Stockholm Finance Ltd v Garden Holdings [1995]

1. Facts

• A mother (M) purchased a house and conditionally gifted it to her daughter (D), giving D a proprietary right in the property.

• M considered using the house as security for a loan and subsequently defaulted on the mortgage.

• The lender sought to sell the house to recover its money.

• To prevent the sale, M arranged for D to move back into the house, hoping that D could assert an actual occupation (AO) right to block the sale.

• Although the property was furnished and contained some of D’s clothing, D had not lived there for an extended period.

2. Outcome

• The court held that D was not in actual occupation of the property.

• The fact that the property was furnished and contained some of D’s belongings was insufficient to establish AO.

• The court considered D’s prolonged absence from the property—over a year—and determined that D had no general intention to occupy the property regularly. Instead, her return was seen as an attempt to prevent the lender from selling the house.

3. Impact and Analysis

• Expansive Approach to AO: The case reflects an expansive approach to determining actual occupation. The court considered not only the length of D’s absence but also the reasons behind it.

• Lack of Genuine Intention: D's lack of a genuine intention to occupy the property played a significant role in the decision. The court found that her return to the property was not for the purpose of residing there but merely to prevent the sale, which undermined her claim of AO.

• Prolonged Absence: The extended period of absence (over a year) further weakened D's argument. The case illustrates that continued absence, without a clear intent to return and occupy the property, can prevent a claim of actual occupation, even if some belongings remain at the property.