Kroll Agency Services Limited & Ors v Inlustrem Maritime Limited & Ors

Where a parent provides money for property acquired in an adult child’s name, the court must determine the provider’s actual subjective intention. The presumption of advancement remains a legal presumption, but it is not a strong presumption and its weight depends on the circumstances. Relevant evidence may include matters before, during and after the transaction, although self-serving evidence arising after a dispute may carry little weight. Cultural background may be relevant evidence of the provider’s actual intention, without displacing the presumption itself. If the presumption of advancement is rebutted, the provider may establish a resulting trust and retain the beneficial interest.

The claimant judgment creditors obtained charging orders over a flat registered in the name of Sam Tariverdi, one of the judgment debtors. His father, Hassan, applied to set the charging orders aside, claiming that he had provided the purchase and lease-extension monies and retained the entire beneficial interest. The claimants relied on the presumption of advancement between father and son. Farimah, Sam’s mother, asserted an alternative right or interest in the flat, while Postantzis advanced a conditional claim concerning funds routed through companies associated with him.

The central issues were whether the monies were loans, gifts or contributions giving rise to a resulting trust; whether Hassan had rebutted the presumption of advancement; and whether Farimah’s alternative claim required determination.

1. Outcome. Hassan established that he held the entire beneficial interest in the flat on a resulting trust. Sam had no beneficial interest, and the charging orders were set aside under Charging Orders Act 1979. Postantzis’s conditional application therefore fell away. Farimah’s alternative claim was not determined.
2. The first question was whether the transactions were loans. That was an objective question concerning whether a loan agreement had been made. The court found no express, implied or inferred loan agreement. The 2014 document signed by Sam was not accepted by Hassan and did not establish a bilateral loan.
3. The court adopted the distinction between the provider’s subjective intention in a gift or resulting-trust analysis and objective agreement in a loan or constructive-trust analysis. A resulting trust was the legal consequence of the absence of a gift, loan or other inconsistent transaction.
4. The presumption of advancement applied because Hassan was Sam’s father. It was not a strong presumption. Hassan bore the burden of rebutting it by showing, on the balance of probabilities, that he intended to retain beneficial ownership rather than make a gift.
5. In determining that intention, the court considered the whole evidential picture. Evidence of post-transaction conduct was legally admissible, although its weight depended on its reliability and proximity to the transaction. Evidence of Iranian culture was relevant to Hassan’s actual mindset and to the evidential force of the presumption, but did not displace the English-law presumption.
6. The court found that the flat was put into Sam’s name for convenience and to assist visa applications, not as a gift. The funding evidence, the Family’s use of the flat, Hassan’s control of the relevant assets, the evidence of Duckworth and Postantzis, and the Amicus surveyor’s conversation supported that conclusion.
7. The court declined to determine Farimah’s possible right to occupy or equitable interest because that issue arose only in the alternative scenario that Sam was the beneficial owner, which did not arise after the principal finding.