In Link Lending Ltd v Hussein and another, the Court of Appeal considered what constitutes actual occupation so as to defeat an application for a possession order.

The detail of the case is set out in our November 2009 banking update. The owner of the property (B) had psychological problems and was induced to sell the property while not being aware of what she was doing. The claimant lent money to the purchasers which was secured on the property. Possession proceedings were commenced and B was joined in to the proceedings. At first instance the court held that the sale was voidable due to B's mental illness and the property was transferred back to her. The court also held that although B had been admitted to psychiatric hospitals and care homes, she was in actual occupation of the property at the date the loan was made to the purchasers. Her furniture and possessions were in the property, she regularly made supervised brief visits, kept furniture there and paid household bills. Her interest was deemed to be an overriding interest which took priority over the claimant's charge which the court ordered to be discharged.

The Court of Appeal dismissed the claimant's appeal. It held there was no single legal test for determining whether a person was in actual occupation. It was a question of fact. The relevant factors included:

  • the degree of permanence and continuity of presence of the person concerned
  • the intentions and wishes of that person
  • the length of, and reason for, absence from the property
  • the nature of the property
  • the personal circumstances of the person.

The Court of Appeal found that although B was not physically present at the date of the loan, her furniture was present, she visited the house, considered it to be her home and regularly paid bills. Her residence elsewhere was involuntary and she had an intention to return home when possible. That was enough evidence to conclude that B was in actual occupation. B therefore had an overriding interest and the lender was not entitled to repossess the property.

Things to consider

This case confirms that although a person may not be physically present, they may still be deemed to be in occupation. All the circumstances of the particular case, and particular intention of the occupier, will need to be determined in deciding whether someone is in occupation and whether their rights are overriding.