National Provincial Bank Ltd v Hastings Car Mart Ltd

National Provincial Bank Ltd v Hastings Car Mart Ltd [1964] Ch. 665

LAND LAW – REGISTERED LAND – OVERRIDING INTERESTS – ACTUAL OCCUPATION

Facts

A man was the sole registered proprietor of the home he occupied with his family. He transferred the property to his company, which used it as security for a mortgage. The man deserted his family, the company fell into arrears and the bank sought possession of the home.

Issues

Under the Land Registration Act 2002, Schedule 3 (and its predecessors), certain interests are ‘overriding’, meaning that even if they are not registered they can be asserted against those with registered interests in the property. One of these overriding interests is any interest belonging to a person in actual occupation of the property (para. 2).

The issue was whether the bank could claim possession of the house despite the continued occupation of the family. The court was asked to determine what sort of interest needed to be coupled with the actual occupation.

Decision/Outcome

The Court of Appeal held that the bank could not claim possession of the home, as the wife had an overriding interest.

The Court held that the husband had granted the wife an irrevocable license. The majority thought that as equity would grant the wife an injunction to prevent the husband from revoking the license and evicting her, the license could be characterised as an equitable interest, and therefore an interest in land. Since this interest was coupled with actual occupation, it constituted an overriding interest.

This case is likely no longer good law, due to the decision of the House of Lords in National Provincial Bank v Ainsworth, which held that licenses are non-proprietary and therefore cannot be the subject of an overriding interest. The dissent in this case also asserted that licenses are non-proprietary.