Facts
Mr and Mrs Grainger paid £45,000 for Mrs Burnett’s flat and received a signed disposition in November 1990. They took possession but did not immediately record the disposition. Mrs Burnett’s estate was sequestrated. Her trustee knew of the sale but recorded his notice of title in October 1991, before the Graingers recorded their disposition in January 1992.
Issue
Did the flat form part of Mrs Burnett’s estate for the purposes of section 31 of the Bankruptcy (Scotland) Act 1985, and whose title took priority?
Decision
The buyers had a personal right under the sale. Ownership remained with Mrs Burnett until the disposition was recorded, and delivery of the disposition did not create a trust for the buyers. The flat therefore vested in the trustee as part of her estate. The trustee’s title took priority because he recorded first.
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The House of Lords upheld the declaration that the trustee had the better title. It did not decide whether the buyers had a separate claim in unjust enrichment.
Reported citations: 2004 SC (HL) 19, 2004 SLT 513, 2004 SCLR 433, 2004 GWD 9-211, [2004] 11 EGCS 139, [2004] 11 EG 139
Source: Full judgment
