Case Summary: Lloyds Bank plc v Rosset [1991] 1 AC 107

Home » News » Case Summary: Lloyds Bank plc v Rosset [1991] 1 AC 107

Legal Principles and Key Points:

• In the case of Lloyds Bank plc v Rosset [1991] 1 AC 107, the court’s use of financial contributions to help signify common intention were applied. The later case of Stack v Dowden [2007] held other factors would be considered too.

Facts of Lloyds Bank plc v Rosset [1991] 1 AC 107

• D’s husband bought a home for himself and his wife to reside in
• He took out a mortgage with the C bank
• The common intention of the parties was that the property’s renovation would be a joint venture, and the D wife had a beneficial interest in the property under a constructive trust
• D spent almost every day helping the builders, she was unaware that her husband had successfully applied for an overdraft for the purchasing and repairs
• This meant D did not contribute to either the purchasing of the home, nor the repairs
• The husband made no payments to C, the payment defaulted, and C sought possession of the property as well as an order for its sale
• D argued this could not happen due to her overriding interest in the property under s70 of the Land Registration Act 1925
• The Court of Appeal held that the D did have an overriding interest, C appealed to the House of Lords

Issues in Lloyds Bank plc v Rosset [1991] 1 AC 107

• Did the D have an overriding beneficial interest in the property?

Held by the House of Lords

Appeal allowed; the decision of the Court of Appeal reversed. The D wife did not have an overriding beneficial interest in the property.

Lord Bridge

Common intention [132 – 133]:

Parties sharing a home, common intention is inferred where:

1. “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”
2. Where there is no evidence, “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”.

This will be by way of evidence of express discussions, detrimental reliance upon the agreement. Direct contributions, and instalments are ways to infer conduct.