Abbey National Building Society v Cann

JurisdictionEngland & Wales
Judgment Date03 March 1989
Judgment citation (vLex)[1989] EWCA Civ J0303-5
Docket Number89/0247
CourtCourt of Appeal (Civil Division)
Date03 March 1989
Abbey National Building Society
George Edward Cann


Abraham Samuel Cann


Daisy Winifred Cann

[1989] EWCA Civ J0303-5


Lord Justice Dillon

Lord Justice Ralph Gibson

Lord Justice Woolf


CASE NO. 87/27155





Royal Courts of Justice

MR MARC BEAUMONT (instructed by Messrs Porter & Co.) appeared on behalf of the appellants (second and third defendants).

MR GRAHAM CLARK (instructed by Messrs Malthouse Chevalier) appeared on behalf of the respondent (plaintiff).


This appeal, from a decision given by His Honour Judge D.A.Thomas in the Croydon County Court on the 10th January 1989, raises somewhat anxious issues, not least in that the order of the judge, if upheld, involves the eviction from her home of a lady of 75, the third defendant Mrs Cann, and her husband of 81, the second defendant Mr Abraham Cann.


The issues arise out of the purchase in 1984 of a property known as 7 Hill View, South Lodge Avenue, Mitcham by the first defendant, George Cann, as a residence for Mrs Cann. The purchase money was in fact in large part provided by a loan by the plaintiff Building Society to George Cann on the security of a legal charge on the property which is now a registered charge, the title to the property having at all material times been registered. The question is whether Mrs Cann has rights in respect of the property which prevail over the rights of the plaintiff. More specifically it is submitted that she has an overriding interest within section 70 of the Land Registration Act 1925, to which the plaintiff's registered charge is subject. That sort of question has been familiar since the decision of the House of Lords in Williams & Glyn's Bank Ltd. v. Boland [1981] A.C. 487. Many of the issues in the present case have similarities to the issues in the case of Lloyd's Bank Ltd. v. Rosset [1988] 3 W.L.R. 1301 in which an appeal to the House of Lords is now pending; it is common ground between the parties that we in this court are bound by the decision of the majority in Rosset, though there was some discussion in argument as to what exactly the majority in Rosset had decided.


Although the appeal is concerned with the purchase of 7 Hill View in 1984, it is necessary to go into much earlier events for some of the background facts.


Mrs Cann and her first husband, who died in 1962, were the parents of George Cann and of another son, Alan Cann, who gave evidence at the trial before the learned judge. Mrs Cann's first husband became the tenant of a house, 48 Warren Road, Mitcham, in or about 1940, and Mrs Cann would have succeeded to the protected tenancy on her husband's death. Mr Abraham Cann, a brother of Mrs Cann's first husband, came to share 48 Warren Road with Mrs Cann about 1970, and he in fact married Mrs Cann in February 1987.


Early in 1977 Mrs Cann, as the sitting tenant, was given the opportunity of buying 48 Warren Road at a reduced price of £5,000. She had no money herself, but George Cann took out an endowment mortgage for the total price, and in May 1977 the freehold of 48 Warren Road was conveyed into the joint names of Mrs Cann and George Cann. Mrs Cann knew at the time how the price was provided. There is evidence from Mrs Cann in the present proceedings that at the time of the purchase George Cann said that Mrs Cann had nothing to worry about and would have a roof over her head without having to pay rent any more; the intention was that George Cann would have an investment for himself which would come to him on Mrs Cann's death and in the meantime Mrs Cann and Mr Abraham Cann—who may have initially provided the money for the solicitor's fees—would have a roof over their heads.


In 1979 48 Warren Road was sold for £20,500 and another house, 30 Island Road, Mitcham, was bought for £26,500. The reason for the change was merely that 30 Island Road was a better house than 48 Warren Road. It was apparently Mrs Cann's understanding, according to her affidavit, that 30 Island Road was to be held in the joint names of George Cann and herself as 48 Warren Road had been, but that did not happen. Instead 30 Island Road stood in the sole name of George Cann, although bought as a residence for Mrs Cann and Mr Abraham Cann. There is a document in evidence dated 9th March 1979 and signed by Mrs Cann whereby she agreed to 30 Island Road being transferred into the sole name of George Cann. 30 Island Road was bought with the assistance of a mortgage for £15,000 taken out with the Nationwide Building Society, of which Mrs Cann was at all times well aware. Accordingly, there is no doubt that Mrs Cann's rights to possession of 30 Island Road as against George Cann were subject to the Nationwide's charge and to all rights to possession which that charge gave the Nationwide— Bristol and West Building Society v. Henning [19853 2 A.E.R. 606.


30 Island Road was sold for £45,000 and 7 Hill View was bought for £34,000 in 1984. Completion of each transaction took place on the 13th August 1984, which was a Monday. The intention clearly was that Mrs Cann and Mr Abraham Cann should occupy 7 Hill View as they had previously occupied 30 Island Road, and before that 48 Warren Road. The reason for the change from 30 Island Road to 7 Hill View was, as explained by Mrs Cann in her evidence, that George Cann was in financial difficulties. George Cann was living at that time at 84 Berkshire Way, Pollards Hill, Surrey, with a lady whom he has since married; Mrs Cann's understanding, as given in evidence, seems to have been that he was having difficulty in keeping down the mortgage on 30 Island Road as well as paying the outgoings of 84 Berkshire Way. Therefore she understood that 7 Hill View was to be purchased without any mortgage. Alan Cann said in an affidavit that he was told by George that he, GeorgeCann, wanted to clear the mortgage on 30 Island Road and purchase 7 Hill View outright without a mortgage on that property; that evidence does not take matters very far, however, since the oral evidence of Alan Cann at the trial was that he did not discuss these matters with his mother, Mrs Cann. In the event, the purchase of 7 Hill View was in the sole name of George Cann with the benefit of an advance of £25,000 from the plaintiff secured by a first legal charge on the property which is now a registered charge. Subsequently George Cann borrowed further money from the plaintiff under security of the charge without Mrs Cann's knowledge. As a result of George Cann's default und the charge the plaintiff now claims possession of 7 Hill View, not only against George Cann who has not contested the proceedings, but also against Mrs Cann and Mr Abraham Cann who are the only persons who have been in actual occupation of 7 Hill View since the completion of the purchase of 7 Hill View on the 13th August 1984. The total amount due to the plaintiff under the charge at the commencement of these proceedings was over £30,000, which is hopelessly beyond the means of Mrs Cann and Mr Abraham Cann.


The contracts for the sale of 30 Island Road and for the purchase of 7 Hill View were exchanged on the 17th July 1984. The 13th August was the contractual completion date for both transactions, and they were plainly treated by all concerned as parts of a chain of transactions to be completed on the same day, A deposit of £3,400 was paid by George Cann under the contract for the purchase of 7 Hill View. There is no evidence at all where that money came from; it is possible it was raised by way of bridging loan against the completion of the sale of 30 Island Road.


The evidence as to the conveyancing transactions is extremely scanty.


The solicitors who acted for George Cann on the sale of 30 Island Road and for George Cann and the plaintiff on the purchase of 7 Hill View and the mortgage of it to the plaintiff were Messrs H.C.L. Hanne & Co. of Lavender Hill, Clapham Junction. We do not know who the purchaser of 30 Island Road was, nor what solicitor acted for that purchaser. The vendor of 7 Hill View was a Mr Michael Watson, who gave helpful evidence at the trial. He was buying a property at Buckhurst Hill and his purchase of that property had to be completed on the same day. Mr Watson's solicitors were Messrs David Blank & Co. of Manchester; the partner nominally in charge was a Mr John Alcock, but the transaction was actually handled throughout by an articled clerk, Miss K.M. Ball, who has since left the firm. The solicitors acting for the vendor of the Buckhurst Hill property Mr Watson was buying were Messrs Crust, Lane and Davis. It is possible that there was a further link in the chain involving the vendor of the Buckhurst Hill property as purchaser of some other property.


None of the conveyancing files of any of the firms of solicitors was available at the trial; nor were any of those concerned with the conveyancing called to give evidence except Mr Alcock of David Blank & Co. He had no personal knowledge of the transaction and so was only able (i) to speak as to his firm's general practice and (ii) to produce a log kept by the firm's receptionist of incoming telephone calls received by David Blank & Co. after 9.30 a.m. on the 13th August 1984. It is important to keep in mind that there is no record of outgoing calls made by David Blank & Co.


It is to he inferred that the completions of all the transaction were effected by post and the various funds were remitted by transfer between hanks, i.e. telegraphic transfer, as it has been called. David Blank & Co's bankers were Williams & Glyn. Who the bankers of the other firms of solicitors, and in particular...

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