Lloyds Bank plc v Rosset is an important case in English property law dealing with the rights of cohabitees. The case establishes that contributing to the cost of running a house does not, in itself, create a beneficial interest. Mr & Mrs Rosset bought a derelict property with the proceeds of a trust fund set up for Mr Rosset, one of the stipulations of which was that the property must be conveyed into the husband's name alone.

Unbeknown to Mrs Rosset, Mr Rosset then took out a loan secured against the property, and when he became unable to repay that loan, Lloyds Bank sought to take possession of the property. At this point Mrs Rosset asserted that she had an overriding interest in the property and that the bank had to take account of this beneficial interest which arose as a result of her contributions to the property. Held, dismissing the appeal by Lloyds Bank, that the relevant date for determining whether Mrs Rosset was in occupation of the property for creation of an overriding interest in terms of the Land Registration Act 1925 s.70 was the date of the creation of the charge, 17 December.

Lloyds Bank correctly challenged whether Mrs Rosset had any beneficial interest in the property. There was no express agreement between Mrs Rosset and Mr Rosset between November and 17 December that Mrs Rosset would have a beneficial interest in the property and no express evidence of discussions to that effect. The work Mrs Rosset did on the property was insufficient to create the inference of beneficial ownership or creation of a constructive trust.

Conduct such as payment towards the purchase price by the party who was not the legal owner was required before such an inference would be drawn. Lord Bridge of Harwich sought to define the two distinct ways in which the courts would recognise a beneficial interest in property as a result of common intention, but where one partner did not have legal title to the property. He said the interest can be based on "express agreement, arrangement or understanding", or it can be, "where there is no evidence to support a finding of an agreement or an arrangement to share...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...in this situation, direct contributions to the purchase price by the partner who is not the legal owner...will readily justify the inference necessary"

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