Hypo-Mortgage Services Ltd v Robinson The Times, January 2, 1997
A child in occupation cannot have an overriding interest.
The appellant, Robinson, appealed against a mortgage possession order against their home that had been granted to a mortgage lender. Although the house was in the sole legal name of the husband, his wife’s children had occupied the property.
The wife appealed on the basis that she had a one half beneficial interest in the property and this was held on trust by her for the children. Under s.70(1)(g) of the Land Registration Act 1925 all registered land was held subject to the overriding interest of a person in actual occupation of the land except where enquiry was made of such person and the rights were not disclosed. Therefore, the equitable interest of someone in actual occupation could override a registered disposition of land, such as the legal charge created by a mortgage. The appellant argued that, as the children had an equitable interest and were in actual occupation, this created an overriding interest which could defeat the mortgagee’s claim.
The court rejected the wife’s argument. Nourse LJ said that children had no right of occupation of their own but were only in occupation as shadows of their parent. He said that to hold otherwise would be to leave mortgage lenders defenceless, as they would always be frustrated when trying to repossess the property by simple devices such as conferring a token beneficial interest in the property on a child. Section s.70(1)(g) Land Registration Act 1925 could not have been intended to operate this way, as no enquiry could be made of a minor, especially very young children.
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