Rebutting Presumption of Advancement

Jimmy (Beneficial interest)

The issue is whether Jimmy has beneficial interest in the property.

Beneficial interest in the property may arise through resulting trust, which can arise through direct payments towards purchase price. Mortgage payment can also amount to contribution towards purchase price. The presumption of resulting trust is rebuttable in certain relationships, such as, father and child. In such relationships involve presumption of advancement, unless there is evidence of the transferor intending to retain an interest in the property. The presumption of advancement would work to bar the presumption of resulting trust in favour of Jimmy in absence of evidence that shows that Jimmy intended to retain interest in the property. If Jimmy is able to prove that he intended to retain interest in Ivy House, only then Abigail will be bound by Jimmy’s beneficial interest. To conclude, Jimmy can rebut the presumption of advancement if he has retained title documents, or he may refer to his intention to retain as reflected in words or actions.

Nicky (Personal right)

The issue is whether Nicky has right to use Ivy House for driving to the train station.

Proprietary rights can bind the third parties (in this case Abigail) but personal rights are enforceable only between the grantor and the grantee. In Choudhary v Yavuz, the court has held that a personal physical activity, such as, using the stairway only amounts to the use of the stairway and does not create any proprietary interest. Fiona has granted a licence to Nicky to use the driveway so that it becomes easier for her to reach the train station. This does not amount to creation of proprietary right. To conclude, Abigail is not bound by Fiona’s permission to let Nicky use the driveway of Ivy House because this is a personal right and not a proprietary right.

Dipesh (Licence)

The issue is whether Dipesh is a tenant.

In order to be a tenant under a lease, there should be a right to exclusive use of possession of a property for a fixed or periodic term in return for a consideration of lump sum or periodical payments. A Licence Agreement merely entitles a licencee to use the property as per the terms of the Agreement and does not create any other interests in the property. Where the licence is made through a contract, then the terms of the contract with respect to consideration, and period are applicable. As Dinesh is not a tenant, but a lodger, he cannot claim the protection under the Protection from Eviction Act 1977, Section 3, which provides that eviction of a tenant can only be done under court order. As Dinesh does not have exclusive possession of Ivy House but only a spare room, it cannot be said to be an exclusive possession. Therefore, the agreement is in the nature of a licence and not a lease. To conclude, Dipesh is not a tenant even though there is a tenancy agreement, because he is living in a landlord occupied property.

Charles (Option to purchase)

The issue is whether the option to purchase is binding on Abigail.

An option to purchase is an equitable right in rem. The Law of Property Act, Section 53(1) provides that equitable rights in rem must be created in written document and signed. As Charles option to purchase is a pre-existing right vis a vis Abigail’s purchase of land, Land Registration Act 2002, Section 29(2) is applicable. It provides that priority of an interest which is a right in rem is protected if it is a registered charge or the subject of a notice in the register, or falls within the paragraphs of section 3. In this case, Charles can enforce the option to purchase against Abigail only if he had secured his interest through registration of charge and not otherwise. To conclude, Abigail can use the lack of registration defence to Charles claim of option to purchase.

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Jimmy and Second mortgage

The issue is whether the second mortgage overrides Jimmy’s interest.

Jimmy has beneficial ownership in the property and is also paying the first mortgage payments. If Jimmy is able to rebut the presumption of advancement, then Trusts of Land and Appointment of Trustees Act 1996, Section 1 is engaged for creation of trust of land, which means that Jimmy has beneficial ownership with Abigail. However, as this is unregistered interest, and Jimmy does not live in the property. If Jimmy were living there, a reasonable inspection of the property would have revealed the fact. To conclude, mortgagee will get a priority of interest as against Jimmy.

Table of Cases

Antoni v Antoni [2007] UKPC 10.

Ashburn Anstalt v WJ Arnold & Co, [1988] EWCA Civ 14

Choudhary v Yavuz [2011] EWCA 1314.

Credit & Mercantile plc v Kaymuu Ltd and others [2014] All ER (D) 49.

Curly v Parks (2004) EWCA Civ 151

Hurst v Picture Theatres Ltd [1915] 1 KB 1.

Midland Bank Trust Co v Green [1981] AC 513.

National Provincial Bank v Ainsworth [1965] AC 1175.

Scott v Southern Pacific Mortgages [2014] 3 WLR 1163.

Books

Bevan C, Land Law (Oxford University Press 2018).

McFarlane B, Hopkins N, Nield S, Land Law: Text, Cases, and Materials (Oxford University Press 2015).

Bray J, Unlocking Land Law (5th Edition, Oxford: Routledge 2016).