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 binding on the building society whose money the purchaser had used to complete and in whose favour a charge (containing provisions against leasing by the chargor) was executed at the same time as completion of the purchase. Default having been made in payments due under the society’s charge, the society were not entitled to possession against the tenants in possession.
Held: The tenants succeeded. The various conveyancing steps must be treated as separate steps in the eye of the law. The court accepted the argument of the tenants that they had acquired their tenancies by estoppel which was ‘fed’ by the acquisition of the legal estate, thereby converting their tenancies into legal tenancies binding on the society. The court rejected the argument of the society that the conveyance and the charge were in reality one single transaction with the result that the purchaser’s legal estate was, from the outset, subject to the society’s charge and so could not be available to feed the estoppel free from it.
 Ch 553
England and Wales
Distinguished – In re Connolly Brothers Ltd (No. 2) CA 1912
A company had granted a debenture over all its assets, present and future, but wishing to acquire an additional property, it approached a third party who agreed to finance the purchase against a charge. It contracted to buy the property at pounds . .
Overruled – 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 . .
Cited – Hardy 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 . .
Cited – Cook 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 . .
Mentioned – Scott 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 . .
Lists of cited by and citing cases may be incomplete.
Updated: 12 September 2021; Ref: scu.261364