Priorities under LRA

Question 1

Abbey National v Cann (2 points)

Answer 1

1. X must be in actual occupation of the land at the time of the disposition to claim overriding status for his property right
2. There is no scintilla temporis in between the purchase of the property and the creation of the charge in acquisition mortgages out of which an equitable interest could be carved, as the charge interest and the purchase are insolubly bound together - so any equitable interest in the house must be postponed to the priority of the mortgage.

Question 2

Explain how the concept of waiver works, and give an example of what will or will not constitute waiver.

Answer 2

X’s express consent to disposition of the land over which his right exists will constitute waiver (e.g. in Mendelsohn - implied consent in acquisition mortgages). Simple knowledge, however, is not sufficient (Clayton).

Question 3

Discuss the 3 requirements for overreaching.

Answer 3

1. S.2 – the interest must be capable of being overreached
   and the transaction must be one that has overreaching effect
2. S.27(2) LPA – Disposition by at least two trustees or a trust corporation
   There is no third requirement. Sood - overreaching may occur even where no capital monies arise contemporaneously w/ the overreaching disposition, since there is no mention of a capital monies requirement in S.2 or S.27.

Question 4

Flegg (2 consequences of overreaching)

Answer 4

• The purchaser takes title to the land unencumbered by the beneficial interest.
• The equitable interest is shifted so as to become a corresponding interest or power over the proceeds of the disposition, and thus cannot support a Para 2 overriding interest since it is no longer a right in the land.

Question 5

Dyche (2 criticisms)

Answer 5

Suggests that a disposition of the property unauthorised by B cannot overreach B’s interest, but
o It is very unlikely that such a significant change to the scope of overreaching would have been endorsed by TOLATA w/o full discussion.
o Moreover in Dyche the transaction was executed only by one trustee and thus incapable of overreaching, so the above discussion might be treated as obiter

Question 6

Crucial difference between Sch 1 and Sch 3?

Answer 6

Para 2 overriding interests and Para 3 overriding interests are unqualified (e.g. no discoverability requirement)

Question 7

What is the overarching strategy of Sch 3?

Answer 7

The overriding strategy is to limit overriding interests to those that could be discovered by a reasonably diligent transferee making a physical inspection of the land

Question 8

4 requirements for Para 2 overriding interests.

Answer 8

a) The interest to be protected must be enforceable against the land immediately before registered disposition (Cann).
b) The interest-holder must be in actual occupation at the date the transfer is executed (North East Property Buyers)
c) The actual occupation must be obvious on a reasonably careful inspection of the land at the time of the disposition (Para 2(2)c)
d) If an inquiry was made of the right-holder, he must have disclosed the interest where he could reasonably have been expected to do so (Para 2(2)b)

Question 9

Cann

Answer 9

There must be some degree of permanence and continuity that would rule out mere fleeting presence (moving some furniture in does not suffice)

Question 10

Rosset

Answer 10

A caretaker or representative can occupy on behalf of the interest-holder (here renovators occupied as agents of client)

Question 11

Dugdale

Answer 11

If P is not occupying on his own behalf but as an agent of a company, he does not have an overriding interest

Question 12

Robinson (criticism)

Answer 12

Children living with their parents could not be said to be in actual occupation on their own right as their presence is wholly explained by that of their parents (the issue is not one of right, but of factual presence – case is dubious!)

Question 13

Caswell (2 points)

Answer 13

1. Actual occupation by a licensee does not count as actual occupation by the licensor unless the licensee is a representative.
2. Mere presence of furniture does not usually, w/o more, qualify as actual occupation.

Question 14

Thompson + Bustard

Answer 14

If the person said to be in actual occupier at a particular time is not physically present, it will usually be necessary to show that his occupation was manifested and accompanied by a continuing intention to occupy (e.g. in Bustard - Although P was in hospital the land was her only home, which she visited regularly and paid the bills for. This manifested a clear intention to return + her absence was involuntary.)

Question 15

Yavuz

Answer 15

What is required is actual occupation and NOT actual use (so exercise of an easement does not qualify)

Question 16

Qutb

Answer 16

Under the 1925 Act, for the equivalent of Para 2(2)b to apply the inquiry has to be both as to the occupation and the existence of the occupier’s right