Facts
- Mr. and Mrs. Henning, a married couple, jointly purchased a property, but the legal title was registered solely in Mr. Henning’s name.
- Mrs. Henning contributed to the purchase price and lived at the property.
- Mr. Henning obtained a mortgage from Bristol and West Building Society without informing Mrs. Henning.
- Upon Mr. Henning’s default, the building society sought possession of the property.
- Mrs. Henning claimed an overriding interest pursuant to section 70(1)(g) of the Land Registration Act 1925, asserting that her actual occupation bound the building society.
- The building society argued it had no notice of Mrs. Henning’s interest and that she had given implied consent to the mortgage.
Issues
- Whether Mrs. Henning’s actual occupation established an overriding interest under section 70(1)(g) of the Land Registration Act 1925.
- Whether Mrs. Henning’s conduct amounted to implied consent to the mortgage, thereby defeating her claim to an overriding interest.
- Whether the building society was bound by Mrs. Henning’s rights in the absence of constructive notice.
Decision
- The Court of Appeal held that Mrs. Henning’s implied consent to the mortgage defeated her overriding interest claim.
- The court determined that Mrs. Henning’s conduct, including signing documents related to the mortgage, constituted implied consent.
- As a result, the building society was not bound by her interest under section 70(1)(g).
- The doctrine of constructive notice did not apply, as the building society had made reasonable inquiries and acted in good faith without notice of Mrs. Henning's interest.
Legal Principles
- Actual occupation may give rise to an overriding interest under section 70(1)(g) of the Land Registration Act 1925.
- Implied consent, inferred from conduct such as signing relevant documents, can defeat a claim to an overriding interest.
- Constructive notice requires that mortgagees make reasonable inquiries to discover occupiers with potential interests in the property.
- Where a mortgagee acts in good faith and without notice of the occupier’s rights, and the occupier has given implied consent, no overriding interest will bind the mortgagee.
Conclusion
The decision in Bristol & West BS v Henning established that an occupier’s implied consent to a mortgage transaction can prevent the assertion of an overriding interest, provided the mortgagee acts in good faith and without notice of the claim, thereby clarifying the application of constructive notice and the protection of occupiers under the Land Registration Act 1925.