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On appeal from: [2012] EWCA Civ 17

The appellant was persuaded to sell property to purchasers, who promised them the right to remain in their home as a tenant after the sale. The purchasers bought the property with the assistance of a mortgage from the respondents and when they defaulted on the payments the respondents began possession proceedings. The appellant argued that she had an equitable interest in the property from the moment of exchange of contracts which amounted to an unregistered interest given priority by the Land Registration Act 2002, s 29(2)(a)(ii) and Sch 3 (para 2).

The issue in the appeal was whether the purchaser had been in a position at the exchange of contracts to confer equitable proprietary rights on the appellant, as opposed to personal rights only. Secondly, even if she had, the Court had to consider whether the transaction of acquiring the legal estate and granting the charge was one indivisible transaction so that the appellant could not assert against the respondent an equitable interest which had only arisen on completion, in accordance with the decision of the House of Lords in Abbey National Building Society v Cann [1991] 1 AC 56.

The Supreme Court unanimously dismissed the appeal. It stated that the purchasers could not confer equitable proprietary rights on the appellant at any time before the completion of the purchase. On this basis the second issue did not arise but the Court did stated that it would have taken a different view on the indivisibility of the transaction if it had done so.

For judgment, please download: [2014] UKSC 52
For Court’s press summary, please download: Court’s Press Summary
For a non-PDF version of the judgment, please visit: BAILII