Vajpeyi v Yusaf

This is a case with a sad history. On the first day of the hearing I suggested that it might be a good idea for all concerned if the parties were to settle their differences. I granted an adjournment for that purpose; but the negotiations were not successful.

There are two aspects to this case, the one legal, the other human. It is impossible to understand the one without the other.

The legal aspect might seem prosaic in the extreme: it is about rebutting a presumption of a resulting trust, and about repaying money secured on mortgage.

The human aspect concerns a poignant relationship between a woman and a man, fatally flawed at the outset. It began when he was 20 and she was 32. The woman is the Claimant, Dr Ravi Vajpeyi. The man is the Defendant, Mr Shuaib Yusaf. The relationship between them has been anything but conventional.

The dispute concerns two properties in the Croydon area: 108 Brigstock Road, Thornton Heath, Surrey; and 2 Warminster Road, London SE25.

Put shortly, the Claimant’s case is that in 1980 she provided the Defendant with £10,000 towards the purchase price of 108 Brigstock Road, so that although the property was in his sole name, it was (and still is) held on a resulting trust in proportionate shares. Her share is 33.89%, and she claims a declaration accordingly. Furthermore it was an investment property, which the Defendant exploited by rental to tenants. She claims an account of her share of the rents and profits, and interest.

The Claimant’s case arising from 2 Warminster Road is that in 1994 she sold it to the Defendant for £200,000. He had paid half of the money up front but owed the other half to her, the loan being secured. Unusually, her security took the form, not of a mortgage on 2 Warminster Road itself, but of a charge over 108 Brigstock Road. She claims repayment of the loan (£100,000) plus compound interest and certain consequential relief.

Put with similar brevity, the Defendant says that 108 Brigstock Road is his sole property and always has been. He bought it for £29,500 and it is now worth eight times as much. The £10,000 was a loan, advanced to him when he was a young man. He repaid it long ago and can prove it, because he has kept copies of the cheques. As for the loan of £100,000 incurred on the purchase of 2 Warminster Road, he likewise can prove that he has repaid £95,929.89. Yes, there is a modest balance outstanding, but he is ready willing and able to pay it, and these proceedings should not have been necessary. No interest is due on this loan because the contract says so in black and white. The loan was agreed to be interest-free because, in reality, he had already paid much more than half the purchase price. He paid about £190,000, but allowed it to count as £100,000 for personal and stamp duty reasons. He counterclaims for an order that he be entitled to redeem the mortgage on paying the outstanding balance.

The Claimant does not dispute that the Defendant did indeed pay her, over the years, sums equal to or exceeding £10,000 and £95,929.89. But she claims that those were not repayments. They were gifts, or monies laid out on account of mutual business dealings.

The Claimant Dr Vajpeyi is a general medical practitioner and was born into the Hindu community. She has two grown children by a marriage with a fellow Hindu, who was also a doctor. Unfortunately, the marriage ended in divorce. Dr Vajpeyi, her daughter (herself now a doctor) and her son gave evidence before me.

The Defendant is a senior project manager in the employ of a public limited company. He is a Muslim and was born in Kenya. His family were Kashmiri Muslims. They were part of a proud but very conservative community. The Defendant is married and has two teenage children. In the year 2001 he became seriously ill with leukaemia: he is still on chemotherapy. Very fortunately, he is now in remission.

There are many aspects of the lives of the Claimant and the Defendant which would be a source of legitimate pride to anyone. Both are, in my opinion, accomplished, attractive and hard working people. The sort who have done so much to rebuild our country’s economy in recent years. By their efforts both have risen to positions of credit in the world. Both have sent their sons to Dulwich College: a particularly excellent education may be obtained at that school. As I have said, the Claimant’s daughter is herself a doctor.

I must now recount the relationship between the Claimant and the Defendant. This is a court where parties may obtain relief in respect of property matters; it is not a place for revenge in respect of grievances real or imagined. So I shall deliberately suppress, insofar as I may properly do so, some circumstances or allegations whose public recital might only serve to cause pain and distress to the respective families. In case too much may be read into those words, I should stress that nothing that was proved before me was illegal, nor was any illegitimate child procreated.

On 13 February 1976 the Claimant met the Defendant. She was 32 and she had a busy general practice as a physician. He was 20, unmarried, living with his parents (who were not in affluent circumstances), and was a studying to be an actuary at The City University. At that time the Claimant was still married to her husband, but the marriage was a very unhappy one and virtually at an end. It was the parties’ evidence that her husband was abusive to her, emotionally and physically.

The Defendant’s evidence was that he found Dr Vajpeyi to be “a very attractive, likeable and intelligent person”. I accept that evidence and have no doubt that those feelings were reciprocated.

On 30 June 1976 there began a close physical relationship between them. They agree that not only was this the first time he had had sexual intercourse; it was the first time he had even kissed a woman. He said: “I was totally besotted and infatuated with her”. The relationship progressed to love on both sides.

When they met the Defendant was an impecunious student: according to the Claimant, his free disposable income was 50p a week. The Claimant was not rich (her husband had incurred debts and at that stage she was exposed to them) but she was established in her profession. She gave him various presents: for example, she paid for some of his clothing, food, towards his hobby of photography, and so on. In 1979 he got a job as an actuarial trainee and although she continued to advance him small sums of money to tide him over temporary financial embarrassments, it is his evidence that from that point in time he would always repay her.

The Defendant not only formed a close relationship with the Claimant, but in the course of time he became almost a father to her children, particularly to her son Ram. In many ways the emotional bond between him and the children has outlasted his relationship with the Claimant.

Having obtained paid employment and then a salary rise, the Defendant wanted to get on the property ladder. On 11 August 1980 he purchased 108 Brigstock Road, Thornton Heath, Surrey for the sum of £29,500. This was not a dwelling house for him – he still lived with his parents – but an investment property. His intention, which he carried out and, so far as I know, still carries out to this day, was to rent it to tenants.

The purchase price was funded as follows. The Defendant was in a position to raise £20,000 on mortgage, which he did by creating a legal charge over the property in favour of the Sentinel Insurance Company Limited. He therefore needed a further £9,500 plus solicitor’s fees and stamp duty, making £10,000. It is common ground that the £10,000 was provided by the Claimant.

The mortgage deed described the Defendant as the beneficial owner and the document was witnessed by the Claimant.

According to the Defendant, the £10,000 was a loan and was expressed to be such in conversations between them. There was no provision for interest and his obligation was to repay the money as and when he could. She was in a remunerative profession and wanted to help him get on to the property ladder. Even so, it was quite a lot of money in those days, as can be seen from the fact that her salary as a GP was in the region of £14,500. She raised the money by borrowing from her bank.

If it was a loan, it left the Claimant somewhat exposed in the event of the untimely death of the Defendant. It was therefore agreed between them that he would make a will, which he did, according to which she was to have an option to purchase the property for £20,000 in the event of his death. Of course this was not much security at all because a will can be revoked, and will be revoked in the event of the testator’s marriage. But I believe the parties trusted each other.

According to the Claimant, this was no loan, but a capital contribution on her part towards what she referred to as their joint nest-egg. On the first day of the hearing she told me that there was no spoken agreement to that effect, but it was their mutual understanding. On the second day she told me that there was a spoken agreement after all. She explained the discrepancy by saying that her memory was poor as a result of a subsequent attack on her by robbers (which I shall describe later). She had been hoping that her relationship with the Defendant would be permanent.

Now, the Defendant has been collecting the rents on this property since about 1980. There is no evidence of any written demand for her share of the rents, if to such she was entitled, until very recently. Even though the parties have been on terms of some hostility since about 1994, as I shall describe later. The Claimant told me that she had indeed asked him for statements but these had not been provided. She was asked why she did not press her demand once the Defendant had got married. My note records that she was not able to give a satisfactory reply to that question.

I should perhaps add that the Particulars of Claim in this case aver that the Defendant wrongly charged 108 Brigstock Road with second and third mortgages without the knowledge or consent of the Claimant. This complaint was withdrawn on him producing the documents: they were witnessed by the Claimant.

Might Mr Yusaf have married Dr Vajpeyi? In my judgement the reality of the situation was this. The circumstances were such that marriage between them was never a practical option, though both of them seem to have put their heads in the sand at various times and lived for the moment. At the start he was, of course, too young to shoulder the responsibilities of marriage, supposing that had been in question at that stage. He was very short of money, he had to finish his studies, and he had to make some headway in the world.

When he became mature enough to marry, family considerations intruded. As I have indicated, the Defendant was a member of a very traditional Muslim family. He was expected in due course to enter into an arranged marriage with a Muslim girl from a similar background. He was expected to have children of his own, preferably sons. He eventually did marry such a girl, Tehsin, on 8 July 1984. The parties may have been living in the liberal West, but from a conservative Muslim point of view the situation was plain and obvious. The Claimant was a Hindu, was divorced, and could not have further children of her own (she underwent a hysterectomy in 1983). To the Claimant’s credit, I believe the truth is that she accepted the reality of the situation at that time, although she disliked it in the extreme. It was very hard for her; but so it would have been for the young Muslim wife if the Defendant, having married her, had then cast her aside because of a prior attachment to the Claimant.

In one way or another the relationship between the Claimant and the Defendant continued for many years. They never lived together as man and woman, although he seems to have visited her house very often and they were seen to attend social functions together. The relationship continued long after the Defendant was married. In effect, for too long they just could not let go of each other. It was like a powerful drug – in some ways, much worse. A great deal of guilt and resentment built up on one side or another.

Arranged marriages are said to work just as well as the other sort. At any rate, over time Mr Yusaf seems to have developed a close relationship with his wife Tehsin, although for a long period he was torn both ways. Mr and Mrs Yusaf had a daughter on 5 November 1985 and a son on 1 February 1988.

It was the Claimant’s evidence that she was the deceived woman: that she went along with the Defendant’s marriage only because she believed it was nothing but a barren formality, entered into under extreme family pressure, and that he would in due course leave his wife for her. In my judgement the Claimant’s heart wanted it to be so, and she may at times have been persuaded (or have persuaded herself) that it was so. But the Claimant had a head as well as a heart. This was no Regency novel, Dr Vajpeyi was no simple country girl and Mr Yusaf was no heartless old libertine. He loved her with a passion. She was 12 years older that he. She was a highly educated woman – a doctor with a busy family practice – and she was well acquainted with the customs of the Indian sub-continent.

On any conventional view neither of them behaved well. I have said that I do not propose to set out more of the circumstances than is necessary, and I shall keep to that resolution. In my judgement, it came to this. On the one side, she sought to put him under intense emotional pressure – perhaps not a difficult thing for her to do in the first place, for she was very attractive and he felt about her intensely – but she strongly worked on his feelings of guilt by performing certain acts which I refrain from describing in detail. On the other side, he told her things about his relationship with his wife that were manifestly absurd, and I do not mean the platitudes that men are traditionally supposed to utter in those situations. He said things that her heart wanted to hear but her head could not have believed. He did it because, in his own words:

She may have wanted spurious comfort, but it would have been much better for all concerned had he refused to provide it. At any rate she was frequently able to persuade herself that there might be a future in their relationship after all.

Since 1977 the Claimant had been living at 2 Warminster Road, a substantial detached property that she owned. In 1985 she and the Defendant had discussed the possibility of converting it into a residential nursing home. Planning was approved, but the project came to nothing because of tighter regulation of what the Defendant called “the nursing home industry”, implying poor economics.

On the evening of 31 October 1988 the Claimant and her son were at home at 2 Warminster Road. Two armed burglars entered the premises and she and her son were brutally robbed and beaten. (Eventually, in 1993, the Claimant succeeded in obtaining compensation in excess of £200,000 from the Criminal Injuries Compensation Board.)

However, the robbery had a profound emotional effect on the Claimant. Understandably, she had been very frightened, and she continued to be so. She could no longer bear to live at 2 Warminster Road. She therefore vacated the property in January 1989 and went to live with her children and their nanny at 35 Croham Valley Road, Purley, a property that she purchased for £190,000.

It is my clear impression that 2 Warminster Road continues to have a deep-seated significance for the Claimant and I suspect this may be a root cause of the present dispute. Legally the dispute may be about 108 Brigstock Road but emotionally it is very much about 2 Warminster Road. When legal warfare did break out nothing was said about the former: the attack took the form of her seeking to place a caution on the latter – on the ground that he had obtained it from her by the exercise of undue influence.

She had purchased 2 Warminster Road about 9 months after the start of her physical relationship with the Defendant. She lived there for nearly 12 years and he frequently visited her and her children. He used to read them bedtime stories and in other ways behave as a father to them. She must have many happy memories associated with that house. It was where she hoped he would come and live with her. On the other hand it would be an exaggeration to say that she was wedded to it for ever as an ersatz matrimonial home. She had considered converting it into a nursing home, and she must have unhappy memories about it too, especially after the robbery.

At any rate, when she vacated the property she allowed the Defendant to move in there with his family and his parents. Of course this included Mrs Yusaf, of whose status Dr Vajpeyi was intensely jealous. What is more, she allowed them to live there for five years without paying any rent, until he purchased the property from her on 25 February 1994. On any showing this was extraordinary, and neither side has provided me with a wholly convincing explanation.

According to her version, after the robbery he had promised her that he would now come to live with her permanently “but only if we found another home so that we could leave the painful memories of the attack behind”. Hence 35 Croham Valley Road. He said he could not live in palatial accommodation while his parents and family continued to live in a small terraced house. Employing skilful advocacy, he persuaded her to allow them to move to 2 Warminster Road. That much is intelligible, but it does not fully explain why, when he failed to abandon his family and come to live with her permanently at 35 Croham Valley Road as promised, she nevertheless permitted them to continue to reside at her old home for five whole years rent free. It was proved that he frequently visited her at her new address, but that is not the same thing.

His version is that even before the robbery she had been considering moving to a better neighbourhood but the robbery was the final impetus. Having seen and listened to Dr Vajpeyi I find as a fact that it was the fear engendered by the robbery that was the main cause for her move, and very naturally so. But that still does not explain why she permitted him and his family – including, significantly, his wife – to come in her place and live there rent-free for five years. As to that, his elucidation was as follows. 35 Croham Valley Road had to be paid for and it required the building of an extension and it was in need of substantial refurbishment. It therefore made sense for her to sell 2 Warminster Road, but she was reluctant to do so (I infer, because of the emotional attachment I have already described). He had been saving quite lot of money towards the purchase of a family home but not enough to be able to purchase 2 Warminster Road outright, and so they agreed that he would release his savings towards her purchase of 35 Croham Valley Road and the cost of the works to be accomplished on that property. It is common ground that he (more precisely, his father) provided about £30,000 in order to pay off the existing mortgage on 2 Warminster Road and it is his evidence that he eventually paid about £190,000 altogether. I shall return to this point later when I consider the merits of the parties as witnesses. He then says that it was agreed that at some appropriate juncture he would either buy 2 Warminster Road from her or she would reimburse him for the monies he had paid her so that he could purchase an alternative property.

Assuming either side’s version to be true, however, why would Dr Vajpeyi allow his family to live there without any written agreement, and why would Mr Yusaf move his family into the property without any security of tenure? I suspect I have not been told the whole story but in the end it probably does not matter.

On 25 February 1994 the Claimant and the Defendant entered into an agreement according to which she was to transfer 2 Warminster Road to him for a stated price of £200,000. As I have explained earlier in this judgement, half was deemed to have been paid up front and the other half was left as an outstanding debt from him secured, not on 2 Warminster Road, but on 108 Brigstock Road. Clause 2.3 of the agreement provided that the charge “shall not contain provision for repayment of capital or interest”.

As I have said, the Claimant considers that she was induced to enter into this transaction by the exercise of undue influence on his part. However, it is not pleaded as a claim in this case and it is not hard to see why. It was proved that she received independent legal advice from a solicitor. The solicitor seems to have thought the transaction was unusual to say the least but that the Claimant was an adult woman after all. At any rate, I do not accept that she failed to appreciate the legal consequences of her action. There was no expert valuation evidence and it was not proved that the sale was at an undervalue.

The Claimant told me that as far as she was concerned the whole transaction was nothing more than a sham – a “fig leaf”, as she put it. The assertion was not pleaded and in any event I do not accept it. In my judgement, even if the Defendant had never been born she would have moved out of 2 Warminster Road because of her fear caused by the robbery and she would have had to sell the property to somebody.

When couples go through a divorce at least they know precisely when they cease to be married to each other. But irregular liaisons seldom enjoy a comparable advantage; and so it was in the case of Dr Vajpeyi and Mr Yusaf.

In 1993 the Claimant entered into a physical relationship with a Hindu man who was willing to marry her, a fact that greatly distressed her son Ram, because he was so fond of Mr Yusaf. Despite her new relationship she was still willing to marry the Defendant. The Defendant for his part was now committed to his wife and family and hoped that the new relationship would work.

The connection between the Claimant and the Defendant really began to deteriorate and become hostile in 1994. (According to the Defendant they had ceased to have sexual intercourse in 1990; she says in 1992.)

In April 1994 the Claimant purchased several plots of land at Dry Hill Park, Tonbridge, for a total of £150,000 for redevelopment, funded by her award from the Criminal Injuries Compensation Board. She invited the Defendant to invest in this venture and he did so, considering it to be financially sound and the risk to be low. They entered into the venture on a businesslike basis with a proper written agreement drafted by her solicitors. In the event it was not a success and it incurred a loss of some £11,000. The Defendant attributes the failure of the venture to the deterioration of their personal relations and I daresay the converse was also true.

It is accepted that from some time in 1994 onwards until the hearing of this case they saw each other on no more than seven occasions, never in circumstances of intimacy, although there is unchallenged evidence that he continued to telephone her at her surgery with great frequency until as late as 1999.

A bizarre feature of the aftermath of their relationship is that, although they hardly ever met, they continued to allow each other to use their credit cards: as additional cardholders. The practice had begun in about 1984, and my impression is that it was continued for so long because of a kind of residual sentiment or symbolic significance. The Defendant claims, and I accept, that he reimbursed expenditures incurred by him on the Claimant’s card. Substantial expenditures were incurred the other way – by the Claimant on the Defendant’s card – and these were not reimbursed. He relies on those payments by way of making up part of the sum of £95,929.89 he paid her (he says, in discharge of the loan of £100,000).

For the purposes of this judgement I need not describe the circumstances leading to a final breakdown of all civility, which began in 1999. There were acrimonious disputes about monies said to be owed and matters were not improved when the Claimant discovered that the Defendant had transferred 2 Warminster Road into the joint names of himself and his wife.

Both the Claimant and the Defendant gave evidence before me.

The Defendant is the sort of man who keeps copies of his cheque stubs all the way back to when he first opened a bank account. He has a head for financial detail. He was able to prove, and the Claimant perforce had to accept, that during one period he had paid her in excess of £10,000 (Footnote: ¹ ) (which on his story would have been the repayment of the £10,000 she had lent him towards the purchase of 108 Brigstock Road), and that during a later period he had paid her £95,929.89 (which could have been by way of redemption of the charge incurred in connection with the purchase of 2 Warminster Road).

He knew that the onus lay on him to rebut the presumption of a resulting trust; and in my judgement he had appreciated, well before he went into the witness box, that his success would depend on him being taken as a witness of truth, a scrupulous approach being the best policy. He was cross-examined on his witness statement and in my judgement his evidence was not shaken.

There was only one substantial aspect of his evidence where I was inclined to entertain any doubt, and that concerned how much he had actually paid up front in connection with the purchase of 2 Warminster Road. His contention was that he had paid the Claimant in the region of £190,000, and not just the £100,000 recorded in their written agreement. The relevance of this issue is not overwhelming, for he is not seeking to recoup or set off the difference. He accepts that he should be treated in law as if he had paid no more than £100,000. The relevance is simply this: it could serve to explain why the Claimant was willing to let him live rent free with his family at 2 Warminster Road for a long time, and was willing to lend him £100,000 on mortgage without charging him any interest, and without there being any fixed period for repayment of the principal. There is no doubt that that the agreement explicitly said the loan was interest-free and provided for no fixed repayment date, but the question, if it is a relevant question, is why.

The sum was said to be made up as follows: about £30,000 went towards discharging the prior mortgage (this was accepted), and about £160,000 was achieved by way of various payments to the Claimant from certain building society accounts that he had. The reason I did entertain some doubts on this matter was not that his demeanour in the witness box seemed to be unsatisfactory. It was because, untypically for him, he was not able to produce copies of the corroborating documentation. Of course building societies do not retain records going back that far in time, but one might expect him to have retained his pass books. He said he could not remember what had happened to these, and suggested that he might have thrown them out accidentally.

In my judgement the parties should be held to the conventional basis of the written agreement. The Defendant should be treated in law as having paid no more than £100,000 up front, and the Claimant should be treated as having agreed to advance the other £100,000 free of interest for whatever reason. In my judgement the document is now the best evidence of the manner in which the parties chose to proceed at the time.

I thought the Claimant was a likeable person, but she did not always tell the truth before me. In particular, I reject her story that some of the various sums that he paid her (he says, in repayment of the loan) were on account of mutual business dealings on the Indian sub-continent and elsewhere. Aspects of her evidence on that topic clearly and discernibly fell into the class of invention, and not mere loss of memory. Nor do I accept that the figures I have mentioned (call them £10,000 and £95,929.89 for the sake of simplicity) represented mere bounty. £95,929.89 in particular was a very large sum, and it was paid after the parties were on hostile terms and had almost ceased to see each other. She said that, of that amount, £20,000 was a contribution to the expenses of her daughter’s wedding in August 2000 (which the Defendant was not invited to attend because his presence would have irritated the bride’s father); but this was inconsistent with what she had stated previously: that it was a gift to the daughter, or that the amount was different. The Defendant did lavish some gifts on the Claimant (as indeed she did on him), but they were of a sort which one would expect between a man and a woman, and he does not seek to bring the value of his presents into account.

According to paragraph 27 of the Defendant’s witness statement, the accuracy of which the Claimant accepted, the Claimant was a lady possessed of natural business acumen.

On the vital question concerning 108 Brigstock Road – was the £10,000 a loan, or a capital contribution – I prefer the Defendant’s evidence. However, I do not wish to put too much weight on this aspect alone, because I am inclined to be sceptical about the reliability of human memory after such a great lapse of time, the more so where parties may be open to at least unconscious bias.

From a legal point of view Mrs Yusaf has played virtually no active role in this case, she did not give evidence before me, and I can quite understand that it was not felt to be necessary to involve her in that way.

It is often the case that, although property is acquired in the sole name of one person, the real or presumed intention is that he should hold it for the benefit of another, or jointly for the benefit of himself and that other. There is no difficulty in discovering the real intention if the parties set it down in black and white. But sometimes they omit to do so. What happens then?

In Pettit v. Pettit [1970] AC 777, 814, Lord Upjohn described the presumption as follows:

This sounds fairly straightforward. A acquires property in his own name but some or all of the purchase money was provided for the purpose by B. So A holds the property in trust for himself and B in proportionate shares. But A has the right to show, if he can, that some other transaction was intended – for example, that the contribution to the purchase money was a loan, or a gift. But there is a snag.

The snag is that the transaction may have happened a very long time ago, so that, for example, A and B cannot be expected to remember the details. A says, “I thought it was a loan”; B says “No, it was supposed to be a contribution to our joint nest-egg”. Each gives their version of the details. After such a lapse of time, how is a court to arrive at the truth? Indeed, it may be that A and B are not available to give evidence at all, because they are both in their graves, and the claim is being brought by B’s executors. For it is feature of trust law (or, at any rate, of the law of resulting trusts) that there is no period of limitation.

Normally, if a person has a legal claim he or she must bring it within a set time, defined in the Limitation Act, or it will be too late. Usually the period is six years. Sometimes it is even less. In the case of a claim for personal injuries e.g. in a road accident, the normal period of limitation is three years: it has been found that, after such a long time, most people cannot give reliable evidence about the cause of the accident. But the Limitation Act does not apply to resulting trusts. So in theory there is nothing to prevent such a claim from being brought after the lapse of generations.

Quite commonly, the parties who are alleged to have entered into a transaction which produced a resulting trust were in a close emotional relationship at the time. Everybody knows that it may be very difficult to know the exact circumstances of even a minor marital quarrel, though it happened only last week. Each partner has a mental “video” which he or she is willing to replay, but the two films, albeit honestly made, have different plots. But now take the case of a couple who lived together as husband and wife years ago, then split up. There may be much bitterness. Suppose the parties have got to go into the witness box and describe the circumstances in which the property was bought. It may be impossible for them to give reliable evidence. Even if they are trying to behave with complete impartiality – which is not likely.

It is possible for there to be a resulting trust even where the parties admit they never came to any agreement about their respective shares in the property, if any, or gave any thought to the nature of their interests at all: compare Dewar v. Dewar [1975] 1 WLR 1533, 1535A.

In this case Mr Gerard van Tonder, who appeared for the Defendant, accepted that there was a presumption that 108 Brigstock Road was acquired by Mr Yusaf on trust for himself and Dr Vajpeyi and that the onus lay on the Defendant to rebut it.

How strong must be the evidence that is required to rebut the presumption of a resulting trust? This depends on the strength of the presumption. And the strength of the presumption depends on the facts and circumstances which gave rise to it. This is because the doctrine of resulting trusts is supposed to be based on common sense. In each case the court is trying to find the answer to the question: what would the parties have intended if they had given thought to the position?

In Fowkes v. Pascoe (1875) L.R. 10 Ch 343, 352, Mellish LJ said:

In Pettit v. Pettit at page 816G Lord Upjohn said:

Thus, and depending on the circumstances, it is possible for the presumption to be rebutted by comparatively slight evidence: per Lord Upjohn at 814G; see also McGrath v. Wallis [1995] 2 FLR 112 at 122B, C.A.

What kind of rebutting evidence is admissible? In Snell’s Equity (30th edition, 2000) at §9-16 it is stated that:

I shall now illustrate what I have written. When an unmarried couple intend to live together in the property and both contribute to the purchase price there is, I think, a fairly strong presumption that they intend to hold it in proportionate shares, even though the property is in the name of one of them alone. The fact that both came up with part of the money calls for a common sense explanation, and the most obvious explanation is that they intended the property to be acquired for their joint benefit. I say “a fairly” strong presumption, because modern couples usually have the property conveyed into their joint names and, if they do not, one may wonder why.

In contrast, if a young woman in her first job, not very well paid, were to raise as much as she could on mortgage in order to buy a flat, what would we make of the fact that her well-to-do uncle, a man on affable terms with her, provided a minor part of the purchase price? Once again the fact that he came up with the money calls for a common sense explanation, but this time the most obvious explanation is not that he wanted a part of the speculation. It is more credible that it was meant to be a loan or, perhaps, a gift.

I have said that there is no limitation period in respect of a resulting trust, which both sides accept to be the law. So the claim might be raised after many years, or even generations. But it seems to me that the amount of time that has elapsed before the alleged resulting trust is asserted is capable of helping to rebut the presumption. This again is a matter of common sense. The provider of the money may know nothing about the law of resulting trusts, but all the same she will be likely to feel aggrieved if the other party calmly proceeds to treat the property as his and his alone. The fact that no complaint is made for a long time calls for an explanation. If no sufficiently credible explanation is forthcoming when one might have been expected this may, in my judgement, serve to rebut the presumption, or help to do so.

Mr van Tonder contends that there is an estoppel by convention which precludes the Claimant from claiming an interest in 108 Brigstock Road. He says it arose in the following way. In 1994, when 2 Warminster Road was purchased, the £100,000 lent by the Claimant was secured on 108 Brigstock Road. But it was done on the basis that the Defendant was the sole beneficial owner of 108 Brigstock Road. Even if the Claimant did not know the law it would be unjust to depart from the common assumption (that the Defendant owned 100% of the property) because the asset that which was going to support the loan would be less. How do we know that he would have agreed to accept an indebtedness of such a large sum as £100,000 if the conventional basis of the transaction had been different?

But I am inclined to believe that Mr Adrian Davies, who appeared for the Claimant, had a good answer. How do we know that she, the Claimant, did not suppose that the loan was being charged on their joint “nest egg”? You cannot tell from looking at the document. Thus there was no shared assumption (or an assumption made by him and acquiesced in by her), as the law requires for this purpose.

Mr Davies contended that interest was payable on the loan of £100,000 incurred in connection with the purchase of 2 Warminster Road. He cited authorities to show that even though an agreement of that sort mentions no interest, an obligation to pay interest will be implied. No doubt he is right, but the agreement of 25 February 1994 was not silent on the point. It expressly stipulated that no interest was payable.

108 Brigstock Road: Was the £10,000 a Loan?

In my judgement the £10,000 advanced by the Claimant to the Defendant in 1980 was a loan, and not an investment in the venture. I think so because of a combination of several circumstances whose sum effect is strong.

In the first place, it is plausible that it could have been a loan. Here is a young man with limited resources who is anxious to get onto the property ladder . He needs an extra £10,000 in order to do so. A lady who is very fond of him, is 12 years his senior, is already on the property ladder herself, and who is in a distinguished profession which enjoys a good credit rating, borrows the money in order to supply it to him. Why could that well not have been a loan, though a kind one, quite understandable in the circumstances of their relationship? So although I agree that there is raised a presumption of a resulting trust, in my judgement it is a weak one having regard to what I have called the common sense of the situation. And we must not have our judgement clouded because of their respective sexes. Imagine they were reversed: what might we expect the position of the older and wealthier man to be?

Secondly, if it was a shared venture, why did the Claimant tolerate him collecting the rents on the property and keeping them for himself for nearly 21 years? If her case is right it would have felt like their money – but he was accounting for none of it. True, she says that they were like a family and he promised he was going to come and live with her, and no doubt that was so in many respects. But in my judgement that point cannot be pressed too far in all the circumstances, including:

In the same way, and irrespective of the matter of the rents, her failure to propound her claim to an interest in the property for nearly 21 years (she first did so in an undated letter to his father which was written in mid-2001) to my mind tells against her claim.

Next, what are we to make of the fact that, when she sold 2 Warminster Road in February 1994, and the loan of £100,000 was secured on 108 Brigstock Road, and she was advised by solicitors, she said nothing about her beneficial interest? She did not say “108 Brigstock Road is our property”. Her instructions to her solicitors are retailed in a letter they wrote on 9 February 1994. It refers to “your Client’s property at 108 Brigstock Road”.

Both sides rely on the terms of the Defendant’s 1980 will. In my judgement, they does not really support either case. The terms of the option certainly do not map onto a shared beneficial ownership, one third belonging to the Claimant; but neither do they square with the simple assumption that it was a straight loan of £10,000. But what does signify to my mind is that she wanted the will to be made at all. This shows a certain businesslike attitude, even though it was not the right way to go about the business. It corroborates the evidence, unchallenged anyway, that she was a lady of natural business acumen. So, if it was supposed to be their joint property, why did she not get him to sign a simple document that said so?

Mr Davies stressed that in 1980 the relationship was a loving one and he said that it had a least a possibility of a future. So it is plausible that it could have been a capital contribution – to their “nest egg”. £10,000 was a lot of money for Dr Vajpeyi at the time: nearly 70% of her annual salary. She was contemplating buying her own surgery and she had to borrow the £10,000 from the bank at interest, in order (said Mr Davies ironically) to lend it to someone interest-free. I have paid careful attention to those points and they have their weight. But in the end I think they are simply not strong enough to outweigh the accumulation of points for the Defendant.

I conclude that the presumption of a resulting trust was not a strong one and that it has been rebutted by the Defendant.

Were the Loans Repaid?

I hold that the loans of £10,000 and £100,000 were repaid, save that in the second case it was to the extent of £95,929.89 only, the balance admittedly being outstanding. It is common ground that, deducting some matters not relevant for present purposes, the Defendant did pay the Claimant sums amounting to £10,000. It is common ground that in one way or another he did pay her £95,929.89 and not for items that were obviously personal gifts. If those monies were not paid by way of discharging the loans, what were they for? Earlier in this judgement, when referring to the parties as witnesses, I have rejected the Claimant’s evidence that they were, even in part, payments on account of mutual business dealings, or mere bounty.

The Claimant’s claim fails, save for the outstanding amount admitted to be due to her, which I believe comes to £4,070.11. I will hear submissions on costs at a later date if the principle cannot be agreed.

The Defendant’s counterclaim succeeds in principle, subject to mutually satisfactory provision for the £4,070.11.

It is, as I said at the outset, a sad case. At the human level I have sympathy with the Claimant. But in my judgement the wisest thing that was said throughout the trial was said by her own son Ram, a truly fine young man. He suggested it was time for his mother to let go of her emotional burden. I earnestly hope that she can.