Boris Ignachkov Legal Principles and Key Points
- In the case of Chaudhary v Chaudhary [2013] EWCA Civ 758, the Court of Appeal ruled after the father died, the stepmother held beneficial interest over the property based on a £5,000 contribution made towards the deposit.
- This case involved intention of parties, purchase prices, beneficial interests and a resulting trust.
Facts of the Case
- C purchased a house allowing D to remain as a tenant as they paid £5,000 to the mortgage deposit.
- Later, C asked for rent owed but D contended that they had a beneficial interest thus they did not have to pay the arrears.
Issues
- Did the stepmother have a beneficial interest in the purchased property?
Held by Court of Appeal
- Appeal allowed – D does have an 8% beneficial interest in the property.
Aikens LJ
Beneficial interest
- The principle of advancement does not apply to these circumstances.
- “The principal issue is whether the judge was correct to conclude that Mrs BC and her late husband never had any beneficial interest in the property. The second issue is whether, if Mrs BC (following her husband’s death) has any sole beneficial interest in the property, that has any effect on the claim by Mr Chaudhary against Mrs BC for arrears of rent.” [8]
- “Neither Mr Chaudhary nor his father expressed any particular intention on whether the £5,000 should be given to Mr Chaudhary or whether the result of this money being used as a deposit for the purchase would be that Mr Chaudhary senior and Mrs BC should have, to that extent, a beneficial interest in the property. In those circumstances” [30]
- “If, as Lord Phillips of Worth Matravers states in Lavelle v Lavelle & Ors [2004] EWCA Civ 223, the subjective intention of the transferor is the key, then it seems to me, on a balance of probabilities, that Mr Chaudhary senior and his wife must have subjectively intended that the £5,000 would be for their benefit and so was not intended as a gift for Mr Chaudhary. On the contrary, it was their subjective intention that this would be their contribution to the purchase of the property, which they hoped to buy in the future. So to that extent they would have a beneficial interest in the property.” [35]