The case of Abbey National v Cann [1990] 1 All ER 1085 focuses on the timing and conditions under which an overriding interest in property is recognized in the eyes of the law. This landmark ruling has profound implications for mortgagees and occupiers, setting significant precedents for future property disputes and is summarised in this article.

  • In the case of Abbey National v Cann [1990] 1 All E.R. 1085, it was held that the relevant date for determining whether an overriding interest exists is the date of registration of the estate, not the date of transfer or creation. However, a person claiming an overriding interest by virtue of actual occupation had to be in actual occupation at the time of creation or transfer.

Facts of the Case

  • In May 1984, D1 applied to C for a £25,000 loan, secured on mortgage of a property he proposed to buy, stating he wanted it for his sole occupation.
  • In actuality, D1 intended the property would be occupied by his mother D2 and her husband D3.
  • On 13th August, the property was purchased, and C’s charge on the property took place. On 13th September, D1 was registered as the sole proprietor.
  • D1 defaulted in payments to C, leading C to commence possession proceedings against him. D1 had no part in the defence.
  • D2 and D3 argued that D2 had an equitable interest in the property by virtue of her actual occupation, and this was an overriding interest binding on C.
  • C contended that the relevant date for determining an overriding interest was the date of completion of the purchase. Since D2 was not in occupation on the 13th of August, she could not have an overriding interest.


  • What was the relevant date for determining whether an overriding interest exists, and did D2 have such an interest?

Held by the House of Lords

  • Finding for C, that an occupier’s interest had to arise before the creation of C’s charge over the property. When a buyer buys a property with a mortgage, the entire process is a single transaction. The fact that furniture was moved in shortly before the transfer of the property did not constitute actual occupation. As such, D2 did not have an overriding interest over the mortgage.

Lord Oliver

  • The governing principle of the Law of Property Act 1925 is that the title to land should be ascertainable from the register alone. However, there may be subsisting rights of third parties that would not be deduced from title documents and which, though ascertainable by inquiry, may not have been protected by the register. The Act therefore provides for ‘overriding interests’ to which the registered title is made subject.
  • C relies on Lloyds Bank v Rosset [1989] Ch. 250, arguing that it established that the relevant date for ascertaining the existence of an overriding interest is not the date of registration but the date of completion of the purchase.
  • D2 claims priority because she was in actual occupation of the property prior to actual completion of the purchase. That claim was rejected by the trial judge, who inferred that the purchase and the charge were completed on 13th August.
  • On 13th August, D2 was in the Netherlands on a holiday she would not return from until the 18th. D1 and D3 had prepared to move into the property. D2’s chattels were moved into the property 35 minutes prior to the actual completion of the purchase.
  • “The conclusion at which the Court of Appeal arrived makes good conveyancing sense and I should be extremely reluctant to overrule it unless compulsively driven to do so, the more so because it produces a result which is just, convenient and certain, as opposed to one which is capable of leading to manifest injustice…the solution propounded in Rosset depends upon the words ‘affecting the estate transferred or created’ in sections 20(1)(b) and 23(1)(c) and construes them as if there were added the words ‘at the time at which it was transferred or created,’ thus excluding from the category of interests affecting the estate the rights of a person entering into occupation after the transfer or creation of the estate effected by completion of the transaction” [1112].
  • This is an attractive solution because it is a ‘conveyancing absurdity’ that a mortgagee (after parting with his money) should be bound by interests of newly arrived occupants coming in between completion and registration of his charge.
  • The chargee can protect himself from registered interests with an official search that preserves his priority during a period sufficient to enable them to lodge their charge for registration. However, there is no similar protection against unrecorded overriding interests and can only be ascertained through inquiry. There is good sense in preserving the priority of the chargee from the date of completion when all parties are irrevocably committed to the transaction.

Significance of the Case in Legal Development

Abbey National v Cann is instrumental in shaping property law, particularly regarding the rights of actual occupation and the priority of mortgagees. This case impacts several other cases, including:

  1. Lloyds Bank v Rosset [1989]: This case is pivotal in understanding family contributions to property and how these affect property rights.
  2. Williams & Glyn’s Bank v Boland [1981]: This case discusses the rights of a spouse not named on the title deeds but established an overriding interest through actual occupation.
  3. City of London Building Society v Flegg [1988]: In this case, the court held that the rights of occupiers can be overreached by a mortgage executed by joint owners, further refining the limits of overriding interests.

Exam Questions & Answers

Below, you will find answers to questions that are usually asked about this case.

How does this ruling affect the rights of temporary occupants or guests in terms of claiming an overriding interest?

Abbey National v Cann focuses on the concept of “actual occupation” as a requirement for establishing an overriding interest. Therefore, the rights of temporary occupants or guests to claim an overriding interest are generally not supported unless they can demonstrate permanence and apparent occupation similar to that of a permanent occupant.

In what ways might the principles set out in Abbey National v Cann be applied to digital assets or properties that include technological integrations?

The principles from Abbey National v Cann could theoretically extend to digital assets in scenarios where digital property, like data stored in a physical server, is treated similarly to real property. However, the tangible occupation concept might need reinterpretation for intangible assets, involving legal recognition of digital possession akin to physical possession.

How could changes in property law to accommodate co-living spaces or shared housing agreements impact the application of this ruling?

Changes in property law to better accommodate co-living spaces or shared housing agreements might require a reevaluation of what constitutes “actual occupation” under Abbey National v Cann. If property laws evolve to recognize more fluid living arrangements, this could broaden the definition and application of overriding interests, potentially offering more protection to co-occupants not listed on property deeds.