1

EQUITY AND TRUSTS LL.B LEVEL THREE UJUTK4-30-3

Workshop 3 Weeks 16 & 17, 6 & 13 November

THE FAMILY HOME

This topic has been covered in the lectures on the Family Home in weeks 13
and 14. Reading can be found in Chapter 18 of the Clements and Abass
book. Further reading is given in the lecture handouts.

A. Lloyds v Rosset

The judgment of Lord Bridge of Harwich is attached. It is surprisingly short for

such an important case. Lord Bridge was attempting to summarise the
existing law and provide clear guidance for future courts. Read his judgment
and consider the following questions. We are not concerned with the issue of
Land Registration and overriding interests, as that is dealt with in Land Law.
We are concerned with whether Mrs Rosset had any equitable interest in the
house.
1. Why was the legal estate of the house put in Mr Rosset’s sole name?
2. Who paid for the house?
3. Was there a common intention between Mr and Mrs Rosset?
4. Did Mrs Rosset act to her detriment?
5. What are the two ways of claiming a beneficial interest in the home and
how do they differ?
6. Does this case consider how to decide upon the relative size of the
couple’s beneficial interests?

Since Lloyds v Rosset, the House of Lords (now the Supreme Court) has looked
at the issue of the Family Home in two cases, Stack v Dowden [2007] 2 AC 432
and Jones v Kernott [2012] 1 A.C. 776. These two cases concerned couples
who jointly held the legal estate.
So we now have a distinction between cases where the legal estate is in a
single name like Lloyds v Rosset, and cases where the legal estate is in joint
names.
Single name case
Firstly, the party who does not have legal title must prove that they should have
a share (equitable interest) using one or both of the two types of constructive
trust in Lloyds v Rosset .
Secondly, if the party has proved that they have a share, then the court goes
on to decide the size of their share using the principles in paragraph 69 of Stack
v Dowden.
Joint name case
Firstly, it is presumed that both parties have a share (equitable interest) and
that their shares are equal, unless one of the parties can prove to the contrary.
Lloyds v Rosset is not needed to establish the existence of the share.
Secondly, if the party convinces the court that unequal shares were intended,
then the court goes on to decide the size of their shares using the principles in
paragraph 69 of Stack v Dowden.
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Para 69 of Stack v Dowden is at the end of this document.

1. What are the rules on quantifying the size of an equitable interest?

2. How does the common intention on the size of the equitable interests
change?

B. Questions

1.Constance and Justin are in love and want to move in together, so, in 1998,
they decide to buy a house together. They do not marry. As Constance is only
21 and has only just secured full-time employment, the mortgage company is
reluctant to give her a mortgage. Justin is older and has a much better job and
so is able to secure a mortgage of £220,000. He is also able to pay £40,000 in
cash, whereas Constance can only contribute £6000. Justin has the legal estate
in the house, but he and Constance orally agree that they are going to hold the
house in equal shares. They do not make any written declaration of trust.

They live in the house for 7 years, during which Constance pays some of the
bills and carries out a renovation project involving redecorating and rewiring the
whole house and building an extension. Justin is the main wage earner and
repays the mortgage. In the course of their relationship they have three children.

In 2005, Constance leaves. She has little contact with Justin and the children
and makes no financial contribution to the house or the children, leaving Justin
to pay for everything. Constance and Justin do not discuss whether her leaving
changes how they share the house.

In 2010, Constance tells Justin that she wants her half share in the house, as
they agreed in 1998.

Advise Justin whether he has any claim to the house and, if so, the
possible size of his share.
Advise Constance upon whether she has any claim to the house and, if
so, the possible size of his share.

2. The Law Commissioner Prof. Elizabeth Cooke wrote in 2011 that “the existing
law is uncertain and expensive to apply and, because it was not designed for
cohabitants, often gives rise to results that are unjust.”
Quoted in para.50 Gow v Grant [2012] UKSC 29.
Do you agree? How could the law for cohabitants be reformed?

*107 Lloyds Bank Plc. Appellants v Rosset and Another Respondents

House of Lords
29 March 1990
[1990] 2 W.L.R. 867
[1991] 1 A.C. 107
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Lord Bridge of Harwich, Lord Griffiths, Lord Ackner, Lord Oliver of Aylmerton
and Lord Jauncey of Tullichettle
1990 Feb. 12, 13, 14, 15; March 29
Land Registration—Overriding interest—'Actual occupation'—Semi—derelict
property purchased by husband as matrimonial home with trust moneys—
Trustee's requirement that husband be registered as sole proprietor—Bank
loan to husband charged on house without wife's knowledge—Wife undertaking
renovation work prior to completion—Transfer to husband and charge to bank
completed on same date—Registration at later date—Wife's claim to overriding
interest having priority over bank's charge—Common intention that wife have
beneficial interest in property alleged—No express agreement—Whether wife's
activities in relation to renovation of property sufficient to justify inference of
common intention—Relevant date for ascertaining whether interest in
registered land protected by actual occupation—Whether date of transfer or
creation of legal estate or of registration—Land Registration Act 1925 (15 Geo.
5, c. 21), ss. 20(1), 70(1)(g)
Trusts—Constructive trust—Joint enterprise—Property acquired in husband's
name as matrimonial home—Intention that wife have beneficial interest—No
express agreement—Wife undertaking renovation work—Whether joint venture
or intention to occupy as family home sufficient to indicate intentions relating to
beneficial ownership
A husband and wife, the first and second defendants, wished to purchase
a property, which was registered land and in a semi-derelict condition, as a
home for themselves and their two children. The purchase was to be
effected with moneys from the husband's family trust in Switzerland, and
the Swiss trustee, to the knowledge of both defendants, insisted on the
acquisition being in the husband's sole name. The vendors gave the
defendants permission to enter the property with builders to undertake
renovation work before exchange of contracts. The builders began work on
7 November 1982, and the wife herself carried out decorating work almost
daily, obtained necessary materials and generally urged on the builders.
Contracts were exchanged with the vendors on 23 November for a
purchase price of £57,500. On 14 December, the husband, without the
wife's knowledge, sought and obtained permission from the plaintiff bank to
overdraw up to £15,000 on his current account with them to meet the cost
of the renovation and signed the bank's form of legal charge. Completion of
the transfer in the husband's sole name and execution of the bank's charge
took place on 17 December, £2,267 being provided towards the purchase
price from the husband's overdraft facility. The wife made no financial
contribution either to the purchase of the property or to the cost of
renovation. The transfer and the *108 charge were registered on 7
February 1983, the family moving into the property in the same month. The
husband left in May 1984 following matrimonial difficulties, the wife and
children remaining in the property. After a formal demand for repayment of
the loan had not been met, the bank claimed possession and an order for
sale. The husband did not resist the claim, but the wife alleged by way of
defence that she had a beneficial interest in the property under a
constructive trust that qualified as an overriding interest under section
70(1)(g) of the Land Registration Act 19251 because she had been in actual
 4

occupation of the property on the relevant date. The judge rejected the
wife's claim that it had been expressly agreed between the husband and
herself that the property was to be jointly owned. He found, however, that
there had been a common intention between the parties formed prior to 17
December 1982 that the wife should have a beneficial interest in the
property under a constructive trust and that, by virtue of the work that she
had done towards the renovation of the property before that date, she had
acted to her detriment on the faith of that common intention. He concluded,
however, that she had not been in actual occupation of the property on that
date and that, accordingly, her equitable interest as against the husband
was not protected as an overriding interest by section 70(1)(g) of the Act of
1925 so as to prevail against the bank's legal charge. The Court of Appeal,
by a majority, allowed an appeal by the wife.
On appeal by the bank: -
Held, allowing the appeal,
(1) that the relevant date for ascertaining whether an interest in registered
land was protected by actual occupation so as to prevail against the holder
of a legal estate as an overriding interest under section 70(1)(g) of the Land
Registration Act 1925 was that of the transfer or creation of the estate, not
of its registration (post, pp. 126C-D, 134C-E).
Abbey National Building Society v. Cann [1991] 1 A.C. 56, H.L.(E.) followed.
(2) That the wife's activities in relation to the renovation of the property
between the beginning of November 1982 and the date of completion, on
which the judge had, essentially, based his inference of a common intention
that she should have a beneficial interest in it, had been insufficient to justify
that inference, and, accordingly, the judge's finding that *109 the husband
held the property as constructive trustee for himself and the wife could not
be supported (post, pp. 131C-D, 132B, 134B-D).Per curiam. A critical
distinction that any judge required to resolve a dispute between former
partners as to the beneficial interest in the home that they formerly shared
should always have in the forefront of his mind is between the effect of
evidence on the one hand of express discussions capable of establishing
an express agreement or an express representation that the partner who
was not the legal owner was to have an interest in the property and
evidence on the other hand of conduct alone as a basis for an inference of
a common intention to share the property beneficially and giving rise to a
constructive trust. In the latter case, it is at least extremely doubtful whether
anything less than direct contributions to the purchase price by the non-
owning partner will be sufficient. Neither a common intention that a house
is to be renovated as a 'joint venture' nor a common intention that the house
is to be shared by parents and children as the family home throws any light
on the partners' intentions with respect to the beneficial ownership of the
property (post, pp. 130C-D, 132D-133A, H-134A).
Decision of the Court of Appeal [1989] Ch. 350; [1988] 3 W.L.R. 1301;
[1988] 3 All E.R. 915 reversed.
The following cases are referred to in the opinion of Lord Bridge of Harwich:

Abbey National Building Society v. Cann [1991] 1 A.C. 56; [1990] 2 W.L.R.
 5

832; [1990] 1 All E.R. 1085, H.L.(E.)

Eves v. Eves [1975] 1 W.L.R. 1338; [1975] 3 All E.R. 768, C.A.
Gissing v. Gissing [1971] A.C. 886; [1970] 3 W.L.R. 255; [1970] 2 All E.R.
780, H.L.(E.)
Grant v. Edwards [1986] Ch. 638; [1986] 3 W.L.R. 114; [1986] 2 All E.R.
426, C.A.
McFarlane v. McFarlane [1972] N.I. 59, C.A.
Pettitt v. Pettitt [1970] A.C. 777; [1969] 2 W.L.R. 966; [1969] 2 All E.R. 385,
H.L.(E.)

The following additional cases were cited in argument:

Amalgamated Investment & Property Co. Ltd. v. Texas Commerce

International Bank Ltd. [1982] Q.B. 84; [1981] 2 W.L.R. 554; [1981] 1 All
E.R. 923, C.A.

Bernard v. Josephs [1982] Ch. 391; [1982] 2 W.L.R. 1052; [1982] 3 All E.R.
162, C.A.
Burns v. Burns [1984] Ch. 317; [1984] 2 W.L.R. 582; [1984] 1 All E.R. 244,
C.A.
Church of England Building Society v. Pustor [1954] Ch. 553; [1954] 2
W.L.R. 952; [1954] 2 All E.R. 85, C.A.
City of London Building Society v. Flegg [1988] A.C. 54; [1987] 2 W.L.R.
1266; [1987] 3 All E.R. 435, H.L.(E.)
Connolly Brothers Ltd. (No. 2), In re [1912] 2 Ch. 25, C.A.
Crabb v. Arun District Council [1976] Ch. 179; [1975] 3 W.L.R. 847; [1975]
3 All E.R. 865, C.A.
Dillwyn v. Llewelyn (1862) 4 De G.F. &; J. 517
Grace Rymer Investments Ltd. v. Waite [1958] Ch. 314; [1958] 2 W.L.R.
200; [1958] 1 All E.R. 138; [1958] Ch. 831; [1958] 3 W.L.R. 337; [1958] 2 All
E.R. 777, C.A. *110

Greasley v. Cooke [1980] 1 W.L.R. 1306; [1980] 3 All E.R. 710, C.A.
Ives (E. R.) Investment Ltd. v. High [1967] 2 Q.B. 379; [1967] 2 W.L.R. 789;
[1967] 1 All E.R. 504, C.A.
Jones (A. E.) v. Jones (F. W.) [1977] 1 W.L.R. 438; [1977] 2 All E.R. 231,
C.A.
Lysaght v. Edwards (1876) 2 Ch.D. 499
Midland Bank Plc. v. Dobson [1986] 1 F.L.R. 171, C.A.
National Provincial Bank Ltd. v. Hastings Car Mart Ltd. [1964] Ch. 665;
[1964] 3 W.L.R. 463; [1964] 3 All E.R. 93, C.A.; [1965] A.C. 1175; [1965] 3
W.L.R. 1; [1965] 2 All E.R. 472, H.L.(E.)

Paddington Building Society v. Mendelsohn (1985) 50 P. &; C.R. 244, C.A.

Pascoe v. Turner [1979] 1 W.L.R. 431; [1979] 2 All E.R. 945, C.A.
Rayner v. Preston (1881) 18 Ch.D. 1, C.A.
 6

Ridout v. Fowler [1904] 1 Ch. 658

Security Trust Co. v. Royal Bank of Canada [1976] A.C. 503; [1976] 2
W.L.R. 437; [1976] 1 All E.R. 381, P.C.
Strand Securities Ltd. v. Caswell [1965] Ch. 958; [1965] 2 W.L.R. 958;
[1965] 1 All E.R. 820, C.A.
Taylors Fashions Ltd. v. Liverpool Victoria Trustees Co. Ltd. (Note ) [1982]
Q.B. 133; [1981] 2 W.L.R. 576; [1981] 1 All E.R. 897
Williams & Glyn's Bank Ltd. v. Boland [1979] Ch. 312; [1979] 2 W.L.R. 550;
[1979] 2 All E.R. 697, C.A.; [1981] A.C. 487; [1980] 3 W.L.R. 138; [1980] 2
All E.R. 408, H.L.(E.)

APPEAL from the Court of Appeal.

This was an appeal by the plaintiffs, Lloyds Bank Plc., by leave of the House of
Lords from the decision of the Court of Appeal (Purchas and Nicholls L.JJ.,
Mustill L.J. dissenting) [1989] Ch. 350 dated 13 May 1989 allowing an appeal
by the second defendant, Diana Irene Rosset, from the judgment of Judge
Scarlett given at Thanet County Court on 22 May 1987. The judge had ordered
that the bank be given possession of Vincent Farmhouse, Manston Road,
Manston, Kent.
The Court of Appeal refused the bank leave to appeal from their decision, but
on 19 October 1989 the Appeal Committee of the House of Lords (Lord Bridge
of Harwich, Lord Oliver of Aylmerton and Lord Jauncey of Tullichettle) allowed
a petition by the bank for leave to appeal.
The facts are set out in the opinion of Lord Bridge of Harwich.
The first defendant, Gerald Marcel Rosset, did not appear and was not
represented.
Their Lordships took time for consideration. 29 March. LORD BRIDGE OF
HARWICH.
My Lords, the subject matter of this dispute is Vincent Farmhouse, Manston
Road, Thanet ('the property'). The property is registered land which the first
respondent, Mr. Rosset, contracted to purchase on 23 November 1982 and
which was conveyed to him on 17 December 1982. On the same date Mr.
Rosset executed a legal charge on the property in favour of the appellant,
Lloyds Bank Plc. ('the bank'), to secure an overdraft on his current account with
the bank. The bank's charge was registered on 7 February 1983. The bank
initially agreed to allow Mr. Rosset to borrow up to £15,000, but later raised this
limit to £18,000. The limit was after a time exceeded, the bank's demand for
repayment was not met and the bank instituted proceedings in the Thanet
County Court for possession of the property in July 1984 against both
respondents. Mr. and Mrs. Rosset, who had initially occupied the property as
their matrimonial home, had by this time parted. Mr. Rosset, who was no longer
residing in the property, did not resist the bank's claim. Mrs. Rosset, however,
alleged by way of defence to the bank's claim and by way of counterclaim
against her husband that she had been entitled, since the date when her
husband contracted to purchase the property, to a beneficial interest in the
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property under a constructive trust which qualified as an overriding interest

under section 70(1)(g) of the Land Registration Act 1925 because she was in
actual occupation of the property both on 17 December 1982 and 7 February
1983, whichever was the relevant date to be considered in determining the
existence of the overriding interest to which she alleged the bank's charge was
subject.
At the trial Judge Scarlett found that Mrs. Rosset was entitled as against her
husband to a beneficial interest in the property in an amount to be determined
at a future hearing. He held that, on the true *126 construction of the Land
Registration Act 1925, the proprietor of a legal charge takes subject to
overriding interests which are subsisting on the date of creation, as opposed to
the date of registration, of the charge. He accordingly asked himself whether
Mrs. Rosset was in actual occupation of the property on 17 December 1982
and, finding that she was not, concluded that her equitable interest was not
protected as an overriding interest by section 70(1)(g) so as to prevail against
the bank's legal charge. He gave judgment for possession in favour of the bank.
Mrs. Rosset appealed, but Mr. Rosset has taken no further part in the
proceedings.
The Court of Appeal unanimously affirmed the judge's decision that the relevant
date on which Mrs. Rosset had to show that she was in actual occupation in
order to establish an overriding interest which would prevail against the bank
was 17 December 1982, the date of creation of the bank's charge. But they
differed on the facts as to whether she was in actual occupation on that date.
Purchas and Nicholls L.JJ. held that she was; Mustill L.J. held that she was not.
The bank now appeals by leave of your Lordships' House against the majority
decision of the Court of Appeal in Mrs. Rosset's favour.
The important question arising under the Land Registration Act 1925 as to the
relevant date on which to ascertain whether an interest in registered land is
protected by actual occupation so as to prevail under section 70(1)(g) against
the holder of a legal estate has now been resolved by your Lordships' decision
in Abbey National Building Society v. Cann [1991] 1 A.C. 141 in favour of the
view that it is the date when the estate is transferred or created, not the date
when it is registered.
The primary ground of the bank's appeal challenges the judge's finding, which
was also unanimously affirmed by the Court of Appeal, that Mrs. Rosset had by
the date of completion acquired a beneficial interest in the property.
The Rossets were married in 1972. There are two children of the marriage, a
daughter born in 1972 and a son born in 1981. From 1976 until the events giving
rise to the present dispute, the parties were living in premises which had been
built as an extension to a bungalow in Broadstairs which was the home of Mrs.
Rosset's parents, Mr. and Mrs. Gardner. Mr. Rosset had borne the cost of
building the extension, but it was occupied on the terms of an agreement
between the Rossets and the Gardners which provided that, on the Rossets
vacating the extension, each should be paid a fixed sum by Mr. and Mrs.
Gardner. Mrs. Rosset's father had insisted on his daughter being joined in the
agreement in this way.
Mr. Rosset is a Swiss national. He was working in 1982 as a courier conducting
coach parties of tourists on the continent of Europe and was away from home
 8

a great deal. Some time before 1982 he became entitled to a substantial sum
of money under a trust fund established by his grandmother in Switzerland. In
1982 the Rossets were looking for a new home to be bought with Mr. Rosset's
inheritance. It was Mrs. Rosset who first found the property. It had been
unoccupied for seven or eight years and required substantial work to render it
suitable for occupation. Mrs. Rosset took her husband to see it. He liked it and
*127 made an offer to purchase it for the asking price of £57,500. This was
accepted on 3 August 1982 subject to contract.
On 25 October 1982 Mr. Rosset opened an account at the Broadstairs branch
of the bank. He saw the manager and told him that he was intending to buy the
property with money he had inherited in Switzerland. On 2 November Mr.
Rosset received a payment of £70,200 from Switzerland of which £59,200 was
paid into his account with the bank. On 23 November contracts for the purchase
of the property were exchanged. On 14 December Mr. Rosset saw the bank
manager and asked to be allowed to overdraw on his current account up to
£15,000 to meet the cost of the works of renovation which were needed to be
undertaken to the property. The manager asked whether the property was to
be acquired in joint names. Mr. Rosset replied that the property was to be
acquired in his sole name because his wife and children were living with her
parents. The manager agreed the overdraft and Mr. Rosset signed the bank's
form of charge which was then sent to Mr. Rosset's solicitor to be dated on
completion and registered on behalf of the bank. Completion took place on 17
December with funds drawn from the account which required an initial overdraft
of £2,267. Mrs. Rosset knew nothing of the charge to the bank or the overdraft.
Meanwhile Mr. and Mrs. Rosset had been let into possession of the property by
the vendors even before the exchange of contracts. The builder employed by
them, a Mr. Griffin, commenced work on 7 November 1982. It was originally
hoped that the house would be ready for the Rossets to move in before
Christmas, but this proved in the event to be impossible. Eventually the Rossets
moved in about the middle of February 1983 when the work was substantially
complete. By this time Mr. Rosset's overdraft had risen to over £18,000 and the
bank refused to extend further credit. Most of the additional funds drawn from
the account had been expended in paying for the renovation works. Both the
purchase price of the property and the cost of the works of renovation were paid
by Mr. Rosset alone and Mrs. Rosset made no financial contribution to the
acquisition of the property.
The case pleaded and carefully particularised by Mrs. Rosset in support of her
claim to an equitable interest in the property was that it had been expressly
agreed between her and her husband in conversations before November 1982
that the property was to be jointly owned and that in reliance on this agreement
she had made a significant contribution in kind to the acquisition of the property
by the work she had personally undertaken in the course of the renovation of
the property which was sufficient to give rise to a constructive trust in her favour.
There was a conflict of evidence between Mr. and Mrs. Rosset on the vital issue
raised by this pleading. The question the judge had to determine was whether
he could find that before the contract to acquire the property was concluded
they had entered into an agreement, made an arrangement, reached an
understanding or formed a common intention that the beneficial interest in the
property would be jointly owned. I do not think it is of importance which of these
 9

alternative expressions one uses. Spouses living in amity will not normally think
it necessary to formulate or define their respective interests in property in
*128 any precise way. The expectation of parties to every happy marriage is
that they will share the practical benefits of occupying the matrimonial home
whoever owns it. But this is something quite distinct from sharing the beneficial
interest in the property asset which the matrimonial home represents. These
considerations give rise to special difficulties for judges who are called on to
resolve a dispute between spouses who have parted and are at arm's length as
to what their common intention or understanding with respect to interests in
property was at a time when they were still living as a united family and
acquiring a matrimonial home in the expectation of living in it together
indefinitely.
Since Mr. Rosset was providing the whole purchase price of the property and
the whole cost of its renovation, Mrs. Rosset would, I think, in any event have
encountered formidable difficulty in establishing her claim to joint beneficial
ownership. The claim as pleaded and as presented in evidence was, by
necessary implication, to an equal share in the equity. But to sustain this it was
necessary to show that it was Mr. Rosset's intention to make an immediate gift
to his wife of half the value of a property acquired for £57,500 and improved at
a further cost of some £15,000. What made it doubly difficult for Mrs. Rosset to
establish her case was the circumstance, which was never in dispute, that Mr.
Rosset's uncle, who was trustee of his Swiss inheritance, would not release the
funds for the purchase of the property except on terms that it was to be acquired
in Mr. Rosset's sole name. If Mr. and Mrs. Rosset had ever thought about it,
they must have realised that the creation of a trust giving Mrs. Rosset a half
share, or indeed any other substantial share, in the beneficial ownership of the
property would have been nothing less than a subterfuge to circumvent the
stipulation which the Swiss trustee insisted on as a condition of releasing the
funds to enable the property to be acquired.
In these circumstances, it would have required very cogent evidence to
establish that it was the Rossets' common intention to defeat the evident
purpose of the Swiss trustee's restriction by acquiring the property in Mr.
Rosset's name alone but to treat it nevertheless as beneficially owned jointly by
both spouses. I doubt whether the evidence would have sustained a finding to
that effect. But the judge made no such finding. On the contrary, his judgment
on this point amounts to a clear rejection of Mrs. Rosset's pleaded case. He
said:
'The decision to transfer the property into the name of the first
defendant alone was a disappointment to the second defendant, but
I am satisfied that she genuinely believed that the first defendant
would hold the property in his name as something which was a joint
venture, to be shared between them as the family home and that
the reason for it being held by the first defendant alone was to
ensure that the first defendant's uncle would sanction the export of
trust funds from Switzerland to England for the purchase. As so
often happens the defendants did not pursue their discussion to the
extent of defining precisely what their respective interests in the
property should be. It was settled that the property should be
transferred into the name of the first defendant alone to achieve the
 10

provision of funds from Switzerland, but in the period from August

*129 1982 to 23 November 1982 when the contracts were
exchanged, the defendants did not decide whether the second
defendant should have any interest in the property. On one occasion
the second defendant heard the first defendant say to her parents
that he had put the house in their joint names, but she knew that he
could not do that and treated what he said as an expression of what
he would like to do. In these circumstances I am satisfied that the
outcome of the discussions between the parties as to the name into
which the property should be transferred did not exclude the
possibility that the second defendant should have a beneficial
interest in the property.'

I have emphasised the critical finding in this passage from the judgment.
Even if there had been the clearest oral agreement between Mr. and Mrs.
Rosset that Mr. Rosset was to hold the property in trust for them both as tenants
in common, this would, of course, have been ineffective since a valid
declaration of trust by way of gift of a beneficial interest in land is required by
section 53(1) of the Law of Property Act 1925 to be in writing. But if Mrs. Rosset
had, as pleaded, altered her position in reliance on the agreement this could
have given rise to an enforceable interest in her favour by way either of a
constructive trust or of a proprietary estoppel.
Having rejected the contention that there had been any concluded agreement
or arrangement or any common intention formed before contracts for the
purchase of the property were exchanged on 23 November 1982 that Mrs.
Rosset should have any beneficial interest, the judge concentrated his attention
on Mrs. Rosset's activities in connection with the renovation works as a possible
basis from which to infer such a common intention. He described what she did
up to the date of completion as follows:
'Up to 17 December 1982 the second defendant's contribution to the
venture was: (1) to urge on the builders and to attempt to co-ordinate
their work, until her husband insisted that he alone should give
instructions; (2) to go to builders' merchants and obtain material
required by the builders . . . and to deliver the materials to the site.
This was of some importance because Mr. Griffin and his
employees did not know the Thanet area; (3) to assist her husband
in planning the renovation and decoration of the house. In this, she
had some skill over and above that acquired by most housewives.
She was a skilled painter and decorator who enjoyed wallpapering
and decorating, and, as her husband acknowledged, she had good
ideas about this work. In connection with this, she advised on the
position of electric plugs and radiators and planned the design of
the large breakfast room and the small kitchen of the house; (4) to
carry out the wallpapering of Natasha's bedroom and her own
bedroom, after preparing the surfaces of the walls and clearing up
the rooms concerned before the papering began; (5) to begin the
preparation of the surfaces of the walls of her son's bedroom, the
Den, the upstairs lavatory and the downstairs washroom for
papering. All this wallpapering was completed after 17 December
 11

*130 1982 but by 31 December 1982; (6) to assist in arranging the

insurance of the house by the Minster Insurance Co. Ltd. home
cover policy, in force from 3 November 1982; (7) to assist in
arranging a crime prevention survey on 23 November 1982; (8) to
assist in arranging the installation of burglar alarms described in a
specification dated 3 December 1982.'

Later the judge said:

'I am satisfied that in 1982 the common intention expressed by the
defendants in conversation between themselves was that Vincent
Farmhouse should be purchased in the name of the first defendant
alone, because funds would not be made available from the first
defendant's family trust in Switzerland unless the purchase was
made only in his name. In addition, however, it was their common
intention that the renovation of the house should be a joint venture,
after which the house was to become a family home to be shared
by the defendants and their children.'

I pause to observe that neither a common intention by spouses that a house is

to be renovated as a 'joint venture' nor a common intention that the house is to
be shared by parents and children as the family home throws any light on their
intentions with respect to the beneficial ownership of the property.
Reverting to Mrs. Rosset's activity in connection with the renovation of the
property the judge said:
'It is plain that she made every effort to make the house fit for
occupation before Christmas 1982 and spent all the time she could
at Vincent Farmhouse in between taking Natasha to school and
fetching her from school. . . . Obviously the extent of the work which
the defendant did in preparation, clearing up before painting and
decorating, and the painting and decorating itself, was valuable. . .
. In the result, having considered: (1) the semi-derelict condition of
Vincent Farmhouse in November 1982, (2) the absence of the first
defendant abroad for 10 days in November and early December
1982, (3) the second defendant's special skills in painting and
decorating over and above those of the average housewife and her
indirect contribution to reducing the cost of renovation of the
farmhouse by carrying out certain painting and decorating herself,
(4) the time she spent at the farmhouse from 4 November 1982
attempting to co-ordinate the work of the builders and her work in
ordering and delivering materials to the site for the builders, and (5)
the conversations between the parties concerning into whose name
the property was to be transferred and the nature of the joint venture
and the purpose of purchasing Vincent Farmhouse, I am satisfied
that prior to 17 December 1982 there was a common intention
between the defendants that the second defendant should have a
beneficial interest in the property under a constructive trust and that
she did act to her detriment on the faith of such a common intention.
Some, but not all, of her work at the farmhouse prior to 17 December
 12

1982 falls into the category of work upon which she *131 could not
reasonably have been expected to embark unless she was to have
an interest in the house, namely the work to which she brought the
special skills of painting and decorating and her work in ordering
and delivering materials to the site for the builders in attempting to
co-ordinate her work. These actions by the second defendant must
have reduced the cost of renovating the farmhouse and thus
indirectly contributed to the acquisition of the property, albeit to a
small extent.'

At the very end of his judgment the judge pointed out that he had made no
finding as to the extent of Mrs. Rosset's beneficial interest in the property. He
indicated that he would hear counsel as to what directions should be given for
the determination of this issue at a later date. He concluded his judgment with
the sentence:
'An area which the court would wish to explore is the extent to which
the qualifying conduct of the second defendant reduced the cost of
the renovation of the farmhouse and its buildings.'

It is clear from these passages in the judgment that the judge based his
inference of a common intention that Mrs. Rosset should have a beneficial
interest in the property under a constructive trust essentially on what Mrs.
Rosset did in and about assisting in the renovation of the property between the
beginning of November 1982 and the date of completion on 17 December 1982.
Yet by itself this activity, it seems to me, could not possibly justify any such
inference. It was common ground that Mrs. Rosset was extremely anxious that
the new matrimonial home should be ready for occupation before Christmas if
possible. In these circumstances it would seem the most natural thing in the
world for any wife, in the absence of her husband abroad, to spend all the time
she could spare and to employ any skills she might have, such as the ability to
decorate a room, in doing all she could to accelerate progress of the work quite
irrespective of any expectation she might have of enjoying a beneficial interest
in the property. The judge's view that some of this work was work 'upon which
she could not reasonably have been expected to embark unless she was to
have an interest in the house' seems to me, with respect, quite untenable. The
impression that the judge may have thought that the share of the equity to which
he held Mrs. Rosset to be entitled had been 'earned' by her work in connection
with the renovation is emphasised by his reference in the concluding sentence
of his judgment to the extent to which her 'qualifying contribution' reduced the
cost of the renovation.
On any view the monetary value of Mrs. Rosset's work expressed as a
contribution to a property acquired at a cost exceeding £70,000 must have been
so trifling as to be almost de minimis. I should myself have had considerable
doubt whether Mrs. Rosset's contribution to the work of renovation was
sufficient to support a claim to a constructive trust in the absence of writing to
satisfy the requirements of section 51 of the Law of Property Act 1925 even if
her husband's intention to make a gift to her of half or any other share in the
equity of the property had been clearly established or if he had clearly
 13

represented to her that that was what he intended. But here the conversations
with her husband on *132 which Mrs. Rosset relied, all of which took place
before November 1982, were incapable of lending support to the conclusion of
a constructive trust in the light of the judge's finding that by that date there had
been no decision that she was to have any interest in the property. The finding
that the discussions 'did not exclude the possibility' that she should have an
interest does not seem to me to add anything of significance.
These considerations lead me to the conclusion that the judge's finding that Mr.
Rosset held the property as constructive trustee for himself and his wife cannot
be supported and it is on this short ground that I would allow the appeal. In the
course of the argument your Lordships had the benefit of elaborate submissions
as to the test to be applied to determine the circumstances in which the sole
legal proprietor of a dwelling house can properly be held to have become a
constructive trustee of a share in the beneficial interest in the house for the
benefit of the partner with whom he or she has cohabited in the house as their
shared home. Having in this case reached a conclusion on the facts which,
although at variance with the views of the courts below, does not seem to
depend on any nice legal distinction and with which, I understand, all your
Lordships agree, I cannot help doubting whether it would contribute anything to
the illumination of the law if I were to attempt an elaborate and exhaustive
analysis of the relevant law to add to the many already to be found in the
authorities to which our attention was directed in the course of the argument. I
do, however, draw attention to one critical distinction which any judge required
to resolve a dispute between former partners as to the beneficial interest in the
home they formerly shared should always have in the forefront of his mind.
The first and fundamental question which must always be resolved is whether,
independently of any inference to be drawn from the conduct of the parties in
the course of sharing the house as their home and managing their joint affairs,
there has at any time prior to acquisition, or exceptionally at some later date,
been any agreement, arrangement or understanding reached between them
that the property is to be shared beneficially. The finding of an agreement or
arrangement to share in this sense can only, I think, be based on evidence of
express discussions between the partners, however imperfectly remembered
and however imprecise their terms may have been. Once a finding to this effect
is made it will only be necessary for the partner asserting a claim to a beneficial
interest against the partner entitled to the legal estate to show that he or she
has acted to his or her detriment or significantly altered his or her position in
reliance on the agreement in order to give rise to a constructive trust or a
proprietary estoppel.
In sharp contrast with this situation is the very different one where there is no
evidence to support a finding of an agreement or arrangement to share,
however reasonable it might have been for the parties to reach such an
arrangement if they had applied their minds to the question, and where the court
must rely entirely on the conduct of the parties both as the basis from which to
infer a common intention to share the property beneficially and as the conduct
relied on to give rise to a *133 constructive trust. In this situation direct
contributions to the purchase price by the partner who is not the legal owner,
whether initially or by payment of mortgage instalments, will readily justify the
inference necessary to the creation of a constructive trust. But, as I read the
 14

authorities, it is at least extremely doubtful whether anything less will do.

The leading cases in your Lordships' House are Pettitt v. Pettitt [1970] A.C. 777
and Gissing v. Gissing [1971] A.C. 886. Both demonstrate situations in the
second category to which I have referred and their Lordships discuss at great
length the difficulties to which these situations give rise. The effect of these two
decisions is very helpfully analysed in the judgment of Lord MacDermott L.C.J.
in McFarlane v. McFarlane [1972] N.I. 59.
Outstanding examples on the other hand of cases giving rise to situations in the
first category are Eves v. Eves [1975] 1 W.L.R. 1338 and Grant v. Edwards
[1986] Ch. 638. In both these cases, where the parties who had cohabited were
unmarried, the female partner had been clearly led by the male partner to
believe, when they set up home together, that the property would belong to
them jointly. In Eves v. Eves the male partner had told the female partner that
the only reason why the property was to be acquired in his name alone was
because she was under 21 and that, but for her age, he would have had the
house put into their joint names. He admitted in evidence that this was simply
an 'excuse.' Similarly in Grant v. Edwards the female partner was told by the
male partner that the only reason for not acquiring the property in joint names
was because she was involved in divorce proceedings and that, if the property
were acquired jointly, this might operate to her prejudice in those proceedings.
As Nourse L.J. put it, at p. 649:
'Just as in Eves v. Eves [1975] 1 W.L.R. 1338, these facts appear
to me to raise a clear inference that there was an understanding
between the plaintiff and the defendant, or a common intention, that
the plaintiff was to have some sort of proprietary interest in the
house; otherwise no excuse for not putting her name on to the title
would have been needed.'

The subsequent conduct of the female partner in each of these cases, which
the court rightly held sufficient to give rise to a constructive trust or proprietary
estoppel supporting her claim to an interest in the property, fell far short of such
conduct as would by itself have supported the claim in the absence of an
express representation by the male partner that she was to have such an
interest. It is significant to note that the share to which the female partners in
Eves v. Eves and Grant v. Edwards were held entitled were one quarter and
one half respectively. In no sense could these shares have been regarded as
proportionate to what the judge in the instant case described as a 'qualifying
contribution' in terms of the indirect contributions to the acquisition or
enhancement of the value of the houses made by the female partners.
I cannot help thinking that the judge in the instant case would not have fallen
into error if he had kept clearly in mind the distinction between the effect of
evidence on the one hand which was capable of *134 establishing an express
agreement or an express representation that Mrs. Rosset was to have an
interest in the property and evidence on the other hand of conduct alone as a
basis for an inference of the necessary common intention.
If Mrs. Rosset had become entitled to a beneficial interest in the property prior
to completion it might have been necessary to examine a variant of the question
regarding priorities which your Lordships have just considered in Abbey
 15

National Building Society v. Cann [1991] 1 A.C. 56 and, subject to that question,
to decide whether, as a matter of fact, she was in 'actual occupation' of the
property on 17 December 1982. Since these questions have now become
academic, I do not think any useful purpose would be served by going into them.
For the reasons I have indicated I would allow the appeal, set aside the order
of the Court of Appeal and, as between Mrs. Rosset and the bank, restore the
order of the trial judge.
LORD GRIFFITHS.
My Lords, I have had the advantage of reading in draft the speech of my noble
and learned friend, Lord Bridge of Harwich. I agree with it and, for the reasons
he gives, I would allow the appeal.
LORD ACKNER.
My Lords, I have had the advantage of reading in draft the speech delivered
by my noble and learned friend Lord Bridge of Harwich. I agree with it and would
allow the appeal for the reasons which he has given.
LORD OLIVER OF AYLMERTON.
My Lords, I have had the advantage of reading in draft the speech delivered
by my noble and learned friend Lord Bridge of Harwich. I agree with it and would
allow the appeal for the reasons which he has given.
LORD JAUNCY OF TULLICHETTLE.
My Lords, I have had the advantage of reading in draft the speech prepared by
my noble and learned friend Lord Bridge of Harwich. I agree with it, and for the
reasons which he has given I too would allow the appeal.
Representation
Solicitors: Collyer-Bristow for Walmsley & Barnes, Cliftonville; Gregory
Rowcliffe & Milners for Daniel & Edwards, Ramsgate.Appeal allowed. Order of
Court of Appeal of 13 May 1988, as amended on 15 June 1988, set aside
save as to costs. Order of Judge Scarlett of 22 May 1987 as between bank
and second defendant restored. Bank to pay second defendant's costs in
House of Lords without prejudice to its rights against first defendant. Cause
remitted to Queen's Bench Division to do therein as just and consistent with
judgment. (M. G. )
_____________________________________________________________
Baroness Hale in Stack v Dowden [2007] 2 AC 432
69 In law, “context is everything” and the domestic context is very different from
the commercial world. Each case will turn on its own facts. Many more factors
than financial contributions may be relevant to divining the parties' true
intentions. These include: any advice or discussions at the time of the transfer
which cast light upon their intentions then; the reasons why the home was
acquired in their joint names; the reasons why (if it be the case) the survivor
was authorised to give a receipt for the capital moneys; the purpose for which
the home was acquired; the nature of the parties' relationship; whether they had
children for whom they both had responsibility to provide a home; how the
purchase was financed, both initially and subsequently; how the parties
arranged their finances, whether separately or together or a bit of both; how
they discharged the outgoings on the property and their other household
 16

expenses. When a couple are joint owners of the home and jointly liable for the
mortgage, the inferences to be drawn from who pays for what may be very
different from the inferences to be drawn when only one is owner of the home.
The arithmetical calculation of how much was paid by each is also likely to be
less important. It will be easier to draw the inference that they intended that
each should contribute as much to the household as they reasonably could and
that they would share the eventual benefit or burden equally. The parties'
individual characters and personalities may also be a factor in deciding where
their true intentions lay. In the cohabitation context, mercenary considerations
may be more to the fore than they would be in marriage, but it should not be
assumed that they always take pride of place over natural love and affection.
At the end of the day, having taken all this into account, cases in which the joint
legal owners are to be taken to have intended that their beneficial interests
should be different from their legal interests will be very unusual.
70 This is not, of course, an exhaustive list. There may also be reason to
conclude that, whatever the parties' intentions at the outset, these have now
changed. An example might be where one party has financed (or constructed
himself) an extension or substantial improvement to the property, so that what
they have now is significantly different from what they had then.

Multiple Choice Questions

1. The best way for an unmarried, cohabiting couple to protect their

respective claims to their shared home is to:
a. Live together for ten years
b. Make equal financial contributions
c. Put the legal estate in joint names
d. Make a written declaration of trust

2. The first category of common intention constructive trust in Lloyds Bank

v Rosset requires an oral agreement and one of the parties relying upon
that agreement and acting to their detriment. The oral agreement:
a. Must precisely define what the parties have agreed
b. Can be inferred from the conduct of the parties in sharing the house
c. Can be made at any time
d. Must be based on evidence of an express discussion

3. Which of the following would not qualify as detrimental reliance?

a. Housekeeping and looking after children
b. A man carrying out extensive building work on the house
c. A woman carrying out extensive building work on the house
d. Moving to another country and giving up secure accommodation

4. In the second category of common intention constructive trust in Lloyds

Bank v Rosset the claimant must show that they made a financial
contribution to the purchase of the house. Which of the following would
not qualify as a financial contribution?
 17

a. Contribution to the deposit

b. Payment of part of the purchase price
c. Payment of mortgage instalments
d. Payment of household bills

5. When the court decides the size of the couple’s respective shares, what
is the most important factor?
a. The respective size of each of their financial contribution
b. Equality is Equity
c. The whole course of dealing between them in relation to the house
d. What the couple have agreed

6. The presumption in Stack v Dowden is that if the couple are joint tenants
in law they will also be joint tenants in equity. Yet the court awarded
unequal shares to Ms Dowden and Ms Stack. Why?
a. Because the woman, Dowden, was the main wage earner
b. Because Dowden needed the house for her four children
c. Because the man, Stack, only paid part of the mortgage
d. Because they kept their financial affairs rigidly separate

7. The majority of the judges in Stack v Dowden held that constructive

trusts should be used in family home cases. Lord Neuberger would have
preferred to use a resulting trust. What difference would a resulting trust
have made to the outcome of the case?
a. No difference
b. The shares would have been equal
c. Mr Stack would have got nothing
d. Ms Dowden would have received a larger share

8. In Jones v Kernott the court decided that the couple’s common intention
as to the size of their beneficial interests could change. How does this
happen?
a. The couple make a new oral agreement
b. The couple make a new written agreement
c. The couple make unequal financial contributions
d. The couple’s whole course of dealing in relation to the house
indicates a changed common intention

9. The Law Commission recommended in its 2007 report “Cohabitation:

The Financial Consequences of Relationship Breakdown” (Law Com No
307) that the value of the cohabitants’ shares should be decided:
a. According to the common intention of the couple
b. According to their respective financial contribution to the acquisition
of the house
c. According to who had responsibility for the children
d. According to the economic benefits that each of the couple brought
 18

to the relationship and the economic disadvantages that each had

suffered

10. In Jones v Kernott the court decided that in some circumstances it was
possible to impute a common intention as to the size of their respective
shares. What does this mean?
a. The court assumes that equal shares were intended
b. The court does what is fair
c. The court looks at the evidence to decide what the couple intended
d. The court decides what the couple would have intended if they had
thought about it