City of London Building Society v Flegg
Encyclopedia
City of London Building Society v Flegg [1987] UKHL 6 is an English land law
case decided in the House of Lords on the priority given to overriding interests and overreaching interests.
section 70, people with actual occupation may have an overriding interest that would take priority over a third party, like the building society, this does not happen if the purchase money is paid to two or more trustees or a trust corporation. If that happens, under LPA 1925 section 2(ii) the interests of the beneficiaries will be overreached and will attach to the purchase price, not the property.
Lord Templeman said the following.
Lord Oliver gave a concurring judgment.
English land law
English land law concerns the law of real property in England and Wales. Because of its heavy historical and social significance, land is a major part of the wider English property law....
case decided in the House of Lords on the priority given to overriding interests and overreaching interests.
Facts
In 1977 Mr and Mrs Flegg sold their home of 28 years and used the £18,000 they made to help buy Bleak House, Grange Road, Gillingham, Kent, registered at HM Land Registry title number K467866. Their daughter and her husband, Mrs and Mr Maxwell-Brown had asked them to, and they put in the remaining £16,000 by taking out a mortgage. It was meant for them all to live in, but the daughter and husband registered as the owners, despite their solicitor advising all four of them be registered. (So Mr and Mrs Flegg had an equitable property right from their contributions to the purchase price, the Maxwell-Browns holding on trust for them.) The Maxwell-Brown’s had money trouble and remortgaged with the City of London Building Society to raise £37,500 without the Fleggs’ consent. They Fleggs were suspicious and entered a caution against dealings at the Land Registry. They defaulted and the building society sought possession.Judgment
The House of Lords held that the building society’s charge took priority, and could use the overreaching defence against the Fleggs’ pre-existing trust right. Although under the Law of Property Act 1925Law of Property Act 1925
The Law of Property Act 1925 is a statute of the United Kingdom Parliament. It forms part of an interrelated programme of legisation introduced by Lord Chancellor Lord Birkenhead between 1922 and 1925. The programme was intended to modernise the English law of real property...
section 70, people with actual occupation may have an overriding interest that would take priority over a third party, like the building society, this does not happen if the purchase money is paid to two or more trustees or a trust corporation. If that happens, under LPA 1925 section 2(ii) the interests of the beneficiaries will be overreached and will attach to the purchase price, not the property.
Lord Templeman said the following.
Lord Oliver gave a concurring judgment.