Abbey National Building Society v Cann [1991] 1 AC 56
Actual occupation will not bind a first mortgagee.
Facts:
The first defendant, George Cann, applied for a mortgage from a building society to buy a house. However, unknown to the building society, his mother (the second defendant) had contributed to the purchase price. The building society advanced the mortgage loan money before the property was transferred to the defendant. Some 25 minutes before completion the defendant’s mother moved into the address. When the defendant defaulted on his mortgage, his mother claimed an overriding interest. The defendants appealed against the granting of a possession order in the building society’s favour, and the appeal reached the House of Lords.
Issues:
The Land Registration Act 1925, s.70(1)(g) provides that an interest of a person in actual occupation may override registered dispositions. The mother claimed she had such an interest due to having contributed to the purchase price. Consequently, if she was also in actual occupation before the legal charge took effect she would have an overriding interest that would take priority over the mortgage. If so, she could not be evicted.
Held:
Appeal dismissed. The occupier’s interest also had to arise before the creation of the legal charge if it was to override it. Their Lordships held that when a buyer buys a property with a mortgage, the entire process is one indivisible transaction. Therefore, moving furniture in 25 minutes before the legal transfer of the property was not enough for actual occupation as this required some degree of permanence. Consequently, her interest did not override the legal mortgage.
Updated 20 March 2026
This case summary remains accurate as a statement of the legal principles decided in Abbey National Building Society v Cann [1991] 1 AC 56. However, readers should note that the statutory provision at the centre of the case, section 70(1)(g) of the Land Registration Act 1925, has been repealed and replaced. The Land Registration Act 2002 now governs overriding interests in registered land. The equivalent provision is found in Schedule 3, paragraph 2 of the 2002 Act, which protects the interest of a person in actual occupation, subject to certain qualifications including an enquiry and discoverability test that did not exist under the 1925 Act. The core principle established in Cann — that a mortgagor’s interest and the mortgage are simultaneous and indivisible, so that actual occupation must pre-date the creation of the charge — continues to be applied under the 2002 Act framework and remains good law. Students should ensure they refer to the 2002 Act provisions when applying these principles to current registered land problems rather than to the repealed 1925 Act.
