The Gazette 1985

GAZETTE

APRIL 1985

purchasers. By analogy with what was thought to be the position for unregistered land, the rights of an occupier would be overridden whenever the vendor or mortgagor was also in occupation 7 . Other judges — notably Russell LJ. 8 — adopted the ordinary meaning of the words, i.e. that they connoted a physical state of affairs. Whether there was "actual occupation" depended on the circumstances, but "a wise purchaser or lender will take no risks. Indeed, however wise he may be, he may have no ready opportunity of finding out; but, nevertheless the law will protect the occupier." 9 Doubt as to the correct construction of the phrase was dispelled by the decision of the House of Lords in Williams & Glynns Bank -v- Boland 10 . In that case the spouses had pooled their earnings to buy the matrimonial home. Title was taken in the name of the husband, and he was registered as sole proprietor. It was common ground that the wife was entitled in equity to a half-share in the house as a result of her contributions to the purchase price and mortgage instalments. However, she had taken no steps to protect her interest by restriction or caution. Later, the husband borrowed from the Bank and, without his wife's knowledge, gave a legal charge on the property as security. At the time, the Bank made no inquiries as to whether the wife had any interest in the property. When the husband defaulted on the repayments, the Bank instituted proceedings for possession. The wife resisted the claim on the ground that her equitable interest coupled with her occupation gave her an overriding interest. The net question was whether she was in "actual occupation" within s.70(1 Kg). The House of Lords held that the words were to be construed in their ordinary literal sense without qualification. On this basis, the wife was in "actual occupation," and, since the Bank had made no inquiries of her, its claim to possession was defeated by her overriding interest. The Bank advanced a number of arguments to avoid the conclusion that the wife was in occupation: first, that as a general proposition s.70(l)(g) did not apply if the vendor or mortgagor was in occupation. Both the Court of Appeal and the House of Lords made it clear that occupation by a vendor or mortgagor did not exclude the possibility of occupation by others. Secondly, that the wife's occupation was merely the shadow of the husband's occupation. This contention — premised on the fiction of conjugal unity — was roundly rejected as being "heavily obsolete", "unrealistic and anachronistic", and inconsistent "with the standing of women in our society today". Thirdly, it was argued that to come within s. 70(1 )(g) the occupation must be apparently inconsistent with the title of the vendor. This, it was suggested, would exclude the wife of a husband vendor because her occupation would be satisfactorily accounted for by his. Lord Wilberforce exposed the flaw in this argument: "Consistency or inconsistency involves the absence or presence of an independent right to occupy . . . but how can either quality be predicated of a wife simply qua wife? A wife may . . . have rights of her own; particularly, many wives have a share in a matrimonial home. How can it be said that the presence of a wife . . . is consistent or inconsistent with the husband's rights until one knows what rights she has? And if she has rights, why, just because she is a wife . . . should these rights be denied protection under the paragraph." His Lordship concluded that "the only solution which is consistent with the Act and with common sense is to read the paragraph for

what it says. Occupation existing as a fact may protect rights if the person in occupation has rights." Finally, it was argued that if the overriding interest sought to be protected was only binding on a purchaser by virtue of notice, then, under s.74 of the 1925 Act, the Bank was not affected by notice of any trust and consequently did not have to make inquiries of the wife. Their Lordships, however, pointed out that the doctrine of notice had no application, even by analogy, to registered land. S.74 was merely an administrative measure to prevent entries on the register which would only be appropriate if that doctrine were applicable. Overriding interests take effect under s.70(l) whether or not a purchaser or mortgagee has notice of them. It is clear from the judgments that "actual occupation" involves an essentially factual investigation. Referring to the beneficially co-owning wife Lord Denning M.R. remarked, "Visit the home and you will find that she is in personal occupation of it just as much as [the husband]. She eats there and sleeps there just as he does. She is in control of all that goes on there just as much as he is. In no respect whatever does the nature of her occupation differ from his . . . [A]ctual occupation is a matter of fact, not a matter of law." Since the question is one of fact in each case, the Courts have sensibly eschewed laying down "a code or catalogue" of situations in which persons other than the vendor or mortgagor should be held to be in "actual occupation" within the paragraph. Therefore the concept is still an elusive and problematical one. Certain guidelines do, however, emerge: "actual occupation" connotes physical presence, not some entitlement in law; occupation may be shared. A person may be in occupation through another. Occupation of part only of a property may be sufficient. 12 On the other hand mere temporary presence is not enough — there must be some degree of permanence, though, in assessing the degree of permanence, a temporary absence will not necessarily be fatal. Implications for this Jurisdiction There can be little doubt that the Irish courts, when confronted directly with the question, will adopt a literal construction of the phrase "in actual occupation" in s.72(l)(j). If this opinion is correct, the section's potential for surprising purchasers, mortgagees, and their legal advisers is great. The effect of a literal interpretation is to protect the rights of an occupier whether or not they can reasonably be discovered. In the context of equitable interests derived from contributions the problems are immense: a transfer of property may be taken in the name of one person, but if another has contributed towards the acquisition so as to be entitled to a beneficial interest under a resulting or constructive trust, the registered owner will hold the property as trustee in the appropriate proportions. If the beneficial co-owner is in actual occupation, a transferee from the registered owner will, unless the claim is cleared, take subject to his or her rights under s.72(l)(j). Moreover, the register can be rectified to give effect to such rights and normally no compensation under s.120 will be available to the aggrieved transferee. 13 Therefore not only is the mirror principle undermined but so also is the principle of a state-guaranteed title.

On one view this totally undermines the system of registered conveyancing. Writing in 1973, R. H. Maudsley 61