Burnett's Trustee v Grainger

Burnett’s Trustee v Grainger [2004] UKHL 8

Property law – Land registration – Mistake

Facts

Grainger purchased the title to a flat for £45,000 from Burnett (B). Once this was agreed, Grainger failed to register the disposition of title to the flat. B was subsequently sequestrated and B’s trustee who knew about the sale of flat to Grainger, recorded a notice of title to the premises before Grainger could do so. Grainger argued that the trustee had been enriched unjustly and that it had not been the intention of the Bankruptcy (Scotland) Act 1985, for this to be the case. B’s trustee argued that he was not bound by any previous personal obligations of B, and that the transfer of the title of the property had not been completed. Grainger appealed an initial decision that held that the property had vested into B’s trustee.

Issue

The key issue, in this case, was whether the court was to prefer a trustee in sequestration, to a prospective purchaser of a property. It was clear that Grainger had not registered the benefit gained from purchasing the property, and therefore it was for the court to answer whether this allowed B’s trustee the opportunity to register such interest.

Decision/Outcome

The appeal from Grainger was dismissed. The court held that the Act clearly defined the requirements to register title. Moreover, the estate of B and those possessions had been vested in the trustee, who had not intended to become the trustee of the premises for Grainger’s benefit. Ultimately, Grainger had not registered the interest gained from purchasing the flat, and therefore the trustee was entitled to take advantage of the mistake of not doing so.