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City of London BS v Flegg

[1998] 1 AC 54

Case summary last updated at 01/01/2020 17:23 by the Oxbridge Notes in-house law team.

Judgement for the case City of London BS v Flegg

Fs and Ms bought a house in Ms’ names but F having a beneficial interest by contributing to the price. Ms took out a mortgage without Fs’ knowledge and defaulted. Fs claimed an overriding interest under s.70(1)(g) – actual and apparent occupation. HL held that Fs had no interest once the payment had been made by the bank, since their interest, held on trust by Ms, had been overreached and therefore overriding interests was irrelevant since the interest no longer existed. HL held that to find Fs’ interest overrides that of a purchaser would be to unduly burden the purchaser. NB the decision may be different today due to TLATA 1996 though there is debate on this. 

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