Abbey National Building Society v Cann: HL 29 Mar 1990

Registered land was bought with an advance from the plaintiff. The transfer and charge were registered one month later, but in the meantime, the buyer’s parents moved in. When the buyer defaulted, his mother resisted possession proceedings, saying that she had an overriding interest through her occupation at the time when the charge was registered.
Held: The mother’s plea failed. When land is purchased using a mortgage, the charge takes effect immediately, and there is no intermediate stage at which the purchaser owns the land free of the charge.
Lord Oliver said: ‘the relevant date for determining the existence of overriding interests which will ‘affect the estate transferred or created’ is the date of registration. This does, of course, give rise to the theoretical difficulty that since a transferor remains the registered proprietor until registration of the transfer, it would be possible for him in breach of trust, to create overriding interests, for instance, by grant of an easement or of a lease, which would be binding on the transferee and against which the transferee would not be protected by an official search. ‘ However, ‘A chargee who advances money and so acquires an equitable charge prior to the creation of the occupier’s right does not lose his priority because the occupier’s right becomes an overriding interest. That interest remains what it always was, an interest subject to the prior equity of the chargee which, on registration, is fortified by the legal estate. Equally, a chargee advancing his money after the creation of the occupier’s equitable right is, as one would expect, subject to such right.’ and
‘Nevertheless, I cannot help feeling that it flies in the face of reality. The reality is that, in the vast majority of cases, the acquisition of the legal estate and the charge are not only precisely simultaneous but indissolubly bound together. The acquisition of the legal estate is entirely dependent upon the provision of funds which will have been provided before the conveyance can take effect and which are provided only against an agreement that the estate will be charged to secure them. Indeed, in many, if not most, cases of building society mortgages, there will have been, as there was in this case, a formal offer and acceptance of an advance which will ripen into a specifically enforceable agreement immediately the funds are advanced which will normally be a day or more before completion. In many, if not most, cases, the charge itself will have been executed before the execution, let alone the exchange, of the conveyance or transfer of the property… The reality is that the purchaser of land who relies upon a building society or bank loan for the completion of his purchase never in fact acquires anything but an equity of redemption, for the land is, from the very inception, charged with the amount of the loan without which it could never have been transferred at all and it was never intended that it should be otherwise.’


Lord Bridge of Harwich, Lord Griffiths, Lord Ackner, Lord Oliver of Aylmerton, Lord Jauncey of Tullichettle


[1990] 1 All ER 1085, [1991] 1 AC 56, [1990] UKHL 3




Land Registration Act 1925 70(1)(g)


England and Wales


CitedCity of London Building Society v Flegg And Another HL 14-May-1987
A couple bought a property and registered it in their own names with substantial financial assistance from the parents of one of them. The parents occupied the house with them. Without telling the parents, the owners borrowed again, executing . .
OverruledChurch of England Buidling Society v Piskor CA 1954
Weekly tenancies had been granted by the purchaser of the property, title to which was unregistered, before completion. The society now sought possession of the property. The tenants argued that although their tenancies were equitable, they were . .
ApprovedLloyds Bank plc v Rosset CA 13-May-1988
Claim by a wife that she has a beneficial interest in a house registered in the sole name of her husband and that her interest has priority over the rights of a bank under a legal charge executed without her knowledge. The case raises a point of . .

Cited by:

CitedUCB Group Ltd v Hedworth CA 4-Dec-2003
The defendant challenged the claimant’s right to possession under a legal charge. She appealed a finding that she had not established the undue influence of her husband, a solicitor.
Held: A lender who received a voidable security was entitled . .
CitedIngram and Another v Commissioners of Inland Revenue HL 10-Dec-1998
To protect her estate from Inheritance Tax, the deceased gave land to her solicitor, but then took back a lease. The solicitor then conveyed the land on freehold on to members of her family.
Held: The lease-back by the nominee was not void as . .
CitedHardy and others v Fowle and Another ChD 26-Oct-2007
Mortgagees claimed possession of the land. The occupiers claimed a right of occupation under a lease. The mortgagees argued that the lease had been surrendered.
Held: The lease had been surrendered by a deed. The defects in notice alleged did . .
CitedHSBC Bank Plc v Dyche and Another ChD 18-Nov-2009
The parties disputed the claimed beneficial interest of the second defendant. The second defendant (C) said that it had been purchased for him by the first defendant (D) from C’s trustee in bankruptcy, and was thereafter held in trust for him on the . .
CitedLink Lending Ltd v Bustard CA 23-Apr-2010
The respondent had been detained in a secure mental unit for a year. In that time her home was charged to the appellant. She asserted that she had been a person in actual occupation. The chargee now appealed against a finding that the respondent had . .
CitedCook v The Mortgage Business Plc CA 24-Jan-2012
The land owners sought relief from possession orders made under mortgages given in equity release schemes: ‘If the purchaser raises all or part of the purchase price on mortgage, and then defaults, the issue arises whether the mortgagee’s right to . .
CitedCook v The Mortgage Business Plc CA 24-Jan-2012
The land owners sought relief from possession orders made under mortgages given in equity release schemes: ‘If the purchaser raises all or part of the purchase price on mortgage, and then defaults, the issue arises whether the mortgagee’s right to . .
CitedVarious Mortgagors v Various Mortgagees and Others ChD 19-Nov-2010
Land owners had entered into sale and rentback agreements. The buyers had taken out loans to complete the purchasers, but had then defaulted, having misrepresented the nature of the agreements to their lenders and the sellers. The lenders now . .
CitedScott v Southern Pacific Mortgages Ltd and Others SC 22-Oct-2014
The appellant challenged a sale and rent back transaction. He said that the proposed purchaser had misrepresented the transaction to them. The Court was asked s whether the home owners had interests whose priority was protected by virtue of section . .
CitedRevenue and Customs v The Investment Trust Companies SC 11-Apr-2017
Certain investment trust companies (ITCs) sought refunds of VAT paid on the supply of investment management services. EU law however clarified that they were not due. Refunds were restricted by the Commissioners both as to the amounts and limitation . .
CitedWaterside Escapes Ltd v Revenue and Customs FTTTx 13-Oct-2020
Qualifying Property Rental – Stamp Duty Relief
SDLT – higher threshold interest 15% rate – relief for a qualifying property rental business – intention that a non-qualifying individual be permitted to occupy a dwelling on the land (paragraph 5(2), Schedule 4A, FA 2003) – whether a non-qualifying . .
Lists of cited by and citing cases may be incomplete.

Registered Land

Updated: 01 February 2022; Ref: scu.186353