Lavelle v Lavelle and others

Respondent purchasing property in first appellant’s name — Respondent treating property as his home — Dispute as to ownership of property — Evidence rebutting presumption of advancement — Appeal dismissed The respondent purchased a flat in 1997. On instructions apparently given by the respondent, his solicitor conveyed the property into the name of his daughter, the first appellant. The respondent spent most of his time abroad, but when he was in the UK he lived in the flat as his home. He also paid for utility bills, maintenance and renovations. A dispute subsequently arose as to the true ownership of the property. At first instance, the court found that the respondent had purchased the flat for his own use, thus rebutting any presumption of advancement in the first appellant’s favour: the first appellant therefore held the property upon trust for the respondent. The appellants appealed, arguing that the judge had rejected part of the respondent’s evidence and should, logically, have found that the respondent was a dishonest witness. In addition, they maintained that, on the evidence, the respondent had received tax advice as to the situation if he were to gift the property to his daughter, and it could therefore be implied that he had undertaken to do so. Held: The appeal was dismissed. When property was transferred between parties who were in a close relationship, a presumption of advancement implied that such a transfer was in the nature of a gift unless evidence to the contrary could be adduced. That evidence could include words or conduct proximate to the transaction itself and, with less weight, words and conduct after the event. Although such a transfer might have been undertaken in order to avoid the payment of inheritance tax, equity would not permit either of the parties to found their case on an underlying illegal purpose: for example, if such a transaction were being undertaken in order to perpetuate a fraud. Neither party had advanced their case on that basis. The evidence indicated that none of the parties had intended or understood that the property was being gifted to any of the appellants. Although the judgment at first instance was poorly drafted, the presumption of advancement had been rebutted and, accordingly, the judgment would stand. Paul Chaisty QC and Mark Harper (instructed by Addleshaw Goddards) appeared for the appellants; Mark Cawson QC and Martin Budworth (instructed by Fruhman Davies Livingstones, of Manchester) appeared for the respondent. Vivienne Lane, barrister