Chaudhary v Chaudhary [2013]

Chaudhary v Chaudhary [2013] EWCA Civ 858 examined the application of the presumption of advancement in the context of property transactions.

The central issue revolved around a property purchased by the son, with a £5000 contribution from his stepmother and father towards the mortgage deposit. Following the purchase, the son allowed his father and stepmother to reside in the house as tenants. A dispute arose when the son claimed rent arrears from the stepmother, and the trial judge initially ruled that the stepmother had no beneficial interest in the property, characterising the £5000 contribution as a premium or arrangement fee.

The Court of Appeal, however, overturned this decision, asserting that the stepmother possessed an 8% beneficial interest in the property due to the £5000 contribution made by her and her husband. Aikens LJ, delivering the judgment, underscored the crucial role of evidence in determining intention when applying presumptions of resulting trust and advancement.

Aikens LJ clarified that these legal presumptions are invoked only in the absence of clear evidence regarding intention. In this case, the Court of Appeal found that the father's intention was not to make a gift of £5000 but rather to eventually purchase the house from his son. The £5000 contribution was intended to offset the future purchase price, leading to the successful rebuttal of the presumption of advancement.

This case highlights the importance of considering the specific intentions of the parties involved in property transactions. It establishes that the presumption of advancement can be set aside when there is clear evidence that the transferor intended the contributed sum to be used to offset a future purchase of the property. The case serves as a reminder that legal presumptions should yield to the actual intentions of the parties, particularly in situations where evidence supports a different understanding of the financial arrangement.
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