## Facts

- The case involved the purchase of a house, acquired solely in the man’s name, intended for cohabitation with his partner, D.
- The man obtained a mortgage from Lloyds Bank to secure the purchase.
- D made no direct financial contribution to the initial purchase price or subsequent mortgage payments.
- After the man defaulted on the mortgage, Lloyds Bank sought possession of the property.
- D argued her substantial efforts in renovating and refurbishing the home granted her an overriding beneficial interest.
- The House of Lords assessed whether D’s non-financial contributions amounted to a beneficial interest enforceable against the Bank.

## Issues

1. Whether a common intention to share beneficial ownership of property can be established by an express agreement, arrangement, or understanding.
2. Whether, absent an express agreement, direct financial contributions by a non-legal owner to the purchase or mortgage suffice to establish a constructive trust.
3. Whether non-financial contributions, such as renovation or improvement of the property, are adequate to demonstrate a common intention to share beneficial ownership.
4. Whether D had acquired a beneficial interest capable of overriding the rights of Lloyds Bank as mortgagee.

## Decision

- The House of Lords held that the primary routes to establishing a beneficial interest through a constructive trust are: (i) evidence of an express agreement, arrangement, or understanding, plus detrimental reliance; or (ii) direct financial contributions to the purchase price or mortgage payments.
- D did not provide any direct financial contribution to the purchase or mortgage; her work on renovations was not deemed a sufficient basis for inferring common intention.
- Substantial effort or physical work on the property, absent direct financial contribution, was found insufficient to establish beneficial ownership.
- D’s contributions were described as ‘trifling’ in monetary value compared to the overall worth of the property and did not arise from an explicit agreement of shared ownership.
- The claim for an overriding beneficial interest against the Bank therefore failed.

## Legal Principles

- Two principal routes exist for establishing a common intention to share beneficial ownership: (1) express agreement, arrangement, or understanding demonstrated by explicit discussion, and (2) direct financial contributions to purchase price or mortgage.
- Detrimental reliance is required where an express agreement is relied upon.
- Courts are unlikely to infer common intention from non-financial contributions such as renovations or general household expenditures.
- The test for beneficial interest in constructive trusts is stringent; non-financial acts generally do not meet the threshold absent express agreement.
- The decision set a restrictive standard for the recognition of non-proprietor interests, later reconsidered by subsequent cases.

## Conclusion

Lloyds Bank plc v Rosset established that in cases of sole legal title, only express agreements concerning ownership or direct financial contributions to the acquisition or mortgage of a home can establish a constructive trust. Non-financial contributions, including renovation or maintenance, are insufficient without more. While this restrictive view was later revisited in later case law, at the time it set a high threshold for non-legal owners seeking a beneficial interest in family properties.

Lloyds Bank plc v Rosset [1991] 1 AC 107 (HL)