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.