G purchased a house and M made a large financial contribution, entitling her under a constructive trust. G had taken out a mortgage without M’s knowledge and defaulted on the payment. M had not moved in by the time of completion but had moved in by the time of registration. G defaulted and the bank, P claimed possession. M resisted on the grounds of her interest as actual and apparent occupation and therefore as an overriding interest (s.70(1)(g) LPA 1925). HL rejected this, saying that (1) the relevant date for determining whether MOST overriding interest existed was the date of registration (i.e. was there an interest before the date of registration); but (2) that “actual occupation” interests constitute an EXCEPTION and had to have occurred BEFORE the moment of the transfer/creation of the legal estate; and (3) Where a bank loan is used to buy a house (i.e. mortgage) the creation/transfer of the estate is not complete until both the estate has been transferred/created AND the legal charge has been created. In this case, D2 was not in actual occupation before the transfer was complete (even though some of her things had been moved in- these were merely preparatory steps towards occupation).
Lord Oliver: It would be absurd to have the relevant date for determining the possible existence of an “actual occupation” OI as the date of the registration (NB this comes after completion/transfer of legal estate): This is because if it were so, a person could, in between the bank’s completing the transfer of estate and official investigation, and the later registration, install themselves and claim OI. This would make it impossible for the bank to carry out an effective search, since there will always be a delay between the search/completion and registration.