The claimants asked the defendant to find a purchaser for their house for a fee. Pretending to be a purchaser under an assumed name, he obtained from them the documents necessary to register the transfer, and received a further payment towards the deposit on a new house. He was registered as proprietor, and obtained a substantial advance on a first charge to a building society. He was later convicted of fraud. C, still in possession, received no money for the sale of their house, and none of the other payments was returned. In a dispute between the Collings and the Building Society, the issue was whether their interest was ‘an overriding interest’ as that of a ‘person in actual occupation’. The Society, relying on Lonrho and Twinsectra argued, ‘ . . that the transfer of the property to the first defendant was not void, but voidable by Mr and Mrs Collings; that unless and until they avoided it they had no subsisting equitable interest in the property, their right to avoid it being a ‘mere equity’; and that such a right does not fall within s 70(1)(g).’
Held: The argument was rejected: ‘The rationale of the principle, as it applies to a transfer of property, is that even where the transfer is obtained by fraudulent misrepresentation, the transferor nevertheless intends that the whole legal and beneficial ownership in the property shall pass to the transferee. But that was not this case. Mr and Mrs Collings did not intend to transfer the property to the first defendant and they did not intend to transfer it for no consideration. The first defendant acquired the property without their knowledge and consent and in breach of his fiduciary duty to them. The equitable interest remained vested in Mr and Mrs Collings.’
Judges:
Nourse LJ
Citations:
[2001] 2 All ER
Statutes:
Land Registration Act 1925 70)1)(g)
Jurisdiction:
England and Wales
Registered Land
Updated: 12 May 2022; Ref: scu.188812
