You can’t give what you don’t have, says Lina Mattsson
Lord Collins stated in terms that the decision in Scott v Southern Pacific Mortgages Ltd [2014] UKSC 52, [2014] All ER (D) 251 (Oct) was ultimately a decision of “which of the innocent parties will bear the consequences” when lending goes wrong. The balancing of competing interests between “innocent occupiers” and “innocent lenders” has troubled the courts for decades. In the high watermark of protection for beneficiaries under a trust in actual occupation, the House of Lords in Williams and Glyn’s Bank v Boland [1981] AC 487, [1980] 2 All ER 408 put some onus on lenders to make enquiries. Fearing that Scott would be another high watermark, the lending industry was holding its breath for some seven months awaiting the Supreme Court’s decision which was finally handed down on 22 October 2014.
The facts
Rosemary Scott’s case was originally one of ten test cases involving shady buy-and-rent-back agreements. The facts had not been determined and the case was decided on assumed facts, which
