Actual Occupation Flashcards
Why bother with an actual occupation defence?
Lord Denning - Strand Securities v Carswell - to ensure that disorganised property interests are not ‘lost in the welter of registration’
To protect people who have made contributions to the property price - even small ones such as the £550 in Midland Bank v Green
What are the two restrictions to actual occupation where the disponee will be protected?
The disponee will be protected where;
- Enquiry was made about the person before the disposition and they failed to disclose the right when they could reasonably have been expected to do so (reasonable disclosure).
- The interest wasn’t obvious on a reasonably careful inspection of the land and the right was not within the ‘actual knowledge’ of the purchaser at the time of disposition (reasonable inspection).
Explain a classic priority dispute.
- B’s pre-existing priority right will bind C’s later acquired right following S28 LRA 2002.
- C will try and use the lack of registration as a defence.
- B will use their actual occupation to enforce their right.
- C will use Schedule 3 Paragraph 2 (maybe overreaching) to defeat B’s overriding interest.
What is the most important HL law on actual occupation?
Boland - Lord Wilberforce - absolutist view - the disponee is bound by the right of the actual occupier no matter what.
Actual occupation was given its plain English meaning.
Abbey National v Cann - Lord Oliver - actual occupation must have a degree of permanence and continuity, not a mere fleeting presence.
This both limited and widened the scope of Boland.
Does a promise of property rights allow for actual occupation?
No, following Scott v Southern Pacific Mortgages.
There needs to be an interest at the time of disposition.
What is the law related to time away from the property (intention to occupy)?
Cann is the best starting point (permanence and continuity).
It is important to have an intention to occupy - Link Lending v Bustard - 6 months in hospital did not detract from the intention to return and even longer could be permissible.
Chhokhar - it was clear that the wife intended to return to the property following the holiday.
Contrast Stockholm Finance - a Saudi Princess’s visit to her apartment was a mere fleeting presence to prevent sale by the mortgagee - she hadn’t visited the place for over a year.
Explain actual occupation by proxy.
Actual occupation can be inferred from a course of conduct other than the presence of the right-holder.
Occupation by proxy generally goes to the reasonableness of the inspection by the disponee or their agent - should the purchaser have asked about what they found?
Kling v Keston Properties - a car other than the owner’s was parked in the garage, the agent should have asked who it belonged to.
Lloyd’s Bank v Rossett - The Rossett’s builders were occupying the property during renovation. The agent assumed they were working for Mr R but should have inquired about Mrs R.
Cann - furniture was being moved into the house and the agent should have inquired as to whose it was.
Chaudhary v Yavuz - raised the point that the proxy element must be referable to a person’s actions, not a feature of the land there already.
Explain the decision in Chhokhar.
Mr P’s inquiry was not reasonably careful due to the presence of Mrs C’s furniture.
The significant undervaluing of the house and its ‘firesale’ nature also should have been better questioned.
Dixon notes that there is tension between this decision and Schedule 3 Paragraph 2(c) - the case might be decided differently now.
What is the unreasonable non-disclosure rule?
Schedule 3 Paragraph 2(b) - protects the disponee against an occupier who failed to disclose his property interest when he could reasonably have been expected to.
An incomplete or misleading answer (‘not anymore’) will require a better inquiry to be made.
What is the law on actual occupation and overreaching?
An actual occupation can be overreached if the two trustee rule from S27 LPA 1925 is followed i.e. Flegg.
In Boland the money was only paid to one trustee and so overreaching could not occur.
Following Boland, mortgage providers put stringent arrangements for discovering parties interested in a property.
How about consent?
Bristol & West v Henning - if the right-holder consented to the conveyance or mortgage then they lose their defence of actual ocupation.
Consent must be free and informed, no coercion.
Where is actual occupation outlined?
LRA 2002 S29 & S30 protect people in actual occupation.
Schedule 1 Paragraph 2 - a person will be in actual occupation if they have a property right and are in actual occupation at the time of disposition.
