Summary

A judge was wrong to conclude that the fourth defendant's transfer of his legal interest in a property to the claimant was also intended to transfer his beneficial interest in that property.

Facts

Appeal by the fourth defendant ('K') from an order of HH Judge McKenna by which he ordered K and his family to deliver up possession of their home ('the property') to the claimant ('S'), thereby giving effect to his finding that a transfer of the property between K and the claimant ('S') was effective to transfer the entire legal and beneficial interest of the former to the latter. K and S were father and daughter. In September 1997 K, as the sole legal and beneficial owner of the property, transferred it to S and another of his daughters ('H') for a stated consideration of £25,000 when its true value was agreed to be £75,000. S and H raised the purchase monies by way of a mortgage on the property. S, jointly with H, and later on her sole account after H transferred her interest in the property to S by way of gift, paid the instalments on the mortgage, but K and his family continued to live in the property and to discharge all the usual outgoings. In 2000 K and S fell out, and S brought proceedings for possession of the property. K alleged that he had transferred the property to S so as to enable him to raise funds to pay for the forthcoming weddings of his daughters, but that it had always been intended that he should retain at least two-thirds of his beneficial interest in the property and/or should have a right to occupy the property for the remainder of his life. The judge, whilst rejecting virtually all of S's evidence as to the circumstances prompting the transfer, found that there was no evidence of any common intention, agreement or understanding that K should have any beneficial or other interest in the property after the transfer to S. He further held that, insofar as it was necessary for K to avoid the presumption of advancement, he was unable to do so because he was obliged to rely on what the judge characterised as a fraud practised on the building society which had granted the mortgage to S. He therefore ordered K to deliver up possession of the property. On this appeal K argued for the first time that no part of his beneficial interest had in fact been transferred to S.

Held

(1) The facts as found by the judge clearly demonstrated that it was not the intention of K, S or H that K's beneficial interest in the property should be disposed of by K. The sole purpose of the transfer was to raise money. It was only necessary for the legal title to be transferred in order for that purpose to be achieved. (2) As to the supposed fraud, there was no evidence that K had ever sought to dispute the validity of the building society's legal interest or to conceal in any way his occupation of the property. The other evidence amply rebutted the presumption of advancement.

Appeal allowed.