Boris Ignachkov 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:
- “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”
- 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.
