Lloyds Bank plc v Rosset
A common intention constructive trust requires either express discussions about sharing the property, or direct contributions to the purchase price from which such an intention can be inferred.
Facts
Mr Rosset bought a semi derelict farmhouse in his sole name, with money from a family trust which required the house to be in his name alone. Mrs Rosset spent a lot of time supervising the builders who were renovating the house, and did some decorating herself. Without her knowledge, Mr Rosset borrowed money from Lloyds Bank secured by a charge over the house. When he defaulted, the bank sought possession, and Mrs Rosset claimed that she had a beneficial interest that bound the bank, because she was in actual occupation.
Legal principle
The House of Lords held that Mrs Rosset had no beneficial interest. Lord Bridge said that there are two ways of establishing a common intention constructive trust: first, where there is evidence of express discussions between the parties, however imprecise, showing an agreement or understanding that the property is to be shared beneficially, on which the claimant has relied to her detriment; and second, where there is no such evidence, the court must rely on conduct, and direct contributions to the purchase price, whether initially or by payment of mortgage instalments, will readily justify the inference of a common intention. It is extremely doubtful whether anything less will do. Mrs Rosset's work on the house was trifling and did not support an inference. Lord Bridge's narrow approach to inferred intention was later doubted in Stack v Dowden.
Related cases on trusts of the family home
- Abbott v Abbott [2007] UKPC 53
- Burns v Burns [1984] Ch 317
- Capehorn v Harris [2015] EWCA Civ 955
- Curran v Collins [2015] EWCA Civ 404
- Eves v Eves [1975] 1 WLR 1338
- Fowler v Barron [2008] EWCA Civ 377
- Geary v Rankine [2012] EWCA Civ 555
- Gissing v Gissing [1971] AC 886
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