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Lloyds Bank v Rosset

[1991] 1 AC 107

Case summary last updated at 08/01/2020 14:57 by the Oxbridge Notes in-house law team.

Judgement for the case Lloyds Bank v Rosset

The house was purchased solely with funds from a trust fund and placed in X’s name. Unbeknown to D, his wife, X took out a mortgage on the house and when he defaulted the bank, P, claimed for repossession. D resisted on the basis that she had an overriding beneficial interest. HL held that D had no overriding interest and found in favour of the banks. 
Lord Bridge: He reiterated that the courts could not allocate property according to what was just, but rather a trust could arise in response to the common intention of the parties that both would have a beneficial share in the property. The court may infer the common intention of a beneficial interest from the conduct of the parties. “Direct contributions” to the purchase price of the mortgage will “readily justify the inference…but I doubt whether anything less will do”. This narrows the Gissing decision in terms of how the trust can be evidenced (direct financial contributions to the purchase price only). 

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