Hope) drew on historical sources to argue that Scotland has, and has always had, a unitary system of property law and that ownership could only lie with the holder of the recorded title. As the Thomsons had not recorded the disposition, title remained with Albyn and so the house was available to Sharp.

The Thomsons appealed to the House of Lords. The Court overruled the Inner House and found in favour of the Thomsons. The House gave two main reasons for its decision. Lord Jauncey upheld the Thomsons' argument that, because in delivering the disposition, Albyn could no longer make use of or sell the house, it had no "Beneficial Interest" in the house and this was enough to remove it from being part of its property. Lord Jauncey commented that the ability to sell the house in fraud of the disposition did not amount to a right in property. Lord Clyde offered different reasoning. He said that the term "Property and Undertaking" used in the Charge Agreement and the legislation had to be construed in its context. He said the Court of Session was wrong to ascribe it a technical meaning. He said that a proper construction of the term was to include only what the company could make use of in its day-to-day business dealings and not all its property in a strict legal sense.

The case caused great confusion in Scottish Conveyancers and academics who saw it as over-turning the long established Scots law principle that ownership could not be divided. However, the effect of the case was greatly reduced by the House of Lords in 2004 in Burnett's Trustee v Grainger [2004] UKHL 8 where the Court held that Sharp v Thomson was authority only for holders of floating charges. [2] For all other sales of property where the seller goes bankrupt or into sequestration, the rule that applies is that owner is the holder of the registered title. [3]

Related Research Articles

<span class="mw-page-title-main">Judicial functions of the House of Lords</span> Historical role of the UK House of Lords

Whilst the House of Lords of the United Kingdom is the upper chamber of Parliament and has government ministers, for many centuries it had a judicial function. It functioned as a court of first instance for the trials of peers and for impeachments, and as a court of last resort in the United Kingdom and prior, the Kingdom of Great Britain and the Kingdom of England.

<span class="mw-page-title-main">Court of Session</span> Supreme civil court of Scotland

The Court of Session is the supreme civil court of Scotland and constitutes part of the College of Justice; the supreme criminal court of Scotland is the High Court of Justiciary. The Court of Session sits in Parliament House in Edinburgh and is both a trial court and a court of appeal. The court was established in 1532 by an Act of the Parliament of Scotland, and was initially presided over by the Lord Chancellor of Scotland and had equal numbers of clergy and laity. The judges were all appointed from the King's Council. As of May 2017, the Lord President was Lord Carloway, who was appointed on 19 December 2015, and the Lord Justice Clerk was Lady Dorrian, who was appointed on 13 April 2016.

<span class="mw-page-title-main">High Court of Justiciary</span> Supreme criminal court in Scotland

The High Court of Justiciary is the supreme criminal court in Scotland. The High Court is both a trial court and a court of appeal. As a trial court, the High Court sits on circuit at Parliament House or in the adjacent former Sheriff Court building in the Old Town in Edinburgh, or in dedicated buildings in Glasgow and Aberdeen. The High Court sometimes sits in various smaller towns in Scotland, where it uses the local sheriff court building. As an appeal court, the High Court sits only in Edinburgh. On one occasion the High Court of Justiciary sat outside Scotland, at Zeist in the Netherlands during the Pan Am Flight 103 bombing trial, as the Scottish Court in the Netherlands. At Zeist the High Court sat both as a trial court, and an appeal court for the initial appeal by Abdelbaset al-Megrahi.

<span class="mw-page-title-main">Lord of the manor</span> Landholder of a rural estate

Lord of the manor is a title that, in Anglo-Saxon England and Norman England, referred to the landholder of a rural estate. The titles date to the English feudal system. The lord enjoyed manorial rights as well as seignory, the right to grant or draw benefit from the estate. The title continues in modern England and Wales as a legally recognised form of property that can be held independently of its historical rights. It may belong entirely to one person or be a moiety shared with other people.

<span class="mw-page-title-main">Barons in Scotland</span> Scottish feudal barons, and a list of baronies

In Scotland, a baron or baroness is the head of a feudal barony, also known as a prescriptive barony. This used to be attached to a particular piece of land on which was situated the caput or essence of the barony, normally a building, such as a castle or manor house. Accordingly, the owner of the piece of land containing the caput was called a baron or baroness. According to Grant, there were around 350 identifiable local baronies in Scotland by the early fifteenth century and these could mostly be mapped against local parish boundaries. The term baron was in general use from the thirteenth century to describe what would have been known in England as a knight of the shire.

<span class="mw-page-title-main">Constructive trust</span> Type of legal remedy

In trust law, a constructive trust is an equitable remedy imposed by a court to benefit a party that has been wrongfully deprived of its rights due to either a person obtaining or holding a legal property right which they should not possess due to unjust enrichment or interference, or due to a breach of fiduciary duty, which is intercausative with unjust enrichment and/or property interference. It is a type of implied trust.

A laird is the owner of a large, long-established Scottish estate. In the traditional Scottish order of precedence, a laird ranked below a baron and above a gentleman. This rank was held only by those lairds holding official recognition in a territorial designation by the Lord Lyon King of Arms. They are usually styled [name] [surname] of [lairdship]. However, since "laird" is a courtesy title, it has no formal status in law.

R v Hinks [2000] UKHL 53 is an English case heard by the House of Lords on appeal from the Court of Appeal of England and Wales. The case concerned the interpretation of the word "appropriates" in the Theft Act 1968. The relevant statute is as follows:

<i>Stack v Dowden</i> Leading English property law case

Stack v Dowden [2007] UKHL 17 is a leading English property law case concerning the division of interests in family property after the breakdown of a cohabitation relationship.

<span class="mw-page-title-main">Inter regalia (Scots law)</span>

The inter regalia are the rights falling to the Crown in Scots Property law. The term derives from Latin inter (among) and regalia.

<i>Smith v Eric S Bush</i>

Smith v Eric S Bush [1990] UKHL 1 is an English tort law and contract law case, heard by the House of Lords. First, it concerned the existence of a duty of care in tort for negligent misstatements, not made directly to someone relying on the statement. Second, it concerned the reasonableness of a term excluding liability under the Unfair Contract Terms Act 1977, s 2(2) and s 11.

<span class="mw-page-title-main">Scots property law</span> Rules relating to property in Scotland

Scots property law governs the rules relating to property found in the legal jurisdiction of Scotland. As a hybrid legal system with both common law and civil law heritage, Scots property law is similar, but not identical, to property law in South Africa and the American state of Louisiana.

<span class="mw-page-title-main">University of Glasgow School of Law</span>

The School of Law at the University of Glasgow provides undergraduate and postgraduate courses in Law, and awards the degrees of Bachelor of Laws, Master of Laws, LLM by Research, Master of Research (MRes) and Doctor of Philosophy, the degree of Doctor of Laws being awarded generally only as an honorary degree.

<span class="mw-page-title-main">Scots law</span> Legal system of Scotland

Scots law is the legal system of Scotland. It is a hybrid or mixed legal system containing civil law and common law elements, that traces its roots to a number of different historical sources. Together with English law and Northern Irish law, it is one of the three legal systems of the United Kingdom. Scots law recognises four sources of law: legislation, legal precedent, specific academic writings, and custom. Legislation affecting Scotland and Scots law is passed by the Scottish Parliament on all areas of devolved responsibility, and the United Kingdom Parliament on reserved matters. Some legislation passed by the pre-1707 Parliament of Scotland is still also valid.

<span class="mw-page-title-main">Judiciary of Scotland</span> Judicial office holders in the courts of Scotland

The judiciary of Scotland are the judicial office holders who sit in the courts of Scotland and make decisions in both civil and criminal cases. Judges make sure that cases and verdicts are within the parameters set by Scots law, and they must hand down appropriate judgments and sentences. Judicial independence is guaranteed in law, with a legal duty on Scottish Ministers, the Lord Advocate and the Members of the Scottish Parliament to uphold judicial independence, and barring them from influencing the judges through any form of special access.

<i>Russell v Northern Bank Development Corp Ltd</i>

Russell v Northern Bank Development Corp Ltd [1992] 1 WLR 588 is a leading case on shareholders' rights in the United Kingdom in which the House of Lords held that a private shareholders' agreement could not fetter a company's statutory powers but could bind the voting rights of those parties to the agreement.

<span class="mw-page-title-main">Missives of Sale (Scots law)</span> Scottish trading law

The missives of sale, in Scots property law, are a series of formal letters between the two parties, the Buyer and the Seller, containing the contract of sale for the transfer of corporeal heritable property (land) in Scotland. The term 'land' in this article includes buildings and other structures upon land.

<span class="mw-page-title-main">Disposition (Scots law)</span> Deed transferring ownership of heritable property

A disposition in Scots law is a formal deed transferring ownership of corporeal heritable property. It acts as the conveyancing stage as the second of three stages required in order to voluntarily transfer ownership of land in Scotland. The three stages are:

  1. The Contractual Stage
  2. The Conveyancing Stage
  3. The Registration Stage
<span class="mw-page-title-main">Land registration (Scots law)</span> Method and process of certifying, verifying, and registering land ownership in Scotland

Land registration in Scots law is a system of public registration of land, and associated real rights. Scotland has one of the oldest systems of land registration in the world. Registration of deeds is important as it constitutes the third stage of the creation and transfer of real rights.

<span class="mw-page-title-main">Souvenir plot</span> Term for an online purchasable novelty item, does not entitle its purchaser to ownership

Souvenir plots of land were first defined in section 4(1)(b) of the Land Registration (Scotland) Act 1979 as

References

  1. 1 2 3 Scottish Law Commission (2001). Discussion Paper on Sharp v Thomson. Scottish Law Commission.
  2. MacQueen, Hector. "Distinguishing Sharp v Thomson". Scots Law News. The University of Edinburgh, School of Law. Retrieved 16 April 2011.
  3. van Erp, Sjef. "Comparative Case Notes: Burnett's Trustee v. Grainger as an Example". Vol. 8.1, March 2004. Retrieved 16 April 2010.