Abbey National plc v Moss (1993) 26 HLR 249

Key point

  • Collateral purpose of a trust for sale can subsist even when one beneficiary loses his beneficial interest


  • D and her husband purchased a house in joint names
  • Following the husband’s death, D made her daughter a joint tenant
  • The daughter applied to the bank (C) to borrow £30,000 on the security of the house by forging her mother’s signature
  • The bank sought an order of sale when D’s daughter defaulted

Held (Court of Appeal)

  • The order of sale was rejected
  • The collateral purpose that D should continue living in the house was still subsisting

Peter Gibson LJ

Collateral interest was subsisting

  • Jones v Challenger shows that where the collateral purpose is subsisting, a trust for sale will not defeat that purpose even when an original party to the purpose assigned his share
  • The collateral purpose that D shall continue to live in the property did not come to an end due to her daughter losing her beneficial interest: p. 257

Distinguishing Re Citro

  • It only establishes that a collateral purpose to provide a matrimonial home will not subsist when one of the parties loses his share
  • It does not purport to apply where a different collateral purpose continues to subsist even when one of the parties loses his share: p. 258
Trusts of Land Cases
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