Tinsley v Milligan
The former reliance test: a claimant could recover property if it did not need to rely on its own illegality to establish its claim.
Facts
Miss Tinsley and Miss Milligan, who were in a relationship, used money from a joint business to buy a house, which they registered in Miss Tinsley's sole name so that Miss Milligan could falsely claim welfare benefits from the Department of Social Security. Both women knew of and took part in the fraud, and both benefited from the money. After the relationship broke down, Miss Tinsley claimed possession of the house, and Miss Milligan counterclaimed for a declaration that the house was held on trust for them both in equal shares. Miss Milligan had by then confessed the fraud to the Department and made amends.
Legal principle
The House of Lords held, by a majority of three to two, that Miss Milligan was entitled to her share. She could establish her equitable interest under a resulting trust simply by showing that she had contributed to the purchase price, without having to rely on the illegal purpose of the arrangement. The reliance test meant that a claimant could recover if it could establish its claim without relying on its own illegality. The test was criticised for producing arbitrary results that depended on procedural rules rather than policy, and the Supreme Court replaced it in Patel v Mirza.
Related cases on illegality and restraint of trade
- Archbolds (Freightage) Ltd v S Spanglett Ltd [1961] 1 QB 374
- Esso Petroleum Co Ltd v Harper's Garage (Stourport) Ltd [1968] AC 269
- Fitch v Dewes [1921] 2 AC 158
- Herbert Morris Ltd v Saxelby [1916] 1 AC 688
- Holman v Johnson (1775) 1 Cowp 341
- Les Laboratoires Servier v Apotex Inc [2014] UKSC 55, [2015] AC 430
- Re Mahmoud and Ispahani [1921] 2 KB 716
- Mason v Provident Clothing and Supply Co Ltd [1913] AC 724
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