To demonstrate the existence of an overriding interest, the occupant must prove that they possess pertinent rights with the ability to legally bind the buyer of the title, except when considering the factor of actual physical occupation.
Dalhanna, registered land purchased by Kaymuu Limited in 2010, was later mortgaged to C&M for £500,000 by Sami Muduroglu. Sami misappropriated the funds, leading to Kaymuu defaulting on the loan.
C&M exercised its mortgage rights, selling Dalhanna for £1.1 million in 2012. C&M seeks to retain £694,072.75 from the proceeds as part of its charge. Mr. Wishart, claiming beneficial ownership, contests this, arguing his interest should take priority.
The court ruled Mr. Wishart was the beneficial owner, in occupation during the mortgage registration, but his interest wasn't overriding. C&M's charge prevailed, but it could only recover costs related to possession, not those defending Mr. Wishart's claim
The surplus awaits distribution, and even if C&M is entitled to costs, a residual balance remains, which Mr. Wishart would be entitled to.
This case underscores the importance of a clear legal foundation for claims of overriding interests, balancing the rights of occupants against those acquiring property titles.
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