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Sekhon v Alissa [1989] 2 FLR 94

Presumed resulting trust of land; contribution to purchase price; equitable interests; gifts.

Facts

A daughter contracted to purchase a house which was held in her sole name. The house cost £36,000 and the daughter contributed £15,000, whilst her mother paid the balance. The mother sought to claim a beneficial interest in the house and the daughter contended the monies paid by her mother had been by way of gift, and she accordingly should hold the beneficial title outright.

Issues

The mother alleged the purchase of the property had been a joint venture. She claimed she only agreed to the property being in the sole name of her daughter because she believed a joint venture would have adverse capital gains tax consequences. The evidence showed that the mother’s contribution amounted to her whole life savings in their entirety. She also argued that no one else in the family had regarded the contribution as a gift, and the daughter had sought legal advice on transferring an interest to her mother. The daughter argued the monies were paid to her by way of gift or interest free loan, and the title had been deliberately placed in her sole name because both parties had intended her to be the sole beneficial owner.

Held

A resulting trust was held to have arisen in favour of the mother in proportion to the value of her contribution. Where there is a direct contribution to the purchase price of land, there is a presumption of a resulting trust in favour of the contributor, unless there is evidence to rebut it. The evidence did not establish the monies were paid by way of gift or loan. As the mother had not had to engage in any illegal conduct in terms of tax evasion, she was able to rely on her actual intention to establish that the interest remained with her on resulting trust.


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