Kenneth Thomas v Deborah Porter
[2023] EWHC 983 (KB)
Vytas Karpavicius & Anor v John Waites
7 August 2023
[2023] EWHC 2051 (Ch)
High Court
One man paid for land, but it was put in another's name to save on taxes. Even though they pretended it was a loan, the judge decided the man who paid for it actually owned it, because it's about who really paid, not just what they called it. The appeal failed.
Key Facts
- •Mr. Waites provided £230,000 for the purchase of land, registered in Mrs. Karpaviciene's name.
- •The parties intended to develop the land jointly, with profits split equally.
- •The purchase price was described as a loan to avoid stamp duty.
- •The joint venture failed, and Mr. Waites claimed ownership of the land.
- •The lower court ruled in favor of Mr. Waites, declaring him the sole legal and beneficial owner.
Legal Principles
Resulting trust: A trust implied by law where a person provides the purchase money for property but the property is transferred to another.
Westdeutsche Bank v Islington LBC [1996] 2 WLR 806
Illegality: Courts will not assist a claimant who must rely on their own illegality to establish their claim.
Tinsley v Milligan [1994] 1 AC 340, Patel v Mirza [2016] UKSC 42
The 'reliance' principle from Tinsley v Milligan has been modified by Patel v Mirza, adopting a more flexible approach to whether illegality should bar a claim.
Patel v Mirza [2016] UKSC 42
Substance over form: The true nature of a transaction is determined by its substance, not merely the labels attached by the parties.
Gascoigne v Gascoigne [1919] 1 KB 223, In re Emery's Investment Trusts, Emery v Emery [1959] 1 Ch 410, Tinker v Tinker [1970] 1 All ER 540
Outcomes
Appeal dismissed.
The court found that the judge correctly disregarded the parties' attempt to label the transaction as a loan to avoid stamp duty and correctly applied the resulting trust principle.
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