Case No: B2/2002/0136
Neutral Citation Number [2002] EWCA Civ 974
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM BIRMINGHAM COUNTY COURT
His Honour Judge McKenna
Royal Courts of Justice
Strand, 
London, WC2A 2LL

Thursday, 11th July 2002
Before :

 THE VICE-CHANCELLOR

LORD JUSTICE RIX

and 

 THE RT. HON SIR SWINTON THOMAS    

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Between :

	ALI	Claimant/
Respondent	
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KHAN and Others	
Defendants/Appellants	
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(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040,  Fax No:  020 7831 8838
Official Shorthand Writers to the Court)
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Mr. John Randall QC and Ms Catherine Rowlands (instructed by Messrs Dickinson Parker Hill) for the Claimant/Respondent
Mr. Mark Cunningham QC and Mr. Abid Mahmood (instructed by Michael Lee & Co) for the Defendant/Appellants
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Judgment
As Approved by the Court
Crown Copyright ©

The Vice-Chancellor  : 
1.	The fourth defendant, Mr Gulzar Khan (“the Father”) and his wife Saeeda Bibi (“the Mother”) have six children.  There are four daughters the claimant, Shazia Parveen Ali (“Shazia”), Haleya Parveen Ali (“Haleya”), the first defendant Naseem Khan (“Naseem”) and Shenaz Bibi (“Shenaz”).  The two sons are the second defendant (“Zulfiquar”) and Zaheer Abbas (“Zaheer”).   The only other party to these proceedings is the second defendant Rehanna Ali (“Rehanna”).  She is the wife of Zulfiquar.
2.	In 1986 the Father acquired the freehold of No 137 Grove Road, Sparkhill, Birmingham (“No 137”) for use as the family home.  Thereafter he lived in it with the Mother and their children, who were born between September 1977 and April 1985.   On 24th September 1997 the Father, then aged 70, executed a transfer of No 137 in favour of Shazia and Haleya.   No 137 had been recently valued for mortgage purposes at £75,000.   The consideration specified therein was £25,000, which Shazia and Haleya borrowed from the Halifax Building Society on the security of No 137.    The transfer was duly registered and Shazia and Haleya became the registered proprietors of No 137.   The circumstances surrounding the execution of the transfer, to which I shall refer in detail later, are crucial to the resolution of the disputes between Shazia and her father, mother, sister, brother and sister-in-law.
3.	Notwithstanding the execution of the transfer the Father and the Mother continued to live in No 137 with their children.  The usual domestic bills were rendered to and paid by the Father as well after the transfer as before.   The sums due to the building society were paid by Shazia.  In November 1998 Shazia and Haleya married in Pakistan.  Their respective husbands, Mumtaz and Liquat Ali, are brothers and sons of a brother of the Father.  Shortly thereafter, and also in Pakistan, Zulfiquar married Rehanna.    In due course the Father, Mother, Shazia, Haleya, Zulfiquar and Rehanna returned from the weddings in Pakistan and continued to live at No 137 with Naseem, Shenaz and Zaheer.    In December 1999 Mumtaz and Liquat Ali came to England and joined their wives at No 137. 
4.	Unfortunately it proved impossible for all of them to live at No 137 in harmony.   In July 2000 Haleya and Liquat left.   Haleya transferred her interest in No 137 to Shazia for no consideration except a release of her covenants by the Halifax Building Society.   This transfer was duly registered so that Shazia became the only registered proprietor of No 137.  In October 2000 Shazia and Mumtaz, Shenaz and Zaheer also left.   There remained living at No 137 the Father, the Mother, Naseem, Zulfiquar and Rehanna.
5.	By a letter dated 19th December 2000 solicitors acting for Shazia wrote to the Father, the Mother, Naseem, Zulfiquar and Rehanna requiring them to vacate No 137 within 21 days.  They refused to do so and Shazia commenced these proceedings in the Birmingham County Court on 12th April 2001.   Her claim for possession was founded on her title as sole registered proprietor of No 137.
6.	The claim was disputed by the Father.  He averred that at the time of the transfer No 137 was worth £75,000.   He alleged that in 1997 he wanted to raise money to enable him to pay for the impending weddings of Shazia, Haleya and Zulfiquar.   He claimed that in order to raise that money he agreed with Shazia and Haleya that they should buy part of his interest.   In paragraph 6 of the defence and counterclaim, he alleged that it was the common intention of Shazia, Haleya and himself that Shazia and Haleya should not acquire the entire beneficial interest in No 137 but only such share as reflected their financial stake in No 137, that the Father would retain a beneficial interest therein and should have the right to occupy No 137 for the remainder of his life.   He claimed that the transfer was executed in accordance with and in reliance on that agreement and that he subsequently spent some £9,700 on works to No 137.  He sought declarations that (a) Shazia holds No 137 on trust for herself and the Father in the proportion 1/3rd:2/3rds or in such other shares as the court may direct, and/or (b) the Father is entitled to occupy No 137 by virtue of his beneficial interest in No 137 or by virtue of a proprietary estoppel.
7.	These contentions were denied by Shazia in her reply and defence to counterclaim.  She admitted that the property had been sold at an undervalue but contended that this was to compensate her and Haleya for agreeing to the marriages with Mumtaz and Liquat Ali which the Father had arranged.  She denied that there was any agreement that she and Haleya should buy only part of the Father’s interest in No 137.  She maintained that they had agreed to buy the whole of the Father’s legal and beneficial interest.   She specifically denied that the Father was to have the right to occupy No 137 for the rest of his life.
8.	The trial of the action took place before HH Judge McKenna on 5th, 6th and 7th November 2001.  Oral evidence was given for Shazia by, amongst others, Shazia, Haleya, Liquat, Mumtaz, Zaheer and Shenaz.  Oral evidence on behalf of the defendants was given by the Father, the Mother, Zulfiquar and Naseem.   Mumtaz, Liquat, the Father and the Mother gave their evidence through an interpreter.   
9.	Judge McKenna gave judgment on 14th November 2001.  After setting out the undisputed facts which I have summarised the judge referred to the evidence he had heard from various members of the family.   He observed that a good deal of it was repetitive so that he proposed to concentrate on the evidence of the principal witnesses on each side, namely Shazia and the Father.   
10.	The judge described the evidence of Shazia in some detail.  He stated that in numerous respects he found her evidence unsatisfactory.  He described certain statements made by her as being intentionally misleading.  He concluded that he could not accept her evidence.   It is important to appreciate what allegations were made and rejected.   First, Shazia alleged that the Father needed to raise capital in order to return to Pakistan.   It was, she suggested, for that reason that he wanted to sell “the family home” to her and her sister outright for £25,000.  Second, she accepted that the sale was at an undervalue but contended that to that extent the transfer effected a gift to her and her sister.  She claimed that the Father did not trust Zulfiquar and wished Shazia to be responsible for and look after the rest of the family.   Third, she claimed that the Father did not need to raise £25,000 to pay for the weddings and had in fact spent considerably less. 
11.	The judge noted that the evidence of Shazia was at odds with that of the Father.   As we do not have transcripts of his oral evidence it is appropriate to set out in full the judge’s description of it:
“[The Father] says that in 1997 he did indeed have a need to raise funds, but not to go and live in Pakistan as contended for by [Shazia], but rather to pay for the marriages of three of his children, [Shazia], her sister Haleya and his son Zulfiquar.  He estimated that the cost of these weddings would be a maximum of £25,000 and that is how the figure of £25,000 raised came to be identified.  He himself did not have any sufficient savings and his income was modest being a small pension from Rover, his state pension and various other benefits in the nature of State benefits.
Zulfiquar was only 17 and earning little as an apprentice and his other children were even younger.  [Shazia] and Haleya, on the other hand, were both over 18 and in the case of [Shazia] at least in gainful employment with Birmingham City council.
The issue was discussed within the family and it was agreed that the way in which the necessary funds would be raised was by [Shazia] and Haleya purchasing the property from the Father with the benefit of a mortgage from the Halifax Building society for the amount the Father estimated he needed to fund the weddings.  However, says the Father, it was never his intention to transfer ownership of the property outright to his two daughters but rather that in due course they would transfer the property back, not to him, but to his son Zulfiquar.
Following the transfer, utility bills continued to be addressed to the [Father] and he continued to pay them.  Indeed he suggests that everything continued as before the transaction.
Now the [Father] was somewhat confused as to the exact basis on which the property was to be held by the claimant and Haleya.  In his witness statement he suggest that it was to be held on trust for himself and his wife.  This would suggest, as it seems to me, that the daughters did not acquire any beneficial interest in the property, although it must be said that it was clear from his evidence that he had no real understanding of the meaning of the expression of holding property on trust, certainly in the legal sense of the meaning of those words.
In the amended defence and counter-claim it is suggested that the two daughters should obtain a share of the beneficial interest which reflected the extent of their financial stake in the property.  Again, later in his witness statement he says that it was his intention that the daughters would transfer the property to Zulfiquar for an amount sufficient to repay the mortgage and a little extra to assist them with a down payment towards the purchase of the future matrimonial home.
The [Father] admitted in cross-examination that at least part of the rationale behind the transfer of the property was that if the property was in the name of his two daughters that would assist or facilitate applications by his two prospective sons-in-law with the British Immigration authorities to enable them to come to this country.  And it is clear from a letter written by Golden Estates to the British High Commission on 15th June 1999 that the High Commission was told that the property was owned by the two daughters.  This is clear from document eight in the supplementary bundle, where they are described in these terms:  "Mrs Helaya Parveen, half share owner, sponsor of husband Liquat Ali."  And [Shazia] is described as:  "Mrs Shazir Parveen, half share owner sponsor of husband Mumtaz Ali."  Mr. Gulzar Khan is merely described as:  "Father of sponsors."
The [Father] says that his command of English is poor and he relied on his two daughters in discussing with the solicitors the transfer of the property, that he made it clear to the daughters what his intentions were and that he relied on his daughters to make those intentions clear to the solicitors.
The [Father] went on to say in his evidence that in October 2000 [Shazia] agreed to transfer the property to Zulfiquar for £40,700 but then reneged on the agreement, an allegation which [Shazia] denies, although it is clear from solicitors' letters, in particular a letter of 30th October 2001,...., that they had discussions with [Shazia] along those lines, that they went so far as to get the deeds of the property from the building society and obtained a redemption statement, and, significantly, wrote to the [Father]'s then solicitors, Khan & Co., to the effect that the price was to be £45,000, and indeed to the claimant herself.”
12.	The judge then asked “Which of these versions of events am I to believe?”.    He explained at some length why he found the evidence of Shazia unacceptable and continued:
“I am afraid that I do not accept [Shazia]’s evidence, and prefer the evidence of the [Father] as to the circumstances leading to the transfer of the property to [Shazia] and Haleya.   In my judgment [Shazia], no doubt prompted by her husband, is cynically taking advantage of the situation for her own benefit.  Her claim is, in my view, wholly unmeritorious and opportunistic, but that does not necessarily mean that it fails in law.  There is no doubt that a transfer document was entered into and equally that no formal declaration of trust was entered into.  And it is for the [Father] to establish that a trust should be imposed.
What is the evidence to support such a trust?  And more importantly, what is the nature of the trust?  As I have recorded the [Father] himself has given contradictory evidence on this point.  He has variously described the transaction in 1997 as a loan, as a gift, as a transaction under which he retained the whole of the beneficial interest in the property, one under which his two daughters would obtain a share of the beneficial interest in the property but which reflected their financial stake - but what does that mean in the circumstances where one of the sisters, although a party to the mortgage and therefore under a legal liability to pay the loan, never in fact made any payments to the building society?
Again, the [Father] has described the transaction as one in which the intention was that the two daughters would transfer the property not back to him, but to his son Zulfiquar for an amount sufficient to repay the mortgage plus a little extra to assist them with the down payment.  What in these circumstances is a little extra?
The reality as it seems to me is that whilst the expectation was that the claimant would return the property to the family at some point in the future, the exact detail of how and on what basis was not discussed or agreed at the time.  The Father, no doubt as father and head of the household, simply expected that his daughters would do as he asked with the property.  In that, as things have turned out, he was sadly mistaken.  But he did not, in my judgment, impose a trust obligation on the daughters in the legal sense.  Equally, no question of any constructive trust by means of any common intention can, on the fact as I have found them, arise since there was no such common intention.
It is said that the Father made an indirect contribution by undertaking household expenditure, but in my judgment this does not give rise to a resulting trust, or indeed any form of constructive trust in the absence of some express arrangement.  And again, on my findings, no such express arrangement was ever agreed.
I similarly reject any suggestion that a proprietary estoppel arises or can have any relevance in this case.”
13.	The judge then considered what the position would be “If I am wrong about the trust issue, if I can so describe it”.   In that event he considered that the presumption of advancement, to which he had earlier referred, would have applied as between the Father and Shazia and Haleya and the Father would be unable to rebut it because
“....for the [Father] to have retained an interest in the property would be to have deceived the building society into thinking that they had security over the whole of the property as opposed to only a part, and indeed to have deceived the Immigration authorities as to the ownership of the property.
It is clear from various authorities, but in particular Tinsley v Milligan, a decision of the House of Lords, (1993) 3 AER, 65, for example from the speech of Lord Browne-Wilkinson at page 90 where he says:
"A party to an illegality can recover by virtue of a legal or equitable property interest if, but only if, he can establish his title without relying on his own illegality.  In cases where the presumption of advancement applies, the plaintiff is faced with the presumption of gift and therefore cannot claim under a resulting trust unless and until he has rebutted the presumption of gift.  For those purposes the plaintiff does have to rely on the underlying illegality and therefore fails.”
That was on the facts of that case, and it seems to me that in this case the fourth defendant needs to rely on his illegality in order the rebut the presumption of advancement and this he simply cannot do.”
14.	In the event Judge McKenna found for Shazia, ordered the defendants to give possession of No 137 in 56 days and refused permission to appeal.   Permission to appeal was granted by Aldous LJ on 26th March 2002 on the ground that he was by no means certain that the judge fully understood the law on estoppel, nor on illegality, nor on advancement.  But by then the order for possession had been executed.    We were told that Shazia, Mumtaz and their children now live at No 137.   The Father, the Mother, Shenaz and Zaheer live in local authority accommodation, as, in other local authority accommodation, do Zulfiquar, Rehanna and their children.   Naseem does not live with any of them.
15.	The case for the Father, as advanced by leading counsel at the hearing, was somewhat different to that advanced before the judge and foreshadowed in the Father’s notice of appeal.   He now contends that Shazia holds No 137 in trust for the Father alone.   He does not seek to challenge any findings of primary fact, only the inferences to be drawn from them.   In those circumstances counsel for Shazia, helpfully, did not suggest that the points were not open to counsel for the Father at all, rather he relied on their late appearance as support for his contention that they are wrong.   The Father contends that the judge’s primary finding, quoted in full in paragraph 12 above, and his alternative finding, quoted in paragraph 13 above, are both wrong.  I will deal with them in turn.
16.	With regard to the primary finding counsel for the Father accepted that the absence of discussion or agreement as “to the exact detail of how and on what basis” No 137 was to be returned to the family in the future precluded any common intention with regard to those details.  It followed, as he also accepted, that the judge’s conclusion ruled out a constructive trust.   But he criticised the judge’s apparent conclusion that the absence of discussion or agreement on those details precluded any relevant common or other intention at all.   He contended that in the light of all the facts, as found by the judge, the only proper inference is that the Father did not intend to dispose of his beneficial interest in No 137 to Shazia, Haleya or anyone else.   In those circumstances, he submitted, the true view is that at all times Shazia and Haleya held No 137 on a resulting trust for the Father.   Thus they or either of them would be bound, in the future, to dispose of No 137 as the Father might direct subject only to reimbursement for the moneys paid or payable by either of them to the building society.
17.	The response of counsel for Shazia was that the judge’s primary finding was one of fact and determinative of the case.   He contended, relying on Greer v Kettle [1938] AC 156, that the Father was estopped by the transfer from contending that the transaction was not one of sale of both the legal and beneficial interest in No 137 for £25,000.   He relied on the fact that the Father had not sought to set aside or rectify the transfer.   He submitted that resulting trusts arose in the case of contributions to a purchase price or a voluntary transfer but that the transaction effected by the transfer was neither.   He pointed out that no authority had been cited to suggest that in the case of a sale at an undervalue there was a resulting trust of such proportion of the property as represented the undervalue.  
18.	In my view it is necessary at the outset to determine the true construction and effect of the transfer and the extent to which it may preclude the Father from challenging the judge’s conclusions.  It is in a standard form setting out the county and district, title number and property address.   Clause 1 provides that 
“In consideration of Twenty-five thousand Pounds (£25,000), the receipt whereof is hereby acknowledged, Gulzar Khan of 137 Grove Road, Sparkhill, Birmingham (the Transferor) (1) with full title guarantee transfers to Shazia Parveen and Haleya Parveen both of 137 Grove Road, Sparkhill (the Transferees) (2) the land comprised in the title above mentioned.”
Clause 2 contains a declaration by the Transferees that
“the survivor of them cannot give a valid receipt for capital money arising on a disposition of the land.”
Such a declaration is appropriate not only to transferees who hold the property as tenants in common but also to those who hold it as bare trustees.  Ruoff & Roper: Registered Conveyancing para 32-08.   By clause 3 the parties certified that the transaction thereby effected did not form part of a larger transaction or series of transactions in respect of which the amount or value or the aggregate amount or value of the consideration exceeds £60,000.   Such a certificate precludes the submission of counsel for the Father that the case is to be regarded as a joint purchase for £75,000 of which the Father produced £50,000.
19.	The transfer contains no express reference to the beneficial interest in No 137.   No doubt in the absence of some unusual surrounding circumstances the court would readily construe the transfer as constituting a disposal of the legal interest and, by implication, of the beneficial interest too.   The importance of such surrounding circumstances or background was emphasised by Lord Hoffmann in ICS Ltd v West Bromwich BS [1998] 1 WLR 896, 912/3.   It is open to the Father to contend that on the true construction of the transfer in the light of all the circumstances the beneficial interest of the Father in No 137 was not included.   If that is the true construction then the form of transfer cannot estop the Father from contending otherwise.
20.	Further, the limitation on the use of extrinsic evidence in relation to deeds or other written contracts has never excluded evidence as to the true nature of the transaction, Chitty on Contracts 28th Ed. Vol.1 para 12-111.  Thus evidence is admissible to show that a written contract for sale was a loan on security, Maas v Pepper [1905] AC 102.  Likewise, and of more significance in relation to the facts of this case, extrinsic evidence may be relied on to show that a conveyance in form absolute was only for a limited purpose for which a transfer of the legal estate was both sufficient and all that was intended, see Haigh v Kaye (1872) LR 7 Ch. 469 and Re: Duke of Marlborough [1894] 2 Ch. 133.
21.	In Haigh v Kaye the plaintiff conveyed land to the defendant by means of a conveyance apparently for valuable consideration.  The purchase price was not paid.   The plaintiff was permitted to prove by extrinsic evidence that the conveyance to the defendant was as trustee for the plaintiff, notwithstanding the absence of writing, for the Statute of Frauds was never intended to prevent a court of equity from giving relief in a case of fraud.
22.	In Re: Duke of Marlborough the Duchess assigned her own separate leasehold property to the Duke absolutely in consideration of her natural love and affection for him.   The Duke mortgaged the property as security for a loan to him by a deed to which the Duchess was also a party.   The equity of redemption was thereby reserved to the Duke alone.   On the death of the Duke the question arose whether the equity of redemption in the property was part of his estate or was held in trust for the Duchess.  Stirling J held that (p.140)
“the house was transferred to the Duke for the limited purpose of enabling him to borrow money and that, subject to the mortgage created by him, it was intended that the house should continue to belong to the Duchess.”
In those circumstances Stirling J concluded that the equity of redemption belonged to the Duchess notwithstanding the form of the mortgage or the absence of writing to satisfy the Statute of Frauds.  The principle he applied, as indicated on page 144, was that as the real agreement between the Duke and the Duchess was only that the former should be enabled to raise money on the property of the latter it would be a fraud on the Duchess if the Duke were to rely on the assignment to him as carrying the beneficial interest.  Accordingly parol evidence was admissible to prove the true agreement.    The decision of Stirling J was approved by the Court of Appeal in Rochefoucauld v Boustead [1897] 1 Ch. 196,207.
23.	It is clear from Greer v Kettle [1938] AC 156, 171 as well as the two cases to which I have referred that an estoppel by deed does not preclude contradictory oral evidence admissible in accordance with equitable principles.   Accordingly for this reason also I reject the submission of counsel for Shazia to the effect that the Father is unable to assert and prove that the transfer was not intended to or did not comprise the beneficial interest.
24.	I should also refer to Lohia v Lohia [2001] WTLR 101, 113.   This case establishes that the presumption of a resulting trust on a voluntary conveyance of land has been abolished by s.60(3) Law of Property Act 1925.   It was not suggested that this proposition precludes a party to the conveyance from relying on evidence from which a resulting trust may be inferred.    Accordingly there is nothing in this case to inhibit the Father from relying on the extrinsic evidence the judge accepted.
25.	The facts as found by the judge demonstrate clearly that it was not the intention of the Father or of Shazia and Haleya that the beneficial interest in No 137 should be disposed of by the former to the latter.   No 137 was and had been for eleven years the family home of the Father and the Mother and for each of their children, four of whom were still under age when the transfer was executed.   It was common ground that at the time of the transfer No 137 was worth about £75,000, yet the consideration expressed in the transfer was only £25,000.  The judge rejected the evidence of Shazia that the Father intended any gift in their favour.   Nor was there was any reason to believe that the Father wished either to dispose of the family home or to benefit two only of his children.
26.	The judge accepted the Father’s evidence as to the circumstances leading to the transfer of the property by the Father to Shazia and Haleya.   That evidence, as described by the judge, was to the effect that
“The issue [how to raise £25,000 for use by the Father to fund the marriages] was discussed within the family and it was agreed that the way in which the necessary funds would be raised was by [Shazia] and Haleya purchasing the property from the Father with the benefit of a mortgage from the Halifax Building society for the amount the Father estimated he needed to fund the weddings.  However, says the Father, it was never his intention to transfer ownership of the property outright to his two daughters...”
27.	It is inconsistent with that evidence, which the judge accepted, to infer that the transfer comprised the beneficial as well as the legal interest.   The proper analysis is that the Father was to transfer No 137 to Shazia and Haleya to enable them to provide to the Father by borrowing on the security of No 137 the £25,000 he needed to fund the marriages of themselves and Zulfiquar.   Whilst such a transaction might well be regarded and described by those involved as a sale of No 137 for £25,000 such an analysis is inconsistent with the facts and the intentions of the parties and involves conclusions of law which are wrong.
28.	The judge’s error, as I see it, was to conclude that the beneficial interest was transferred to Shazia and Haleya in the absence of any common intention as to when and to whom they should dispose of it in the future.    He should have concluded, in the light of all the other evidence he accepted, that the absence of any such common intention as to the future supported the evidence of the Father that he did not intend to transfer the beneficial interest with the consequential inference that it remained with him.     In that event the Father was and is entitled to direct Shazia (and, formerly, Haleya) when and to whom to transfer the legal interest in the future.
29.	At this stage it is convenient to consider the judge’s alternative finding relating to the presumption of advancement and the Father’s challenge to it.  As counsel for the Father observed the judge’s rejection of the evidence of Shazia and his acceptance of the evidence of the Father is inconsistent with the presumption of a gift.   He contends that where there is evidence of intention the issue depends on the conclusions to be drawn from that evidence and not on the application of any presumption.   He submits that such presumption is, in any event, of little force and cannot outweigh the obvious inference to be drawn from the evidence in this case.   He also argues that the judge was wrong to conclude that the Father was unable to rebut the presumption of advancement because he could only do so by relying on his own fraud or illegality.
30.	It is true that in recent years the strength formerly accorded to the presumption of advancement as between husband and wife has been reduced in line with social change.   This may be seen in the dicta to which we were referred in Pettit v Pettit [1970] AC 777, 793, 811 and 824; Gissing v Gissing [1971] AC 886, 907 and Falconer v Falconer [1970] 1 WLR 1333, 1336.   Those cases concerned husband and wife, not parent and child, but in McGrath v Wallis [1995] 2 FLR 112, 155, a case of the latter type, Nourse LJ described the presumption as a judicial instrument of last resort comparable to the contra proferentem rule in the construction of deeds and contracts.     As he pointed out at page 121, the court must have regard to all the circumstances of the case.     I did not understand counsel for Shazia to contend that the presumption of advancement could be used to override admissible evidence of a contrary intention.  His contention was that it supported a conclusion already warranted by the evidence.
31.	In the light of these submissions I can deal shortly with the judge’s suggestion that the Father could not rebut the presumption, if it arose, without relying on his own fraud or illegality.   (Counsel for Shazia did not contend before us that he could rely on the judge’s suggestion that the Immigration Authorities had been misled.)  The fraud or illegality to which the judge referred is the suggested deception of the building society into believing that they had security over the whole of No 137 as opposed to a part only.   In my view the judge was wrong.   There could be no such deception unless and until the Father sought to assert priority for his equitable interest over the later legal interest of the building society.  Not only was there no evidence that he ever intended to do so but it is quite clear that had he tried he would have failed.   The ability of Shazia and Haleya to confer a legal charge over No 137 was not dependent on being beneficial owners of the whole or any part of No 137, it would be sufficient that they had the legal estate and the authority of the Father as beneficial owner. 
32.	The contrary was not asserted by counsel for Shazia.  Instead he suggested that the building society would have followed the normal practice of requiring a disclaimer of any interest from every person in actual occupation so as to preclude such an interest being an overriding interest for the purposes of s.70(1)(g) Land Registration Act 1925.   But, as he frankly admitted, there was no evidence that the building society did follow the normal practice or of the Father’s response if they did.   If, as he suggested, the judge had inferred a dishonest response by the Father then he had no evidential basis for doing so.
33.	The judge’s concern with regard to this aspect of the case also suggests that he thought that an effective charge could only be given by Shazia and Haleya to the Building Society if and to the extent that they were the beneficial owners of No 137.   This would explain why he considered that the Father had disposed of the beneficial interest notwithstanding his clear evidence that he did not intend to do so.   For the reasons I have given I disagree.   There was no reason why, to accomplish the result which had been discussed and agreed, Shazia and Haleya should have any more than the legal estate in No 137 and the authority of the Father to create the charge.
34.	As I have already pointed out the family agreement was that Shazia and Haleya should borrow £25,000 on the security of No 137 to enable the Father to finance the marriages.   It was not necessary to achieve that result that the Father should do more than transfer the legal estate in No 137 and confer the necessary authority on Shazia and Haleya.  Clearly he did both.  The judge’s conclusion that the Father also transferred the beneficial interest is inconsistent with his rejection of the evidence of Shazia, his acceptance of the evidence of the Father and any reasonable inference to be drawn from the facts that No 137 had been and still was the family home of the Father and the Mother and all six children, four of the children were still under age and the consideration paid was but one third of the value of the house at the time.
35.	It is neither unusual nor of itself improper to transfer the legal estate in land to enable the transferee to raise money on its security.  If that is the true nature of the transaction then the equity of redemption in the property is held on a resulting trust for the transferor.   This was the result in Haigh v Kaye LR 7 Ch.473 and Re: Duke of Marlborough [1894] 2 Ch. 133.  In my view it is the result in this case too.
36.	In these circumstances there is no need to consider whether Shazia is bound by some proprietary estoppel or whether the Father is entitled to possession of No 137 otherwise than as the beneficial owner thereof.    If, as I consider to be the case, he is the sole beneficial owner of the equity of redemption of No 137 then he is entitled to possession of it subject only to the prior right of the building society as first mortgagee.
37.	For all these reasons I would allow this appeal, set aside the order of the judge and make a declaration as to the rights of the Father.    The consequences of such an order with regard to the re-transfer of the title to and possession of No 137 require further consideration by the parties’ representatives, not least so that Shazia may be given a suitable indemnity against her past and present liabilities to the building society.  Unless all such consequential provisions can be agreed then, in my view, the matter should be remitted to the Birmingham County Court for further directions.

Rix LJ:

38.	I agree.
Sir Swinton Thomas:
39.	I also agree.

Order:
 
1.	Appeal allowed
2.	Order as per counsel’s agreed Minute of Order

(Order does not form part of the approved)