Link Lending Ltd v Bustard

Whether a person is in actual occupation for the purposes of an overriding interest under the Land Registration Act 2002 is a question of fact and degree. There is no single legal test. Relevant matters include the permanence and continuity of occupation, the person’s intentions and wishes, the length and reason for any absence, and the nature of the property and the person’s circumstances.

Physical presence at the relevant date is not invariably required. A substantial involuntary absence may be consistent with continuing actual occupation where the home remains furnished, the absence is objectively explained, and there is a persistent and manifested intention to return.

Link Lending Ltd took a registered legal charge over a dwelling from the registered proprietor, Mrs Hussain, who had obtained the property through a transaction in which Ms Bustard lacked mental capacity. Ms Bustard had an equity to set aside that transfer.

At the date Link registered its charge, Ms Bustard was detained and living in psychiatric residential care. She was unable to return home, but her furniture remained there, her bills were paid from her funds, she made supervised visits, and she sought permission to return. HHJ Walton held that she was in actual occupation and dismissed Link’s possession claim.

Link appealed, contending that her year-long absence prevented her from being a person in actual occupation under the Land Registration Act 2002.

1. Appeal dismissed. The trial judge was entitled to conclude that Ms Bustard was a person in actual occupation of the property when Link registered its charge. Her equity therefore had priority over the charge, and Link’s possession claim remained dismissed.

2. Actual occupation under section 29 and Schedule 3 paragraph 2 of the Land Registration Act 2002 is a factual evaluation. The court should not impose a single legal test. It should weigh the degree of permanence and continuity, the claimant’s intentions and wishes, the duration and reason for absence, and the nature of the property and the claimant’s personal circumstances.

3. The authorities did not make physical presence indispensable. The court accepted the approach summarised in Thompson v Foy [2009] EWHC 1076. A claimant absent from the land will usually need occupation manifested by circumstances and a continuing intention to occupy. The claimant’s absence here was not a fleeting presence case, nor was it analogous to preparatory acts before taking up occupation in Abbey National BS v Cann [1991] 1 AC 56.

4. The prolonged absence in Stockholm Finance Ltd v Garden Holdings Inc [1995] LTL (26 October 1995) was distinguishable. Ms Bustard’s absence was involuntary and objectively explained by her psychiatric care. The property remained her furnished home, she maintained regular contact with it, and she persistently sought to return. Those facts provided sufficient continuity and permanence of occupation.

5. An appellate court could interfere only if the judge had misconstrued the legislation or made an unsustainable evaluative judgment. Neither ground was made out. Lords Justices Sullivan and Jacob agreed with Lord Justice Mummery.

• Court of Appeal (Civil Division): By [2010] EWCA Civ 424, dismissed Link’s appeal and upheld the finding that Ms Bustard was in actual occupation.
• Newcastle-upon-Tyne County Court: On 25 September 2009, HHJ Walton dismissed Link’s possession claim, held that Ms Bustard had an equity to set aside the transfer, and ordered the property transferred back to her.