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   Home      Lloyds Bank v Rosset
 
Lloyds Bank v Rosset [1989] Ch 350  House of Lords
 
Mr Rosset became entitled to a substantial sum of money under a Swiss Trust fund. He wished to use the money to purchase a family home. Mrs Rosset found the property in question which was a derelict farmhouse requiring extensive modernisation and improvements. Mr Rosset liked the farmhouse and purchased it with money from the Swiss trust fund. In accordance with the terms of the trust fund, the property was conveyed into Mr Rosset's name alone on 17th Dec 1982. Mr Rosset arranged an overdraft facility with Lloyds Bank of £15,000 to cover the improvements needed for the farmhouse this overdraft was secured by a charge on the property which was registered on 7th Feb 1983. Mrs Rosset made no financial contribution to the purchase price but carried out supervision of the builders, planning of the renovation works and a substantial amount of redecoration of the farmhouse. Mrs Rosset was allowed into possession of the property prior to exchange of contracts to commence the renovation. The overdraft limit was later raised to £18,000 and this was exceeded. The bank then commenced proceedings for possession. Mrs Rosset sought to defeat the possession by claiming to be entitled to a beneficial interest under a constructive trust which became an overriding interest under s.70(1)(g) by reason of her occupation.
 
 
Held:
 
Following Abbey National Building Society v Cann, the relevant date for actual occupation to protect an interest for the purposes of s.70 (1) (g), is the date of the transfer not the date of registration. In any event Mrs Rosset did not have an interest in the house arising from a constructive trust as there was insufficient evidence that there was a common intention that she would take a share in the beneficial interest and given that Mr Rosset had provided the whole purchase price and cost of renovations her efforts in supervising the builders and redecoration were insufficient.
 
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 a proprietary estoppel."


 

    "It was common ground that Mrs. Rosset was extremely anxious that the new matrimonial home should be ready for occupation before Christmas if possible. In these circumstances it would seem the most natural thing in the world for any wife, in the absence of her husband abroad, to spend all the time she could spare and to employ any skills she might have, such as the ability to decorate a room, in doing all she could to accelerate progress of the work quite irrespective of any expectation she might have of enjoying a beneficial interest in the property."



Back to lecture outline on overriding interests in land law

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