Tahir v Faizi

An appellate court should rarely disturb a trial judge’s primary findings of fact where credibility was in issue. A resulting trust may arise where one person acquires property in another’s name under an agreement that the latter will hold the legal title for the former. Contributions to mortgage instalments may confer a beneficial interest where they are made pursuant to an agreement at the time of purchase that the payer will bear the mortgage liability and have the corresponding beneficial interest. Where the agreement gives the claimant the entire beneficial interest, the legal owner holds the property on resulting trust and is entitled to reimbursement for mortgage outgoings from the trust property and personally. A common intention constructive trust concerning a shared home, and the equity in Pallant v Morgan, did not apply on these facts.

The appeal concerned linked County Court claims arising from the purchase and occupation of a residential property. The respondent claimed a declaration under section 14(2)(b) of the Trusts of Land and Appointment of Trustees Act 1996 that the appellant held the legal title on trust for him. The appellant sought possession for alleged non-payment of rent.

After trial, HHJ Moradifar declared that the respondent had the entire beneficial interest, ordered reimbursement to the appellant for mortgage payments made from 2015 onwards, and dismissed the possession claim. The appellant challenged the judge’s assessment of the evidence and his legal conclusion that the informal oral arrangement could give rise to the claimed beneficial interest.

1. Appeal dismissed. The judge was entitled to accept parts of the respondent’s evidence despite serious deficiencies in documentary evidence. The appellant failed to show that the findings were unsupported by the evidence or that no reasonable judge could have reached them. The appellate court therefore could not disturb the primary findings of fact, applying London Borough of Haringey v Ahmed [2017] EWCA Civ 1861 and Cook v Thomas [2010] EWCA Civ 227.
2. The findings established an agreement that the appellant would purchase the property and hold the legal title for the respondent, who was to own the property in all but legal title. The arrangement was properly characterised as a resulting trust. The judge’s references to detriment were not strictly relevant to that analysis but did not undermine the conclusion.
3. A resulting trust may arise from a gratuitous transfer where the beneficial ownership is unclear, subject to a rebuttable presumption of resulting trust. The appellant’s mortgage liability did not itself confer a beneficial interest on him. Contributions to mortgage instalments may confer a beneficial interest where they are referable to an agreement made at the time of purchase that the payer will be responsible for the instalments on terms that he receives a commensurate beneficial interest.
4. Because the agreement gave the respondent the entire beneficial interest, it necessarily included an undertaking by him to indemnify the appellant for mortgage liabilities. The appellant therefore had an enforceable right to reimbursement for mortgage outgoings, personally and against the property.
5. Neither a Pallant v Morgan constructive trust nor a common intention constructive trust arising in the context of a shared home applied. Authorities concerning matrimonial or quasi-matrimonial homes were materially different.
6. The parties were advised to arrange transfer of the legal title and novation of the mortgage, subject to the mortgagee’s consent.

• High Court (Queen’s Bench Division): appeal from the final order of HHJ Moradifar dated 28 March 2019; appeal dismissed.
• County Court at Oxford: HHJ Moradifar declared that the respondent held the entire beneficial interest, ordered reimbursement of mortgage payments, and dismissed the appellant’s possession claim.