A couple lived in a maisonette with their aunt. The property had been purchased in the name of the husband but the aunt had contributed a partial sum towards the purchase price, while the rest of the amount was raised by way of a mortgage. The couple subsequently went bankrupt and the aunt claimed to be entitled to a proprietary interest in the maisonette by means of a resulting trust presumed from her contribution to the purchase price.
Held: The money had in fact been advanced by way of a loan with the intention that it be repaid. She was, therefore, not entitled to any share of the equitable interest of the property. Monies advanced by way of loan are not, on this basis alone to be treated as contributions to the purchase price of property so that the lender acquires a beneficial interest in that property as a result.
A constructive trust will be treated as coming into existence at the time of the conduct which gives rise to the trust.
Browne-Wilkinson J said: ‘I will first consider whether she has established an equitable interest in the property and its proceeds of sale by virtue of having provided the bulk of the purchase money, that is to say, has she an interest under a resulting trust? I have no doubt that she has not established any such interest. It is clear that the parties never worked out in any detail what was the legal relationship between them, but no one has suggested that Mrs. Johnson advanced the money to the debtor otherwise than by way of gift or loan. In his public examination, the debtor suggested that the monies were a gift, but I find as a fact that the monies were advanced by way of loan.’
Judges:
Browne-Wilkinson J
Citations:
[1980] 1 WLR 219, (1980) 39 P and CR 459, [1980] 1 All ER 190
Jurisdiction:
England and Wales
Cited by:
Cited – Tackaberry and Another v Hollis and others ChD 13-Nov-2007
A house had been purchased in 1982 by one member of a large family. Other family members now disputed whether the land was held in trust for them. A constructive trust was asserted.
Held: The claimants had failed to establish that a . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Land, Trusts
Updated: 12 May 2022; Ref: scu.190151
