Lloyds Bank plc v Rosset [1990] UKHL 14, [1991] AC 107 is an important case in English property law dealing with the rights of cohabitees. The case establishes that contributing to the cost of running a house does not, in itself, create a beneficial interest.
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Mr & Mrs Rosset bought a derelict property with the proceeds of a trust fund set up for Mr Rosset, one of the stipulations of which was that the property must be conveyed into the husband's name alone. Unbeknown to Mrs Rosset, Mr Rosset then took out a loan secured against the property, and when he became unable to repay that loan, Lloyds Bank sought to take possession of the property. At this point Mrs Rosset asserted that she had an overriding interest in the property and that the bank had to take account of this beneficial interest which arose as a result of her contributions to the property.
Held, dismissing the appeal by Lloyds Bank, that the relevant date for determining whether Mrs Rosset was in occupation of the property for creation of an overriding interest in terms of the Land Registration Act 1925 s.70 was the date of the creation of the charge, 17 December. Lloyds Bank correctly challenged whether Mrs Rosset had any beneficial interest in the property. There was no express agreement between Mrs Rosset and Mr Rosset between November and 17 December that Mrs Rosset would have a beneficial interest in the property and no express evidence of discussions to that effect. The work Mrs Rosset did on the property was insufficient to create the inference of beneficial ownership or creation of a constructive trust. Conduct such as payment towards the purchase price by the party who was not the legal owner was required before such an inference would be drawn.
Lord Bridge emphasised the distinction between evidence on the one hand which was capable of establishing an express agreement or an express representation that [the partner who was not the legal owner] was to have an interest in the property, and evidence on the other hand of conduct alone as a basis for an inference of the necessary common intention." He was extremely doubtful as to whether anything less direct contributions to the purchase price by the partner who is not the legal owner, whether initially or by payment of mortgage instalments, would suffice to satisfy the latter.[1] Whilst the trial judge held that a constructive trust existed by virtue of what Mrs Rossett did in and about in the renovation of the property, Lord Bridge held that her contribution was almost de minimis and therefore did not give rise to any beneficial interest in her favour.[2] The appeal by the bank was upheld, with Lords Griffiths, Ackner, Oliver and Jauncey agreeing.
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