Collins v Simonsen

An inter vivos gift is incomplete until the donor has done everything necessary, according to the nature of the property and the chosen mode of transfer, to make it binding. A payment into an agent’s client account, without instructions identifying the purpose or intended beneficiary, does not perfect a gift to a third party. The intermediary instead holds the money on resulting trust for the payer, who may demand its return. An appellate court should not disturb findings of primary fact or assessments of evidential weight unless the trial judge was plainly wrong.

Mr Collins appealed against an order of District Judge Holmes in the County Court at Kingston-upon-Thames declaring that £42,000 paid into court belonged to Ms Simonsen and ordering payment of the money to her.

Ms Simonsen had transferred the money to the client account of an estate agent, intending it to fund rent for a property which Mr Collins was considering renting. She later requested its return before any tenancy agreement had been signed. The County Court found that she intended a conditional gift, but that the gift had not been perfected because she had given the estate agent no instructions concerning the purpose of the payment.

The appeal raised issues concerning the appellate review of factual findings, the perfection of an inter vivos gift, resulting trusts, estoppel and equitable assistance.

1. Outcome. The court granted an extension of time, refused permission to appeal on the first, second, fourth and fifth grounds, granted permission on the third ground, but dismissed that ground and the appeal.
2. The finding that Ms Simonsen intended a conditional gift was open to the trial judge on the evidence. An appellate court must not interfere with primary factual findings or the weight given to evidence unless the judge was plainly wrong. The judge’s acceptance of some evidence from a witness did not prevent him accepting other evidence from a less credible witness on a particular issue.
3. The payment into Carringtons’ client account did not perfect a gift to Mr Collins. Under Milroy v Lord (1862) 4 De GF & J 264, a donor must transfer the property directly to the donee, transfer it to a trustee for the donee, or declare that the donor holds it on trust for the donee. None of those modes had occurred.
4. Because Carringtons received £42,000 from an unknown payer without instructions, it had no authority to allocate the money to Mr Collins, the landlord or anyone else. The money was therefore held on resulting trust for Ms Simonsen. Her communication of the purpose of the transfer to Carringtons would have been sufficient to complete the gift, but the payment reference “Camilla Simonsen Rental” was insufficient.
5. The agency relationship between Carringtons and the landlord did not alter the result. Nor did Pennington v Waine [2002] EWCA Civ 227 or the other share-transfer authorities assist, since those cases concerned equitable assignments of shares and did not establish that an unexplained transfer of cash to an agent perfected the gift.
6. Questions of estoppel, unconscionability and whether equity should assist a volunteer did not arise on the facts. The County Court’s further observations on those matters were obiter.

• High Court (Queen's Bench Division): the appeal from the County Court was dismissed. Permission was refused on four grounds and granted but unsuccessful on the third ground.
• County Court at Kingston-upon-Thames: District Judge Andrew Holmes declared the £42,000 and accrued interest to be Ms Simonsen’s property and ordered payment to her.