Thomas v Clydesdale Bank [2010]

Thomas v Clydesdale Bank [2010] EWHC 2755 (QB) delves into a recurring conveyancing question: the competing interests of a bank and a spouse in the context of a residential property. The case revolves around Mr Burtenshaw, the sole legal owner of a home, and his partner Ms Thomas, who intended to move into the property with their children after necessary renovations. The couple planned to finance the renovations through a bridging loan from Clydesdale Bank.

Despite the initial plans, Mr Burtenshaw's business failure led to mortgage payment difficulties, resulting in the bank seeking possession. Ms Thomas, who was actively involved in supervising the renovation work, did not attend the hearing. The judge, considering her health-related adjournment request, refused and ruled in favour of the bank. Ms Thomas appealed, treating the appeal as an application to set aside the judge's decision.

The central issue before the High Court was whether Ms Thomas had a reasonable prospect of success in her claim that she had an interest in the property, even though Mr Burtenshaw was the registered proprietor. The bank conceded that Ms Thomas had an interest, described as a common intention constructive trust.

The court examined Section 29 of the Land Registration Act 2002, which gives priority to a registered mortgage over an unregistered interest. However, certain circumstances, outlined in Schedule 3 of the Act, can override this priority. Ms. Thomas relied on Paragraph 2 of Schedule 3, asserting her actual occupation as an overriding interest.

The court, in line with established principles articulated in Lloyds Bank Plc v Rosset [1989], recognised that Ms Thomas's supervisory visits constituted actual occupation. The famous dictum in Rosset emphasised that physical presence involving renovation work aligns with the concept of actual occupation.

Regarding actual knowledge, the court rejected the bank's argument that it needed knowledge of the interest itself rather than the factual basis for that interest. The court held that the bank must have actual knowledge of the circumstances underlying Ms Thomas's interest.

In interpreting Paragraph 2(c)(i), the court determined that a reasonable inspection should reveal the occupation, without the necessity of discovering the extent or degree of occupation. The decision clarified that a reasonable inquiry is not mandated.

The case raises interesting implications for situations similar to Kingsnorth Finance v Tizard [1986], indicating that the current approach may differ. The decision underscores the importance of recognising actual occupation in cases where a partner's interest may be overshadowed by a registered mortgage, providing clarity on the factors that influence the priority of competing claims in residential property disputes.
Back to blog

UOL Case Bank

Upon joining, you become a valuable UOL student and gain instant access to over 2,100 essential case summaries. UOL Case Bank is constantly expanding. Speed up your revision with us now.

Subscribe Now

Where are our students from?

Council of Europe
Crown Prosecution Service
Baker Mckenzie 
Yale University
University of Chicago
Columbia University
New York University
University of Michigan 
INSEAD
University of London
University College London (UCL)
London School of Economics (LSE)
King’s College London (KCL)
Royal Holloway, University of London 
Birkbeck, University of London
SOAS, University of London
University of Manchester
University of Zurich
University of York
Brandeis University
University of Exeter
University of Sheffield
Boston University
University of Washington
University of Leeds
University of Law
University of Kent
University of Hull
Queen’s University Belfast
Toronto Metropolitan University
Hong Kong University of Science and Technology
University of Buckingham
ESSEC Business School

  • Criminal Practice

    Diagrams and Charts

    Our carefully designed diagrams and charts will guide you through complex legal issues.

  • Criminal Law

    Clear and Succinct Definitions

    Key concepts are concisely defined to help you understand legal topics quickly.

  • Property Law

    Statutory Provisions

    Statutory provisions are provided side by side with legal concepts to help you swiftly locate the relevant legislation.

  • Public Law

    Case Summaries

    We have summarised important cases for you so that you don't need to read long and boring cases.

  • Evidence

    Rules and Exceptions

    Rules and exceptions are clearly listed so that you know when a rule applies and when it doesn't.

  • Company Law

    Terminology

    Legal terms and key concepts are explained at the beginning of each chapter to help you learn efficiently.

  • Case Law

    Case law is provided side by side with legal concepts so that you know how legal principles and precedents were established.

  • Law Exam Guide

    Law Essay Guide

    You will learn essential law exam skills and essay writing techniques that are not taught in class.

  • Law Exam Guide

    Problem Question Guide

    We will show you how to answer problem questions step by step to achieve first-class results.

  • Conflict of Laws

    Structured Explanations

    Complex legal concepts are broken down into concise and digestible bullet point explanations.

  • Legal System and Method

    Legal Research

    You will learn legal research techniques with our study guide and become a proficient legal researcher.

  • Jurisprudence and Legal Theory

    Exam-focused

    All essential concepts, principles, and case law are included so that you can answer exam questions quickly.