National Provincial Bank v Ainsworth [1965] AC 1175

Key point

  • An equitable right or a personal nature is not binding on third parties and cannot be an overriding interest

Facts

  • A deserted wife (D) had an equitable right to remain in occupation in her former husband’s home, known as ‘deserted wife’s equity’
  • D’s former husband had defaulted on the mortgage on the house
  • The mortgagee bank (C) sought an order of sale of the house, D argued that she had an overriding interest that had priority to the mortgage

Held (House of Lords)

  • Order of sale was granted
  • D’s right is a personal right against the husband but not binding on mortgagee

Lord Wilberforce

  • Equitable does not mean proprietary
  • The fact that a contractual right can be specifically performed or its breach prevented by injunction does not mean that the right is less of a personal right
  • What is relevant is the nature of the right, not the remedy which exists for its enforcement
  • An obligation that binds a man’s conscience it not always binding on the conscience from those that take from him
  • The right is therefore not an overriding interest under s70 LRA 1925 (the predecessor of s29 LRA 2002)