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Lloyds Bank v Carrick

[1996] 4 All ER 630

Case summary last updated at 09/01/2020 20:11 by the Oxbridge Notes in-house law team.

Judgement for the case Lloyds Bank v Carrick

D1 told D2 he would provide her with a house if she gave him money to pay for it, which she did. However the house remained in D1’s name and did not register her interest. D1 then mortgaged th house to P and when he failed to meet the payments, P sued for possession of the house. CA found for P, saying that there was an enforceable contract between D1 and D2 and therefore it could not imply a constructive trust between them. Also D2 had failed to register her interest and therefore could not protect it. Proprietary estoppel also could not be applied since D2 had spent money under her enforceable contract with D1. 
 
Morritt LJ: Where D has an interest that doesn’t have to be registered and TP (e.g. with subsequent mortgage over property) knew or ought to have known of the interest, D’s interest takes priority and constructive trust/proprietary estoppel can be invoked to protect that interest. However here the interest was an estate contract (i.e. ownership) which DOES have to be registered and therefore constructive trusts/proprietary estoppel cannot be invoked to protect it. 

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