Baker & Anor v Craggs

For the purposes of overriding interests, actual occupation requires physical presence with sufficient permanence and continuity. Its assessment depends on the nature of the land and may extend to adjoining or access land used as part of an owner’s occupation. Mere use of an access route is insufficient.

An equitable interest acquired after completion but before registration may be overreached where trustees grant an easement over the land and the statutory requirements for payment of capital money to two trustees are satisfied. A completed transfer generally merges the earlier estate contract. The easement therefore takes priority over the equitable interest, subject to the applicable statutory provisions.

The claimants purchased a barn from the Charltons and were granted a right of way across a yard included in an earlier transfer of land to the defendant. The defendant’s transfer was completed first, but his registration application was cancelled and he was registered only after the claimants’ transfer had been completed and registered.

The parties agreed that the defendant had acquired an equitable interest before the claimants’ transfer, and that the claimants’ right of way could prevail only if the defendant’s interest was protected as an overriding interest or had been overreached. The issues were whether the defendant was in actual occupation, whether his interest was overreached, whether the register required alteration, and what relief followed from interference with the right of way.

1. Actual occupation. The defendant was in actual occupation of the yard on 20 February 2012. Actual occupation requires physical presence, rather than a legal entitlement. Occupation may have different meanings according to the nature and purpose of the property. It requires a degree of permanence and continuity, although regular absence and the absence of residential use do not necessarily prevent occupation.
2. The relevant factors included the permanence and continuity of presence, the person’s intentions, the length and reason for absence, the nature of the property and the person’s circumstances. Occupation is distinct from mere use. The defendant had carried out substantial works in the adjoining barn, attended the farm almost daily, and necessarily passed through, parked in and used the yard in carrying out those works. His occupation extended to the yard. His continued frequent attendance meant that the position had not changed by the date of the claimants’ completion.
3. Overreaching. Under the Law of Property Act 1925, the statutory concept of a legal estate includes an easement. Overreaching can therefore occur when trustees grant an easement over trust land for consideration, provided the statutory requirements concerning trustees and payment of capital money are met. The fact that the transaction concerns a limited interest rather than the fee simple does not prevent overreaching.
4. The defendant’s completed transfer had merged the earlier estate contract. His interest during the registration gap was therefore no longer an estate contract within section 2(3)(iv) of the Law of Property Act 1925. The claimants’ easement accordingly overreached and subordinated his equitable interest.
5. The register was correct and required no alteration. The defendant was liable for interference with the right of way. Damages were assessed at £250 because no specific loss was alleged. Declaratory relief was granted, but an injunction was refused as unnecessary.