Meisels v Lichtman & Anor

A charitable recipient cannot treat every payment as a gift merely because it ordinarily receives donations. A gift requires a voluntary and gratuitous transfer, together with the donor’s intention that the property will not be returned. The donor’s intention is therefore central where the nature of a payment is disputed. A written agreement, separate treatment of sums, repayment language and the absence of a receipt may all assist in determining that intention. Money transferred through a solicitor’s client account may still be recoverable personally where the transaction was made with the individual and documented as such.

The claimant transferred two sums to a registered charity whose principal fundraiser was the first defendant. The claimant alleged that one sum was a currency transaction and the other a short-term loan. The defendants maintained that both payments were charitable donations and argued alternatively that any repayment was due to companies connected with the claimant.

The court considered the parties’ informal Hebrew agreement, the surrounding circumstances, subsequent communications, the charity’s records and the evidence concerning the source of the funds. The central questions were whether the transfers were gifts or repayable transactions, and whether the claimant personally was entitled to recover them.

1. Nature of gifts. Gifts between living persons are voluntary and gratuitous transfers made without consideration. They require the donor to intend that the property will not be returned. A recipient’s assumption that a payment is a gift does not establish that character, particularly where the recipient regularly accepts both gifts and loans. The claimant bore the burden of proving that the payments were loans rather than gifts.
2. Construction and intention. The court assessed the donor’s intention from the agreement and the surrounding circumstances. The agreement identified two separate sums, referred to repayment of one sum as a loan, contained no word corresponding to a gift, and was signed by both parties. The absence of a receipt or expression of thanks was also significant. The arrangements for immediate currency conversion and the subsequent text stating that money would be sent with interest supported the claimant’s account. The court therefore concluded that neither transfer was intended to be, or took effect as, a gift.
3. Corporate entitlement. The payments were made following dealings with the claimant personally. The solicitor’s client-account records identified the claimant as the client, and the written agreement was made with him rather than with any company. The fact that some funds originated from companies did not displace his entitlement to repayment.
4. Disposition. The claimant succeeded on both issues and was entitled to recover the transferred sums, with interest from the dates on which the loans should have been repaid. No agreement to pay interest in December 2004 was established. The trustees were personally responsible for repayment by reason of their positions as trustees.

Not stated in the judgment; this was a first-instance decision.