Lloyds Bank plc v Rosset [1989] Ch 350

• Defendant 1 and Defendant 2 bought a semi-derelict house in only Defendant 1’s name. A family trust fund paid for Defendant 1’s house. Defendant 1 took out a mortgage from Plaintiff without telling Defendant 2. Defendant 2 made no financial contribution.

• Defendant 1 deserted Defendant 2 and, failing payments, Plaintiff sought possession of the house.

• CA found for Defendant 2, saying that a semi-derelict house IS capable of actual occupation and that the constant presence of Defendant 2’s agents (in this case builders) = actual occupation. Builders were as much Defendant 2’s agents as Defendant 1’s.

• CA held that the relevant date for determining whether overriding interest/disposition has priority is the date of execution, NOT of registration. Here, Defendant 1 mortgaged to Plaintiff AFTER the overriding interest had been executed i.e. actual occupation had begun, and therefore Plaintiff’s mortgage was subject to OI.

Nicholls LJ

• The everyday meaning given to “actual occupation” by Wilberforce in Williams’ and Glyn’s Bank extends to occupying incomplete houses. I can occupy without “inhabiting”, and this extends to agents e.g. residential caretaker. 

Mustill LJ (dissenting)

• Nicholls LJ is pushing the ordinary meaning of “actual occupation” too far. 

RELATED CASES

• Williams and Glyn's Bank v Boland