Head 8 - Competition of title

Question 1

What is the rule of first completion?

Answer 1

The rule of first completion states that the person who is first to obtain a real right prevails over all competitors. This applies to property of all types; in cases involving land, it is often referred to as a “race to the register”.

Question 2

What is the “offside goal” rule?

Answer 2

The “offside goal” rule applies when the person who completes title first is later disqualified. The grant of a real right is voidable if the grant is in breach of the terms of an obligation binding on the granter, and the obligation must pre-date any right to the grant personal or real in the grantee.

Question 3

What is the danger of insolvency in competition of title?

Answer 3

A sale involves an exchange, and the seller begins the transaction with the property while the buyer begins with the price.
If the buyer has not yet completed the transfer process and the seller is affected by an insolvency process, there is a competition of title between the seller’s creditor and the buyer. The difficulty applies to property of all types, and in the rule of first completion there is an obvious risk for acquirers.

Question 4

What are advance notices?

Answer 4

Advance notices are notices that can be put on the Land or Sasine Register to protect against competition of title. They give the grantee a priority period of 35 days, and if a competing deed is registered within the priority period but ahead of the protected deed, the latter is treated as having been registered first.

Question 5

What is the main judgment that deals with transfer and competition in the modern law?

Answer 5

The judgment by Lord President Hope in Sharp is the leading judicial analysis of transfer and competition in the modern law.

Question 6

What is the “beneficial interest” quasi-real right?

Answer 6

The “beneficial interest” quasi-real right is a right that was thought to have been upgraded from the purchaser’s personal right in Sharp v Thomson.

Question 7

What is the basis of the offside goal rule?

Answer 7

The basis of the offside goal rule is probably the delict of fraud on a creditor. In transferring the property to someone else, the granter has deliberately made it impossible to perform a prior contract with a third party. The third party’s bad faith makes them an accomplice in the granter’s fraud.

Question 8

What is the narrow rule established in Rodger (Builders) Ltd v Fawdry?

Answer 8

The narrow rule established in Rodger (Builders) Ltd v Fawdry is that the grant of a real right is voidable if the grant is in breach of the terms of an obligation binding on the granter, and the obligation must pre-date any right to the grant personal or real in the grantee.

Question 9

What case is the authority for the rule of first completion?

Answer 9

Burnett’s Trs v Grainger 2004

Question 10

What case is the authority for the offside goal rule?

Answer 10

Rodger (Builders) Ltd v Fawdry 1950

Question 11

When is the grant of a real right voidable?

Answer 11

1. The grant is in breach of the terms, express or implied, of an obligation on the granter
2. The obligation must pre-date any right to the grant, personal or real, in the grantee
3. At least in the normal case, the obligation must include an entitlement to a real right. The offside goals rule is about competition of title.
4. The grantee must either know of the personal right at the time obtaining his real right or be a donee. Constructive knowledge counts

Question 12

Cases that are important on the authority of voidable real right grants

Answer 12

Wallace v Simmers 1960
Brewster and Sons v Caughey 2002