AB v CD v EF (Beneficial Interest Application)

These are financial remedy proceedings between AB, the Applicant and CD, the Respondent. There is a dispute between the two of them as to whether the assets which would be distributed between them include a piece of land which is adjacent to the former matrimonial home. The Applicant states that it is beneficially owned by the parties whereas the Respondent states that it is both legally and beneficially owned by her son, EF, the Second Respondent.

As I stated during the hearing this is a particularly poor piece of litigation. The land involved has been valued at £137,500 and after costs and CGT it is estimated that the net proceeds of sale would be in the region of £120,000. In pursuing this issue, the Applicant has incurred costs of £34,500, the Respondent £32,737 and the Second Respondent £36,685. That is just short of £104,000 that has been spent arguing over an asset valued at £120,000 – 86.66% of the value of the land. That in itself is not a proportionate use of the parties’ money. Further, it is accepted by all parties that the decision will turn upon the oral evidence of each of them and as such the litigation risk is all the higher.

Further, there is an obvious benefit to the parties to settle this case. The value of the former matrimonial home together with the land in question is stated to be between £250,000 and £500,000 greater than without the land. A settlement could have benefited all parties as the Applicant and Respondent could have agreed to the Second respondent receiving certain monies and still be better off than they would have been if it is decided that the Second Respondent is entitled to the property as a whole. It was therefore surprising to say the least that at the commencement of these proceedings I was informed that there were no open offers save for the parties stating that they would agree to accept everything that they were looking for. In 2025 this is not the way to conduct litigation and to say I am unimpressed is understating the position. Nonetheless as I stated in court if a decision is required to be made then that is what I will do.

In considering this matter I have read the very helpful notes provided by Counsel for each of the parties as well as reading all of the pleadings and the witness statements. I have also heard evidence from each of the parties together with TM’s friend who was the gardener at the property.

The facts

The parties first met through an online dating app in early 2012. The first face-to-face meeting took place on 4^th February 2012. Staggeringly, they put in an offer to purchase the family home a mere 16 days later on 20^th February 2012. That was a property valued at £975,000 and it completed on 5^th April 2012. They did not in fact marry until 19^th October 2013. At the same time as purchasing this property an adjacent piece of land was purchased of approximately 7 acres (“the Land”). It is agreed by all that this was purchased in the name of the Second Respondent but was funded by the Applicant and Respondent.

The parties separated in 2024, after a previous brief separation in 2023. An application for divorce has been filed and a Conditional Order pronounced on 29^th January 2025 and the Final Order came through during this hearing.

The parties Positions

The Applicant. He states that the parties originally were intending to purchase both the family home and the land together and it was only once it was pointed out that there was an issue in relation to Stamp Duty thresholds that any consideration was given to placing the two parcels in separate names. He agrees that it was decided to place the land in the name of the Second Respondent but is adamant that at no point was it stated that this was a gift. He states that there is a common intention constructive trust or alternatively a resulting trust for the land to be held by the Applicant and Respondent beneficially.

The Respondent and Second Respondent. The Respondent agrees that initially it was intended to purchase both the home and the land in the joint names of the Applicant and Respondent but that was altered to deciding that it should be gifted to the Second Respondent in order to ensure that he felt part of the new family that was being created. At the time the Second Respondent was a 20 year old student who had just lost his maternal cousin with whom he had lived since his teenage years. It was stated that he was vulnerable at this stage.

The Law in relation to finding of facts.

This is a case in which the factual issues that are in dispute are vital to decide before considering the legal issues. In relation to this I apply the following principles:

The facts ascertainable through documents and/or agreed.

The central issues in dispute in relation to discussions about gifts and/or beneficial interests comes from the oral evidence of the parties. It is always important to understand the issues which are set out in writing/not disputed as they provide the context within which to consider the disputed evidence. I set out my understanding of the evidence that is not disputed:

The Applicant’s case.

The Applicant states that the Respondent presented herself as an independent wealthy individual who asked him to marry her within two weeks of meeting. They were swiftly looking at buying a property for £1 million and he was considering remortgaging the rental flats that he owned in Newcastle as well as his home in London. It was suggested that the Respondent would remortgage her flat as well as borrow £100,000 from her sister (this did not transpire). The balance would be funded by a mortgage. It was discovered that the Respondent would not be able to obtain a mortgage on her property due to an inability to prove her income at the time and consequently it was placed in the joint names of the Applicant and Respondent to ensure that further borrowings could be obtained.

The monies could not be released from the Respondent’s flat in time for the purchase so all of the purchase money was coming from the Applicant. He stated that he became suspicious of the Respondent and even considered pulling out of the purchase at one point. The Applicant stated that he was in charge of obtaining the finances and the Respondent was liaising with the estate agents and the conveyancing. The suggestion had been made by the solicitor that it may be possible to put the house in the name of the Applicant and the land in the name of the Respondent so as to avoid the extra Stamp Duty. It is possible that the parties would not be connected because they were not married at the time.

The Applicant states that the Respondent did not wish the property and the land to be placed in the separate names of the parties and it was agreed that the Land should be placed in the name of the Second Respondent. The Applicant is adamant that it was never discussed or suggested that the Land was a gift to the Second Respondent. He states that it was placed in his name purely as a legitimate way of reducing the Stamp Duty liability and he adds in his witness statement that “this too was the Respondent’s understanding of the transaction and that she only created the narrative of gifting the land to the Second Respondent after our separation and ahead of the inevitable division of our financial assets.”

The Applicant states that he was very much in the background in relation to the conveyancing and wasn’t aware of what was being said. He states that he was not informed by either the Respondent or the Second Respondent that the Conveyancers considered the transactions to be linked and that the solicitor refused to register the interest at the Land Registry. He claims that he had no idea they were breaking the law.

The Applicant states that when they were considering planning permission that the Second Respondent was never notified or informed of any of the proposals or developments and that it did not occur to either himself or the Respondent to consult him. This is due to him not having a beneficial interest in the property it is stated. He accepts that there were occasions when the Second Respondent did joke about selling the land to a large corporation but this was nothing more than being said in humour.

In his oral evidence the Applicant added the following:

Issues with the Applicant’s case

There are a number of points that have been raised, legitimately, in relation to the Applicant’s position. These include:

Impressions of Applicant’s position.

The Applicant did all he could to distance himself from any knowledge as to the true position in relation to the Stamp Duty. The reality is that these parties were fully intending to put the house and the Land in the joint names of the Applicant and Respondent. The only reason that that did not occur was due to the issue in relation to Stamp Duty. If that had not arisen, then there would have been no consideration of placing the land in the name of the Second Respondent. It simply beggars belief that thereafter there was no discussion between the Applicant and Respondent on this topic or indeed between the Second respondent and the Respondent. This was the central issue to the purchase of the Land at the time. The evidence from the Applicant suggesting he was unaware of the position was unconvincing at best and I do not accept that he was not fully aware of the position or would not have discussed this in detail with the Respondent. To that extent I do not accept that the Applicant was being honest in his evidence.

The Respondent’s Case.

The Respondent’s case as pleaded is set out quite simply. It was accepted that the original offers for both the home and the Land were in the joint names of the Applicant and Respondent and that they were subsequently advised about possible stamp duty implications of purchasing them in both names. The divergence of cases appears at paragraph 7 of her defence which was dated 17^th January 2025. It reads “the Applicant suggested that the Applicant and First respondent gift the monies required to purchase the Land to the Second Respondent who would hold the legal and beneficial interest in the same…… The intention of the Respondent and Applicant in making the gift was to allow the Second Respondent to hold the land until such time as you wish to sell it to fund the purchase of his own property. Further, the decision to make the gift to the Second Respondent was around the same time as the First Respondent agreed to transfer another property held in her sole name… Into the joint names of the Respondent and Applicant for nil consideration.”

The Respondent’s witness statement was provided one month later and set out with some particularity the time at which the Applicant stated he wished to gift the land to the Second Respondent. It is stated in her witness statement that they went out for a meal on 3^rd March 2012 in Greenwich and shared information about each other’s families. The Respondent adds “I had been reflecting on how important it was for JT to feel included in this new chapter of my life. We spoke openly about my cousin’s passing, its impact on JT, and the sentimental value of the Adjacent Land. It had been part of JT’s childhood, with my cousin renting it out for our horses, and following her passing, carried even greater significance. L and I discussed how I would take his daughter under my wing and teach her to ride. I did not want JT to feel left out or distanced from me as my relationship with L progressed so rapidly. After everything I had explained, I vividly remember L removing his glasses, looking at me lovingly, saying that we should gift the field to JT so he felt part of the family and he could sell it when he was ready to settle down.”

The Respondent accepted that at this point the Applicant and Second Respondent had not met but she was able to give a number of reasons for this generous offer:

The issues with the Respondent’s evidence:

The animosity of the Respondent towards the Applicant shone through her oral evidence with following examples:

The evidence of the Respondent was provided with a huge degree of animus towards the Applicant. Indeed, she had a total disdain for any of the questions or any suggestion that what she is saying may not be true. She gave the distinct impression of not understanding why anyone could not believe what she is stating and attempted to put down counsel when she was being asked questions. An example of this is when it was being put to her that they had built pipes on the Land without referring the matter to the Second Respondent. Rather than respond to the question she picked up counsel on the use of the word ‘build’ because one does not build pipes but simply lay them. This was all said with a huge degree of disdain towards the whole court process. I am of course used to hearing separated partners giving evidence against each other and holding each other in contempt. However, I suspect that the Respondent was the most contemptuous and dismissive former partner that I have come across in my 20 years of being a judge. Frankly, her evidence was a very hard listen.

The only conclusion I can reach is that the Respondent has been dishonest on certain matters within this case. Further, due to the extreme animosity that she feels towards the Applicant I am satisfied that she does not have any difficulty in being dishonest if she considers that it would harm him. It is always important for a judge not to take a witnesses’ demeanour as a crucial method of considering their credibility but in this case the sheer venom with which the Respondent delivered her replies made it difficult not to consider that she would be willing to go to any length to ensure that the Applicant did not get his way. The question to consider is has she been dishonest in relation to the gift issue.

The Second Respondent’s case.

This mirrored the Respondent’s position in that he confirms that he was a student at University at the time of this transaction aged 20. He had not been involved in any previous property transactions. He had lived with his maternal cousin until she died in 2011. The Second Respondent states that he was in the University department when he got a call from his mother in or about early March 2012 in which she offered to give him the money to buy the backfield as a gift from her and L. He said that he was told by his mother that the idea was that it would give him something to make him feel part of the family and he considers it particularly appealing to him because he would own some of the land that he had spent a significant amount of time on in the past as his cousin had exercised horses on the field. It was the Respondent that first got in touch with the Conveyancers but thereafter they were in contact with the Second Respondent.

There is no mention within either the pleadings or the witness statement of the Second Respondent ever thanking the Applicant for the gift. He says in his oral evidence that he was sure he would have said thank you although he accepts that he would not have sent a card as that is not something that he would be used to doing. The Second Respondent says he had no understanding of Stamp Duty and he thought as it was a gift there was no Stamp Duty owing. He said he had understood that the solicitors had thought it might be a linked transaction simply because he had used his mother’s address on the relevant form and that he had spoken to the solicitor after the messages he had received and they said it should be fine and he just needed to complete the forms with his university address.

In his oral evidence the Second Respondent confirmed that he would speak to his mother on a daily basis. He recalled when he first met the Applicant but could not remember whether it was before or after he had been told about the gift of the land. He stated that he knew of no plan to avoid tax and that he had not spoken to the Respondent about it being a possible linked transaction because he did not think it would apply. He accepted that he had done nothing in an attempt to convince the solicitor it was not a linked transaction because he did not need convincing, and he could see no reason why he would be concerned about stamp duty at the time.

The Second Respondent stated that the money had been gifted to him and “I could have done anything with it – there was no attachment to say that it must be spent in a particular way.” He didn’t pass the information onto the Solicitor that the money had come from the Applicant and Respondent as he did not consider that there was a need to do so. He said he had not thought that it would have been an option for the Applicant and Respondent to pay the money directly to the solicitor without going through him. The Second Respondent stated he did not get the impression that the Conveyancer was concerned about the issue when he spoke to him on the phone.

The Second Respondent stated that it was his mother’s intention to give him a gift and it was not her plan to avoid stamp duty. He confirmed that he did mention to the Applicant and Respondent that he would sell the field to a large corporation …. which was a joke due to his father being one of the founders. He stated that this had been said sometimes to stop arguments between the Applicant and Respondent.

Issues with the Second Respondent’s evidence

Findings

Was there a gift? This is the stark question. If I am satisfied that the Respondent and Second Respondent have proved that it was a gift then there is no doubt as to the result in terms of this issue. The land would be held both legally and beneficially by the Second Respondent. The first part of the evidence relating to the gift comes from the Respondent herself. As I have stated above, she holds the Applicant in total contempt and I am entirely satisfied that she would do whatever she could to put him down. There is absolutely no doubt in my mind that this would include making up a story such as the gift. It is striking that there is no mention whatsoever of the meal on 3^rd March 2012 in her pleadings and that it features so heavily within her witness statement. How can that be the case? Further I am entirely satisfied that the Respondent has attempted to “over egg the pudding” within her oral evidence as I have referred to above.

There are other times at which the Respondent has been dishonest as with her dealings with the solicitor in failing to disclose that she was funding the purchase and also that it was her and the Applicant would be using the land and not the Second Respondent as she had obviously told the Solicitor. Further the Respondent saw no difficulty whatsoever in including the Land when making her planning applications both in 2012 and 2015. Further, when the work was being carried out on the land there was no discussion whatsoever with the Second Respondent. None of this points towards the fact that this was a gift to the Second Respondent. It is also odd that there is nothing in writing either formally or informally that this was a gift.

It is submitted on behalf of the Respondent that the idea that it was a gift makes sense because at the same time she transferred her property into the joint names of the Applicant and Respondent. It is suggested that the gift was a quid pro quo for that decision and consequently that it supports a finding that it was a gift. I am satisfied that the purpose of the transfer into the joint names of the Applicant and Respondent was in order to be able to raise further funds on that property and that could not be achieved if the Respondent was the sole owner. It follows that this position does not support the Respondent’s case. I would also add that it was the Applicant that provided all of the monies that were put towards the purchase of the house save for those that were funded by the joint mortgage. This totals £420,000 which was not matched by the Respondent at all and would be more than ample evidence of his commitment to the relationship and it would not require there to be any gift to the Respondent’s son.

The evidence of the Second Respondent was not convincing for all of the reasons set out above. He clearly was also dishonest with the Conveyancer and I cannot accept that he was unaware of the important issues in relation to Stamp Duty. It is impossible to read the documentation he had received from the solicitor and not be aware that this was a major issue. It is also simply dishonest to suggest that this was not something that was frequently discussed with his mother in their daily phone calls. It was suggested that he would have no reason not to be dishonest. That is ignoring the fact that if he is successful he would be entitled to a piece of land that is now valued at £120,000 net and his evidence was that he wished to purchase his own property and use that as a deposit. That is precisely what one would consider a motivation not to be honest. I have no doubt that the Second Respondent is particularly loyal to his mother and is very much in her thrall. He would follow her lead if it was required, and I am satisfied that that is what has occurred on this occasion.

The only supporting evidence in relation to the gift is TM’s friend who was the gardener at the family home. She confirmed that she had been known to the Respondent prior to the purchase of this property as she had worked for her at her previous property. She lived in the London area and therefore when she was carrying out gardening work she would stay with the Applicant and Respondent and would eat with them. She has subsequently become a good friend of the Respondent. She confirmed that she had discussed the issues involved before writing her statement as she needs to know what the case was about in order to be supportive.

Part of her evidence was that the field in question was always referred to as Mr JT’s field. This is now agreed between all of the parties. The mere fact that it was referred to as Mr JT’s field does not assist in deciding whether it was gifted to him or whether he was simply holding the legal title. The important part of TM’s friend’s evidence was when she states that she was having dinner one evening with the Applicant and Respondent and she states “they were discussing how important it was to ensure that their two children were treated equally and how best to integrate their families. TM told me that she and L had decided to give the Adjacent Land to JT to help support him in buying a home of his own in the future, once he had established his career. This was so he wouldn’t feel left out, as both TM and L were conscious that TM was putting a lot of effort into looking after L’s daughter.”

TM’s friend was not able to state precisely when this was said but it was fairly early on in the two families coming together. This would mean that this discussion took place some 13 years ago now. She confirmed that she was first asked to provide a statement in either January or February 2025.

Guidance has been provided in how one should consider such issues by Leggatt LJ in Gestmin v Credit Suisse [2013] EWHC 3560 :

“Memory is especially unreliable when it comes to recalling past beliefs. Our memories of past beliefs are revised to make them more consistent with our present beliefs. Studies have also shown that memory is particularly vulnerable to interference and alteration when a person is presented with new information or suggestions about an event in circumstances where his or her memory of it is already weak due to the passage of time. The process of civil litigation itself subjects the memories of witnesses to powerful biases. The nature of litigation is such that witnesses often have a stake in a particular version of events. This is obvious where the witness is a party or has a tie of loyalty (such as an employment relationship) to a party to the proceedings. Other, more subtle influences include allegiances created by the process of preparing a witness statement and of coming to court to give evidence for one side in the dispute. A desire to assist, or at least not to prejudice, the party who has called the witness or that party’s lawyers, as well as a natural desire to give a good impression in a public forum, can be significant motivating forces.”

It is clear that TM’s friend was aware that the field was known as Mr JT’s field. It would be surprising if someone who was not personally involved with such a transaction to recall the precise discussions of a meal some 13 years previously which had not been discussed since that date. The reality is that I suspect TM’s friend would have no understanding of the difference between legal and beneficial ownership as it is a construct with which few people are familiar. It may well be that she was aware that the property had been transferred into JT’s name but that is very different to it necessarily being a gift.

As I have stated above I have little confidence in the honesty of the Respondent and it may well be that she has assisted TM’s friend in her memory, either directly or indirectly. There have obviously been discussions between her and the Respondent for the witness statement to be prepared. As this is effectively the only evidence provided by anyone other than the parties involved it is important to consider whether it is genuinely independent. As she states she is a good friend of the Respondent I cannot consider this as independent evidence. It is certainly not evidence that makes it clear in my mind precisely what was said. When I take into account what Leggatt LJ set out above I cannot be satisfied that the memory that TM’s friend is relying upon is her independent thoughts but would have been influenced strongly by her friend, the Respondent. As such it is not sufficient to swing the pendulum in favour of a finding that this is a gift.

Having considered all of these matters I am not satisfied on the balance of probabilities that it was agreed that this transaction was a gift from the Applicant and Respondent to the Second Respondent. I am satisfied that the Land would have been purchased by the Applicant and Respondent in their own names but for the issues concerning stamp duty. It was due to that issue that the decision was made to place it in the name of the Second Respondent in the hope that that device avoided Stamp Duty. There was no other reason for that occurring. The Respondent discussed the issue with her solicitor to suggest dropping the Second Respondent’s second part of his surname to make it look as if he was not connected to her in any way. The only reason for doing that was to attempt to hide the reality and that was again done purely to avoid stamp duty. I am further satisfied on the balance of probabilities that this was discussed in full between the Respondent and Second respondent and that he, the Second Respondent, was fully aware of the reason the property was put in his name. He would have been certain of this upon reading the letters from his solicitor. It is accepted by all that there were no discussions between the Applicant and the Second Respondent in relation to this issue.

As a result of this finding, I discount the option that the land has been gifted to the Second Respondent. However, that does not mean that he is not the legal and beneficial owner. I must consider the legal position as far as the Applicant’s case is concerned.

The legal position

The starting point in considering the legal position is that equity is presumed to follow the law and consequently the beneficial interest in the Land must be assumed to reflect the legal title absent clear evidence to the contrary as was made clear in Stack v Dowden [2007] 2 AC 432. It must fall to the Applicant to establish that the beneficial ownership of the Land differs from the legal ownership. The Applicant relies on the case of Laskar v Laskar [2008] EWCA Civ 347 to state that the presumption would not apply. The Court of Appeal stated in that case that because the purchase was not between an intimate couple, the property was not intended to be their joint home and the parties lived independently of each other and the investment was very much an investment which caused the presumption not to apply.

I am satisfied that this case is not akin to Laskar as I have already made a finding that this property was not gifted to the Second Respondent and that was the only basis upon which it could be considered as an investment. The reality is that it was part of the purchase of the property as a whole which was being lived in by the Applicant and Respondent as their joint property. The purpose of the purchase of the land was not for investment but simply to ensure that the property as a whole could be large enough to be an ‘equestrian property’. This case is easily distinguished from the facts in Laskar.

Common Intention Constructive Trust.

It is accepted by the Applicant that there is no express declaration of trust in this case and accordingly the argument centres on whether he can prove a Common Intention Constructive Trust. The parties have each made reference to a number of cases concerning the correct approach that the Court should take in these cases. I do not intend to set out all of the authorities that are referred to but it seems to me the test set out by counsel for the Second Respondent is a fair summary. Ms Francis sets out the following:

The law is set out in Lewin on Trusts, 20^th Edition, at 10-063, as approved by Moor J in Paul v Paul [2022] EWHC 1638 (Fam) at [24]):

“When a claim is made by a person to displace the presumption that the beneficial ownership of property follows the legal ownership in a case where there is no express declaration of trust, the following questions must be addressed:

(1)

Does the case fall within the domestic consumer context, such that the common intention doctrine applies?

(2)

Is there evidence of an actual common intention, in the form of an agreement, arrangement or understanding between the parties that the beneficial ownership should not follow the legal ownership, either at the date when the property was first acquired or at some later date?

(3)

In the absence of such a common intention, can an agreement, arrangement or understanding to this effect be inferred from the parties’ conduct?

(4)

Has the claimant relied to his detriment on the common intention relied upon?

(5)

If there is an actual common intention, does it extend, either expressly or by inference, to the shares in which the property is to be beneficially owned?

(6)

If the common intention does not extend to the shares in which the property is to be beneficially owned, what is a fair share having regard to the whole course of the parties’ dealing in relation to the property, and to both financial contributions and other factors?”

It is important to consider each of these issues in relation to this transaction.

Does the case fall within the domestic consumer context?

I have already set out above that I am satisfied that this is a domestic consumer context case. The only basis to argue that this could have been an investment was if it was a gift to the Second Respondent for him to invest for his future. I have found that not to be the case and consequently the reality is that this was part of the overall property that was purchased and all fully funded by the Applicant and Respondent. That brings this case clearly within the domestic consumer context.

Is there evidence of an actual common intention by way of agreement arrangement et cetera? There are three parties involved in this arrangement. The Applicant, the Respondent and the Second respondent. As I have already stated above there was an agreement between the Applicant and the Respondent that the Land should be held in the name of the Second Respondent as a device to avoid Stamp Duty. That was the sole reason for the Land not being held in the names of the Applicant and Respondent.

I am further satisfied on the balance of probabilities that the Respondent and Second respondent also had those discussions. It is the only sensible interpretation of the correspondence that one can see between the Respondent and the Solicitors and the Second Respondent and the solicitors. The correspondence very much focused on the issue of Stamp Duty and that would have been the focus of discussions between the two of them as well.

It is also clear that there were simply no discussions between the Applicant and the Second Respondent on the issue whatsoever. That is the evidence of the Applicant and the Second Respondent. As such it is impossible to make a finding that there was any common intention between those two parties by way of any agreement or arrangement. It is impossible to find that the Respondent was acting as the agent of the Applicant in her discussions with the Second Respondent as there is simply no direct evidence in relation to it as both those parties have failed to reveal the nature of those discussions.

Can the common intention be inferred from conduct? I am satisfied that there is ample evidence to support the common intention that the Second Respondent was holding the property beneficially for the Applicant and Respondent jointly. As I have set out above, I am satisfied that there is an express intention as far as the Respondent is concerned but all of the issues set out below also apply to her as well as the Applicant.

The evidence supporting the common intention include the following:

Once it has been decided that the land was not gifted to the Second Respondent all of the above factors feed into there being only one conclusion which is that the Land was always to be held for the benefit of the Applicant and Respondent. Without the argument in relation to the proposition that it was a gift, there is simply no evidence going against the proposition that the Applicant and Respondent hold the beneficial interest in the Land.

Has the Applicant relied to his detriment on the common intention? The Applicant contributed £30,000 towards the purchase of this property. It is now suggested by the Respondent and Second respondent that Applicant and Respondent could purchase the land back. This would cost in excess of £120,000 on top of the £60,000 that they have already spent. It is difficult to see how it could be argued that the Applicant has not acted to his detriment. I am satisfied that this limb of the test is met.

Does the common intention extend to the shares in which the property is to be beneficially owned? On the basis that it was the intention of all of the parties that the Land should be bought together with the House and that this was to form part of the overall family home there can be little doubt but that the intention was for the beneficial interest to be owned on a 50-50 basis by the Applicant and Respondent. In any event in relation to the Land they had each made equal contributions which again supports a finding of equal interest between the two of them.

As a result I find that the land is held by the Second Respondent as the legal owner but that it is beneficially held for the Applicant and Respondent jointly.

Resulting Trust

The Applicant submits that if there is not a constructive trust then at least his share would be held by way of a resulting trust. If I am wrong in relation to the constructive trust I have to consider the alternative. It is accepted that the arguments in relation to resulting trusts must be secondary to the constructive trust argument and in general it is considered to be a last resort, but it nonetheless remains an avenue that is available if required.

Ms Francis once again sets out the summary set out in Lewin on Trusts 20^th addition in relation to the test for resulting trusts. It states:

“Where there is a gratuitous transfer containing no express or inferred provisions determining beneficial ownership, then the starting point is that there is a rebuttable presumption of resulting trust, in that the transferor did not intend to make a gift … The presumption may be rebutted in two ways. First, it may be rebutted by extraneous evidence that the transferor did intend to make a gift. Secondly, it may be rebutted by a counter rebuttable presumption ofadvancement, that is that the transferor did intend to make a gift. There is a presumption of advancement if the transferor is the spouse or parent of the transferee, or in a similar relationship. The presumption of advancement may itself be rebutted by extraneous evidence that the transferor did not intend a gift.”.

There is no doubt that the Applicant provided 50% of the funds for the purchase of the Land and that this was a gratuitous transfer. As such the presumption of resulting trust arises. I have made a finding that this is not a gift which leaves the presumption of advancement as the only method of rebutting the resulting trust presumption. There is no presumption of advancement as far as the Applicant is concerned as he has no relationship with the Second Respondent. It follows that any claim by the Applicant for a resulting trust would also succeed.

The same is true for the Respondent as the finding in relation to the gift also applies to her. The impact of this is not only that there is the presumption of the resulting trust but also it rebuts the possible presumption of advancement as I have made a finding that it was not intended as a gift.

Illegality

The sole purpose behind the creation of this trust was an attempt to evade Stamp Duty. The “device” that was used was illegal as there can be no doubt that this was a linked transaction to the purchase of the house. As such, the higher rate of Stamp Duty was due to be paid on the whole transaction. The Solicitor was aware of this and let both the Respondent and Second Respondent know his view.

In Tinsley v Milligan [1993 ]UKHL 3 it was held that parties could not rely on evidence of their own illegality to establish trust. This decision was overturned by the Supreme Court in Patel v Mirza [2016 ] UKSC 42 which set out a policy based ‘range of factors’ approach .

It was stated that a court should consider a “trio of necessary considerations” to determine whether or not the claim should be disallowed on the grounds that it would be contrary to the public interest because it would be harmful to the integrity of the legal system. These are:

The Patel case did not involve an equitable claim but it has been held in Ball v De Marzo [2019 ] EWHC 1587 that the same considerations apply to such cases.

In considering the above in relation to this claim:

I am satisfied that the illegality behind this transaction cannot prevent the finding that the Second Respondent is holding the land for the benefit of the Applicant and Respondent.