Tahir v Faizi
Citations:  EWHC 1627 (QB);  2 P & CR DG25.
Tahir held the legal title to a house in Luton. He also held the mortgage in his sole name. Another man, Faizi, paid the deposit. Faizi lived at the house with his family for over a decade and paid to convert the garage into an office. While Tahir was out of the country for three years, Faizi paid the mortgage.
Faizi argued that the pair had an agreement whereby Tahir would buy a house on his behalf, because Faizi was unable to purchase property due to his immigration status. In return, Faizi would pay the deposit and the mortgage. Tahir denied that any such agreement existed. He claimed that Faizi was, and had always been, a tenant.
Tahir applied to the court for possession on the grounds that Faizi had not paid the rent. Faizi claimed that he held the equitable title to the property and so was entitled to stay. At first instance, the judge preferred Faizi’s version of events. They held that Tahir held the house on resulting trust for Faizi and so could not claim possession. Faizi was liable to account to Tahir for any mortgage payments Tahir had made since he had agreed to indemnify Tahir for the mortgage payments.
Tahir appealed. He argued that the judge was wrong to believe Faizi’s version of events. He also argued that if a resulting trust did exist, Faizi was only entitled to 6% of the property. This reflected the amount which Faizi contributed to the purchase price – which Tahir argued was the deposit alone.
- Was the judge right to prefer Faizi’s version of events?
- Could the oral agreement between the pair create a valid trust of land?
- If there was a resulting trust, what was Faizi’s share?
The High Court dismissed the appeal. The judge made no legal error in their assessment of the witness evidence. They were entitled to prefer Faizi’s version of events.
The absence of a written agreement meant that there could be no valid express trust of land. Since this was not a case of a shared family home, there was no scope for a common intention constructive trust. However, since Faizi had paid the deposit and agreed to indemnify Tahir for the mortgage payments, they were essentially legally responsible for the entire purchase price. On that basis, the judge was correct to hold that Faizi owned the entirety of the equitable title on resulting trust.
This Case is Authority For…
A legally enforceable agreement to pay the mortgage at the time it is granted counts as a contribution to the purchase price for the purpose of resulting trust.