Laskar v Laskar

Court of Appeal

Citations: [2008] EWCA Civ 347; [2008] 1 WLR 2695; [2008] 2 FLR 589; [2008] 2 P & CR 14.

Facts

Zubera Laskar was a council tenant of a house in Hatfield. She had a daughter, Rini, who was currently living away from home while at university. In 1997 she used her right as a secure council tenant to purchase the property at a discount. Shortly after, she realised she could not fund the purchase alone. She and Rini reached an agreement to jointly fund the purchase.

Zubera’s discount was worth £29,415. She provided a further £3600 towards the deposit and paid the fees associated with the purchase. Rini contributed £3400. Both were joint parties to the mortgage. The property was registered in their joint names.

Zubera initially rented Rini’s old room to lodgers to cover the mortgage payments, before moving out entirely and leasing the full property. Zubera granted the leases alone and kept the rents, which she used to meet the mortgage payments. She also paid for all repairs and costs associated with the property. Rini made no contributions to the mortgage or management of the property.

Zubera and Rini fell out. Rini sought an account of the rental income. The High Court held that Rini held a 4% share in the property, based on her £3400 contribution to the purchase price. The court also held that Zubera was not liable to account for the rent.

Rini appealed. She argued that the judge should presumed that the parties had a joint tenancy in equity. Alternatively, she argued that her share should be higher: the council discount and her liability for the mortgage should be apportioned between them.

Issue(s)

1. Had the judge correctly assessed Rini’s share in the beneficial title?
2. Was Zubera liable to account for the rent?

Decision

The Court of Appeal held that:

• Stack v Dowden [2007] UKHL 17 held that there was a presumption that property held as a joint tenancy at law was also held as a joint tenancy in equity. However, this presumption only applies in domestic home cases. This was not such a case. Rini barely lived in the house and Zubera moved out shortly after purchase. It appeared that the parties intended the property as an investment, not a family home.
• Even if the presumption did apply, it would have been rebutted. The parties had completely separate finances, the property was intended as an investment, and the parties’ contribution to the purchase price was very different.
• Accordingly, Rini’s share of the equitable title had to be decided on the basis of resulting trust. As Rini contributed to the purchase price, there was a presumption that she held a share the equitable title proportionate to her contribution.
• The counter-presumption of advancement did not rebut the presumption of resulting trust since Zubera’s contribution was clearly not intended as a gift or loan to Rini.
• Since only Zubera was entitled to the discount, it counted as her contribution to the purchase price alone.
• However, the judge failed to account for the fact that the mortgage was in the parties’ joint names. It should have been treated, therefore, as a joint contribution to the purchase price. While Rini never actually contributed to the mortgage payments, there was no prior agreement that she would not and she remained liable in principle. Taking that into account, Rini’s share in the equitable title was 33%.
• However, an account is a discretionary remedy, and in this case it was still not appropriate to order a retrospective account of the rent. Most of the money had been used to pay the mortgage and upkeep. Zubera had been solely responsible for managing the property and paid any related costs out of her own money. Meanwhile, Rini had made no claim for the rent for over seven years. Rini would only be entitled to claim income from the property going forwards.

This Case is Authority For…

The presumption of joint tenancy by constructive trust does not apply to commercial or investment properties.

A purchasing discount counts as a contribution to the purchase price for the purposes of constructive and resulting trusts. Mortgage liability also usually counts as a contribution to the purchase price, even if that party never actually contributes to the mortgage payments.

Other

Background: Historical cases denied that the counter-presumption of advancement could apply between mothers and children: Bennet v Bennet (1879) 10 Ch D 474. The counter-presumption was traditionally applied in a sexist fashion – covering gifts from male donors but not female donors.

The court in Laskar was willing to accept in principle that the counter-presumption of advancement could apply between parents and children in a gender-neutral fashion. However, on the facts, the counter-presumption was rebutted: Zubera’s investment in the house was clearly not intended as a gift or loan to Rini. That the counter-presumption can apply between female parents and their children was confirmed in Musson v Bonner [2010] WTLR 1369.