Chaudhary v Chaudhary [2013] EWCA Civ 858

Key point
  • Where money is transferred to fund a purchase of property and the presumption of advancement would normally apply, the presumption of advancement will be rebutted where the sum advanced was intended to set off a future purchase of such property from by the transferor from the transferee
  • C bought a house in his name, with his stepmother (D) and father contributing £5000 to the mortgage deposit
  • C allowed his father and D to stay as tenants
  • C claimed for rent arrears that D owed him
  • D argued that her rent arrears could be set off by her beneficial interest in the house
  • The trial judge held that D had no beneficial interest at all, on the basis that the £5000 paid was akin to a premium or arrangement fee
Held (Court of Appeal)
  • D owns a 8% beneficial interest in the property due to the £5000 she and her husband paid
Aikens LJ
  • Only in the absence of evidence of intention does the law apply the presumptions of resulting trust and advancement
  • C’s father had not intended the £5000 to be a gift, instead he intended to one day purchase the house from his son, and that the £5000 would be used to set off the purchase price
  • Therefore the presumption of advancement is rebutted
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