The Gazette 1985

GAZETTE

APRIL 1985

purchasers. By analogy with what was thought to be the

position for unregistered land, the rights of an occupier

would be overridden whenever the vendor or mortgagor

was also in occupation

. Other judges — notably Russell

LJ.

— adopted the ordinary meaning of the words, i.e.

that they connoted a physical state of affairs. Whether

there was "actual occupation" depended on the

circumstances, but "a wise purchaser or lender will take

no risks. Indeed, however wise he may be, he may have no

ready opportunity of finding out; but, nevertheless the

law will protect the occupier."

Doubt as to the correct construction of the phrase was

dispelled by the decision of the House of Lords in

Williams & Glynns Bank

-v-

Boland

In that case the

spouses had pooled their earnings to buy the matrimonial

home. Title was taken in the name of the husband, and he

was registered as sole proprietor. It was common ground

that the wife was entitled in equity to a half-share in the

house as a result of her contributions to the purchase price

and mortgage instalments. However, she had taken no

steps to protect her interest by restriction or caution.

Later, the husband borrowed from the Bank and, without

his wife's knowledge, gave a legal charge on the property

as security. At the time, the Bank made no inquiries as to

whether the wife had any interest in the property. When

the husband defaulted on the repayments, the Bank

instituted proceedings for possession. The wife resisted

the claim on the ground that her equitable interest

coupled with her occupation gave her an overriding

interest. The net question was whether she was in "actual

occupation" within s.70(1 Kg). The House of Lords held

that the words were to be construed in their ordinary

literal sense without qualification. On this basis, the wife

was in "actual occupation," and, since the Bank had

made no inquiries of her, its claim to possession was

defeated by her overriding interest.

The Bank advanced a number of arguments to avoid

the conclusion that the wife was in occupation: first, that

as a general proposition s.70(l)(g) did not apply if the

vendor or mortgagor was in occupation. Both the Court

of Appeal and the House of Lords made it clear that

occupation by a vendor or mortgagor did not exclude the

possibility of occupation by others. Secondly, that the

wife's occupation was merely the shadow of the husband's

occupation. This contention — premised on the fiction of

conjugal unity — was roundly rejected as being "heavily

obsolete", "unrealistic and anachronistic", and

inconsistent "with the standing of women in our society

today". Thirdly, it was argued that to come within

s. 70(1 )(g) the occupation must be apparently inconsistent

with the title of the vendor. This, it was suggested, would

exclude the wife of a husband vendor because her

occupation would be satisfactorily accounted for by his.

Lord Wilberforce exposed the flaw in this argument:

"Consistency or inconsistency involves the absence or

presence of an independent right to occupy . . . but how

can either quality be predicated of a wife simply

qua

wife?

A wife may . . . have rights of her own; particularly, many

wives have a share in a matrimonial home. How can it be

said that the presence of a wife . . . is consistent or

inconsistent with the husband's rights until one knows

what rights she has? And if she has rights, why, just

because she is a wife . . . should these rights be denied

protection under the paragraph." His Lordship concluded

that "the only solution which is consistent with the Act

and with common sense is to read the paragraph for

what it says. Occupation existing as a fact may protect

rights if the person in occupation has rights."

Finally, it was argued that if the overriding interest

sought to be protected was only binding on a purchaser by

virtue of notice, then, under s.74 of the 1925 Act, the

Bank was not affected by notice of any trust and

consequently did not have to make inquiries of the wife.

Their Lordships, however, pointed out that the doctrine

of notice had no application, even by analogy, to

registered land. S.74 was merely an administrative

measure to prevent entries on the register which would

only be appropriate if that doctrine were applicable.

Overriding interests take effect under s.70(l) whether or

not a purchaser or mortgagee has notice of them.

It is clear from the judgments that "actual occupation"

involves an essentially factual investigation. Referring to

the beneficially co-owning wife Lord Denning M.R.

remarked, "Visit the home and you will find that she is in

personal occupation of it just as much as [the husband].

She eats there and sleeps there just as he does. She is in

control of all that goes on there just as much as he is. In no

respect whatever does the nature of her occupation differ

from his . . . [A]ctual occupation is a matter of fact, not a

matter of law."

Since the question is one of fact in each case, the Courts

have sensibly eschewed laying down "a code or

catalogue" of situations in which persons other than the

vendor or mortgagor should be held to be in "actual

occupation" within the paragraph. Therefore the concept

is still an elusive and problematical one. Certain

guidelines do, however, emerge: "actual occupation"

connotes physical presence, not some entitlement in law;

occupation may be shared. A person may be in

occupation through another. Occupation of part only of a

property may be sufficient.

On the other hand mere

temporary presence is not enough — there must be some

degree of permanence, though, in assessing the degree

of permanence, a temporary absence will not necessarily

be fatal.

Implications for this Jurisdiction

There can be little doubt that the Irish courts, when

confronted directly with the question, will adopt a literal

construction of the phrase "in actual occupation" in

s.72(l)(j). If this opinion is correct, the section's potential

for surprising purchasers, mortgagees, and their legal

advisers is great. The effect of a literal interpretation is to

protect the rights of an occupier whether or not they can

reasonably be discovered.

In the context of equitable interests derived from

contributions the problems are immense: a transfer of

property may be taken in the name of one person, but if

another has contributed towards the acquisition so as to

be entitled to a beneficial interest under a resulting or

constructive trust, the registered owner will hold the

property as trustee in the appropriate proportions. If the

beneficial co-owner is in actual occupation, a transferee

from the registered owner will, unless the claim is cleared,

take subject to his or her rights under s.72(l)(j).

Moreover, the register can be rectified to give effect to

such rights and normally no compensation under s.120

will be available to the aggrieved transferee.

Therefore

not only is the mirror principle undermined but so also is

the principle of a state-guaranteed title.

On one view this totally undermines the system of

registered conveyancing. Writing in 1973, R. H. Maudsley