Abbey National v Cann [1990] 1 All ER 1085 (HL)

Facts

• A mother (second defendant) and her son (first defendant) jointly purchased a property, with the son obtaining a mortgage from Abbey National to fund the purchase.
• The mother contributed financially to the purchase and claimed a potential equitable interest in the property.
• She moved some personal belongings into the property approximately 25 minutes before legal completion of the transfer and execution of the mortgage.
• The son defaulted on the mortgage, after which Abbey National sought possession of the property.
• The mother contended that her financial contribution and brief physical presence before completion constituted an overriding interest under the Land Registration Act 1925, which she argued should take priority over Abbey National’s mortgage.

Issues

1. Whether a person can acquire an overriding interest through actual occupation when that occupation commences shortly before or at completion of a mortgage transaction.
2. Whether the "scintilla temporis" principle allows the acquisition of an equitable interest to be separated in time from the creation of the mortgage, such that it could take prior effect.
3. What level of presence or activity constitutes "actual occupation" sufficient to support an overriding interest under the Land Registration Act 1925.

Decision

• The House of Lords determined that the purchase transaction and the grant of the mortgage comprise a single, indivisible event, leaving no point where the property was held unencumbered by the lender’s charge (rejecting application of "scintilla temporis").
• The mother’s equitable rights did not crystallize as an overriding interest before completion and could not take priority over Abbey National's registered charge.
• Moving possessions into the property shortly before completion was not sufficient to constitute actual occupation—such acts lacked the necessary permanence and continuity.
• The court held that actual occupation demands substantial presence at the relevant time, not mere preparatory steps.

Legal Principles

• Actual occupation necessary to support an overriding interest under the Land Registration Act 1925 requires evidence of permanence and continuity, not just transient or preparatory presence.
• The "scintilla temporis" doctrine does not apply to create a moment when a purchaser takes a property free of the lender’s charge in a simultaneous purchase and mortgage.
• Equitable interests must exist and be apparent at the time of completion to achieve overriding status over a lender’s interest.
• The onus is on equitable owners to notify third parties of any limitations on the legal estate if priority is to be claimed.

Conclusion

Abbey National v Cann clarified that actual occupation for overriding interests requires genuine and permanent presence, and that in mortgage purchases, equitable interests cannot arise prior to the lender’s charge; the decision remains central to English land law on overriding interests.