The husband bought a business in Cornwall and a house for his family. At first he intended to buy the house in his own name, but was advised that if the venture failed, the house could be taken by his creditors as part of his business assets. It was put in his wife’s name and all was explained to his wife by the solicitors. The marriage broke down. The husband applied for a declaration that the wife held the house on trust for him. The registrar found that the husband was an honest businessman, intending and able to honour his financial commitments and held that he had rebutted the presumption of advancement and made the declaration sought.
Held: The wife’s appeal succeeded. The husband, being an honest man, must have genuinely intended that the house should belong to his wife because that was the only honest intention he could have. The Court must weigh, or balance, the adverse consequences of granting relief against the adverse consequences of refusing relief. The ultimate decision calls for a value judgment.
Salmon LJ: ‘The husband is in an inescapable dilemma. Either he is honest, in which case the house belongs to his wife; or he is dishonest. The registrar has found that he is honest.’ and ‘The burden of displacing the presumption of advancement is therefore on the husband. This burden can in many cases be displaced without much effort. It seems to me, however, that in this case the husband’s evidence, far from displacing the presumption, has done much to reinforce it.’
‘The burden of displacing the presumption of advancement is therefore on the husband. This burden can in many cases be displaced without much effort. It seems to me, however, that in this case the husband’s evidence, far from displacing the presumption, has done much to reinforce it.’ Having referred to the husband’s evidence as to the advice given by the solicitor and having pointed out that there would have been nothing wrong in the husband’s putting the property into his wife’s name in order to protect it from his creditors, Salmon LJ continued: ‘It seems to me to follow from the registrar’s finding that he was an honest man that the husband must have intended that the house should belong to his wife. That is why I say that his evidence strengthens the presumption of advancement. As far as I can see, the only possible alternative to what I have just described would be the husband dishonestly putting the house in his wife’s name with the intention of himself having the beneficial interest in it, and also with the intention, when he failed in business, to go to his creditors and say quite untruthfully and dishonestly: ‘I have no interest in this house. You can look at the documents, and they are plain enough to show that I have none.’ The registrar negatived that dishonest frame of mind, and certainly this court would not interfere with that finding.’
Lord Denning MR: ‘So it is plain that the husband had the house put into his wife’s name so as to avoid any risk of it being taken by his creditors in case his business was not a success. What is the result in law? In Gascoigne v Gascoigne [1918] 1 K.B. 223, it was held that when a husband put a house in his wife’s name so as to avoid it being taken by his creditors, the house belonged to the wife. The husband could not be heard to say that it belonged to him because he could not be allowed to take advantage of his own dishonesty. That case was applied In re: Emery’s Investment Trusts [1959] Ch. 410; and also McEvoy v Belfast Banking Co. Ltd. [1934] N.I. 67. We were invited by Mr Wheatley to overrule those decisions but in my opinion they are good law.’ He considered the attempts of counsel to distinguish the facts of that case from the authorities that he had quoted and concluded: ‘But whether the solicitor gave that advice or not, I am quite clear that the husband cannot have it both ways. So he is on the horns of a dilemma. He cannot say that the house is his own and, at one and the same time, say that it is his wife’s. As against his wife, he wants to say that it belongs to him. As against his creditors that it belongs to her. That simply will not do. Either it was conveyed to her for her own use absolutely: or it was conveyed to her as trustee for her husband. It must be one or the other. The presumption is that it was conveyed to her for her own use: and he does not rebut that presumption by saying that he only did it to defeat his creditors. It belongs to her.’
Nicholas LJ, Lord Denning MR, Cross LJ
[1970] P 136, [1970] 1 All ER 540
England and Wales
Citing:
Cited – Gascoigne v Gascoigne 1918
When a husband put a house in his wife’s name so as to avoid it being taken by his creditors, the house belonged to the wife. The husband could not be heard to say that it belonged to him because he could not be allowed to take advantage of his own . .
Cited by:
Cited – Lowson v Coombes CA 26-Nov-1998
A house was purchased by an unmarried couple to live together, but conveyed into the female partner’s sole name. Her partner was still married, and she feared that on his death his wife would inherit.
Held: ‘the case being one of illegality, I . .
Cited – Collier v Collier CA 30-Jul-2002
Fraudulent Intent Negated Trust
The daughter claimant sought possession of business premises from her father who held them under leases. He claimed an order that the property was held in trust for him. The judge that at the time the properties were conveyed, the father had been . .
Cited – Slater v Simm ChD 27-Apr-2007
The deceased and her partner did not marry but owned three properties together. They could not agree on the interpretation of the documents setting out their interests, and whether they had been varied.
Held: The court set out the various . .
Cited – SQ v RQ and Another FD 31-Jul-2008
The home in which the family had lived was held in the name of a brother. Each party claimed that it was held in trust for them. Chancery proceedings had been consolidated into these ancillary relief applications. The home had been in the husband’s . .
Lists of cited by and citing cases may be incomplete.
Family, Trusts
Leading Case
Updated: 02 November 2021; Ref: scu.236573
