AB v CD v EF (Beneficial Interest Application) [2025] EWFC 191 (B)

This judgment was delivered in private. The judge has given leave for this version of the judgment to be published on condition that (irrespective of what is contained in the judgment) in any published version of the judgment the anonymity of the children and members of their family must be strictly preserved. All persons, including representatives of the media and legal bloggers, must ensure that this condition is strictly complied with. Failure to do so may be a contempt of court.

IN THE FAMILY COURT AT BRIGHTON No. 1623-2330-0557-0728

B E T W E E N :

[2025] EWFC 191 (B)

Before

HHJ Farquhar

Between

ABApplicant

CDRespondent

- and –

Between

EFRespondent

Mr Calum Smith (instructed by DMH Stallard) for Applicant

Ms Lauren Lanson (instructed by Starke Family Law) for Respondent

Ms Victoria Francis (instructed by Keystone Law) for Second Respondent

Hearing Hearing date: 18-19 th March 2025

Judgment handed down: 14 th April 2025

JUDGMENT

Date 2025-04-14

[1]These are financial remedy proceedings between AB, the Applicant and CD, the Respondent. There is a dispute between the two of them as to whether the assets which would be distributed between them include a piece of land which is adjacent to the former matrimonial home. The Applicant states that it is beneficially owned by the parties whereas the Respondent states that it is both legally and beneficially owned by her son, EF, the Second Respondent.

[2]As I stated during the hearing this is a particularly poor piece of litigation. The land involved has been valued at £137,500 and after costs and CGT it is estimated that the net proceeds of sale would be in the region of £120,000. In pursuing this issue, the Applicant has incurred costs of £34,500, the Respondent £32,737 and the Second Respondent £36,685. That is just short of £104,000 that has been spent arguing over an asset valued at £120,000 – 86.66% of the value of the land. That in itself is not a proportionate use of the parties’ money. Further, it is accepted by all parties that the decision will turn upon the oral evidence of each of them and as such the litigation risk is all the higher.

[3]Further, there is an obvious benefit to the parties to settle this case. The value of the former matrimonial home together with the land in question is stated to be between £250,000 and £500,000 greater than without the land. A settlement could have benefited all parties as the Applicant and Respondent could have agreed to the Second respondent receiving certain monies and still be better off than they would have been if it is decided that the Second Respondent is entitled to the property as a whole. It was therefore surprising to say the least that at the commencement of these proceedings I was informed that there were no open offers save for the parties stating that they would agree to accept everything that they were looking for. In 2025 this is not the way to conduct litigation and to say I am unimpressed is understating the position. Nonetheless as I stated in court if a decision is required to be made then that is what I will do.

[4]In considering this matter I have read the very helpful notes provided by Counsel for each of the parties as well as reading all of the pleadings and the witness statements. I have also heard evidence from each of the parties together with TM’s friend who was the gardener at the property.

[5]The facts

[6]The parties first met through an online dating app in early 2012. The first face-to-face meeting took place on 4th February 2012. Staggeringly, they put in an offer to purchase the family home a mere 16 days later on 20th February 2012. That was a property valued at £975,000 and it completed on 5th April 2012. They did not in fact marry until 19th October 2013. At the same time as purchasing this property an adjacent piece of land was purchased of approximately 7 acres (“the Land”). It is agreed by all that this was purchased in the name of the Second Respondent but was funded by the Applicant and Respondent.

[7]The parties separated in 2024, after a previous brief separation in 2023. An application for divorce has been filed and a Conditional Order pronounced on 29th January 2025 and the Final Order came through during this hearing.

[8]The parties Positions

[9]The Applicant. He states that the parties originally were intending to purchase both the family home and the land together and it was only once it was pointed out that there was an issue in relation to Stamp Duty thresholds that any consideration was given to placing the two parcels in separate names. He agrees that it was decided to place the land in the name of the Second Respondent but is adamant that at no point was it stated that this was a gift. He states that there is a common intention constructive trust or alternatively a resulting trust for the land to be held by the Applicant and Respondent beneficially.

[10]The Respondent and Second Respondent. The Respondent agrees that initially it was intended to purchase both the home and the land in the joint names of the Applicant and Respondent but that was altered to deciding that it should be gifted to the Second Respondent in order to ensure that he felt part of the new family that was being created. At the time the Second Respondent was a 20 year old student who had just lost his maternal cousin with whom he had lived since his teenage years. It was stated that he was vulnerable at this stage.

[11]The Law in relation to finding of facts.

[12]This is a case in which the factual issues that are in dispute are vital to decide before considering the legal issues. In relation to this I apply the following principles:a. The party that raises the point in dispute has the onus to prove that point.

b. The standard of proof is the balance of probabilities that is to say it is more probable than not.

c. It is a binary system, if it is proved on the balance of probabilities then it has occurred and vice versa. There is no room for a finding that it might have occurred.

d. In considering an issue the court must consider all of the evidence and not evaluate it in separate compartments.

e. The Court must form an assessment of the witnesses’ credibility and reliability.

f. The Court must take into account the fact that just because an individual has lied about one matter it does not follow that he or she has lied about everything. This is the so-called Lucas direction. There are many reasons why a witness may lie such as shame, humiliation, misplaced loyalty, panic, fear, distress, confusion and emotional pressure.

[13]The facts ascertainable through documents and/or agreed.

[14]The central issues in dispute in relation to discussions about gifts and/or beneficial interests comes from the oral evidence of the parties. It is always important to understand the issues which are set out in writing/not disputed as they provide the context within which to consider the disputed evidence. I set out my understanding of the evidence that is not disputed:a. The Applicant and Respondent first met face-to-face on 4th February 2012 and almost immediately were discussing the purchase of a property together.

b. The parties viewed several properties on 18th February 2012 including the one that they purchased known as the FMH in East Sussex. The Respondent states that her cousin used to exercise her horses in the land just behind that property.

c. The Applicant and Respondent put in an offer to purchase the property for £975,000 which was accepted. This is set out in a Memorandum of Sale dated 27th February 2012 which states that the purchasers are to be the Applicant and Respondent and that completion must be by 5th April 2012.

d. The Applicant and Respondent also put in an offer (originally £50,000 but increased to £60,000) to purchase the Land and again the later offer was accepted. The Memorandum of Sale dated 27th of February 2012 states that the purchaser was to be the Applicant and Respondent. It was stated that exchange of contracts was to be as soon as possible and simultaneous with the exchange on the house with 50% of the balance being paid six months after completion of the house and the remaining 50% one year after completion of the house.

e. On 27th February 2012 the Respondent contacted Mr C, a conveyancing solicitor, to instruct them on the conveyance.

f. On 28th February 2012 the Conveyancer sent an emailed letter to both the Applicant and Respondent in which he confirmed the instructions. The letter included the following:

“as I mentioned I have some concerns about the second contract and whether or not this device avoids SDLT at 5% on the whole consideration. Transactions are considered to be linked if “they form part of a single scheme, arrangement or series of transactions between the same vendors and purchaser, or in either case persons connected with them.”

Linked transactions need the same seller or buyer or connected parties. They will not, therefore, arise on transactions between third parties – (he then set out examples and continued) so if you are connected to the Respondent we may have an issue. The legislation says that you are connected if you are married or related. I understand you are not yet married; so provided only one of you buys the house and the other buys the Land it probably works. We may need to consider this further.” g. The Stamp Duty to be paid upon the purchase of the house was £39,000. This was calculated at a rate of 4% which applied to sales between £500,000 and £1 million. If the sale was between £1 million and £2 million the rate increased to 5% in which case the total Stamp Duty would be £51,750. The difference in Stamp duty was one of £12,750 if the Land and House were not purchased as linked transactions. h. There is an email from the Respondent to the Applicant dated 20th February 2012 which states “I’ll be calling a solicitor re-stamp duty et cetera.” i. On 1st March 2012 the Conveyancer sent the Applicant and Respondent his Terms of Business in which he stated “you have also agreed to purchase 6 acres of land adjoining the FMH, … At the price of £60,000.” j. On 2nd March 2012 the Respondent contacted the Conveyancer and spoke to his assistant who then sent an email to the Conveyancer stating “the land is to be in the name of her son, Mr J. His actual name is JT but he is allowed to drop the T so therefore there will be no connection to her and the Applicant. They were going to purchase it in the Applicant’s daughter’s name but her name is L. Mr J will be 21 on 28th of March. The Applicant and Respondent will be getting married but not just yet.” k. On 8th March 2012 the Respondent wrote to the Conveyancer to place the property she owned into the joint names of herself and the Applicant and within that email she stated “(J) knows about the field and his email address is ……..(an email address that did not contain any reference to the Respondent’s surname)”. l. On 12th March 2012 the Conveyancer wrote to the Second Respondent in which he stated the Respondent “will no doubt be happy to bear the search fees but you will ultimately be responsible for a registration fee of £80 to register your interest in the land at the Land Registry. Your mother has convinced me that you are buying this property entirely independently of her transaction as a personal investment. I must warn you, however, that Revenue and Customs may argue that the purchase of your land is a linked transaction, in which case Stamp Duty will be payable at the rate of 5% on the cumulative purchase price together with a penalty.” m. On 18th March 2013 (just before completion of the purchase of the Land) the Conveyancer wrote to the Second Respondent and copied in the Respondent stating “At the time of your mother’s purchase of the adjoining property last year, I did question whether or not the transaction to you was, in fact, a linked transaction bearing in mind the relationship. She was clear with me that yours was in fact an independent transaction and that you were independently resourced in buying the fields for your own use. I have to advise you once again that the District Valuer may take a different opinion on this and he if he decrees that the transaction is linked, an additional 1% stamp duty would be payable on the total price for the FMH and the field. I am copying your mother in on this email so that she is reminded of the position.” n. On 28th March 2013 the Conveyancer wrote to the Second Respondent having seen that he had set out his address on the Stamp Duty Land Transaction Return as the family home stating that he refused to continue to act saying “I note that you have now indicated that your permanent address is at the FMH. Now that you have advised me of this, I am afraid I will not be able to submit the Stamp Duty Land Transaction Return and Land Registry application on your behalf since this is clearly a linked transaction and a revised Transaction Return should be submitted and Duty should be paid on the whole consideration. You will understand that I am not willing to prejudice my Practising Certificate for something that I believe is fundamentally wrong. I will therefore supply you with the forms following completion so that you can decide what you wish to do without my input.” o. It is agreed that the funds to purchase the land were paid by the Applicant and Respondent to the Second Respondent in three tranches. On 29th March 2012 the Respondent paid £6000 to the Second Respondent (it being accepted the Applicant paid her £3000 shortly thereafter in respect of his share), on 4th September 2012 the Respondent transferred £29,000 to the Second respondent and finally on 25th March 2013 the Applicant transferred £27,047 to the Second Respondent. On all three occasions the Second Respondent shortly thereafter transferred more or less the same amounts to the solicitors dealing with the purchase. p. The purchase of the house was funded as follows: i. Mortgage in joint names £585,000 ii. Mortgage of Applicant’s flats £242,586 iii. Remortgage of Applicant’s property £72,521 iv. Applicant’s savings and endowment policy £117,000 q. On 30th November 2012 after having completed on the house but not yet on the land the Respondent wrote to solicitors in relation to a planning issue in which she stated “we have approximately 14 acres and wish to erect a new stable block and outside arena, comprising 13 stables and two pony stables …” r. The Applicant and Respondent applied for planning permission in 2015 in which they had to provide information about the property. The planning decision was dated 8th January 2016 and includes the following “There is also adequate grazing available within the 14 acres of land owned by the applicant to support keeping additional horses at the site.” s. In August 2023 the Applicant and Respondent were considering selling the house and the Respondent obtained a valuation without the Applicant. This valued the property at between £2.25 million to £2.5 million. The valuation included the disputed land. t. On 17th March 2024 Mr Vines from Savills wrote to the Respondent in relation to the value of the property. He stated “further to our discussion on Friday, I thought about the values for both options. If you were to sell the 7 acres of land on the open market with a separately metered water supply but with no power or outbuildings, it would in my opinion be worth in the region of £125,000-£150,000. However, the degradation to the value of the house would be far greater than this I am afraid. Not only would it half the land offering from 14 to 7 acres with 14 acres being of great importance to a serious equestrian buyer but the property would be affected by regular comings and goings across the house’s land with no element of control as to when this may occur. I would envisage value dropping considerably due to this. Hard to say how much by until we test it on the market but I would envisage a figure in the region of £1.75 million being a reasonable starting guide price. As you will recall I valued the house on 18 August 2023 at £2 million to £2.25 million. So in summary, I wouldn’t advise you doing this if you’d like to obtain the best value.” u. The Land was not registered into the Second Respondent’s name until 2024.

[15]The Applicant’s case.

[16]The Applicant states that the Respondent presented herself as an independent wealthy individual who asked him to marry her within two weeks of meeting. They were swiftly looking at buying a property for £1 million and he was considering remortgaging the rental flats that he owned in Newcastle as well as his home in London. It was suggested that the Respondent would remortgage her flat as well as borrow £100,000 from her sister (this did not transpire). The balance would be funded by a mortgage. It was discovered that the Respondent would not be able to obtain a mortgage on her property due to an inability to prove her income at the time and consequently it was placed in the joint names of the Applicant and Respondent to ensure that further borrowings could be obtained.

[17]The monies could not be released from the Respondent’s flat in time for the purchase so all of the purchase money was coming from the Applicant. He stated that he became suspicious of the Respondent and even considered pulling out of the purchase at one point. The Applicant stated that he was in charge of obtaining the finances and the Respondent was liaising with the estate agents and the conveyancing. The suggestion had been made by the solicitor that it may be possible to put the house in the name of the Applicant and the land in the name of the Respondent so as to avoid the extra Stamp Duty. It is possible that the parties would not be connected because they were not married at the time.

[18]The Applicant states that the Respondent did not wish the property and the land to be placed in the separate names of the parties and it was agreed that the Land should be placed in the name of the Second Respondent. The Applicant is adamant that it was never discussed or suggested that the Land was a gift to the Second Respondent. He states that it was placed in his name purely as a legitimate way of reducing the Stamp Duty liability and he adds in his witness statement that “this too was the Respondent’s understanding of the transaction and that she only created the narrative of gifting the land to the Second Respondent after our separation and ahead of the inevitable division of our financial assets.”

[19]The Applicant states that he was very much in the background in relation to the conveyancing and wasn’t aware of what was being said. He states that he was not informed by either the Respondent or the Second Respondent that the Conveyancers considered the transactions to be linked and that the solicitor refused to register the interest at the Land Registry. He claims that he had no idea they were breaking the law.

[20]The Applicant states that when they were considering planning permission that the Second Respondent was never notified or informed of any of the proposals or developments and that it did not occur to either himself or the Respondent to consult him. This is due to him not having a beneficial interest in the property it is stated. He accepts that there were occasions when the Second Respondent did joke about selling the land to a large corporation but this was nothing more than being said in humour.

[21]In his oral evidence the Applicant added the following:a. At no point did the Second Respondent ever thank him for the land.

b. He accepts that he and the Respondent did go out for a meal on 3rd March 2012 but he stated that they did not have any discussions about the property. There was no discussion about gifting the land to the Second Respondent.

c. He confirmed his understanding that there were discussions about the Second Respondent dropping the second part of his double-barrelled name – T– so that it did not appear he was connected to the Respondent.

d. The Applicant has not made any contact with HMRC to suggest that there is any Stamp Duty owing.

e. He agreed that the Land would be known as “Mr JT’s Land”.

[22]Issues with the Applicant’s case

[23]There are a number of points that have been raised, legitimately, in relation to the Applicant’s position. These include:a. He does not state at any time that he had discussions with either the Respondent or Second Respondent as to precisely how the Land was to be held.

b. There is not one single written document in email or text message or side note to state that the Second Respondent was holding the property on trust for the Applicant and Respondent.

c. There is no reference to any Trust within the TR1.

d. The Applicant had purchased a number of properties and would be familiar with the way that Stamp Duty operates and consequently would not be as naïve as he states he was.

e. The initial Form E prepared by the Applicant voluntarily did not make any separate reference to the Land. It was only when he filed his formal Form E that he made any reference to it.

[24]Impressions of Applicant’s position.

[25]The Applicant did all he could to distance himself from any knowledge as to the true position in relation to the Stamp Duty. The reality is that these parties were fully intending to put the house and the Land in the joint names of the Applicant and Respondent. The only reason that that did not occur was due to the issue in relation to Stamp Duty. If that had not arisen, then there would have been no consideration of placing the land in the name of the Second Respondent. It simply beggars belief that thereafter there was no discussion between the Applicant and Respondent on this topic or indeed between the Second respondent and the Respondent. This was the central issue to the purchase of the Land at the time. The evidence from the Applicant suggesting he was unaware of the position was unconvincing at best and I do not accept that he was not fully aware of the position or would not have discussed this in detail with the Respondent. To that extent I do not accept that the Applicant was being honest in his evidence.

[26]The Respondent’s Case.

[27]The Respondent’s case as pleaded is set out quite simply. It was accepted that the original offers for both the home and the Land were in the joint names of the Applicant and Respondent and that they were subsequently advised about possible stamp duty implications of purchasing them in both names. The divergence of cases appears at paragraph 7 of her defence which was dated 17th January 2025. It reads “the Applicant suggested that the Applicant and First respondent gift the monies required to purchase the Land to the Second Respondent who would hold the legal and beneficial interest in the same…… The intention of the Respondent and Applicant in making the gift was to allow the Second Respondent to hold the land until such time as you wish to sell it to fund the purchase of his own property. Further, the decision to make the gift to the Second Respondent was around the same time as the First Respondent agreed to transfer another property held in her sole name… Into the joint names of the Respondent and Applicant for nil consideration.”

[28]The Respondent’s witness statement was provided one month later and set out with some particularity the time at which the Applicant stated he wished to gift the land to the Second Respondent. It is stated in her witness statement that they went out for a meal on 3rd March 2012 in Greenwich and shared information about each other’s families. The Respondent adds “I had been reflecting on how important it was for JT to feel included in this new chapter of my life. We spoke openly about my cousin’s passing, its impact on JT, and the sentimental value of the Adjacent Land. It had been part of JT’s childhood, with my cousin renting it out for our horses, and following her passing, carried even greater significance. L and I discussed how I would take his daughter under my wing and teach her to ride. I did not want JT to feel left out or distanced from me as my relationship with L progressed so rapidly. After everything I had explained, I vividly remember L removing his glasses, looking at me lovingly, saying that we should gift the field to JT so he felt part of the family and he could sell it when he was ready to settle down.”

[29]The Respondent accepted that at this point the Applicant and Second Respondent had not met but she was able to give a number of reasons for this generous offer:a. To ensure the Second Respondent did not feel pushed out by the new relationship.

b. The parties were making snap decisions extraordinarily quickly at the time as is evidenced by the purchase of the home.

c. The Respondent had placed her property into the joint names of herself and the Applicant and this was a way of a quid-pro quo..

[30]The issues with the Respondent’s evidence:a. Just as with the Applicant’s case there is not a single document referring to the provision of these monies as a gift – not an email, WhatsApp or text message.

b. The detailed points of defence filed one month before her witness statement made no mention whatsoever of the meal in Greenwich and the offer from the Applicant.

c. The Respondent now says that it was her intention all along for the Land to be gifted to the Second Respondent even though the original memorandum of sale was clearly in the name of the Applicant and Respondent.

d. The Respondent states that she is very close with the Second Respondent and indeed in his evidence the Second Respondent stated that they talk every day. It is striking that after a hugely important decision that she says would have been really appreciated by the Second Respondent that she did not immediately phone him the next day and discuss matters. It is said that she phoned him on a date unknown when he was in the laboratory at university. I assume that must be a weekday and therefore not immediately after the decision to gift him the land (a Saturday). The Respondent did not strike me as someone that would wish to sit on this information if it was to be told to the Second Respondent.

e. The Respondent was less than transparent with the Conveyancer, her solicitor. In the email of 12th March 2012 he states that “your mother has convinced me that you are buying this property entirely independently of her.” This was factually incorrect as the Respondent was aware at all times that she and the Applicant were providing the funds for this purchase.

f. In his email of 18th March 2013 the Conveyancer repeats the position in which he states “she was clear with me that yours was in fact an independent transaction and that you were independently resourced in buying the fields for your own use.” It is difficult to see how this could be anything other than dishonesty on behalf of the Respondent. It is clear that she had informed the solicitor that the Second Respondent was independently funding the purchase and indeed that the Land was for his own use. Those two statements are incorrect and the Respondent well knew it.

g. The Respondent states that at no time did she discuss the Stamp Duty issues with the Second Respondent. This is simply impossible to accept. They had both received letters from a solicitor telling them that he did not believe the position and that Stamp duty was due. These are parties that speak to each other on a daily basis, and it is said that the Second Respondent would have been anxious about this position. This issue would have been top of the agenda for their discussions and I simply cannot accept that it was not something that was discussed.

h. The Respondent stated in oral evidence that it was always the plan for it to be a gift to the Second Respondent in her mind even before the matter was discussed on 3rd March 2012. This makes it even more surprising that she says it was the Applicant that raised that as an issue at the meal on 3 March 2012. Surely if it was something that was in her mind already it would have been her suggestion. Further there is no mention of this previous intention within her pleadings.

i. In terms of the email note to the Conveyancer on 2nd March 2012 that referred to dropping the second part of the Second Respondent’s name the Respondent in her evidence simply stated “if that is what she wrote it must have been discussed”. This is again an example of the Respondent attempting to hide from the reality of the position. It was clear that she was discussing the dropping of the part of his name that would link him with herself in an effort to evade Stamp Duty. The Respondent well knew what she was doing and why at the time that that was being discussed. This was also clear from the email that she sent to the solicitor referencing the Second Respondent as Mr (J) and not using his full name, Mr JT.

j. The Respondent stated, in similar form to the Second Respondent, that he had the £60,000 and he could have done whatever he wanted with it. This is simply a nonsense and has never previously been stated. As soon as the monies were received they were paid over to the solicitors purely for the purchase of this land and that was the only reason that the monies were provided.

k. The Respondent accepts that what was set out within the planning permission applications refer to the property as a whole being one of 14 acres. This clearly includes both the Home and the Land.

l. There is no mention in the original valuation in 2023 of the land being held separately.

m. Even at the second valuation prepared by Savills there is no mention of the house and the Land being held separately, it simply states on 17 March 2024 that having had the discussions with Savills said they had thought about the two options and “if you were to sell the 7 acres of land separately” - no mention of a third party being involved in the sale of the land.

[31]The animosity of the Respondent towards the Applicant shone through her oral evidence with following examples:a. There was a very long hesitation within her oral evidence when she finally agreed that the email that was sent on 24th February 2012 indicating that the house and the Land would be purchased by both the Applicant and Respondent. This was so even though it was her pleaded case that this was factually true. It appeared that she simply could not bring herself to say this as she perhaps feared it might adversely affect her case. It would not have done so.

b. The Respondent was desperate to raise the issue of how much effort she had to put in to helping raise the Applicant’s young daughter who was “very difficult” and she also was quick to point out that she did not wish to mention all of the issues that the family member of the Applicant had with drugs. This was said with considerable feeling by the Respondent, and it was clear that she wants to do nothing more than dish the dirt. It was particularly unedifying and does not cause this court anything but concern about the Respondent’s evidence.

c. The Respondent stated that the Final Order within the divorce had been granted the previous day. I pointed out to her that that was risky as it would mean that she would not be able to claim on the Applicant’s pension if he died and she better hope that he does not fall under a bus or the like tomorrow. Her instant reaction was that she would not care if the Respondent died. There was nothing within her demeanour to suggest other than she fully meant that.

[32]The evidence of the Respondent was provided with a huge degree of animus towards the Applicant. Indeed, she had a total disdain for any of the questions or any suggestion that what she is saying may not be true. She gave the distinct impression of not understanding why anyone could not believe what she is stating and attempted to put down counsel when she was being asked questions. An example of this is when it was being put to her that they had built pipes on the Land without referring the matter to the Second Respondent. Rather than respond to the question she picked up counsel on the use of the word ‘build’ because one does not build pipes but simply lay them. This was all said with a huge degree of disdain towards the whole court process. I am of course used to hearing separated partners giving evidence against each other and holding each other in contempt. However, I suspect that the Respondent was the most contemptuous and dismissive former partner that I have come across in my 20 years of being a judge. Frankly, her evidence was a very hard listen.

[33]The only conclusion I can reach is that the Respondent has been dishonest on certain matters within this case. Further, due to the extreme animosity that she feels towards the Applicant I am satisfied that she does not have any difficulty in being dishonest if she considers that it would harm him. It is always important for a judge not to take a witnesses’ demeanour as a crucial method of considering their credibility but in this case the sheer venom with which the Respondent delivered her replies made it difficult not to consider that she would be willing to go to any length to ensure that the Applicant did not get his way. The question to consider is has she been dishonest in relation to the gift issue.

[34]The Second Respondent’s case.

[35]This mirrored the Respondent’s position in that he confirms that he was a student at University at the time of this transaction aged 20. He had not been involved in any previous property transactions. He had lived with his maternal cousin until she died in 2011. The Second Respondent states that he was in the University department when he got a call from his mother in or about early March 2012 in which she offered to give him the money to buy the backfield as a gift from her and L. He said that he was told by his mother that the idea was that it would give him something to make him feel part of the family and he considers it particularly appealing to him because he would own some of the land that he had spent a significant amount of time on in the past as his cousin had exercised horses on the field. It was the Respondent that first got in touch with the Conveyancers but thereafter they were in contact with the Second Respondent.

[36]There is no mention within either the pleadings or the witness statement of the Second Respondent ever thanking the Applicant for the gift. He says in his oral evidence that he was sure he would have said thank you although he accepts that he would not have sent a card as that is not something that he would be used to doing. The Second Respondent says he had no understanding of Stamp Duty and he thought as it was a gift there was no Stamp Duty owing. He said he had understood that the solicitors had thought it might be a linked transaction simply because he had used his mother’s address on the relevant form and that he had spoken to the solicitor after the messages he had received and they said it should be fine and he just needed to complete the forms with his university address.

[37]In his oral evidence the Second Respondent confirmed that he would speak to his mother on a daily basis. He recalled when he first met the Applicant but could not remember whether it was before or after he had been told about the gift of the land. He stated that he knew of no plan to avoid tax and that he had not spoken to the Respondent about it being a possible linked transaction because he did not think it would apply. He accepted that he had done nothing in an attempt to convince the solicitor it was not a linked transaction because he did not need convincing, and he could see no reason why he would be concerned about stamp duty at the time.

[38]The Second Respondent stated that the money had been gifted to him and “I could have done anything with it – there was no attachment to say that it must be spent in a particular way.” He didn’t pass the information onto the Solicitor that the money had come from the Applicant and Respondent as he did not consider that there was a need to do so. He said he had not thought that it would have been an option for the Applicant and Respondent to pay the money directly to the solicitor without going through him. The Second Respondent stated he did not get the impression that the Conveyancer was concerned about the issue when he spoke to him on the phone.

[39]The Second Respondent stated that it was his mother’s intention to give him a gift and it was not her plan to avoid stamp duty. He confirmed that he did mention to the Applicant and Respondent that he would sell the field to a large corporation …. which was a joke due to his father being one of the founders. He stated that this had been said sometimes to stop arguments between the Applicant and Respondent.

[40]Issues with the Second Respondent’s evidencea. He states that he did not consider there was any issue in relation to the purchase of the Land being a linked transaction. This is in complete contradiction to the letters that he was receiving from the Solicitor.

b. The Solicitor stated he would not proceed at the risk of losing his Practising Certificate. Even for someone not acquainted with property transactions this would surely raise alarm bells.

c. The correspondence referred to the land purchase being an independent transaction and that you were independently resourced in buying the fields for your own use. This was clearly not the case yet the Second Respondent deliberately withheld this information from the Solicitor. Why? He knew he had not provided the finance himself and he was not intending to use the fields. This was dishonest.

d. The suggestion that he could have done whatever he wished to do with the £60,000 that was provided to him is a simple nonsense. The only purpose of providing him with the funds was to carry out this transaction. If he had not used the first tranche of £6,000 as the deposit he would never have got the second and likewise the third tranche of £27,000. It seems to be a recent idea that has been alighted upon as it was not set out within his statement. It is notable that both he and his mother came out with this suggestion in the witness box, it never having been raised previously.

[41]Findings

[42]Was there a gift? This is the stark question. If I am satisfied that the Respondent and Second Respondent have proved that it was a gift then there is no doubt as to the result in terms of this issue. The land would be held both legally and beneficially by the Second Respondent. The first part of the evidence relating to the gift comes from the Respondent herself. As I have stated above, she holds the Applicant in total contempt and I am entirely satisfied that she would do whatever she could to put him down. There is absolutely no doubt in my mind that this would include making up a story such as the gift. It is striking that there is no mention whatsoever of the meal on 3rd March 2012 in her pleadings and that it features so heavily within her witness statement. How can that be the case? Further I am entirely satisfied that the Respondent has attempted to “over egg the pudding” within her oral evidence as I have referred to above.

[43]There are other times at which the Respondent has been dishonest as with her dealings with the solicitor in failing to disclose that she was funding the purchase and also that it was her and the Applicant would be using the land and not the Second Respondent as she had obviously told the Solicitor. Further the Respondent saw no difficulty whatsoever in including the Land when making her planning applications both in 2012 and 2015. Further, when the work was being carried out on the land there was no discussion whatsoever with the Second Respondent. None of this points towards the fact that this was a gift to the Second Respondent. It is also odd that there is nothing in writing either formally or informally that this was a gift.

[44]It is submitted on behalf of the Respondent that the idea that it was a gift makes sense because at the same time she transferred her property into the joint names of the Applicant and Respondent. It is suggested that the gift was a quid pro quo for that decision and consequently that it supports a finding that it was a gift. I am satisfied that the purpose of the transfer into the joint names of the Applicant and Respondent was in order to be able to raise further funds on that property and that could not be achieved if the Respondent was the sole owner. It follows that this position does not support the Respondent’s case. I would also add that it was the Applicant that provided all of the monies that were put towards the purchase of the house save for those that were funded by the joint mortgage. This totals £420,000 which was not matched by the Respondent at all and would be more than ample evidence of his commitment to the relationship and it would not require there to be any gift to the Respondent’s son.

[45]The evidence of the Second Respondent was not convincing for all of the reasons set out above. He clearly was also dishonest with the Conveyancer and I cannot accept that he was unaware of the important issues in relation to Stamp Duty. It is impossible to read the documentation he had received from the solicitor and not be aware that this was a major issue. It is also simply dishonest to suggest that this was not something that was frequently discussed with his mother in their daily phone calls. It was suggested that he would have no reason not to be dishonest. That is ignoring the fact that if he is successful he would be entitled to a piece of land that is now valued at £120,000 net and his evidence was that he wished to purchase his own property and use that as a deposit. That is precisely what one would consider a motivation not to be honest. I have no doubt that the Second Respondent is particularly loyal to his mother and is very much in her thrall. He would follow her lead if it was required, and I am satisfied that that is what has occurred on this occasion.

[46]The only supporting evidence in relation to the gift is TM’s friend who was the gardener at the family home. She confirmed that she had been known to the Respondent prior to the purchase of this property as she had worked for her at her previous property. She lived in the London area and therefore when she was carrying out gardening work she would stay with the Applicant and Respondent and would eat with them. She has subsequently become a good friend of the Respondent. She confirmed that she had discussed the issues involved before writing her statement as she needs to know what the case was about in order to be supportive.

[47]Part of her evidence was that the field in question was always referred to as Mr JT’s field. This is now agreed between all of the parties. The mere fact that it was referred to as Mr JT’s field does not assist in deciding whether it was gifted to him or whether he was simply holding the legal title. The important part of TM’s friend’s evidence was when she states that she was having dinner one evening with the Applicant and Respondent and she states “they were discussing how important it was to ensure that their two children were treated equally and how best to integrate their families. TM told me that she and L had decided to give the Adjacent Land to JT to help support him in buying a home of his own in the future, once he had established his career. This was so he wouldn’t feel left out, as both TM and L were conscious that TM was putting a lot of effort into looking after L’s daughter.”

[48]TM’s friend was not able to state precisely when this was said but it was fairly early on in the two families coming together. This would mean that this discussion took place some 13 years ago now. She confirmed that she was first asked to provide a statement in either January or February 2025.

[49]Guidance has been provided in how one should consider such issues by Leggatt LJ in Gestmin v Credit Suisse

[2013] EWHC 3560

“Memory is especially unreliable when it comes to recalling past beliefs. Our memories of past beliefs are revised to make them more consistent with our present beliefs. Studies have also shown that memory is particularly vulnerable to interference and alteration when a person is presented with new information or suggestions about an event in circumstances where his or her memory of it is already weak due to the passage of time. The process of civil litigation itself subjects the memories of witnesses to powerful biases. The nature of litigation is such that witnesses often have a stake in a particular version of events. This is obvious where the witness is a party or has a tie of loyalty (such as an employment relationship) to a party to the proceedings. Other, more subtle influences include allegiances created by the process of preparing a witness statement and of coming to court to give evidence for one side in the dispute. A desire to assist, or at least not to prejudice, the party who has called the witness or that party’s lawyers, as well as a natural desire to give a good impression in a public forum, can be significant motivating forces.”

[50]It is clear that TM’s friend was aware that the field was known as Mr JT’s field. It would be surprising if someone who was not personally involved with such a transaction to recall the precise discussions of a meal some 13 years previously which had not been discussed since that date. The reality is that I suspect TM’s friend would have no understanding of the difference between legal and beneficial ownership as it is a construct with which few people are familiar. It may well be that she was aware that the property had been transferred into JT’s name but that is very different to it necessarily being a gift.

[51]As I have stated above I have little confidence in the honesty of the Respondent and it may well be that she has assisted TM’s friend in her memory, either directly or indirectly. There have obviously been discussions between her and the Respondent for the witness statement to be prepared. As this is effectively the only evidence provided by anyone other than the parties involved it is important to consider whether it is genuinely independent. As she states she is a good friend of the Respondent I cannot consider this as independent evidence. It is certainly not evidence that makes it clear in my mind precisely what was said. When I take into account what Leggatt LJ set out above I cannot be satisfied that the memory that TM’s friend is relying upon is her independent thoughts but would have been influenced strongly by her friend, the Respondent. As such it is not sufficient to swing the pendulum in favour of a finding that this is a gift.

[52]Having considered all of these matters I am not satisfied on the balance of probabilities that it was agreed that this transaction was a gift from the Applicant and Respondent to the Second Respondent. I am satisfied that the Land would have been purchased by the Applicant and Respondent in their own names but for the issues concerning stamp duty. It was due to that issue that the decision was made to place it in the name of the Second Respondent in the hope that that device avoided Stamp Duty. There was no other reason for that occurring. The Respondent discussed the issue with her solicitor to suggest dropping the Second Respondent’s second part of his surname to make it look as if he was not connected to her in any way. The only reason for doing that was to attempt to hide the reality and that was again done purely to avoid stamp duty. I am further satisfied on the balance of probabilities that this was discussed in full between the Respondent and Second respondent and that he, the Second Respondent, was fully aware of the reason the property was put in his name. He would have been certain of this upon reading the letters from his solicitor. It is accepted by all that there were no discussions between the Applicant and the Second Respondent in relation to this issue.

[53]As a result of this finding, I discount the option that the land has been gifted to the Second Respondent. However, that does not mean that he is not the legal and beneficial owner. I must consider the legal position as far as the Applicant’s case is concerned.

[54]The legal position

[55]The starting point in considering the legal position is that equity is presumed to follow the law and consequently the beneficial interest in the Land must be assumed to reflect the legal title absent clear evidence to the contrary as was made clear in Stack v Dowden

[2007] 2 AC 432

. It must fall to the Applicant to establish that the beneficial ownership of the Land differs from the legal ownership. The Applicant relies on the case of Laskar v Laskar

[2008] EWCA Civ 347

to state that the presumption would not apply. The Court of Appeal stated in that case that because the purchase was not between an intimate couple, the property was not intended to be their joint home and the parties lived independently of each other and the investment was very much an investment which caused the presumption not to apply.

[56]I am satisfied that this case is not akin to Laskar as I have already made a finding that this property was not gifted to the Second Respondent and that was the only basis upon which it could be considered as an investment. The reality is that it was part of the purchase of the property as a whole which was being lived in by the Applicant and Respondent as their joint property. The purpose of the purchase of the land was not for investment but simply to ensure that the property as a whole could be large enough to be an ‘equestrian property’. This case is easily distinguished from the facts in Laskar.

[57]Common Intention Constructive Trust.

[58]It is accepted by the Applicant that there is no express declaration of trust in this case and accordingly the argument centres on whether he can prove a Common Intention Constructive Trust. The parties have each made reference to a number of cases concerning the correct approach that the Court should take in these cases. I do not intend to set out all of the authorities that are referred to but it seems to me the test set out by counsel for the Second Respondent is a fair summary. Ms Francis sets out the following:

[59]The law is set out in Lewin on Trusts, 20th Edition, at 10-063, as approved by Moor J in Paul v Paul

[2022] EWHC 1638 (Fam)

at [24]):

“When a claim is made by a person to displace the presumption that the beneficial ownership of property follows the legal ownership in a case where there is no express declaration of trust, the following questions must be addressed: (1) Does the case fall within the domestic consumer context, such that the common intention doctrine applies? (2) Is there evidence of an actual common intention, in the form of an agreement, arrangement or understanding between the parties that the beneficial ownership should not follow the legal ownership, either at the date when the property was first acquired or at some later date? (3) In the absence of such a common intention, can an agreement, arrangement or understanding to this effect be inferred from the parties’ conduct? (4) Has the claimant relied to his detriment on the common intention relied upon? (5) If there is an actual common intention, does it extend, either expressly or by inference, to the shares in which the property is to be beneficially owned? (6) If the common intention does not extend to the shares in which the property is to be beneficially owned, what is a fair share having regard to the whole course of the parties’ dealing in relation to the property, and to both financial contributions and other factors?”

[60]It is important to consider each of these issues in relation to this transaction.

[61]Does the case fall within the domestic consumer context?

[62]I have already set out above that I am satisfied that this is a domestic consumer context case. The only basis to argue that this could have been an investment was if it was a gift to the Second Respondent for him to invest for his future. I have found that not to be the case and consequently the reality is that this was part of the overall property that was purchased and all fully funded by the Applicant and Respondent. That brings this case clearly within the domestic consumer context.

[63]Is there evidence of an actual common intention by way of agreement arrangement et cetera? There are three parties involved in this arrangement. The Applicant, the Respondent and the Second respondent. As I have already stated above there was an agreement between the Applicant and the Respondent that the Land should be held in the name of the Second Respondent as a device to avoid Stamp Duty. That was the sole reason for the Land not being held in the names of the Applicant and Respondent.

[64]I am further satisfied on the balance of probabilities that the Respondent and Second respondent also had those discussions. It is the only sensible interpretation of the correspondence that one can see between the Respondent and the Solicitors and the Second Respondent and the solicitors. The correspondence very much focused on the issue of Stamp Duty and that would have been the focus of discussions between the two of them as well.

[65]It is also clear that there were simply no discussions between the Applicant and the Second Respondent on the issue whatsoever. That is the evidence of the Applicant and the Second Respondent. As such it is impossible to make a finding that there was any common intention between those two parties by way of any agreement or arrangement. It is impossible to find that the Respondent was acting as the agent of the Applicant in her discussions with the Second Respondent as there is simply no direct evidence in relation to it as both those parties have failed to reveal the nature of those discussions.

[66]Can the common intention be inferred from conduct? I am satisfied that there is ample evidence to support the common intention that the Second Respondent was holding the property beneficially for the Applicant and Respondent jointly. As I have set out above, I am satisfied that there is an express intention as far as the Respondent is concerned but all of the issues set out below also apply to her as well as the Applicant.

[67]The evidence supporting the common intention include the following:a. The Applicant and Respondent provided all of the funding for the purchase.

b. The purchase of the land was agreed at the same time as the purchase of the house which was also fully funded by the Applicant and Respondent.

c. The Land was immediately adjacent to the house and both of the Applicant and Respondent intended to use it as part of the overall property to provide the equestrian facilities on the property.

d. The Applicant and Respondent had sole use of the Land although the Second Respondent did visit it from time to time.

e. The Applicant and Respondent considered the Land as theirs when they were making applications for planning permission and also when they were obtaining valuations on the property.

f. The Second Respondent was not consulted at all in relation to the applications for planning permission and/or the alterations and other work that was carried out on the Land.

[68]Once it has been decided that the land was not gifted to the Second Respondent all of the above factors feed into there being only one conclusion which is that the Land was always to be held for the benefit of the Applicant and Respondent. Without the argument in relation to the proposition that it was a gift, there is simply no evidence going against the proposition that the Applicant and Respondent hold the beneficial interest in the Land.

[69]Has the Applicant relied to his detriment on the common intention? The Applicant contributed £30,000 towards the purchase of this property. It is now suggested by the Respondent and Second respondent that Applicant and Respondent could purchase the land back. This would cost in excess of £120,000 on top of the £60,000 that they have already spent. It is difficult to see how it could be argued that the Applicant has not acted to his detriment. I am satisfied that this limb of the test is met.

[70]Does the common intention extend to the shares in which the property is to be beneficially owned? On the basis that it was the intention of all of the parties that the Land should be bought together with the House and that this was to form part of the overall family home there can be little doubt but that the intention was for the beneficial interest to be owned on a 50-50 basis by the Applicant and Respondent. In any event in relation to the Land they had each made equal contributions which again supports a finding of equal interest between the two of them.

[71]As a result I find that the land is held by the Second Respondent as the legal owner but that it is beneficially held for the Applicant and Respondent jointly.

[72]Resulting Trust

[73]The Applicant submits that if there is not a constructive trust then at least his share would be held by way of a resulting trust. If I am wrong in relation to the constructive trust I have to consider the alternative. It is accepted that the arguments in relation to resulting trusts must be secondary to the constructive trust argument and in general it is considered to be a last resort, but it nonetheless remains an avenue that is available if required.

[74]Ms Francis once again sets out the summary set out in Lewin on Trusts 20th addition in relation to the test for resulting trusts. It states: “Where there is a gratuitous transfer containing no express or inferred provisions determining beneficial ownership, then the starting point is that there is a rebuttable presumption of resulting trust, in that the transferor did not intend to make a gift … The presumption may be rebutted in two ways. First, it may be rebutted by extraneous evidence that the transferor did intend to make a gift. Secondly, it may be rebutted by a counter rebuttable presumption ofadvancement, that is that the transferor did intend to make a gift. There is a presumption of advancement if the transferor is the spouse or parent of the transferee, or in a similar relationship. The presumption of advancement may itself be rebutted by extraneous evidence that the transferor did not intend a gift.”.

[75]There is no doubt that the Applicant provided 50% of the funds for the purchase of the Land and that this was a gratuitous transfer. As such the presumption of resulting trust arises. I have made a finding that this is not a gift which leaves the presumption of advancement as the only method of rebutting the resulting trust presumption. There is no presumption of advancement as far as the Applicant is concerned as he has no relationship with the Second Respondent. It follows that any claim by the Applicant for a resulting trust would also succeed.

[76]The same is true for the Respondent as the finding in relation to the gift also applies to her. The impact of this is not only that there is the presumption of the resulting trust but also it rebuts the possible presumption of advancement as I have made a finding that it was not intended as a gift.

[77]Illegality

[78]The sole purpose behind the creation of this trust was an attempt to evade Stamp Duty. The “device” that was used was illegal as there can be no doubt that this was a linked transaction to the purchase of the house. As such, the higher rate of Stamp Duty was due to be paid on the whole transaction. The Solicitor was aware of this and let both the Respondent and Second Respondent know his view.

[79]In Tinsley v Milligan [1993 ]UKHL 3 it was held that parties could not rely on evidence of their own illegality to establish trust. This decision was overturned by the Supreme Court in Patel v Mirza [2016 ] UKSC 42 which set out a policy based ‘range of factors’ approach .

[80]It was stated that a court should consider a “trio of necessary considerations” to determine whether or not the claim should be disallowed on the grounds that it would be contrary to the public interest because it would be harmful to the integrity of the legal system. These are:a. The underlying purpose of the prohibition which has been transgressed and whether that purpose will be enhanced by denial of the claim;

b. Any other relevant public policy on which the denial of the claimant may have an impact;

c. Whether denial of the claim would be a proportionate response to the illegality, bearing in mind that punishment is a matter for the criminal courts.

[81]The Patel case did not involve an equitable claim but it has been held in Ball v De Marzo [2019 ] EWHC 1587 that the same considerations apply to such cases.

[82]In considering the above in relation to this claim:a. The prohibition involved in this case relates to tax evasion which is undoubtedly widespread within the jurisdiction of England and Wales. It is difficult to see how a denial of this claim could possibly impact upon that underlying purpose.

b. No other public policy issue would impact upon this claim.

c. The Stamp Duty involved would have amounted to £12,750. There will no doubt be interest and penalties in relation to that sum. Even once those figures are added it is difficult to see how it could be a proportionate response not to allow a claim relating to land are valued at a gross figure of £137,500. In any event it is assumed that the sum will be paid following this judgment.

[83]I am satisfied that the illegality behind this transaction cannot prevent the finding that the Second Respondent is holding the land for the benefit of the Applicant and Respondent. His Honour Judge Farquhar 14th April 2025