Vajpeyi v Yusaf

A resulting trust is presumed where property is acquired in one person’s name but another provides some or all of the purchase money. The presumption may be rebutted by evidence that the payment was intended as a loan or gift. Its strength depends on the circumstances and the common-sense inference they support. The absence of a timely assertion of an interest may assist in rebutting it, particularly where no credible explanation is given. The court must assess the whole factual context, including the parties’ relationship, their conduct and contemporaneous documents. An express contractual term excluding interest governs where the agreement is not silent on interest.

The claimant provided £10,000 towards the defendant’s purchase of 108 Brigstock Road in 1980. Although the property was registered in the defendant’s sole name, she claimed a proportionate beneficial interest under a resulting trust. The defendant contended that the money was a loan which he had repaid.

In 1994 the claimant transferred 2 Warminster Road to the defendant for £200,000. £100,000 was left outstanding and secured by a charge over 108 Brigstock Road. The claimant claimed repayment with interest; the defendant contended that nearly all the debt had been repaid and relied on the agreement’s express exclusion of interest. The central issues were whether the £10,000 presumption had been rebutted and what remained due under the 1994 agreement.

1. Resulting trust. The defendant accepted that the claimant’s contribution raised a presumption that 108 Brigstock Road was held for them in proportionate shares. The presumption reflected the common-sense inference about what the parties would have intended, but it could be rebutted by evidence that the contribution was a loan or gift.
2. Strength of the presumption. The strength of the presumption depended on the circumstances giving rise to it. In an emotionally close relationship, a contribution might suggest a joint venture. In this case, however, the claimant was an established professional, the defendant was a young man seeking to buy an investment property, and a loan was a plausible explanation. The presumption was therefore weak.
3. Rebuttal. The defendant’s evidence, the claimant’s failure for nearly 21 years to assert an interest or seek an account of rents, her failure to raise any beneficial interest when the later charge was created, and the terms of the will collectively rebutted the presumption. The £10,000 was a loan, not a capital contribution.
4. 1994 loan. The written agreement was the best evidence of the parties’ arrangement. It expressly provided that the outstanding £100,000 carried no interest and contained no fixed repayment date. An implied obligation to pay interest could not arise because the agreement was not silent on the issue.
5. Repayment and orders. The £10,000 loan was repaid. The £100,000 loan was repaid to the extent of £95,929.89, leaving £4,070.11 outstanding. The claimant’s claim therefore failed except for that admitted balance. The defendant’s counterclaim succeeded in principle, subject to satisfactory provision for the balance. Costs were reserved for later submissions if not agreed.