Scott v Bridge & Ors

A valid common-law gift requires the donor’s subjective intention to give, sufficient certainty as to the property and recipient, acceptance by the donee, and valid transfer of the property. Where money is paid without authority, the recipient may be liable in unjust enrichment, but that liability does not necessarily create proprietary rights in the recipient’s bank account or its proceeds. A proprietary remedy depends on established property principles, including a fiduciary or other recognised proprietary basis. Rectification of the register is ordinarily required where registration resulted from a mistake and no exceptional circumstances justify withholding relief.

The claimant sought relief concerning money and two properties transferred to members of her former daughter-in-law’s family. Her claims relied on unjust enrichment, resulting and constructive trusts, proprietary estoppel, undue influence, mistake and related doctrines.

The third defendant brought a Part 20 claim against the claimant’s son for an indemnity or contribution concerning money transferred from accounts held in the third defendant’s name. The claimant alleged that the property transfers and bank payments were unauthorised and ineffective. The central issues were the legal consequences of those findings, including whether the claimant had proprietary remedies and whether the third defendant was entitled to recover loans made to the claimant’s son.

1. 1 Southgate. The claimant intended to invest in the property and acquire a share, not to make a gift. The first and second defendants were innocent contributors who had believed the money was a gift for Zeus and Nathaniel. The claimant therefore had a personal restitutionary remedy, but no declaration that the property was held on a resulting or constructive trust for her. The mixed-substitution principles in Foskett v McKeown [2001] 1 AC 102 did not apply in the same way because the defendants had not previously held the claimant’s money on trust and were not wrongdoers.
2. 13 Lacy Street. The claimant did not intend to transfer the property to Zeus. The transfer was also ineffective as a deed because the witnessing formalities were not satisfied. Registration nevertheless vested the legal estate in Zeus under section 58 of the Land Registration Act 2002. Registration resulted from a mistake, and rectification under Schedule 4 was required. Zeus was a volunteer and it would be unjust not to restore the claimant’s title. An inquiry and account of interim income was ordered unless agreed.
3. Bank transfers. The claimant did not authorise the transfers totalling £89,500. The payments unjustly enriched Zeus, but they did not create a resulting or constructive trust over his bank account. The reasoning in Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 supported the absence of a resulting trust, and the court declined at first instance to extend proprietary tracing principles beyond established legal bases. Judgment was therefore entered for £89,500 on unjust enrichment, without a proprietary remedy.
4. Part 20 claim. The alleged indemnity or contribution claim failed because no authority established that receipt of money from a person unjustly enriched by the claimant made the recipient liable over to that person. However, Zeus proved loans to David Scott totalling £60,865.65, of which £28,790 had been repaid. David was ordered to pay the balance of £32,075.65. David’s counterclaim for wages failed because the payments to Zeus had been made with his agreement and were used to discharge liabilities incurred by him or to pay Zeus’s agreed wages.