Can A Spouse Claim Sole Ownership Of A Property Purchased In The Other Spouse’s Name? A Review Of The Court Of Appeal’s Decision In Aguocha -V- Aguocha (2023) 10 Nwlr (Pt. 1891) 89
A resulting trust usually arises by operation of the law when property is held in the name of one person, but there is an inference or presumption that the person holds that property for the benefit of another person. It also arises when someone contributes funds or assets to purchase property but does not have their name listed as an owner on the title. The concept of resulting trust suggests that the person who provided the funds is considered to be the true owner of the property, and the person named on the title is merely holding the property in trust for them. See Obika v. Obika (2018) LPELR-43965 (CA).
In several cases, the Nigerian courts have recognized and applied the doctrine of resulting trust. One notable case is Adekeye & Ors v. Akin Olugbade (1987) 3 NWLR (Pt. 60) 214, where the Supreme Court held that a property purchased in the name of a party did not belong to the party. Instead, the Court held that the property belonged to a partnership that had provided the funds for the purchase.
Notwithstanding the well-developed jurisprudence on resulting trust in Nigeria, we have decided to review the Court of Appeal’s recent decision in Aguocha v. Aguocha (2023) (Pt. 1891) 89 because of the peculiar nature of the facts of the case. The parties were still married, and the lawsuit had nothing to do with a divorce.
SUMMARY OF THE FACTS IN AGUOCHA -V- AGUOCHA (2023) (PT. 1891) 89
The Appellant and the Respondent were husband and wife with seven children. They were both civil servants who lived together at a property in the Federal Capital Territory, Abuja, for thirty-four years. The Federal Capital Development Authority (FCDA) gave the husband an offer to purchase the property. When the husband could not raise the funds to acquire the property, he wrote a letter authorizing his wife to secure a loan from her bank to purchase the property. Part of the condition for the loan was that the title document for the property would be deposited with the bank and released to the wife upon repayment of the loan.
The bank disbursed the loan to the wife, and she paid for the property. However, since the FCDA had initially issued the offer letter in the husband’s name, the FCDA had no other choice but to issue the Certificate of Occupancy covering the property in the husband’s name.
A dispute arose between the husband and wife regarding her refusal to release the Certificate of Occupancy to her husband. As a result of the dispute, the husband commenced a lawsuit against her at the High Court of the Federal Capital Territory, seeking declaratory reliefs affirming his ownership of the property and mandating his wife to release the Certificate of Occupancy to him.
Although the husband did not dispute that his wife was the one who took a loan to pay for the property, he argued that his wife’s only claim against him was to file an action to recover the loan from him, as he had no intention of transferring ownership of the property to his wife since she only helped him as a dutiful wife.
The wife, however, argued that the husband could not be regarded as the property owner since she was the one who paid for the property.
Unsurprisingly, the High Court dismissed the husband’s case and held that the beneficial rights in the property vests in the wife by reason of a resulting trust on account of the wife having wholly paid for the property in her husband’s name and upon his mandate. Therefore, by the operation of equity, the husband in whose name the property was acquired does not have beneficial rights in it. The husband appealed against the High Court’s judgment on the ground that the Judge failed to evaluate the evidence provided properly. Yet again, the Court of Appeal dismissed the husband’s appeal and upheld the High Court’s judgment.
FOOD FOR THOUGHT ON THE COURT OF APPEAL’S DECISION IN AGUOCHA V. AGUOCHA (SUPRA)
Several thoughts ran through our mind whilst we were reading the Court’s judgment, and some of them are as follows:
- Would the Court’s judgment have been different if the husband was able to establish that the fact that the FCDA issued an offer letter to him to purchase the property was a form of “contribution” on his part towards the purchase of the property? In most cases, an offer for a sitting government tenant to purchase a government property is usually borne out of the tenant’s long years of service in a government agency.
- Would the Court’s judgment have been different if the husband had asked for a relief permitting him to sell the property and use part of the proceeds to repay the loan, which his wife took from her bank?
- Would the Court’s judgment have been different if the husband had asked for a relief declaring the property as a matrimonial property?
TAKEAWAYS FROM THE COURT OF APPEAL’S DECISION IN AGUOCHA V. AGUOCHA (SUPRA)
The main takeaway for us, in this case, is that married couples can vent their dispute regarding property ownership in court or through any alternative dispute resolution model without necessarily filing for the dissolution of their marriage.
In conclusion, the decision in Aguocha -v Aguocha reiterates the position that the Nigerian Courts will not hesitate to apply the doctrine of resulting trust in deserving cases, especially where a party seeks to use the fact that a property was purchased in its name to dispossess the actual or implied owner of the property. Therefore, it is essential to consult with a legal professional for guidance on how to apply the concept of resulting trust in specific situations, as the circumstances and evidence presented in each case may vary.