Lloyd’s Bank Plc v Rosset

A beneficial interest in a home held in one partner’s sole name requires a common intention to share beneficial ownership. That intention may arise from express discussions, however imprecise. The claimant must then show detrimental reliance.

Where there is no such express agreement, the court may infer intention from conduct. Direct contributions to the purchase price, or mortgage instalments, will readily support that inference. Anything less is at least extremely doubtful.

Work on renovation, decoration, supervision, and family occupation will usually show domestic cooperation. It does not, without more, establish a beneficial interest.

The bank took a legal charge over registered land bought in the husband’s sole name. The wife claimed a beneficial interest under a constructive trust. She also claimed that her actual occupation protected that interest under Section 70(1)(g) of the Land Registration Act 1925.

The trial judge found that the wife had a beneficial interest. He held that she was not in actual occupation on the relevant date. He therefore gave the bank possession.

The Court of Appeal held unanimously that the relevant date was the charge creation date. By a majority, it held that the wife was then in actual occupation. The bank appealed.

The central issue was whether the wife had any beneficial interest before completion. If she had none, priority and actual occupation became academic.

1. Appeal allowed. Lord Bridge delivered the leading speech. Lords Griffiths, Ackner, Oliver and Jauncey agreed. The Court of Appeal order was set aside. The trial judge’s order was restored as between the bank and the wife.

2. Per Lord Bridge, the wife had not established a beneficial interest. The judge had rejected her pleaded case of an express agreement. His finding that discussions left open a possibility of an interest added nothing material.

3. Per Lord Bridge, an oral declaration of trust by way of gift would be ineffective. Section 53(1) of the Law of Property Act 1925 required writing. But detrimental reliance on an agreement could found a constructive trust or proprietary estoppel.

4. Per Lord Bridge, the first question is whether there was an agreement, arrangement, or understanding to share beneficially. Such a finding can only rest on express discussions between the partners. Their terms may be imperfectly remembered or imprecise.

5. If such an agreement exists, the claimant must show detrimental reliance. The claimant may also show a significant alteration of position. That suffices for a constructive trust or proprietary estoppel.

6. Per Lord Bridge, the different case is one based only on conduct. In that case, direct contributions to the purchase price, or mortgage instalments, will readily justify an inference. It was at least extremely doubtful whether anything less would do.

7. The wife’s renovation work did not support the necessary inference. Her efforts were naturally explained by family occupation and urgency. They did not show an intention to share the property beneficially.

8. The questions under Section 70(1)(g) of the Land Registration Act 1925 became academic. The House noted that Abbey National Building Society v Cann had resolved the relevant date issue. The date was creation or transfer, not registration.

• House of Lords: Allowed the bank’s appeal. The Court of Appeal order was set aside, save as to costs. The trial judge’s order was restored between the bank and the wife.
• Court of Appeal: Affirmed that the relevant date for actual occupation was the charge creation date. By a majority, it held that the wife was in actual occupation.
• Thanet County Court: Found that the wife had a beneficial interest. Held that she was not in actual occupation on the relevant date. Ordered possession for the bank.