A man bought a house and registered its title in his name only. However, his wife contributed £100,000 towards the cost of the house. The couple is now getting divorced.
What is the court's likely view on the wife's contribution?
A man bought a house and registered its title in his name only. However, his wife contributed £100,000 towards the cost of the house. The couple is now getting divorced.
What is the court's likely view on the wife's contribution?
The court is likely to find a resulting trust in the wife's favour.
(D) When a couple in a marital relationship purchases a house to live in and both parties contribute to the purchase price, but the legal estate is conveyed to only one of them, the courts will usually assume a resulting trust. This means that the legal owner holds the legal estate on trust for themselves and their partner, and the partner is entitled to proceeds when the land is sold. The presumption of resulting trust means that the beneficial ownership results to the paying party in the proportion that their contribution bears to the purchase price.
In this particular case, the man is the only registered proprietor of the legal estate, but since the wife has contributed to the purchase price, the court is likely to find a resulting trust in her favour. Therefore, the wife has rights to the property in the form of a beneficial interest, and she can claim proceeds when the land is sold.
Option A is incorrect because, as explained above, the wife's contribution means she does have rights to the property in the form of a beneficial interest.
Option B is incorrect because overreaching is irrelevant in this case. Overreaching is a process by which a buyer may take free of a beneficiary's interest under a trust by paying purchase money to two or more trustees.
Option C is incorrect because a constructive trust is not relevant in this case. A constructive trust arises when it would be unconscionable for the legal owner of property to deny the beneficial interest of another in the property.
Option E is incorrect because the man is the sole registered proprietor of the legal estate, which means he alone is entitled to sell the property. However, as explained above, the court will infer a resulting trust in the wife's favour to reflect her contribution to the purchase price.