Malory Enterprises Ltd v Cheshire Homes (UK) Ltd

Malory Enterprises Ltd v Cheshire Homes (UK) Ltd [2002] EWCA Civ 151

Physical residence not required for actual occupation.

Facts:

A company dishonestly obtained a land certificate in respect of some land from the Land Registry and sold the land to the defendants, Cheshire, who were then registered as the new proprietors. The land contained a derelict block of flats. The original owner of the land, also named Mallory Enterprises, used this premises for storage. They erected fences, boarded up windows to keep out trespassers and kept the building locked. When the defendants partially demolished the property, the claimants sought rectification of the Register and damages for trespass. The trial judge found for the claimants. The defendants appealed.

Issues:

Under s,70(1)(g) Land Registration Act 1925 the interest of a person in occupation overrides any registered disposition of land. The defendants argued the claimants had no overriding interest in the land under s.82(3) of the 1925 Act. They claimed that the right to seek rectification of the register was neither a legal nor an equitable interest but something purely discretionary. As such they argued the claimants had no interest in the land only the hope of recovering something they had lost.

Held: 

The appeal was dismissed. The court found that the discretionary nature of the right to seek rectification under s.82(3) of the 1925 Act did not stop the claimants from having an overriding interest due to the fact that they were in actual occupation of the property. If a property was uninhabitable residence was not required for actual occupation but there had to be some physical presence with a degree of permanence and continuity. Consequently, the claimants were in actual occupation and their overriding interest bound the defendants.