Abbey National v Cann [1990] 1 All ER 1085

Key point

  • Where a mortgage is relied on to buy a house, the completion of sale and execution of charge is a single transaction, such that the buyer never has right to the house free of mortgage

Facts

  • D, together with her son, bought the house using mortgage from C
  • The son could not repay and C sought possession
  • D argued that she had an equitable proprietary right that arose before the charge was completed (based on her financial contribution and promises from her son) and that she moved in the carpets 35 minutes before the charge was completed and was thus in actual occupation

Held (House of Lords)

  • D did not have an overriding interest; she was never in actual occupation

Lord Oliver

Scintillia temporis rule

  • Where buyer buys property relying mortgage, the buyer’s rights and rights derived from the buyer are subject to the right of the lender
  • Therefore there was no moment (scintillia temporis) between the transfer of a property and the execution of a mortgage in which the legal estate vested in the buyer free of the charge, the purchaser never acquires anything but the equity of redemption
  • D had no more than a personal right against her son
  • Thus there was no moment for a personal right from the estoppel which could be fed by the acquisition of legal estate so as become a property interest

Actual occupation

  • The acts done by the D on the day of completion had amounted to no more than preparatory steps leading to the assumption of actual residential occupation by the second defendant on or after completion
  • While ‘actual occupation’ did not necessarily involve the physical presence of the person claiming to occupy, it did involve some degree of permanence and continuity, more than a mere fleeting presence