Lloyds Bank v Carrick [1996] 4 All ER 630   Court of Appeal

Mrs Carrick purchased the leasehold in a maisonette from her brother-in-law, Mr Carrick, for £19,000 in 1982. She paid the money and moved in, however, the property which was unregistered, was never conveyed into her name. In 1996 Mr Carrick mortgaged the property to Lloyds. He failed to keep up repayments and the bank sought possession of the maisonette. Mr Carrick argued he held the property as a bare trustee fro Mrs Carrick and she was joined as a defendant to the proceedings. Mrs Carrick defended the claim on the basis that she had a beneficial interest arising from a common intention constructive trust. Alternatively that her interest arose through proprietary estoppel.

Held:

Mrs Carrick's interest in the property derived from an estate contract. Her interest was therefore defeated by the bank as it had not been registered as a Class C (iv) Land Charge

Morritt LJ:

In my judgment the claim of Mrs Carrick fails on a number of grounds. First, as in the case of the constructive trust, I do not see how there is any room for the application of the principles of proprietary estoppel when at the time of the relevant expenditure there was already a bare trust arising in consequence of an enforceable contract to the same effect as the interest sought pursuant to the proprietary estoppel. As the evidence showed Mrs Carrick knew of the need for a conveyance and was content that it should be deferred. Thus at the time that she paid the price and committed herself to the expenditure on the subsequent improvements she believed, rightly, that she was spending the money in respect of her own property albeit under an uncompleted contract.

Back to lecture outline on Land charges or Constructive trusts or the doctrine of notice  or proprietary estoppel in land law