Lloyds Bank v Rosset (1991) 1 AC 107
Mr and Mrs Rosset decided to purchase a semi-derelict farmhouse for £57,000. Mrs Rosset understood that the entire purchase money was to come out of a family trust fund, the trustees of which insisted that the house be purchased in the husband's sole name.
The house was in need of renovation and it was intended that such would be a joint venture.
The vendors allowed Mr and Mrs Rosset to enter the property a number of weeks before completion in order to begin repairs to make the house inhabitable.
During this period Mrs Rosset spent a lot of time at the house, urging on the builders and attempting to co-ordinate their work. Later her husband insisted that he should give all the instructions. She set about going to builders' merchants to obtain materials, delivering them, assisting her husband in planning the renovation and undertaking the decoration of the house in her capacity as a skilled decorator. In addition she wallpapered bedrooms, arranged house insurance and burglar alarm installation.
Mr Rosset was unable to fund the purchase and repairs entirely from the trust fund, and obtained an overdraft of £18,000 from Lloyds Bank, executing a legal charge on the property in their favour on the same day as completion. Mrs Rosset did not now this had occurred. He later defaulted on the repayments, and the bank sought possession. Mrs Rosset claimed a beneficial interest in the property, binding the bank by virtue of her actual occupation, as an overriding interest under the Land Registration Act 1925, s.70(1)(g).
Held: The Court of Appeal found for Mrs Rosset basing their decision on whether she was in actual occupation when the charge was created, in order to be able to rely upon s. 70(1)(g).
The House of Lords however avoided all discussions of s. 70(1)(g), simply holding that Mrs Rosset had no beneficial interest. There was no evidence of any agreement between the parties to share the beneficial interest (first category), and the wife's contributions were regarded as de minimis (second category).
Lord Bridge: "The first and fundamental question which must always be resolved is whether, independently of any inference to be drawn from the conduct of the parties in the course of sharing the house as their home and managing their joint affairs, there has at any time prior to acquisition, or exceptionally at some later date, been any agreement, arrangement or understanding reached between them that the property is to be shared beneficially. The finding of an agreement or arrangement to share in this sense can only, I think, be based on evidence of express discussions between the partners, however imperfectly remembered and however imprecise their terms may have been. Once a finding to this effect is made it will only be necessary for the partner asserting a claim to a beneficial interest against the partner entitled to the legal estate to show that he or she has acted to his or her detriment or significantly altered his or her position in reliance on the agreement in order to give rise to a constructive trust or proprietary estoppel.
In sharp contrast with this situation is the very different one where there is no evidence to support a finding of an agreement or arrangement to share, however reasonable it might have been for the parties to reach such an arrangement if they had applied their minds to the question, and where the court must rely entirely on the conduct of the parties both as the basis from which to infer a common intention to share the property beneficially and as the conduct relied on to give rise to a constructive trust. In this situation direct contributions to the purchase price by the partner who is not the legal owner, whether initially or by payment of mortgage installments, will readily justify the inference necessary to the creation of a constructive trust. But, as I read the authorities, it is at least extremely doubtful whether anything less will do."
This study area has been created by our experts to help students with Administrative Law Essay and Problem Questions. If you require further help with your question, why not order a fully customised model answer on which to base your assignment? Use our online order form to submit your request and you could have a complete model answer written to your specification within 24 hours.
