Chapter 6 Scenario questions

. Anna and Bilal both contribute to the purchase price of a property as part of an investment scheme but the property is registered in Anna's sole name only. Anna contributed £200k while Bilal just £100k. Which of the following statements most accurately reflects how this property is held?

There is a rebuttable presumption that Bilal did not intend to make a gift of the £100k and therefore a resulting trust arises. Anna is taken as holding the property on trust for herself and Bilal, with Bilal enjoying a one-third share of the property commensurate with his contribution.

There is a rebuttable presumption that Bilal intended to make a gift of the £100k and therefore has no equitable entitlement in the land.

There is a rebuttable presumption that Bilal did not intend to make a gift of the £100k and therefore a constructive trust arises. Anna is taken as holding the property on trust for herself and Bilal, with Bilal enjoying a one-third share of the property commensurate with his contribution.

There is a rebuttable presumption that Anna holds 100% of the equity in the property unless Bilal can displace this with evidence of fraud or bad faith.

. Charles purchases a property which is registered in his sole name— he contributes £50k and his mother, Dina, contributes £50k. Charles's friend, Eve also purchases a property which is also registered in her sole name—she contributes £50k and her father, Finn, contributes £50k. How are the properties is held in these two scenarios? Is there a difference between the two? Select one of the following.

In the first scenario, the presumption of advancement will operate as a contribution towards the purchase price from mother to child is presumed to be a gift. In the second scenario, however, the presumption will not arise (father–child) meaning that Dina's contribution is presumed to be a gift and Charles will enjoy 100% of the equity, whereas Eve could expect to share 50–50 the equity in her property with her father.

In the first scenario, the presumption of advancement will not operate as a contribution towards the purchase price from mother to child is not presumed to be a gift. In the second scenario, however, the presumption will arise (father–child) meaning that Finn's contribution is presumed to be a gift and Eve will enjoy 100% of the equity, whereas Charles could expect to share 50–50 the equity in his property with his mother.

In both scenarios, the presumption of advancement will not operate as a contribution towards the purchase price from parent to child is presumed to be a gift. This means that both Charles and Eve, in the absence of contrary evidence, will hold 100% of the equity in their respective properties.

In both scenarios, the presumption of advancement will not operate as a contribution towards the purchase price from parent to child is no longer presumed to be a gift. This means that both Charles and Eve, in the absence of contrary evidence, will hold 50% of the equity in their respective properties; the other 50% being held by their parents under a resulting trust analysis.

. Gina and Idris are an unmarried couple in a romantic relationship. They decide to purchase a property which comprises a pub downstairs and a flat above in which they will reside. Gina contributed £40k and Idris £60k to the purchase price. The property is registered in joint names. The relationship breaks down and Gina asserts that she and Idris are entitled to a 50–50 split of the equity of the property. Idris argues differently that the equity in the property should be split 60–40 in his favour as he contributed more to the purchase price. Which of the following statements most accurately reflects the approach the court will take in this case?

The court would apply the structured judicial discretion under the Matrimonial Causes Act 1973.

The court would apply pure resulting trust principles as the pub is a commercial venture and therefore equitable entitlements would mirror the contributions made.

The court would only every apply Stack v Dowden (2007) principles as the property was purchased primarily as a home for the couple, meaning a starting point of 50–50 split in equity.

The court would consider this a mixed context (domestic/investment) and, applying the principles in Marr v Collie (2017), select between the resulting or constructive trust regime after close scrutiny of the facts of the case.

. Jessica purchased a property, The Elms, which was registered in her sole name but in which she lived with Khalid, her partner, as their family home. The property was purchased with the assistance of a mortgage in Jessica's name but Khalid, whilst not contributing directly to the purchase price, did take responsibility for the mortgage payments and paid the costs of renovation of the kitchen and bathroom. The couple split and the question arose as to ownership of the former family home. Which principles would the court apply in this case? Select one of the following.

As this case involved a house purchased as a family home, the court will apply Stack v Dowden (2007) principles, i.e. the starting point is sharing in equity—a presumption of equitable joint tenancy.

As this case involved a house purchased in Jessica's sole name, it is for Khalid to demonstrate that he has acquired an interest in the property applying the principles laid down by Lord Bridge in Lloyds Bank v Rosset (1989). Khalid will be able to rely on his payment of mortgage instalments as evidence of an express bargain and the renovation costs as detrimental reliance.

As this case involved a house purchased in Jessica's sole name, it is for Khalid to demonstrate that he has acquired an interest in the property applying the principles laid down by Lord Bridge in Lloyds Bank v Rosset (1989). There is nothing on the facts to demonstrate either an express bargain, implied bargain, or detrimental reliance. Khalid will therefore fail to acquire an interest in this property.

As this case involved renovation work carried out by Khalid, he will argue that he is entitled to an interest commensurate with his contribution under resulting trust principles.

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