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.
Updated 21 March 2026
This case note accurately describes the decision of the House of Lords in Burnett’s Trustee v Grainger [2004] UKHL 8. The core legal principle — that under Scots property law, a disponee who fails to register a disposition before the disponer’s sequestration loses priority to the trustee in sequestration, who takes the property free of unregistered personal obligations — remains good law in Scotland.
Readers should note, however, that the relevant statutory framework has since changed. The Bankruptcy (Scotland) Act 1985, which the article references, has been largely superseded by the Bankruptcy (Scotland) Act 2016, which consolidated and restated Scots bankruptcy law. The principles underpinning the Burnett’s Trustee decision are preserved within the 2016 Act. Additionally, the land registration framework in Scotland has been substantially updated by the Land Registration etc. (Scotland) Act 2012, which replaced the Land Registration (Scotland) Act 1979 and introduced a new system of registration. Readers should be aware that when applying or researching these principles today, they must refer to the 2016 and 2012 Acts rather than the 1985 legislation cited in the article. The ratio of Burnett’s Trustee itself has not been overruled and remains an important authority on the relationship between registration and real rights in Scots property law.
