Hypo-Mortgage Services Ltd v Robinson and another
Mortgage executed by sole legal proprietor but trust alleged in favour of infant beneficiaries in occupation at material time – Whether presence of infant beneficiaries can amount to actual occupation for purpose of Land Registration Act section 70(1)(g) and thus defeat mortgagee’s claim to possession
In September 1990 the first defendant, Mrs Robinson, the sole registered proprietor of the house in question, executed a mortgage in favour of the plaintiffs at a time when she occupied the house together with her husband, Mr M Robinson, the second defendant, and two children of a previous marriage then aged one and three respectively. In the plaintiffs’ present proceedings for possession the second defendant resisted the action on the ground that sometime before the mortgage he and his wife had declared that they held her half share on trust for her children and (relying on Williams & Glyn’s Bank v Boland [1981] AC 487) that since those children were in occupation at the date of the mortgage their entitlements took priority over the mortgage as overriding interests under section 70(1)(g) of the Land Registration Act 1925. Following rejection of this defence and others by the trial judge the second defendant sought leave to appeal.
Held The application was refused.
Mortgage executed by sole legal proprietor but trust alleged in favour of infant beneficiaries in occupation at material time – Whether presence of infant beneficiaries can amount to actual occupation for purpose of Land Registration Act section 70(1)(g) and thus defeat mortgagee’s claim to possession In September 1990 the first defendant, Mrs Robinson, the sole registered proprietor of the house in question, executed a mortgage in favour of the plaintiffs at a time when she occupied the house together with her husband, Mr M Robinson, the second defendant, and two children of a previous marriage then aged one and three respectively. In the plaintiffs’ present proceedings for possession the second defendant resisted the action on the ground that sometime before the mortgage he and his wife had declared that they held her half share on trust for her children and (relying on Williams & Glyn’s Bank v Boland [1981] AC 487) that since those children were in occupation at the date of the mortgage their entitlements took priority over the mortgage as overriding interests under section 70(1)(g) of the Land Registration Act 1925. Following rejection of this defence and others by the trial judge the second defendant sought leave to appeal.
Held The application was refused.
Assuming that the alleged trust did subsist in the childrens’ favour, there were two reasons why the presence of the infant beneficiaries could not give rise to overriding interests. First, they were only there as shadows of the occupation by their parent Mrs Robinson. Second, no inquiry can be made of minor children or consent obtained from them in the manner contemplated by section 70(1)(g), especially when they are, as here, of tender years at the material date. If the second defendant was right, lenders would never be protected. Their security could always be frustrated by simple devices.
The applicant, Mr M Robinson, appeared in person; Jonathan Marks (instructed by Eversheds, of Cardiff) appeared for the respondent, Hypo-Mortgage Services Ltd.
