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(Court of Appeal, Aikens, Sullivan, Underhill LJJ, 1 May 2013)
The man bought a property registered in his sole name for his father, step-mother and their children to live in. The father and step-mother contributed £5,000 (8%) to the purchase price and it was agreed that the son would be the landlord but the father expressed a hope that they would purchase the property in the future.
The father died leaving the step-mother and the children living in the property without paying rent and fraudulently claiming housing benefit. During proceedings to establish beneficial ownership of the property the judge found the step-mother had no beneficial entitlement to the property and that the contribution to the purchase price constituted an arrangement fee. She was found to be liable to pay rent and was ordered to pay the rent arrears owed. The step-mother appealed.
The appeal was allowed. There was no evidence in support of the £5,000 contribution being akin to an arrangement fee and, therefore, that finding was set aside. The judge made no findings as to the intention of the father and step-mother as to whether their contribution was a gift or a deposit and therefore applying Lavelle v Lavelle  EWCA Civ 223, the court could impose a presumption. On the evidence, on the balance of probabilities the father and step-mother intended that their contribution should stand as credit in a future purchase of the property and was not a gift. The step-mother was found to have an 8% beneficial interest in the property.
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